Stimulus Bill & HIE, RHIO Market

Copyright: Chilmark Research

For internal use only, not for distribution without

expressed permissionMarch 4, 2009 1

Stimulus Bill & Health

Exchange Market

Impact & Analysis

By: John Moore

[email protected]




Agenda

Macro Market

E.g., Stimulus, Provider Market, etc.

Current Exchange Market

Status, Trends

Future Directions

Stimulus Impact & Market Direction




Defining HIE & RHIO per NAHIT

Health Information Exchange“The electronic movement of health-related informationamong organizations according to nationally recognizedstandards.”

Internal governance => Hospitals, IDNs, etc

Regional Health Information OrganizationAn organization that oversees and governs the exchangeof health-related information among organizationsaccording to nationally recognized standards.

External governance => Govt., Payers, Foundations,etc.




Macro Market Trends: ARRA Legislation

HITECH Act$300M Directly Targeting “Exchanges”

Discretion of ONC director

Administered by States

Will target RHIOs

Dwarfs Previous Federal Investments

Other Potential Exchange Funding Sources:$1.5B Health Resources & Services Admin

$85M Bureau of Indian Affairs

$1.1B NIH & AHRQ

Comparative Effectiveness projects may fundExchanges (HIEs) at hospitals & IDNs

Other Stimulus Funding for Exchanges???$4B+ Broadband, SSA?




Implications of ARRA Legislation (cont.)

“Meaningful Use of Certified EHR”Information Sharing for Care Coordination

Quality Measures Reported

eRxImplications for HIE & RHIOs?

Extension of “Certified” to Include RHIO/HIETechnology?

CCHIT ‘09 Certification Initiative

Research & Extension CentersFocus on Interoperability

Core premise of Exchanges

New HIPAA GuidelinesConsumer Consent & Breach Notification

State Attorney Generals Can Sue




Implications of ARRA Legislation (cont.)

Funding to States in Two Categories

Planning Grants

Less restrictive

Bring together stakeholders to lay out framework,governance, etc.

Forecast minority funding from ONC

Implementation Grants (“Shovel Ready”) Must Have…

Operating governance structure

Detailed technical plan

Defined clinical use cases

Statewide privacy & security policies in place

States Required to Provide Matching Funds After 2011

Rush to Get in Line




ARRA Requires HIT Standardization

Secretary Must Adopt Standards for NHIN

Deadline: Dec. 31, 2009

All Federal Agencies Must Follow Standards

States will likely follow suit

Voluntary for Private Entities (HIEs) But:

Agencies shall require by contract or agreement the

use of standards in new or upgraded systems

Standards tied into ability to receive Medicare and

Medicaid incentives




Looking Globally




United States vs. Rest of World cont.

International InitiativesBased on Top-down Model

Driven by National Entity

Have a Clear Command StructureHigh-level Advisors

Are Well-fundedLong sales & delivery cycles

Consistent within Country, not WorldCultures, control, engagement

Broad Adoption ObtainableNational Health Systems driveadoption




United States vs. Rest of World

US HIE/RHIO Initiatives are…

Bottoms-up Model

Local/Regional

Consensus Based

Significant Legal/Security Issues to Negotiate

Funding a Challenge

Little Consistency

Trial and Error

Broad Adoption Elusive

Value for who?

Exchange Activities in All 50 States




Status of State Initiatives Varies Widely




~200 RHIOs/HIEs in US Today

eHI and HIMSS Significantly DifferentHIMSS*: Extremely Broad Definition = 475 Exchanges

102 proposed

eHI*: Tighter, More Govt. Focused = 130 Exchanges

75% Still in Formative Stages

Majority Struggle with Business ModelMany Failed Attempts

Some barely surviving

HIEs Tend to Perform BetterBusiness Case is Clear

Value proposition in place

RHIOs & HIEs are Distinctly Different

*HIMSS: Health Information Mgmt Systems Society

*eHI: eHealth Initiative




RHIO Market -> Government Sponsored

Driven by GovernmentStates: Keen Interest inRHIOs

eHI Adoption #1 in2007

Most have somethinghappening in their State

Localized

More Failures thanSuccesses

Business modelDefine Value Prop.

LeadershipGovernance

Improve Quality, Safety & Lower Costs




Objectives Drive Attributes - (RHIOs)

RHIOs Focus on Public HealthQuality reporting

Need for metrics/analytics

Patient SafetyMinimize ADEs

Lower CostsCare Coordination

Disease Mgmt

Data aggregation & distribution

Minimize duplicate testing

Alerts

Today, Strong Focus on eRx




Sustainability Remains a Challenge

Over 80% Report Very to Moderate Difficulty

in Creating Self-Sustaining Model

Financial Models in State of Flux

Subscription or Transaction Fees Dominant

Often insufficient

Migration to Value-added Services

Produce reports (eg Quality)

Coordinate financial incentives

EMR implementation guidance

EMR data uploads

Workflow analysis




HIE Market Driven by Hospitals & IDNS

More Difficult to MeasureNumber of HIEs

Wide Range of Deployments

Wide range of Models

Some in HIMSS numbers are littlemore than a portal

A Portal is not an Exchange

Most Large IDNs Have Something

Live or “In the Works”

Increasing Interest in HighlyCompetitive Markets




Objectives Drives Attributes (HIEs)

HIEs Focus on Erecting Competitive BarriersStrengthen & Retain Relationships

Affiliated Practices & Physicians

Ease data access

Push via publish/subscribe

Drive RevenueFacilitate transactions

Keep referrals, orders, etc. in network

Lower CostsDistribution of results

Tap P4P InitiativesAnalytics for reporting




Two Dominant Architectures

Repository (Hub n’Spoke) -

Common in RHIOs

Positives: Common Data Model

& GUI, Common Security/Access,

Population Health

Challenges: Negotiating Data

Ownership, Complex and Long

Implementations, Cost Sharing,

Higher Upfront Costs

Example: Axolotl

H1 Ph1 Ph2 H2

L1 L2

Im1 Im2

Pa1 Pa2Rx1 Rx2

Hub

Struggles with Complex DataOwnership Issues




Two Dominant Architectures (cont.)

Federated - Common in

HIEs

Positives: Fast Installs, Data

Ownership Preserved, Lower

Upfront Costs

Challenges: Scalability,

Security/Access, Standards,

Population Health Studies

Example: Novo Innovations

H1 Ph1 Ph2 H2

L1 L2

Im1 Im2

Pa1 Pa2Rx1 Rx2

Federated Architecture Does Not Scale




Cloud on the Horizon?

Utility Service Model

Positives: Similar to

Repository, Scalability,

Lower Costs?

Challenges: Access

Privileges, Audit Trail, Data

Ownership

Example:

HealthVault, Google Health

H1 Ph1 Ph2 H2

L1 L2

Im1 Im2

Pa1 Pa2

Rx1 Rx2

Utility

Trust in a Third Party Entity?




Future Trends

Massive Stimulus Funding will Distort Market

More than Doubles Current Exchange Software Market

Strong Likelihood of Many More “Santa Barbaras”

Current NHIN Vision will Never Materialize

Too Many X-State Data Ownership & Regulatory Issues

ARRA makes situation worse with new State AG powers

NHIN will Model Rail System in US, vs. Interstate System

Health Clouds will Resolve Data Ownership & Consent Issues

for “Engaged Consumers”

Despite Funding, RHIO Market will Remain Difficult

for Vendors

HIE Market: Far More Lucrative




Key Points

Two Distinct Markets, HIEs & RHIOs

Requires Separate Go-to-Market Strategies

Little Overlap in Operational Structure

Modest Overlap in Needs

No Dominant Vendors

Large HIT/EMR Vendors are Out

RHIOs are Migrating to Services

Exchanges Moving Beyond Subscription/Transaction Model

Payers Stepping Up to the Plate

Large Employers Beginning to Engage

Other Federal Agencies Showing Interest

SSA is Getting Increasingly Involved




Big Question Marks ???Will ONC Legitimize CCHIT

CCHIT Released New ‘09 Certification Guidelines forExchange Solutions

Focus on Security & Simple ExchangeExchange one of three scenarios

Will Health Banks Gain Trust=TractionHybrid, Consumer/Patient-centric

Track Roll-out in WA State, 3 Sites1 Google Health & 2 HealthVault

New HIPAA GuidelinesInterpretation of Consent in HITECH Act

Implications to Data Ownership & Sharing

Definition of “Meaningful Use of EHR”

Legislation Highlights Info SharingProof via an Exchange?




Final Thoughts…

Does RHIO Know What They Are

Doing?

Do they Understand Value

Proposition?

For whom?

Ultimately, it must work for

Physician!!!

2009 is the Set-up Year for RHIOs

2010 Funding for Shovel Ready - a Rush?

2011 States Provide Matching Funds

HIEs will Move Ahead Steadily in Competitive Markets

Wild Card: “Meaningful Use of EHR”

Stimulus Bill & HIE, RHIO Market

Technology

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