state politics: idaho
Funding the Health Data Exchange to be Its Biggest Challenge
By Sharon Fisher, 1-24-08
Governor Butch Otter’s proposed health data exchange network is not expected to require any state operational funding beyond the $500,000 requested this year, Division Administrator Leslie Clement told members of the Joint Finance-Appropriations Committee this morning. Instead, hospitals and other providers will contribute the majority of the project’s anticipated $11.3 million cost during startup and the first five years, she said.
But depending on which survey you read, that may or may not be realistic.
Health data exchanges, also known as health information exchanges (HIEs) and regional health information organizations (RHIOs), provide a standard way for computer systems used by hospitals, doctors, and insurance providers to exchange information, to help provide more complete information, reduce fraud, and reduce costs. They were called for in 2004 by President George W. Bush as components of a National Health Information Network that is intended to be complete by 2014. Otter’s State of the State speech and recommended budget included $350,000 in supplemental funding this year and $150,000 next year for setting up such a system in Idaho.
What Clement told the committee this morning is that the state would need to provide no further money to the project, other than an unspecified amount for the Medicaid system to participate as an ongoing user.
But according to “Sustainable RHIO Funding and the Emerging Business Model,” a 2007 survey of 23% of U.S. RHIOs from the Healthcare IT Transition Group, 80-90% said they still depended on grants – including state funding. Even fully operational RHIOs that had completed the startup stage indicated that 60% of them still anticipated the need for grants.
A similar survey from eHealth Initiative in 2007, of 130 RHIOs, found that 43% of them used state funding for startup costs – an increase from 29% in 2006 – and that 35% of them used state funding for ongoing costs as well.
The National Association for State CIOs also notes that state grants are one of the two ways in which RHIOs are generally funded (along with federal grants), and that RHIOs “must often continue to rely on government funding.” For example, Delaware’s RHIO – considered to be the first statewide one in the U.S. – received $2 million in state funding.
It is also not clear how likely it is that RHIOs can become self-supporting, once past the start-up stage. Research by professors at Harvard University, published in Health Affairs this year, noted that almost a quarter of the RHIOs surveyed in 2006 were defunct by 2007, and that fewer that 10% of them could be considered to be self-sustaining.
In fact, the technological challenges of linking multiple programs and computers pale to the challenges of simply paying for it. “Funding and sustainability issues are the main reasons why RHIO efforts will fold, not technology-based problems,” according to NASCIO.
A number of RHIOs have failed specifically due to funding problems. For example, the Northeastern Pennsylvania RHIO failed because it could not afford $26,000 to obtain nonprofit status with the IRS.
Idaho’s Health Data Exchange will file for its nonprofit status next month, Clement said.
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