RHIOs: What's the Prognosis?

Regional Health Information Organizations:

A recent note in Christina's Considerations points us to a good survey on the potentials and perils of RHIO formation. Just in the past several days, there's been a flurry of reporting on and analysis of RHIOs. So, what is the prognosis?

RHIOs lead to better quality of healthcare service delivery. RHIOs are costly. RHIOs belong to all of us, or at least are funded for the most part by federal grants. RHIOs are struggling to become self-sufficient. RHIOs are anathema to organized, business-oriented delivery of treatment.

So, what is the prognosis?

There's a review of the long, arduous task of RHIO development in "Eight years later, RHIO looks for traction," an article on the status of a benchmark RHIO implementation effort in Santa Barbara. Same day, there's a warning in "Connectivity eases crowding," an article on dealing with regional interoperability of healthcare information systems in San Diego County, that you're better off not calling your integration effort a "RHIO" lest you make participating organizations (i.e. those you want to adopt as clients) a bit skittish about the costs and headaches of all those governance issues that seem to go along with quality of care. Then there's "Perspective: RHIOs beware," the study that Christina mentioned, that flat out pulls us into the "controversy" surrounding the whole process of selecting a RHIO modeling, funding its development, and maintaining client support in a self-sustaining fashion among the P's (payers, providers, and -- oh, yes -- patients).

Here's the synopsis of those commentaries:

Eight years later, RHIO looks for traction
Santa Barbara County provides a case study in the challenges that can result from building health data exchanges.

Connectivity eases crowding
San Diego County pilots public health information-sharing network by starting small and avoiding the RHIO label

Perspective: RHIOs beware
A little controversy is good for the health information exchange (HIE) industry. So says Erica Drazen, vice president and managing director of First Consulting Group's Emerging Practices. This year FCG released its "Myths and Realities of RHIOs" ... and more recently its "Health Delivery Provider Predictions 2006 Executive Insights, " the latter a summary of company executives' top healthcare predictions through 2006.

Why the sudden interest? Whose interest is it? Take a look and let me know:

What is the prognosis?

Brave New World

The push is on. They're marketing Web 2.0. They're worried. The economics models are changing, and they're not the ones changing them.

"They" = "Big software companies"

Microsoft, Oracle, IBM...

The threat is not open source - the threat is the unrelenting march of technology. How to get back control? How to turn SaaMPS (Software as a Monopolistic Product Set) into SaaS (Software as a Service) into SaaRS? (Software as a Revenue Stream??)

John Markoff gives a really good overview of this venture in the article "Software Out There." The technological changes are not news to most of us, but it seems the business and management folks are now the ones becoming most interested in those changes.

And -- oh, yes -- so are the investors. Check out Ray Lane's comments, "Lane: Software shake-up favors new thinking." Ray Lane. Former Oracle exec. Venture capitalist at Kleiner Perkins Caufield & Byers.

There's a lot of money to be made in innovation...

Power of Incentives

In a recent post (Momentum...), I was thinking about how to provide the right kinds of incentives to use information technology to improve healthcare service delivery. The example (from my home state of California) had pretty narrow focus -- standardization of Electronic Medical Records (EMR) for improving interoperability.

Talk about momentum -- now Massachusetts has raised the bar! This just in: "Massachusetts Set to Offer Universal Health Insurance."

They say the process was a testament to the powers of negotiation. Here's an excerpt:

"The bill, which resulted after months of wrangling between legislators and the governor, requires all Massachusetts residents to obtain health coverage by July 1, 2007.

Individuals who can afford private insurance will be penalized on their state income taxes if they do not buy it. Government subsidies to private insurance plans will enable more of the working poor to be able to afford insurance and will expand the number of children who are eligible for free coverage. And businesses with more than 10 workers that do not provide insurance will be assessed a fee of up to $295 per employee per year."

I say the process is a testament to the powers of using incentives. The ramifications are enormous.

What do you think? How does this affect healthcare economics?

Momentum, Incentives, and Freakonomics

Lot's of news posted in recent days on Healthcare IT. "Health files to go high-tech" in Arizona. "Blue Cross Funds Patient Safety Initiatives" in Pennsylvania. "Hospitals go high-tech" for the Veterans Administration all over the country.

What's all this momentum about? Electronic medical records and the benefits of IT?

That last one, for example, prompted introduction of two bills in the California legislature, one to provide a "15 percent tax incentive for private California hospitals and health-care providers to set up health information technology systems, including the creation of Electronic Medical Records (EMRs)," and another to store "medical records and other identifying information into a 'smart card' which can be used by Medi-Cal patients" (State Sen. Abel Maldonado, R-Santa Maria).

Ah! Incentives!

That naturally led me back to the lessons of Freakonomics, Steven Levitt and Stephen Dubner, and the importance of understanding incentives in economic dealings. Basically, there are three kinds, remember? Moral, social, and financial. I do something because it's the right thing to do. I do something because I want you to see me as doing the right thing. I do something because it's the best cost for me to do it.

What's the incentive for creating EMR's? (read also: electronic health records, personal health records, Medic-Alert key-chain USB storage devices, smart-cards, implantable chips, regional information exchanges, you name it...)

If you're a nurse, or any clinician dealing with patients directly, the incentive is moral. In any other case, I maintain, it's financial. For all healthcare beneficiaries (payers, providers, and consumers), quality of care, patient safety, interoperability of HIT systems -- in short, all the benefits that HIT is likely to provide -- are gauged according to how they affect the bottom line.

My bottom line happens to be bang-for-buck in return for my out-of-pocket healthcare expenses (i.e. insurance premiums). My incentive to use and promote EMR's -- i.e. my personal health record -- is strictly financial. How about giving me a 15% cut in my monthly premium if I establish and require use of my PHR, regardless of delivery mechanism? (Actually, I'd prefer a URL that links, in a secure fashion, my personal medical information to the outcomes and results of treatments I receive in a whole slew of healthcare service delivery activities. No muss, no fuss.)

I have the idea that, while providers and consumers (or their advocates) are launching ambitious ten-year plans for governance considerations and privacy concerns and data sharing and all that technical stuff, payers are quietly analyzing costs, quality, and outcomes for optimal delivery of service. That's the best financial incentive of all.