Health information exchanges face significant financial challenges

Concerns about competition could undercut development and long-term sustainability of health information exchanges, according to preliminary findings of a survey by the eHealth Initiative.

Of 126 exchanges that responded to the group’s 2012 survey, 36 said competition from other HIEs was an important challenge, and 50 worried about competition from health IT vendors with exchange capabilities. More than half said stakeholders’ concerns could potentially have an impact on their participation in exchanges, according to the preliminary findings.

“Given the importance of stakeholder buy-in to sustainability, competition between data exchanges and health IT vendors over smaller stakeholder populations could impact development in the area,” the initiative said. “Similarly, these findings suggest that some stakeholders may not engage in data exchange because of fear of losing revenue . . . It will be important for groups to create secure technical infrastructure and policies that can help allay fears from stakeholders.”

The group also concluded that some federally funded HIEs risk going out of business if they don’t develop sustainable business models after funding from the Health Information Technology for Economic and Clinical Health (HITECH) Act ends.

All exchanges need to look at a variety of revenue-generation methods to improve sustainability, the report preliminarily concludes. “There needs to be more development in other areas of revenue generation, such as transaction fees, assessment fees and membership, for HIEs to truly become sustainable,” the initiative said.

Other preliminary findings include:

• Top challenges cited by stakeholders are privacy, developing a sustainable business model, lack of funding, concerns about their competitive position in the marketplace, addressing technical barriers and addressing government policy and mandates.
• More than a quarter of the HIEs that don’t already support Accountable Care Organizations or Patient Centered Medical Homes expect to do so in the future.
• Primary revenue sources are membership fees and government funding.

A link to a PDF of the preliminary report is available under “News” on the eHealth Initiative home page.