Winners and losers under the NHIN Direct project

Although the Health and Human Services Department’s new “NHIN Direct” project might kill a possible revenue stream for some state health information exchanges, those exchanges should be able to make up the revenue in other ways, an HHS official said today.

HHS launched the Nationwide Health Information Network (NHIN) Direct project in March to develop technical specifications for point-to-point secure exchange of patient health data over the Internet. The goal is to allow for doctors and hospitals to directly exchange data electronically on a one-to-one basis with each other or with a lab or a pharmacy.

For some state exchanges that had intended to provide secure point-to-point health data exchange over the Internet to generate revenue, NHIN Direct presents a problem because it will enable that service at a national level, Dr. Doug Fridsma of the HHS Office of the National Coordinator for Health Information Technology said today in an interview. Fridsma is the acting director of the national coordinator’s Office of Interoperability and Standards.

However, the state exchanges should realize there are many other services they can provide to make up the lost revenue, Fridsma said.

“NHIN Direct solves one piece of the puzzle,” Fridsma said. “There is a host of other things they [state exchanges] can provide for which physicians may be willing to pay.”

For example, the state exchanges could generate revenue by aggregating public health data and quality reporting data, by enabling multiparty exchanges and by establishing and providing authoritative directories, Fridsma suggested.

Although some states may have relied on providing point-to-point exchange for revenue in their business plan, that might have been unrealistic because commercial providers are offering similar services, he added.

“A lot of the states have been concerned about [NHIN Direct] removing a revenue stream, but that risk existed before NHIN Direct,” Fridsma said.

The draft specifications for NHIN Direct will be released in several weeks, Fridsma said, and this summer organizations will develop software code to facilitate the exchanges. NHIN Direct is an open development project with a public wiki detailing steps in its development.

The project was an outgrowth of an HHS Health IT Policy advisory group's recommendation to set up specifications to help doctors and hospitals meet the criteria to qualify for $17 billion in “meaningful use” incentive payments for health IT under the economic stimulus law. Under HHS regulations, the providers must demonstrate a capability to securely exchange health data electronically to show meaningful use in 2011. NHIN Direct is intended to help them develop that capability quickly, Fridsma said.

NHIN Direct, once completed, will be a component of the NHIN, an HHS system of specifications that allows trusted parties to engage in data exchange and in searches of patient health data over the Internet.

HHS is working with vendors of electronic health records and personal health records (PHRs), as well as with state and federal agencies, on the NHIN Direct specifications, Fridsma said.

“The PHRs are an important part of the health exchange ecosystem,” Fridsma said. “They may need to exchange data directly.”