Interoperability in Healthcare: Are Anti-Competitive Forces Limiting Innovation and Patient Benefits?

Salt Lake City - Government Health PlanAccording to a physician in Utah, Health Information Exchanges don’t work very well yet.

Dr. Raymond Ward, MD is a member of the Utah State Legislature.  “When I try to look up patients sometimes I find them via the HIE, sometimes I don’t.”  Dr. Ward is both a practicing physician and a passionate legislator for improvement of healthcare regulations and interoperability.  Utah  is known for its leadership in interoperability and was the first in the nation to found a widely accepted and respected health information exchange (See UHIN).  Yet,  Utah health industry interoperability falls short of physician expectations.  According to Dr. Ward, “Utah has one urban area, four major hospitals that 70% of the market.”  That should make Utah a strong candidate to coordinate care via interoperability, Dr. Ward reasons, since the majority of the providers serving Utah patients are concentrated in one urban area.  “Yet, when I use the Clinical Health Information Exchange (CHIE), HCA has radiology and lab reports but not other information I need,” states Dr. Ward.

Even non-physicians can easily understand why health data interoperability is important.  If a patient is being seen by a primary care doctor, an oncologist to manage a cancer diagnosis, a behavioral health professional to manage depression, a pain management specialist for pain caused by cancer, is under treatment for substance abuse related to addiction to pain medication, has had images of their cancer taken by a radiology lab, and subsequently interpreted by a diagnostic radiologist, shouldn’t all of these providers be able to see that patient’s information electronically via a unified platform?   Though some regions like Utah have led innovation, the U.S. as a whole hasn’t achieved this goal yet.

According to  Teresa Rivera, CEO of UHIN and head of the CHIE, there are still regulatory challenges to improving data interoperability.  For example, as Ms. Rivera noted, “Substance Abuse Confidentiality Regulations 42 CFR Part 2 currently limit what may be shared.”  According to Rivera, the HHS Substance Abuse and Mental Health Services Administration (SAMHSA) will be revisiting methods for enabling interoperability while protecting patient information, particularly for behavioral health.

Though one can understand Dr. Ward’s frustration as a care provider, Ms. Rivera has a point too.  According to current regulations (as I write this on April 6, 2016), once a patient has revokes a Part 2 consent to share their behavioral health information, that revocation should be immediately communicated to the HIO by the entity obtaining the patient’s revocation so that it implements the revocation decision and no longer transmits the Part 2 program’s protected patient information to those one or more parties. Part 2 permits a patient to revoke consent orally [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][42 CFR §2.31(a)(8),(c)(8)]. In an HIE environment, the revocation with respect to one or more parties should be clearly communicated to the Health Information Organization (HIO)as well as noted in the patient’s record.  Since UHIN is working with SAMHSA to improve the way this works electronically, and is arguably a leader in interoperability, why can’t we make this work across in the U.S.?

In my opinion, based on personal experience working in the Utah market as an expert witness and an advisor to health systems and health insurance firms, Utah is one of the leaders in U.S. health care data interoperability. UHIN has been a model for innovation and collaboration. So the question one may ask next is, if Utah sets the standard on interoperability, but still falls short of physician expectations, why is the U.S. healthcare industry still falling short on interoperability goals?

Some vendors have refused to open their Health IT and Electronic Health Record systems to complete bidirectional interoperability and the U.S. Health and Human Services Office of the National Coordinator (ONC) has not used enough of the hammer to enforce interoperability on EHRs and HIT vendors, according to 85% of hospital leaders, 88% of physicians and 92% of payers participating in a recent survey.

Black Book Research conducted its annual survey of hospital and health system executives, physician administrators and payer organization IT leaders to identify key interoperability trends and understand the challenges they face in their efforts to exchange patient information with other healthcare organizations.  All user types were polled to understand the importance of interoperability in their strategic planning initiatives, as well as their ongoing and new challenges in areas such as connectivity and data exchange:

  • 2,012 provider Health Information Exchange (HIE) users
  • 2,300 payer HIE users
  • 4,100 prospective HIE users

Between Q3 2015 and Q1 2016, the survey recorded :

  • growing HIE user frustration over the lack of standardization and readiness of unprepared providers and payers.
  • 26% of self-identified connectivity-ready hospitals intend to keep expanding into robust exchanges for value-based payment prospects with primed payers
  • delays by peer providers to electronically share patient data beyond Meaningful Use

“Every stakeholder in the healthcare delivery process cannot establish the infrastructure needed to support interoperability, as evidenced by :

  • 83% of physician practices responding
  • 40% of hospitals currently admit they are still in the planning and catch up stages of sending and sharing secure, relevant data

Of those still lagging behind in prioritizing interoperability, collectively :

  • only 17% place the blame on their organization’s available funding or executive interest level
  • 57% place culpability on their HIT/EHR vendors for connectivity defects and siloes or data blocking
  • 20% blame their respective government agencies for slow progress in development and standards
  • A variety of other and combined forces are found liable by the remaining 6%.

“The misalignment of requirements and protocols has hampered all the stakeholders’ interoperability efforts,” said Doug Brown, Managing Partner at Black Book. “This disorder is ushering in a new replacement revolution, this time for those HIEs failing to meet the expectations of their users, payers and providers alike”.

63% of hospitals & hospitals systems report they in the active stages of replacing their current HIE system, whether private, public, homegrown or EHR-dependent with a variety of options including middleware and more advanced HIE systems. Nearly 94% of payers surveyed intend to totally abandon their involvement with public HIEs and work directly in regions and states to create and/or bolster private enterprise HIEs which more directly meet their needs to facilitate accountable care initiatives with providers.

“The value-based payment reform concept enabled by a robust HIE requires all stakeholders including physicians, insurers, post-acute care, and diagnostic facilities, not just hospitals to reach the goals of dynamic population health,” said Brown, “Focused, private HIEs also mitigate the absence of a reliable Master Patient Index and the continued lack of trust in the accuracy of current records exchange.” According to the survey results, 39% of hospitals currently implementing or evaluating private regional networks intend to participating in regionally-centered enterprise HIEs with contracted payers to ensure greater connectivity among the stakeholders with whom they network within a geographic healthcare market. “The challenge of turning silos of medical and financial information into a linked, complete, accurate secure lifetime medical record is still tenuous,” said Brown.

90% of polled hospitals see private HIEs as a potentially more profitable model that can be sustained as the industry evolves faster towards a values-based and outcome-based healthcare delivery and reformed payment model.

Black Book™ also noted that payers have been largely absent in the development of dozens of private HIEs until late 2014 because data sharing was viewed as mainly benefitting providers.

“Public HIEs and EHR-dependent HIEs were viewed by 79% of providers as disenfranchising payers from data exchange efforts and did not see payers not as partners because of their own distinct data needs and revenue models,” said Brown.

However, 88% of hospitals and 95% of payers in Q1 2016 see secure data exchanges where all parties pay a fair share in the development and maintenance is creating a more collaborative trusting relationship.

Since 2013, the number of private HIEs involving a payer/multiprovider collaboration have increased steadily. 60% of providers that year reported they distrust payer guided HIE initiatives. In 2016, 93% of providers are considering cooperative HIE to satisfy the growing need for data particularly to manage complex patients and integrate clinical and financial data sets.

“Progressive payers are moving rapidly into the pay-for-value new world order and require extensive data analytics capabilities and interoperability to launch accountable care initiatives,” said Brown.

In response to alleviate concerns of HIEs with poor connectivity outside their IDNs and hospital systems, interoperability middleware is also a fast growing consideration according to 16% of hospital systems IT leaders with EHR-dependent HIE grievances, in particular.

“The middleware software sits within the data pipeline and translates data from disparate EHRs which shows promise for private HIEs, particularly payer-centric enterprise models,” said Brown. “It creates a business intelligence layer that provides information to all stakeholders in real time.”

Middleware is gaining popularity fast by hospitals using EHR-dependent HIE systems with extremely expensive custom development for data sharing outside the network. Black Book evaluated middleware vendors in an associated Q1 2016 user survey, ranking these vendors highest in satisfaction among new users.

  • HealthMark
  • Zoeticx
  • Arcadia Healthcare Solutions

In 2013, 82% of all payers and 60% of participating hospitals agreed that an operational national HIE is at least a decade off. In 2015, 91% of all payers and 74% of providers believe that a robust, meaningful national HIE will now be achievable by 2020 if more private or enterprise HIEs are created and a patient locator system is implemented.

Promises made in the recent interoperability pledge for three core commitments from EHR developers (providing patient access, eliminating information blocking, and implementing federal connectivity standards) won’t be the reason why interoperability succeeds, predicts Black Book’s survey results.

Key Trends:

  1. The global healthcare analytics market is projected to grow to $18.4 billion in 4 years (by 2020) and the need for that complex data will propel the interoperability needs of providers and payers. “The only way to accomplish that is robust bidirectional interoperability and that’s what will ultimately force comprehensive interoperability into reality, not government-scripted vendor pledges”, said Brown. “Value based care, payer participation in private HIEs, patient locator systems and analytics will be the real forces that push interoperability ahead next.”
  2. Patients agree on the need for medical data exchanges according to Black Book™. A Q3 2015 survey of recently discharged patients of 70 US hospitals evidenced 94% expressing the desire to have their medical and insurance information held and freely shared electronically among their personal providers and payers.
  3. 57% of providers also confirm their beliefs that the whole interoperability industry will evolve by leaps by 2018 if some basic issues are addressed, with or without a vendor pledge. “Progressive FHIR standards can allow EHRs to talk to other EHRs should standard definitions develop on enough actionable data points as we are enter a hectic period of HIE replacements, centering on the capabilities of open network alliances, mobile EHR, middleware and population health analytics as possible answers to standard HIE,” said Brown.

Thrusting HIE system replacements in Q1 2016 according to current provider users are:

  • 97% Potential for data breaches, Privacy & Security issues
  • 93% Cost of Custom Interfaces, Constrained Budgets
  • 90% Lack of connectivity with EHR Centric HIEs
  • 75% Complexity of current HIE Technologies
  • 72% Questionable sustainability of HIE vendors or agencies

Current users ranked six HIE vendors as top performers in their specialty theatres of engagement. Ranking first in their respective categories in the interoperability marketplace for 2016 are:

  • McKesson RelayHealth – Core Private Enterprise Platform and Packaged HIE Solutions
  • Infor – Complex Data Integrators and Outsourced HIEs
  • Optum – Private Payer and Commercial Insurer Centric HIEs
  • Aetna Medicity – Core Public/Government and Agency HIEs Systems
  • Cerner –EHR/HIT-based HIE, Open Networks
  • Epic Systems– Closed Network, EHR-Dependent HIE
  • Other vendors scored well in specific key HIE performance indicators were: Availity, Allscripts, CSC, Greenway, ICA, Medecision, and QSI Mirth.


Michael F. Arrigo

Michael Arrigo, an expert witness, and healthcare executive, brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health I.T., and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations that provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and billing, fraud damages, and electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, malpractice, and insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software S.A. (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for the top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls I.T. audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto-economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and published in Healthcare I.T. News. Mr. Arrigo serves as a member of the board of directors of a publicly traded company in the healthcare and data analytics industry, where his duties include: member, audit committee; chair, compensation committee; member, special committee.

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