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Multidisciplinary Team Maps Costs of Participating in Health Information Exchanges

A group of WID experts crunched the numbers for Health Information Exchange participation in one Wisconsin area and found a price that could save hospitals money in the long-run.

Electronic health records image from iStockphoto

Following the Supreme Court’s recent decision to uphold the constitutionality of the Affordable Care Act, health care systems around the country are looking more closely at participating in Health Information Exchanges (HIEs) — networks that share patients’ medical data across multiple hospitals and clinics, and improve coordination of care regardless of where patients receive it.

A WID research group has created a model to develop pricing for HIEs in such a way that saves hospitals, clinics, medical labs and patients money.

Using about 4,600 emergency department (ED) encounters from Milwaukee County over a year’s time through the Wisconsin Health Information Exchange, the team calculated the costs for various stakeholders when departments use HIEs to look up patients’ electronic records from other institutions. The detailed data set includes individuals’ visits and treatments while they sought services from hospitals for chronic diagnoses such as asthma, lung diseases and diabetes.

Researchers mapped three possible ways to price HIE use: by having an annual rate that allowed hospitals to “look up” (seek medical information from) electronic records an unlimited number of times; by paying a fee to look up a record for each ED visit; or by paying a fee each time the department looks up a patient.

“It’s a novel application of a computer science technique to a problem in health care that can’t be solved by the current tools we use in health care.” — Patricia Brennan

“If you look at it from a patient care perspective, it makes sense for hospitals to look up every time for every patient,” says Srikrishna Sridhar, a graduate student in computer sciences and Optimization researcher who led the study. “But what we found was that from an institution’s perspective, it also makes sense to look as often as they can.”

The team found that if hospitals were to use annual subscriptions, patients would save money and benefit from fewer ED visits and avoiding unnecessary tests. Overall, health maintenance organizations had the most to gain from participating in HIEs.

But it’s the study’s methods — not the results — that are more important, says Patricia Flatley Brennan, Living Environments Lab researcher, Moehlman-Bascom professor of nursing and engineering at UW–Madison, and a co-author of the paper.

“It’s a novel application of a computer science technique to a problem in health care that can’t be solved by the current tools we use in health care,” says Brennan, who has helped bring a multidisciplinary team together for the study. “We have a problem where we have multiple players, we have different kinds of incentives, and we have lots of uncertainty.”

She says it’s important to understand that benefits from participating in HIEs depend on the number of institutions participating, local health care systems, and how prepared hospitals and providers are in efficiently using these growing databases.

The research, published in the Journal of the American Medical Informatics Association, presents an analytical framework for quantifying the societal savings and financial consequences of HIEs on all of their participating institutions.

Until now, there were few incentives to participate in an HIE, and even then, multiple institutions need to participate in order to be successful. But with new research showing a way to appropriately price HIE participation, the team says HIEs may play a more important role in establishing standards for federal programs such as the National Health Information Network. The team expects more groups to apply similar models to data in other geographic areas.

The research was supported by a grant from the National Library of Medicine, with additional support from the State of Wisconsin Medicaid Transformation Grant and the Clinical and Translational Science Award (CTSA) program through the National Center for Advancing Translational Sciences (NCATS).

Marianne English


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