Business case for payor-supported HIEs
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Albert Tzeel, MD, national medical director at HumanaOne, Victor Lawnicki, PhD, an econometrician at the Business Intelligence and Informatics Competency Center at Humana, and Kim Pemble, executive director and CEO of the Wisconsin Health Information Exchange (WHIE), examined what occurred when clinicians utilize an HIE.
Beginning in December 2008, Humana became one of the first health plans to provide a financial incentive to a local HIE for promoting the query of a clinical database by clinicians (as a part of their workflow) for insured members who present in the emergency department.
Although originally designed for the most acutely ill patients, the emergency department serves patients with less serious illnesses today. It now serves as the primary care provider for many who have no physician outside the setting. In addition, the emergency department provides a triage function, which continues to increase, and the emergency department coordinates care for individuals with chronic medical conditions.
Such emergency care results in cost increases and expenditures due to redundant diagnostic tests. It is also costly to health plans—making up 7 percent of their budgets. This problematic issue will continue for health plans given that individuals will continue to drive the increased use of the emergency department.
For these reasons, many tout HIEs—where clinical data is exchanged between hospitals, providers, public health administrators and payors—as a method of addressing emergency department overutilization. Payors participating in HIEs can promote care coordination and control end user (e.g., health plan member) costs, as well as create value for the plan’s customers (e.g., employers).
Because payors are often viewed as receiving the most benefit from the HIE, many believe that payor support provides a path to HIE sustainability. However, for payors to invest in HIEs voluntarily, they must see a positive business case. Ultimately, assessing the HIE’s effectiveness between multiple facilities in a community can show payors the rationale for having an exchange from an individual, population health and financial perspective.
WHIE, which operates within the National Institute of Medical Informatics, a nonprofit organization for research and development of advanced healthcare information networking, served as the vehicle for linking disparate emergency departments across five competitive health systems in Milwaukee County.
The authors said that evaluating the effectiveness of using the WHIE (or any HIE, for that matter) is challenging, because “the economic value is diffuse, accrues over time, and is difficult to measure.”
Yet, to determine if Humana received “value,” and to promote the business case for ongoing investment in WHIE’s sustainability, Humana analyzed the exchange’s effectiveness in controlling costs for its members who sought emergency care. If the Humana—WHIE relationship could demonstrate mutual benefit, then the study may assist other payors toward additional HIE investments, which will advance sustainability, and further embrace HIE standards.
"Consistent with our hypothesis, we found that when the WHIE was queried, our health plan achieved an average savings of $29 per emergency department visit,” the authors wrote.
The study found that as payors invest in HIEs, they receive a positive financial return on investment. Although the cost savings realized by the health plan may be used in any number of ways, one option encouraged payors to invest in HIE funding, thereby improving the HIEs' sustainability.