News: CJ Exclusives

Stimulus-Funded N.C. Health Exchange Gathers Dust

Hospitals, physician practices prefer regional networks to statewide data exchange

A multimillion-dollar computer system to collect and analyze massive amounts of statewide medical data and designed to improve North Carolina health outcomes and control costs appears to be one more boondoggle funded in part by federal stimulus money.

The North Carolina Health Information Exchange originally was charged with creating a state-level information technology clearinghouse to store patient medical records that could be used to expedite care and aid researchers and health providers across the state.

Instead, said Mark Bell, vice president of health information technology and chief information officer at the North Carolina Hospital Association, NCHIE has “not produced a business model that was in the best interest of providers or affordable to providers. I think if they had a different business model and a different fee structure, they would be more successful than they are.”

Bell, who’s been involved with development of the NCHIE since its inception, said hospitals aren’t the only members of the medical community that helped create the state entity and are not using its technology assets.

“I don’t see that there’s a great adoption rate among physician practices either, or anybody else,” Bell said. He projects it will be years before medical information can be exchanged statewide. “They will have to make a decision at some point if they’re not getting participants that can fund it if they’ve built a system that they cannot sustain.”

The exchange has its vocal defenders, however. “There is a massive piece of technology that is very flexible and very versatile that can be used in our state,” said Whitney Baker, spokeswoman for the North Carolina Health Information Exchange. “Getting folks to jump on board and be the first, that’s the piece that’s really lacking.”

“We launched in 2011 … and everybody sort of backed out at that point,” Baker said of agencies, trade groups, and organizations that helped to develop the agency and its technology assets. “To be valuable it needs to reach that critical mass of information, but hospitals have not been willing to jump in,” Baker said.

“Data aggregated in one place is the model that is least likely to be successful because that data has a whole lot of value” to providers who collect it and to patients who value medical privacy, Bell said.

“Typically, a provider will not be thrilled with the idea of somebody else making money off of their data. That is the hot button topic,” Bell said.

“At some health information exchanges what they seek to do is to aggregate all that data and sell it to anyone who wants to buy that data, or for research, or a number of other uses,” Bell said.

Though the original idea was to create a statewide exchange, Baker said, “We’re under the management of Community Care of North Carolina now, so our focus has shifted a little bit,” trying to leverage the relationship CCNC has with the state and medical community to save Medicaid dollars. The nonprofit CCNC administers care for most Medicaid recipients in North Carolina through a contract with the state Department of Health and Human Services.

Baker referred specific questions about health information exchange to Paul Mahoney, director of communications at CCNC.

When contacted, Mahoney repeatedly refused to discuss the tax-funded system, instead issuing a profanity-laced series of insults against the reporter and his employer over past articles that were unflattering to CCNC’s operations. Gov. Pat McCrory has said repeatedly that transparency and good customer relations will be a hallmark of his administration.

It is unclear how much NCHIE has cost the state. North Carolina received a $12.9 million grant in 2009 through the American Recovery and Reinvestment Act (aka the stimulus program) to launch the technology agency. That was to cover 90 percent of costs for two years, with the state paying 10 percent.

A Feb. 12, 2010 press release from U.S. Health and Human Services Secretary Kathleen Sebelius touted nearly $1 billion in stimulus funding for health information technology. The funding went to 40 states (including North Carolina) and 32 nonprofits, according to the release.

The cost-share formula was supposed to flip to 90 state/10 federal after two years. Requests to get spending amounts from the Office of State Budget and Management were not successful.

Dr. Devdutta Sangvai, president-elect of the North Carolina Medical Society, said the medical community is trying to extract population health metrics from obsolete technology systems “and it’s not working. … In some ways you’re getting the wrong outputs because you’re getting the wrong inputs” when it comes to improving health outcomes.

“It’s going to require a fundamental change to the way we actually analyze data, collect data, interpret the data, and use it. In addition to the data is the analytics. It’s great if you can collect the data, but if you don’t know what to do with it, all you’ve got is a big stack of paper,” Sangvai said.

Stephen Keene, general counsel of the Medical Society, said NCHIE is “a very, very good, private-sector driven, top-notch health information exchange that is sitting on idle over in the corner.”

He blamed “parochial interests of a number of big health systems and a number of private interests that simply haven’t seen the wisdom … of using the North Carolina Health Information Exchange to provide information” to policy makers and the private sector.

Statewide population health analysis and improvement will not be possible if there are “cells of data dotted around in electronic medical records all over the state and no way for them to talk to each other,” Keene said.

“The vitality of the NCHIE is going to be absolutely critical to addressing the cost problem that we have” by targeting the most obvious, most expensive problems, said Melanie Phelps, associate executive director of the Medical Society.

Bell sees interoperable regional networks as a better option. “I would say just because the state has received federal funding for health information exchange, that doesn’t mean it can necessarily produce the best solutions for health information exchange,” Bell said.

There are several health information exchanges around the state, he added. “I think we will never have a single [statewide] system. I think we will have a system of systems,” he said, but no time soon.

WNC Data Link, North Carolina’s first health information exchange, established in Asheville in 2006, allows authorized physicians and clinics to access medical records of patients at 17 western North Carolina hospitals and Department of Veterans Affairs facilities.

Wilmington-based Coastal Carolina Health Information Exchange serves five hospitals and many physician practices in 39 counties of southeastern North Carolina. And the N.C. Hospital Association has started a health information exchange with three hospitals and about a dozen physician practices.

“The big picture is that we’re transforming from this fee-for-service model where a hospital or doctor provides a service and gets paid a fee. The new model is the doctor in collaboration with hospitals and labs and everybody else in a particular trading area will agree to take care of their patient proactively, and is incentivized to keep the patient well,” Bell said.

“That means that more data needs to be shared. So everybody’s moving towards that model” of electronic health records and health information exchanges, he said.

“My estimate is that [North Carolina] hospitals and health systems will spend between $2 billion and $3 billion over about a five-year period of time … to implement new and upgraded health information systems. Hospitals and health systems are making phenomenal investments while all this flurry of activity surrounds them,” Bell said.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.