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‘Defining Moment’ for Health Information Exchange in California

California achieved two major milestones last week on its march toward a digital future in health care.

On Monday, state officials unveiled a new private organization to fit the state’s needs to manage California’s health information exchange.

On Thursday, that new organization — Cal eConnect — had something of a coming-out party with stakeholders from all over the state and from all parts of the health care industry convening to discuss strategic and operational plans.

“This is a defining moment for California in many ways,” said Jonah Frohlich, deputy secretary for health information technology at California’s Health and Human Services Agency and principal architect of the new not-for-profit.

Cal eConnect will oversee the state’s participation in the federal government’s campaign to move the country’s health care system from a paper-based industry to one reliant on electronic health records.

Cal eConnect, starting with a $38.8 million grant from CHHS, is charged with developing a statewide system for hospitals, clinics, physicians and other health care providers to communicate with each other in a secure, private, electronic way. 

By helping California health care providers meet data exchange criteria to qualify for incentive payments from last year’s federal economic stimulus package, Cal eConnect hopes to channel as much as $3 billion — the biggest state allotment of federal stimulus for health IT — over the next decade.

Cal eConnect Leaders Looking Forward

The 10-month process leading up to last week’s milestones involved disagreements, discord and defections. Although there still isn’t unanimity on how to proceed in some areas, the two co-chairs of the fledgling Cal eConnect are looking forward, not backward.

“In a year’s time we’ve come miles and miles to a landscape that has a huge amount of blank space still, but the fact that we have a framework that about 82% of us are fine with is amazing,” said David Lansky, CEO of the Pacific Business Group on Health and co-chair of the new organization.

“The accomplishment is huge,” Lansky said, adding, “Our job now is translating this framework to the next level of specificity.”

Don Crane, CEO of the California Association of Physician Groups and Cal eConnect’s other co-chair, agreed.

“The politics are totally in the past,” Crane said, adding, “We’re moving forward now.”

Cal eConnect is the offspring of a sort of forced mating of two other organizations, one of which died in the process.

Last year, the state received seven responses to its invitation for proposals from organizations interested in managing the state’s health information exchange. Two rose to the top — the California eHealth Collaborative and the California Regional Health Information Organization. Frohlich asked the two to collaborate on a joint proposal.

Although Crane is a member of the CalRHIO board of directors and is representing that organization at least at the birth of the new entity, CalRHIO’s business was effectively dissolved after failing to win designation four months ago. Leaders and employees left, and the business essentially ceased to function.

Formed five years ago in what could be argued was California’s first step on this digital journey, CalRHIO was one of the country’s first organizations trying to define and design electronic health information exchange.

CAeHC (pronounced “cake”), formed about a year ago, continues to function.

Work Groups Report, Carry On

During the several-month process of designing Cal eConnect, five work groups helped CHHS devise a framework for the state’s health information exchange. The work groups, tasked with addressing issues such as patient engagement and finance, met again last week and reported on progress at the operational summit.

In addition to the specific issues dealt with in work groups, the summit addressed other questions ranging from what to call the people whose information is to be exchanged — patients or customers or something else? — to the scope of the organization’s mission.

Brennan Cassidy, president of the California Medical Association and a member of the initial Cal eConnect board, urged the new organization to maintain a tight focus on its mission — at least at the beginning. 

“I would caution that we try not to be too many things to too many people. We should focus on HIE between providers — at least at first,” Cassidy said, adding, “There are a lot of directions this can go in the future, but that should be our preliminary focus.”

Hope Is To Make Cal eConnect Self-Sustaining

One of the thorniest issues facing Cal eConnect is long-term fiscal viability. Although it’s getting a significant jumpstart with federal funding, that money will go quickly and won’t be easily replaced. The organization hopes to be self-sustaining, but the questions of how and when to raise money will be critical.

“There’s a bit of tension between all the goals and priorities we’d like to set and the amount of funding available,” said Scott Cebula, a member of the technical architecture work group. He added, “We’d like to do everything at once, but that isn’t going to happen.”

Three main options have been identified:

  • Savings gain-sharing or cashing in on the savings the system realizes from information exchange;
  • Access charges or subscription fees; and
  • Taxes, either statewide or local/regional taxes to support health data exchange.

Many involved in Cal eConnect want to steer clear of even saying the “T” word, let alone suggesting new taxes.

“Given the very precarious nature of our own state budget, we should not be counting on our state to fund health information exchange,” Frohlich said, adding, “But we do have to figure out how to make this sustainable.”

Next Orders of Business

One of Cal eConnect’s first orders of business will be to seat a full board of 22 directors representing state government, private hospitals, public hospitals, medical groups, independent physicians, employers, private health plans, public health plans, consumers, health information exchange organizations, labor organizations, community clinics and informatics.   

The board then will begin to tackle dozens of specific issues, including:

  • How much and when to use national systems and criteria such as the Nationwide Health Information Network;
  • Evaluating the pros and cons of contracting with a single vendor vs. multiple vendors for data exchange services; and
  • How and when to include patients/consumers in the process.

State officials hope to have the full board in place within 60 to 90 days.

“We have started down the path toward transformation, but we have a long way to go,” Frohlich said.

“We’re all under intense pressure to create the kind of infrastructure that we all believe will improve health care and that’s what it’s all about,” he said, adding, “At the end of the day, we need to ensure that what we do will improve the quality of care for patients in California.”

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