Business
Kentucky legislators approve statewide health network
■ The bill authorizes the creation of a board to determine how the network will take shape -- and how it might be funded.
By Tyler Chin — Posted April 4, 2005
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Lawmakers in Kentucky have passed legislation authorizing the creation of a statewide health network that will enable physicians, hospitals, insurers and others to exchange patient information electronically.
The bill, which Gov. Ernie Fletcher, MD, signed into law on March 8, makes Kentucky one of the first states to approve legislation establishing a statewide health network. Other states, including Delaware, Florida and Rhode Island, are currently exploring developing statewide health networks.
The Kentucky Medical Assn. supported the legislation because it hopes a statewide network may help improve care and lower costs, a spokesman said.
The law authorizes the establishment of a board that will oversee the development of Kentucky's network, said Daniel Mongiardo, MD, an otolaryngologist and a state senator who has sponsored the legislation for the past four years.
The board will determine whether the proposed network will take the form of a private entity, public-private entity or a public-utility type of network, Dr. Mongiardo said.
The bill had 16 other sponsors, including Senate President David Williams, a Republican whose support was widely credited with getting the network legislation approved.
State lawmakers have not appropriated funding for the project itself, but might consider the funding issue as early as January 2006, when they start shaping the budget for fiscal years 2007 and 2008.
Kentucky has taken a good step forward but still must clear huge hurdles to realize its goal, some observers say.
"Obviously, with anything of this type of nature, scope and magnitude you're talking about tremendous issues with respect to formulating governance at the state level" said Michael Mytych, principal of Health Information Consulting, Menomonee Falls, Wis.
"And funding is always a big issue with all of these initiatives. These are not inexpensive endeavors by any stretch of imagination" Mytych said, noting that the cost of building a single network runs in the tens of millions of dollars.
Funding question
Another issue Kentucky officials will have to confront is coming up with a business model "to ensure the project is self-sustaining," he said.
Meanwhile, part of the board's charge will be to seek federal and private funding for the project.
The Bush administration expects to make $50 million available this year and has requested $75 million in the fiscal year 2006 proposed budget to help fund demonstration projects as part of its goal to implement a national health information network in 10 years.
Proponents of the Kentucky network are hoping that their network will become the "backbone" of the national network, meaning that it will serve as the national pilot site for the Bush administration and that emerging local and regional health information organizations will connect to its network.
There are more than 100 emerging regional health information organizations (RHIOs) in the country, according to the Health and Human Services Office of the National Coordinator for Health Information Technology. Some of those networks are already up and running, but they mostly are focused on individual cities or metropolitan regions.