Rhode Island moves toward statewide health information network

The state will pay part of the $20 million cost of building the electronic network, if others, including health plans, chip in.

By Tyler Chin — Posted July 17, 2006

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The Rhode Island General Assembly on June 24 approved a new state budget under which the state agreed to contribute $6 million to help finance the cost of building a regional health information organization, subject to certain conditions.

Under the terms of the measure, Rhode Island will kick in the money if other parties who stand to benefit from the electronic exchange of patient data also pony up. The state estimates the start-up cost for the network at $20 million.

The initial budget Republican Gov. Donald Carcieri submitted earlier this year to the Democrat-controlled Legislature called for the state to borrow the entire amount. However, as the budget made its way through chambers, the lawmakers felt that the state shouldn't have to pay for the whole cost because "there's lot of financial benefit accrued to insurers ... and others should pay their proportional share," said David Gifford, MD, MPH, director of the state's Dept. of Health.

Because studies have shown that insurers reap most of the benefit from physicians' using information technology, Rhode Island is looking primarily to insurers to pay their "fair share" not only of the cost of building the network but also of the $2 million to $4 million it estimates it will cost for annual operations, Dr. Gifford said. The state estimates its fair share of the network's start-up capital cost at 30%, which is how it came up with $6 million.

Health plans, particularly the two major commercial payers in Rhode Island -- Blue Cross & Blue Shield of Rhode Island and United HealthGroup -- have indicated willingness to discuss the issue, Dr. Gifford said, but have pointed out that physicians also are among those who stand to benefit from the network.

The state hasn't ruled out asking physicians and hospitals to help pay for the network, which Dr. Gifford said is at least a year away from launching. Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare did not respond to AMNews' request for comment.

The Rhode Island Medical Society had supported the original budget proposal and subsequent amendment, said Steve DeToy, director of government public affairs at the Rhode Island Medical Society. "We're not opposed to paying our fair share. I don't think anyone is," DeToy said. But, he added, "We wish [the revision] wasn't so heavily contingent upon so many things going on. But we're clearly pleased to have something in place because that keeps the ball moving."

Asking doctors to contribute "is going to be a major hurdle for physicians" but "if we can figure the proportionate benefit analysis and charge everyone accordingly, I think the physicians would be pretty agreeable to that," DeToy said.

The state is optimistic that talks with insurers and other players will be successful. "The governor believes that Rhode Island, in particular, has certain advantages in trying to jumpstart this project," said. Jeff Neal, the governor's press secretary. "There are only a million Rhode Islanders and so we have a natural advantage in as much as we can get all the players in the health care arena to the table to work on the development of this type of network."

Rhode Island is one of several states and localities that are approving or exploring building regional health information organizations, which, under the Bush administration's plan, would be linked together to build a national network.

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