Big employers' initiative on personal health records stumbles

Dossia is in a dispute with its vendor over why the project has not yielded a PHR.

By Pamela Lewis Dolan — Posted Aug. 13, 2007

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A large employer-based personal health records initiative that once promised to push doctors into accepting the technology is now struggling to push itself out of the gate.

Dossia, a consortium that includes Wal-Mart, Intel Corp., Applied Materials, BP America, Cardinal Health and Pitney Bowes, has been working since last year on a major PHR project for its combined 2.5 million-strong work force.

But as internal disputes with its vendor, Portland, Ore.-based Omnimedix Institute, led to a restraining order against Omnimedix, the future of the project became unclear.

PHR advocates said other employers shouldn't be discouraged, as employer-based PHRs are still a worthy and realistic goal. And a spokeswoman for Dossia says the project still will move forward, despite the roadblocks and possible litigation.

Omnimedix was the target of a preemptive restraining order filed by Dossia in late June after Omnimedix reportedly threatened to file suit against Dossia for missed payments. The group asked a judge to approve an order requiring any suits filed by Omnimedix against Dossia to be sealed and preventing the vendor from speaking publicly about its business arrangements with the consortium. An Oregon circuit court judge approved the restraining order in July. As of press time in late July, no suits had been filed by Omnimedix.

Neither party would discuss with American Medical News the source of the dispute. But according to InformationWeek, which first posted news of the Dossia-Omnimedix falling out on its Web site July 11, money was at the center of it. The technology-oriented publication reported that Omnimedix believed it wasn't getting paid enough for the work it had done, while Dossia believed Omnimedix wasn't doing enough and had demanded it refund payments the consortium had made.

One particular point of contention has been whether Dossia needed a full 10 members to fund the project. Omnimedix says it did, and it has launched a Web site (link) with links to public documents that the institute says shows Dossia believed that, as well.

One such link is to the Web site of the National Committee on Vital and Health Statistics, a part of the Dept. of Health and Human Services. The link (link) is a transcript of testimony from Wal-Mart Vice President Carolyn Walton, in which she is quoted as saying, "the business model for Dossia begins with the founders' initial contribution of $1.5 million apiece. The goal is to have 10 founding companies."

But Shannon Love, spokeswoman for both Intel and Dossia, said that while 10 members was a goal, Dossia never said it needed 10 members to move forward. She said Dossia has six members, with two more that haven't yet announced their involvement.

Love would not comment on Dossia's court action or whether the company was going to drop Omnimedix as a vendor. But she said the project is still on schedule to be released to some employees of member companies by the end of 2007.

Divergent views on price tag

David Edman, partner with Risk Management Partners LLC, a Wayne, Pa.-based benefits consultancy, said he was surprised that the project was costing so much money and thinks the problems could stem from the companies trying to "reinvent the wheel to some extent."

Edman said when his clients explore the development of a PHR, he suggests to them two nonprofit organizations that develop a basic PHR for free, or a more sophisticated system for fees far less than that charged by for-profit vendors. He suspects the Dossia project could be developed by one of these organizations for a lot less than $15 million.

But Charley Smith, a consultant with the New York offices of Towers Perrin, a management consulting firm, wasn't surprised at the $15 million price tag. Smith said a valuable, worthwhile system will be expensive to create.

He sees the current trouble as a business-to-business problem and not indicative of potential problems for future employer-based PHRs, which he considers the only viable model. Large employers, he said, have the money and force to move patients and doctors into embracing PHRs.

The American Medical Association and other medical societies support the use of PHRs but not a mandate that physicians use them. Medem, a company owned by the Association and other medical societies, offers a PHR in conjunction with the nonprofit iHealth Alliance.

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