Electronic health network runs out of money, ceases operation

A group that developed technology for health information organizations echoes the problems other networks are facing.

By Pamela Lewis Dolan — Posted Nov. 19, 2007

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The Patient Safety Institute once said it had found the answer to a self-funded, national health information exchange. But a lack of funds has forced the organization to fold before it could launch the project.

The Plano, Texas-based organization recently shut its doors when it fell short of the estimated $10 million it needed to demonstrate the feasibility of a national data exchange, based on the banking model developed by Visa.

Johnny Walker, former CEO and founder of PSI, said that had the organization been allowed the opportunity to demonstrate the cost savings its model would produce, insurers would have been willing to support it. But few were willing to invest the money needed to get the model up and running so that those savings could be proven.

Though PSI did not operate regional health information networks -- instead providing the technology and infrastructure for them -- it ran into the same problem some regional health information organizations have faced: a lack of investment beyond temporary grants.

PSI had large technology partners such as Hewlett-Packard and First Consulting Group, and its board included such prominent names as former AMA president Richard Corlin, MD. But its model gained little traction outside a system in Seattle that linked two large hospital networks together.

The original Seattle network ran smoothly for five years, Walker said, but the two hospital systems merged, eliminating the need for a data exchange. Plans were in the works to expand the Seattle network to include more data suppliers, then ultimately launch a nationwide system using the same platform.

Walker said the Visa model, which places the patient in control over who gains access, doesn't require an expensive technology investment. All a physician would need to obtain data is Internet access and the patient's permission and access codes, he said.

Different from most RHIO models, PSI's Visa model isn't a data repository, but rather a system for accessing relevant data from other sources.

PSI's model is not the only one of its kind. "The Health Record Banking imperative: A conceptual model," a recently published paper in the IBM Systems Journal, lays the groundwork for a national health record bank. In contrast to the PSI model, the HRB model relies on a central repository (a "bank" that would house patient "accounts") and several sources of funding, including patient subscription fees.

Like PSI's model, patients would control how the information is exchanged and could receive dividends for the use of their de-identified data.

Jonathan Gold, MD, a pediatrician and medical informatics specialist who was one of the authors of the paper, said both versions of the banking model work technically. The problem has been, and continues to be, finding the right business plan and initial investors to launch it. Dr. Gold believes it will take one large bank to implement the idea, then others will follow.

Nancy Szemraj, spokeswoman for the Office of the National Coordinator for Health Information Technology, said the government acknowledges a national system will include aspects based on the banking industry.

But a nationwide health information exchange will be much more difficult to standardize than banking because of the enormous number of health care data fields.

"It seems logical that a national exchange will start on the local level," she said.

But funding problems haven't only affected data exchanges built on banking models. Several high-profile RHIOs also have folded. Szemraj said that's because too many are focused on development and not sustainability.

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