Regional health information organizations: lower health care costs, fewer iatrogenic illnesses, and improved care - what are we waiting for?

Author:Ferneding, Angela
  1. INTRODUCTION II. OVERVIEW III. BENEFITS OF RHIOs A. Decreased Health Care Spending B. Improved Safety C. Improved Quality of Care IV. CHALLENGES A. Data Accuracy B. Legal Challenges 1. Stark and Anti-Kickback Statutes a. Stark Laws b. Anti-Kickback Statute c. Summary of Stark and Anti-Kickback Statutes 2. Privacy a. Privacy Concerns b. Improved Security and Control c. Current Federal Legislation d. Proposed Federal Legislation e. Summary of Privacy 3. Personal Jurisdiction 4. Summary of Legal Challenges V. NECESSARY GOVERNMENTAL ACTION A. The Disconnect B. Financing Network Infrastructure C. Legislative Funding D. Pay-For-Performance VI. CONCLUSION I. INTRODUCTION

    Dorothy Kramer is seventy-eight years old and lives alone. (1) One afternoon, neighbors found Dorothy slumped and unconscious in her porch rocker. Rescue workers arrived within minutes and rushed the elderly woman to the nearest hospital. Luckily, when Dorothy arrived at the emergency room, a nurse was able to immediately access her complete medical record from the state's recently implemented Regional Health Information Organization (RHIO). With access to her medical history, the treating physician was able to see that, with the exception of diabetes, Dorothy was extremely healthy for her age. The physician quickly tested Dorothy's blood glucose levels and determined she was hypoglycemic, the likely cause of her unconsciousness. Within minutes, Dorothy had a glucagon injection and was conscious and alert. Just a few months prior, without access to her medical history via the RHIO, Dorothy would have endured numerous and costly tests to determine the cause of her condition. She may have waited hours for the correct diagnosis, and the delay in treatment may have caused complications and permanent, irreversible brain damage. (2)

    Americans spend more on health care than any other industrialized nation, and our costs are rising at astonishing rates. (3) Yet the United States is antiquated in its use of information technology, (4) and consumers are often put at risk when receiving care. (5) In an effort to address these issues, President George W. Bush ("President Bush") envisions a National Health Information Network (NHIN). (6) RHIOs form the foundation of the NHIN. (7) By facilitating the electronic exchange of health records among providers, this technology will help to lower health care costs and to improve care. (8)

    Developing a RHIO takes significant effort, and its success is dependent on the cooperation and dedication of numerous stakeholders. (9) In the process, communities must identify and address regulatory, privacy, and jurisdictional issues associated with the formation and administration of RHIOs. (10) Although these issues are significant, they are resolved through current or proposed legislation and existing case law.

    The more significant challenge for communities is financing. RHIOs are dependent on the use of information technology. Unfortunately, many communities do not have adequate financial resources to establish a regional network. (11) And health care providers are slow to implement electronic medical record systems because the cost is high (12) and their personal return on investment is uncertain. (13) To address these issues, the national government must become more involved. It must provide grants, subsidies, and other incentives that encourage health care providers to implement electronic medical records and to facilitate the development of RHIOs.

    Part II of this article will provide a brief overview of the challenges our health care system is facing, the status of RHIO development, and current governmental action. Part III will discuss the numerous benefits that RHIOs can provide to individuals, health care providers, and the community as a whole. Part IV will then review the challenges associated with the formation and administration of RHIOs and discuss how these challenges can be eliminated or minimized. Part V will advocate for additional governmental action--action that will encourage the adoption of electronic medical record systems and further development of RHIOs. And Part VI will conclude that Congress must encourage the adoption of information technology and the formation of RHIOs by committing significant financial resources, mandating participation in Medicare's and Medicaid's pay-for-performance programs, and encouraging similar private programs.


    Although annual increases for the privately insured peaked in 2001, studies show that health care spending continues to rise at a significant pace. (14) In fact, health insurance costs have increased fifty-four percent over the past five years. (15) In addition to Americans paying higher insurance premiums, many are paying more out-of-pocket through higher deductibles, co-payments, and coinsurance. (16) To make matters worse, increases in health care costs have outpaced the economy (17) and personal incomes. (18) As a result, in 2005, 15.9 percent or 46.6 million Americans were uninsured. (19)

    Although the United States spends about two-and-a-half times more than the average industrialized nation on health care, it is ranked low in overall performance (20) and is at least a dozen years behind other industrialized nations in its use of information technology that can help to contain these costs. (21) Most health care records in the United States are paper; (22) whereas, other countries have implemented electronic medical records and use information technology to reduce overall health care spending and improve care. (23)

    In recent years, President Bush presented his vision for the use of information technology in health care and set the goal of implementing electronic medical records for most Americans by the year 2014. (24) President Bush has estimated that the use of this technology will reduce overall health care costs by twenty percent. (25) Some research suggests that the United States will achieve savings of between $81 and $162 billion annually. (26) For Americans to experience the greatest advantages, electronic medical records must be shared among health care providers. (27) Connectivity is necessary to decrease health care spending and to improve safety and quality of care. (28)

    In April 2004, President Bush issued an executive order establishing the position of the National Health Information Technology Coordinator and providing incentives for the use of health care technology. (29) President Bush envisions a NHIN that facilitates the electronic exchange of health care records and, in doing so, reduces costs and improves safety. (30) The national network will rely on electronic medical records being shared via RHIOs. (31)

    Although the Health Technology Center estimates that there are more than four hundred RHIOs currently in existence, (32) there are differing opinions as to how many are functional and self-sustaining. (33) A recent survey by the eHealth Initiative, an independent advocate that works to improve the quality, safety, and efficiency of health care through the use of information technology, found that twenty-six RHIOs are fully functional, (34) while Forrester Research, an independent market research firm, reports that only seven RHIOs are fully operational. (35) Another analysis is even less optimistic, listing only two RHIOs as self-sustaining. (36) Some RHIOs are able to succeed without grants; however, many struggle financially (37) and some continue to depend on public funding. (38)

    In February 2006, the U.S. Office of the National Coordinator for Health Information Technology initiated a project that is charged with the task of identifying best practices for state-level RHIOs. (39) Nine RHIOs will participate. (40) The project is intended to identify "best practices in the areas of governance, structure, financing, operations, and health information exchange policies." (41) This project is still underway. (42)

    For almost a decade, health care costs have risen at alarming rates, leaving many Americans uninsured. (43) To address these issues, President Bush envisions a NHIN utilizing information technology to reduce spending and improve safety and quality of care. (44) The NHIN relies on electronic medical records being shared via RHIOs, many of which are in existence but few are fully operational and self-sustaining. (45) To assist communities in their RHIO efforts, the United States Office of the National Coordinator for Health Information Technology is working to identify best practices for utilizing this technology. (46)


    RHIOs provide numerous benefits to individuals, health care providers, and the community as a whole. The most significant benefits are decreased health care spending, improved safety, and improved quality of care.

    1. Decreased Health Care Spending

      Health care costs have risen significantly over the past five years, (47) outpacing the economy (48) and personal incomes. (49) Some research suggests that, through the use of information technology, the United States will achieve savings of between $81 and $162 billion annually. (50) In Utah, where the state-wide RHIO encompasses one hundred percent of hospitals and more than ninety percent of other health care providers, (51) health care costs are twenty-four percent less than the U.S. average. (52)

      First, information technology greatly reduces administrative expenses, which account for twenty-five to thirty percent of all health care costs. (53) When a provider relies on a paper record system, administrative staff must transcribe physician notes, pull charts, file paper records, and process laboratory orders and results. These administrative tasks are greatly reduced or eliminated by the use of electronic medical records and interconnectivity between providers. (54) A chart is only a few keystrokes away, physician notes are entered as they are written, and laboratory orders and results are automatically routed and stored.


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