Edward H. Shortliffe, MD, PhDChairman, Advisory Board

Health Record Banking Alliance (HRBA)www.healthbanking.org

Panel on Privacy - III

Defragmenting Individual’s Health Data:It’s Time for Health Record Banking

Medinfo2013, Copenhagen, Denmark

August 23, 2013

The Health Record Banking Alliance:Business Considerations

With thanks to William A. Yasnoff, MD, PhD – President, HRBA

Health Information Infrastructure (HII)

• Goal: “Comprehensive Electronic Patient Information When and Where Needed”• Individual (patient care)• Aggregate (public health, research)

• Reduce errors, improve care, decrease costs – for both individuals and the population

• Components• EHRs – all information electronic• Health Information Exchange (HIE) – mechanism

for finding, aggregating, and delivering comprehensive records for each person

Health Record Banking Alliance™

• HRBA:

• Non-profit organization comprising leading healthcare

information technology professionals and organizations

who are dedicated to promoting and supporting the

development of health record banks

• HRBA Goals

• Promote community repositories as an effective and

sustainable solution for electronic health information

• Provide assistance to communities building health record

banks

• Promote necessary legislation and regulation consistent

with community health record banks

Recent Viewpoint Article in JAMA

Disadvantages of the Distributed Modelfor Health Information Exchange

• Complex and expensive• Prone to error and insecurity• Increased liability• Not financially sustainable• Unable to protect privacy effectively• Unable to ensure stakeholder cooperation• Unable to facilitate robust data searching

JAMA, March 13, 2013 – Vol 309(10):989-990

Advancing Interoperability and Health Information Exchange

• CMS Request for Information

• Notice document issued by the Centers for

Medicare Medicaid Services (CMS) on March 7,

2013 (p. 5 of Federal Register)“ [Our current efforts] alone will not be enough to achieve the widespread interoperability and electronic exchange of information necessary for delivery reform where information will routinely follow the patient regardless of where they receive care.”

HRBs Overcome Key Challenges

• Making Information Electronic– Business model provides free EHRs for physicians

• Stakeholder Cooperation– Patients request data all stakeholders must provide them

(by law)

– HRB profit allocations to data partners

• Privacy– Patient control all individuals set their own privacy policy

• Financial Sustainability– New compelling value for patients ~ $20+/person/year

recurring revenue

HII Business Model Problem

• How Can HII be Sustained?• Why build if it cannot be sustained?• Critical early question for any IT system

• Persistent Unsolved Problem• Involves both cost and value

• Three Business Model Categories (not mutually exclusive)• Taxation• Leverage Health Care Savings• Leverage New Value Created

HII Business Model:Option 1 - Taxation

• Rationale: HII is public good, all should pay• Possible mechanisms

• Excise tax on health insurance claims (VT)• Excise tax on hospital charges (MD)

• Essentially “universalizes” HII component of healthcare

• Politically unpopular & difficult• Especially when amount is non-trivial• Early $50B/yr estimated cost for HIEs

$166/person/year [$55/mo for family of 4]

HII Business Model:Option 2 – Leverage Savings

• HII expected to reduce health care costs by 3-13% [8% is a good working estimate]• 8% x $2.6T = $208 billion/year

• Problems• Savings not proven• Allocation and timing of savings?• “Savings” = “Lost Revenue”

• Has consistently failed in communities• No responsible CFO will pay now for unproven

future savings

HII Business Model:Option 3 – Leverage New Value

• Rationale: Stakeholders should be willing to pay for new value created by HII

• Examples of new value• Replace paper delivery of lab results (75¢) with

electronic delivery [Indianapolis]• Reminders and alerts

– “Peace of Mind” – ER notification– Prevention Advisor– Medication refill reminders

• Research queries (require searching)• Advertising (to consumers)

HRB Implementation Strategy

PATIENT CONTROL

CENTRAL REPOSITORY

Stakeholder Cooperation

ensures

Electronic Patient Data

provides

Benefits1. Clinical: Quality, Costs2. Reminders/Alerts3. Research

produces

pay for

enables

Low Costs

results in

Privacy

protectsreinforce

Financial Incentives

allow

ensure

Key Design

Decisions

Estimated Startup Costs: $5-8 million

◄

Marketing:1. Free/subsidized EHRs for physicians2. Physicians recruit patients for free HRB accounts

How HRBs Create Value

Health Record Bank including free/subsidized EHRs for physicians

More complete electronic health record informationPatients choose optional

services with compelling value

Patients sign up for HRB (recommended by physicians)

Free benefits to physicians and patients

$

HRB Business Model

• Costs (with 1,000,000 subscribers)– Operations: $6/person/year

– EHR incentives: $10/person/year

• Revenue– Advertising: ~$3/person/year (option to opt out for small fee)

– Reminders & Alerts: >= $18/person/year• “Peace of mind” alerts

• Preventive care reminders

• Other reminders

– Queries: >$3/person/year

• No need to assume/capture any healthcare cost savings (!!)

Pro Forma Example (Houston)

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

($1,000)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

"Expenses ($K)"

"Revenue ($K)"

"Net ($K)"

Month

Initial Capital: $4.4 MMBreakeven: 16 monthsEBITDA Year 4: $41 MM+

Summary

• Goal of Health IT: Comprehensive electronic patient records when/where needed

• Current Efforts Not Working• EHR incentives not enough to ensure widespread

adoption• HIEs cannot succeed on current path

• Solution: Health Record Banks• Right architecture: central repository• Patients request and control records• Addresses EHR adoption, privacy, stakeholder

cooperation, and sustainability• Investment opportunity

Thank You!

Edward H. ShortliffeScholar in Residence, New York Academy of Medicine

Professor, Arizona State UniversityAdjunct Professor, Columbia and Cornell Universities

ted@shortliffe.net