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Chicago medical records exchange falters

A three-year effort to rein in soaring medical costs by persuading rival Chicago hospitals to share patient records is on the verge of collapse amid questions about how to pay for the innovative endeavor.

Most major healthcare systems, such as Advocate Health Care Network, Rush University Medical Center and University of Chicago Medicine, have balked at the proposed collaboration, which proponents hoped would become the largest regional health information exchange in the country. The nonprofit group of local hospitals that has led the push says it has agreements with just 18 of the 30 healthcare providers targeted to launch the electronic exchange.

The lack of participation isn't because anyone seems to doubt the benefits of creating the exchange. A medical records network would allow emergency room doctors to call up a patient's complete medical history, saving precious minutes, advocates say. It also would cut costs by avoiding duplicate tests when patients change doctors or hospitals. Public health researchers would obtain data to detect the spread of diseases quickly, potentially saving thousands of lives.Money is a sticking point, with some hospitals asked to pay six-figure annual fees to participate in the exchange. Big medical centers already have invested heavily in their own IT systems. They question the wisdom of plunking down more money on an electronic platform of uncertain value to them.

“No one really has a strong incentive to buy in and spend more than they're getting back without some long-term demonstrated value,” says Allan Friedman, research director at the Center for Technology Innovation at the Washington-based Brookings Institution, who has studied exchanges.

Federal law does not require participation in an exchange, but government grants are available to finance startup costs. Finding revenue to pay for operations has been one of the biggest challenges. While data exchanges are generally growing nationwide, 10 closed last year out of several hundred, and only 29 percent say they will be self-sufficient by 2015, according to eHealth Initiative, a Washington-based nonprofit.

The Metropolitan Chicago Healthcare Council, a nonprofit group of about 150 hospitals and healthcare providers, began organizing the Chicago-area exchange in 2009.

Despite initial interest, just 18 hospitals and physicians groups have agreed to join, says Dan Yunker, senior vice president of MCHC, which had planned to roll out the exchange a year ago. The start has been pushed back until mid-2013, he says.

He blames the delay in part on technology issues and expresses confidence that the project will launch. “It's not an option for it not to happen,” he says.

Mr. Yunker declines to comment on exchange fees or identify the participants.

Crain's has confirmed the group includes Sinai Health System, Swedish Covenant Hospital and Norwegian American Hospital. Alexian Brothers Health System and Silver Cross Hospital & Medical Centers also have agreed to join.

Large hospital networks that have not joined include Presence Health, University of Illinois Hospital and Health Sciences System, Rush and U of C, representatives confirm.

MCHC has started discussions with health insurers about helping pay for the exchange but hasn't quoted fees, Mr. Yunker says.

Some supporters of the MCHC plan grumble about a lack of support from the Quinn administration, which last year launched a state-run exchange that is less elaborate than the MCHC proposal.

Raul Recarey, executive director of the Illinois Health Information Exchange Authority, says the administration does back the MCHC plan but adds, “We don't really feel pushing hospitals to go beyond what they've got planned—or what their resources are—is a smart move.”

The price is too high for Loyola University Health System, says Arthur Krumrey, chief information officer at the Maywood-based hospital network.

Loyola, Evanston-based North-Shore University HealthSystem and Ann & Robert H. Lurie Children's Hospital of Chicago, which already use the same software system for their internal medical records, are discussing setting up their own exchange.

Advocate has not joined, but executives are “working on it,” says John Norenberg, a vice president at the Oak Brook-based system, with 11 hospitals statewide.

Mr. Norenberg, who is also chairman of MCHC's exchange advisory board, adds: “It's turned out to be a bit more difficult to get the players moving on this than I think anybody expected.”
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