Healthcare stakeholders in a coastal California county are betting $30 million that they can save money and improve medical decisionmaking by cooperating on an Internet-based regional data network.
It's a move by the healthcare industry to take another crack at a communitywide information-sharing approach that appeared fatally flawed a half-decade ago.
This time, however, the effort starts with a more plausible foundation for success -- Internet technology -- and a heightened resolve to control costs in the face of an enduring industrywide revenue pinch.
A growing emphasis on cost control through better use of information has fostered the proliferation of data services offered through Internet "portals" (See related story, p. 24).
But the initiative in Santa Barbara County, scheduled for launch next month, is an alternative to portal companies and would preserve local control of network priorities and security matters, says David Brailer, M.D., chief executive officer of Care Management Science Corp., which is managing the project.
The project seeks to balance clinicians' needs for comprehensive patient data with the proprietary business interests of competing organizations and the critical preservation of patient confidentiality, says Sam Karp, chief information officer of California HealthCare Foundation.
The $800 million foundation, created in 1996 when Blue Cross of California was converted to for-profit WellPoint Health Networks, has contributed a $10 million grant to launch the three-year project.
Providers serving Santa Barbara County, including four hospitals, are expected to collectively commit a similar amount, says Brailer. But the contributions are "largely redirected funds that were being spent less productively," he says.
For example, a plan to computerize information exchange throughout the county's largest physician practice organization would cost $3 million to $4 million, says Paul Jaconette, vice president of Sansum Santa Barbara Medical Foundation Clinic. The organization has 180 practitioners at 19 locations, some separated by 60 to 70 miles.
"We were looking for a way to put all of our data online," Jaconette says. Sansum has a way to go -- doctors don't have computers yet, but the only data they'd be able to see anyway are lab results and transcriptions.
Favorable conditions. Meanwhile officers of Care Management, the commercial arm of the University of Pennsylvania's Wharton School of Business in Philadelphia, were "looking for essentially a laboratory to test their hypothesis that competing companies can come together in the area of information sharing," Jaconette says.
And other provider organizations in the county were kicking around ways to exchange data on patients who move from one health plan to another or who seek care outside of the system that keeps their records.
With the foundation weighing in, the conditions for a communitywide effort "serendipitously came together at the right time," Jaconette says.
Karp says the foundation was out to support a promising Internet model that made a good business case for providers in a community to embrace information technology. The World Wide Web is "a powerful tool that can meet business needs of healthcare delivery organizations," he says.
As an advocate for community interests, the California grantmaker also was interested in developing privacy protection. "This effort is an opportunity for the foundation and the community to test the ways information technology can ensure confidentiality of personal health information," Karp adds.
Care Management will put up several million dollars in hopes of making the model transferable to other communities, Brailer says. The Philadelphia-based company now markets a clinical performance-measurement system but plans to expand into new service areas using the Wharton school's research into healthcare business, he says.
Local organizations participating in the project, called the Santa Barbara County Care Data Exchange, are negotiating their individual shares of the $30 million estimated cost of initial program development and investment in infrastructure.
If the new effort takes wing, it would rise from the ashes of a financially and politically untenable model of organizing regional cooperatives that flamed out in the mid-1990s.
Those earlier organizing attempts, known as community health information networks, or CHINs, fixated on making the exchange of data technically feasible at a time when the Internet was not yet trustworthy and Web technology was in its infancy, Brailer says. In addition, all business decisions were likely to have been made unilaterally by a high-level authority.
CHINs built a prohibitively expensive technical platform while turning a blind eye to provider and payer fears that they would have insufficient latitude to make capital and operational decisions in their best interests, Brailer says.
But the collapse of CHINs did not quiet the clamor from provider customers who want to get all the information they need about the patient population they cover, he says. "We want to discover how to do this and what the drivers are," says Brailer.
Key objectives of such an undertaking, says Karp, would include:
* Reducing healthcare costs without compromising access to services.
* Building "safety of care" into healthcare operations by staving off adverse medical events and ensuring preventive care.
* Improving availability of healthcare information at the point of care, while facilitating the measurement of quality.
Those benefits are often mentioned among the rewards of investing in Internet technology. But, Karp says, "nobody has actually demonstrated that the Web can do these things."
Power shift. The Santa Barbara plan takes a federal approach: a separation of powers that recognizes the need for a central coordinating authority but leaves much of the execution to decentralized units throughout the county (See related story, p. 38).
A central policymaking body will attempt to gain consensus on business rules and technology standards among the hospitals, physician organizations, government payers, ancillary services and prominent employers in the county.
But most nitty-gritty decisions on the shape and detail of network implementation will be within the province of smaller organizational units composed of providers and community organizations with a history of working together.
Called "care data alliances," these building blocks of the communitywide network are free to plan their own tailored solution to information-exchange issues -- as long as they agree to use the same technical standards and business rules. That common framework will facilitate ease of selective data-sharing within and among care data alliances.
The care alliances also agree to choose from those vendors certified by an evaluation process that weeds out unqualified products.
Unlike the CHIN approach, which isolated one vendor's wares for all participants, the Santa Barbara project promotes a choice among many vendors whose products adhere to the certification guidelines.
To be certified, a vendor must demonstrate a commitment to industry standards and security practices. In addition, the product must be based on Internet technology, be proven to work as promised and have an open technical structure that can easily mesh with other vendors' products.
About 25 vendors have applied for certification, and the weeding-out process already has certified some and excluded others. Evaluations will be entered into a database as a confidential online reference for alliances to compare similar systems side by side without having to pay fees to consultants, Brailer says. Certification will have to be renewed annually.
Making it workable. An objective of the care data exchange is to investigate and showcase better ways to operate, Karp says. Healthcare is starved for workable models of efficient care that can adapt to changing industry conditions, he says. "Rapid prototyping is critical in a period like this."
The financial pressures of California-style capitation are butting against information deficiencies that make effective medical management difficult, Jaconette says.
Sansum is at risk for 85,000 prepaid commercial and Medicare health plan members, half of its total patient population. But although Santa Barbara conjures up a picture of wealth and resort life, the county has one of the nation's lowest Medicare HMO payment rates -- $440 per member per month, compared with more than $600 for Los Angeles County and $900 for Florida's Dade County, Jaconette says.
"The financial pressure is here. And the ability to put money into projects that will show a return two, three, four years down the road is hard to justify," he says.
MidCoast Medical Care is further along in adopting new technology but in similar straits financially. The Santa Maria, Calif.-based independent practice association has operated under capitation since it was founded 13 years ago and is hard-pressed to continue expanding computer services, says George Hiester, M.D., the IPA's medical director.
"At a time when we need the information systems about which we are talking, the money is not there in California," Hiester says.
MidCoast has managed to create a secure Internet site that verifies enrollee eligibility and processes 85% of the IPA's referrals online. The system enables physician office staffers to nail down the details and hand an authorized referral form to patients while they wait, Hiester says. The information network serves 29 primary-care physicians and 40 specialists.
Hiester would like to add lab and diagnostic radiology results as well as a database to analyze medical trends.
The countywide initiative would decrease development costs, give healthcare organizations more group purchasing power and accelerate the pace of Internet-network progress for all, he says. "The value of the product is worth the risk of developing the product for our organization."