Wednesday, November 27, 2013

Health Information Exchanges for Startups: Leapfrogging the glacial pace of interoperability among providers

There is an emerging transition from fee-for-service to capitated and episode based reimbursement models. With the fastest growing cost driver in healthcare being post-acute care, there is a lot of attention being paid to how to mitigate the increasing spending. One approach to curb the growing cost of post-acute care is to improve interoperability among provider organizations.

A large financial driver to support interoperability is the need for hospitals to meet the requirement for meaningful use (MU). Among those requirements is the need for hospitals to communicate with post-acute providers.

The main mechanism for interoperability between the myriad provider organizations is the health information exchange (HIE). HIEs allow for providers to communicate by creating a common roadway for data to travel. There are emerging national standards for the layout of those roadways, their on-ramps and off-ramps, the types of vehicles that drive on them, and the type of cargo those vehicles can carry.

The focus of these evolving standards, appropriately, is on the provider organizations. Yet there remains much difficulty for providers to communicate with each other. And it is especially difficult for startups to break into that dialogue. Without access to communicate health information with providers, it is challenging for startups to test their interventions for value.

Adding to the difficulty of accessing providers and payers is the frothiness of the digital health startup community. Many fledgling entrepreneurs spend too little time performing the necessary review of analogs and antilogs to explore whether there are others trying to solve the same problem in the same way.

Even when there is some differentiating factor between startups, the incremental difference between startups is drowned out by too little attention span and too high expectations for performance by payers. For example, many startups in the post-acute care sound something like: “care coordination platform to drive down admissions.” Startups need a way for payers to better hear the type of care coordination platform, by whom it is used, and how they drive down admissions.

What if instead of aiming to be interoperable with providers, startups focused on being interoperable with each other? Since HIEs have already created standards for the way data is transmitted and in what form, startups can leap frog the EMR community and revolutionize the use and value derived from HIE and interoperability standards.

Interoperability among startups would create a widget ecosystem where each startup had a small but unique value proposition that was built on a common, best-practice care coordination scaffold. The standardized data architecture would make it much easier for provider and payer organizations to tap into the fabric of collaborating startups. The value of that fabric would grow with each new startup that wove in its data. And the new insights derived from the transformation of multiple strings of data into one robust quilt would reinforce the unique value of each startup contributing to the startup HIE.

The process for creating a startup HIE would include utilizing standards for the way data is input and output. There would need to be agreement on the mechanism of transmitting the data, whether it was through a local HIE or directly between startups. The value of the synergistic relationship would then have to be tested and conveyed to the customer in the form of offering more robust data and analytics or helping to better meet some sort of reporting requirements. Finally, the collaborating startups should establish and share best practices with their community of collaborators in order to eliminate waste in the network and increase the network value for all participants.

The interoperability between startups would allow each one to focus on differentiating themselves by focusing on addressing direct customer needs and reinforcing their verticals through focused product development rather than struggling on common horizontal problems like finding out how to communicate with their customers.

Perhaps there is a role for startup Incubators to be the leaders, facilitators and moderators of these types of collaborations. What if there was a digital health startup incubator HIE?! The incubator that hosted a startup HIE would draw pre-qualified startup applicants, attract investors seeking curated investments, and provider organizations seeking connected startups.

One limitation of this approach is the perceived risk of sharing data with competitors. This risk can be mitigated by a strong incubator community that sets strict ethical rules and the option for startups to be able to remove themselves from the Startup HIE.

I look forward to seeing if startups that collaborate have a higher likelihood of delivering better value to their customers and if they experience more growth then non-collaborating companies.

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