News Feature | February 3, 2014

The Future Of Public Health Insurance Exchanges

Source: Health IT Outcomes
Christine Kern

By Christine Kern, contributing writer

HTO Survey

Black Book anticipates as few as 10 existing public Health Insurance Exchanges will survive to see 2017

In a study published by Black Book, nearly three-quarters (72 percent) of respondents anticipate that “as few as 10 of the currently functioning public exchanges” will still be operating by 2017 without making significant changes to their processes, revenue streams, and general business models.

Further, 97 percent of health insurers indicated that public HIEs are “struggling to exchange trusted patient data sets” which is why 94 percent “do not see the value proposition in public HIEs.” And more than 80 percent “of the nation’s 220 operating public HIEs are stalling as federal grants supporting half of the state and regional HIEs are dried up.”

Government Health IT quoted Doug Brown, managing partner of Black Book, as writing “Payers are looking for ROI that the majority of public HIEs aren't even close to delivering. So it was inevitable the private HIE market got so hot.”

According to FierceHealthIT, approximately $546 million in HITECH funds supported roughly 60 percent of the nation’s 220 operational HIE. With no additional governmental support, HIEs are forced to assess high fees while developing other revenue streams. However, health insurers participate in fewer than 31 percent of public HIEs, and 86 percent of payer respondents refuse to pay the public exchanges' annual fees.

Additional findings from the Black Book survey include:

  • 33 percent of multi-provider networks and hospital systems are considering private HIEs for more standardized sharing of patient data.
  • 82 percent of all payers and providers agree that an operational national public HIE is at least a decade off.
  • 98 percent of healthcare organizations believe that private, community/regional HIEs are the preferred choice to comprehensively achieve accountable care organization deliverables.
  • Although HIE use has increased 69 percent from 2012 to 2013, there’s still a need for financial drivers and regulatory demands to increase interoperability between payers and providers, according to 91 percent of survey participants.
  • 99 percent of providers agree that payers need to reward providers for HIE utilization that leads to tangible reduction in readmissions, elimination of duplicate diagnostic testing and decreasing episodes of care.

Thus, "Private exchanges will continue to outpace public HIEs as organizations are exploring how they will effectively aggregate data to support their ACO efforts,” according to Brown. "Eventually, given meaningful use, the industry can expect to see connections between private and public exchanges emerging for the purpose of sharing public health data and to support the portability of medical records. But there is an obvious challenge of whether public, regional and state exchanges will still be around to connect to when that happens, or if these private exchanges and EHR vendors will instead connect stakeholders directly to a national exchange.”

Black Book Rankings, a division of Black Book Market Research LLC, provides healthcare decision makers, IT users, media, investors, analysts, quality minded vendors, and prospective software system buyers, pharmaceutical manufacturers, and other interested sectors of the clinical technology industry with comprehensive comparison data of the industry's top respected and competitively performing technology and managed services vendors in the sector.