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How were HealthShare Exchange’s costs and benefits estimated and quantified? What is the expected return on investment?

Value: Health care stakeholders, including hospital and insurance leaders involved in the development of the Southeastern Pennsylvania Health Information Organization (SEPA HIO) Business Plan assessed and quantified the value of the discharge and medication summary use cases in terms of their potential to:

  • reduce redundant care;
  • enhance the clinical information available at point of care;
  • prevent adverse health care events;
  • decrease administrative burdens. 

Costs: HealthShare Exchange costs were estimated based on the technology and staff required to start up and operate a regional HIO and HIE for Southeastern Pennsylvania and were validated via cost proposals received during our vendor selection initiative. 

Return on Investment: HealthShare Exchange has performed extensive financial modeling of the cost savings associated with its initial clinical uses cases and anticipates the cumulative value of health information exchange to significantly exceed the cost of start-up and operations over a four-year time horizon via better quality outcomes, reduced patient readmissions, reduction of adverse drug events, etc.

HealthShare Exchange will enlist an independent entity, Health Care Improvement Foundation (HCIF), to provide independent grant evaluation and monitoring services that will include monitoring HealthShare Exchange performance against project benchmarks, and developing and implementing metrics to measure the efficacy of the implemented HealthShare Exchange clinical use cases.

What level of hospital and insurer participation is projected? What critical mass of participation is needed?

The calculation of the value of the use cases was based on a phased-in physician adoption rate: 20 percent of the region’s physicians in year one; an additional 40 percent in year two; 20 percent more in year three; and 20 percent more in year four.

The ‘critical mass’ of hospital and health system participation is defined as follows: In order for HealthShare Exchange to be effective and viable, the participating hospitals and health systems must account for at least 80 percent of the region’s patient encounters. This metric was established by the DVHC Board of Directors as part of the determination to support HealthShare Exchange’s application for a state Community Shared Services grant. At this early stage, this requirement has been met; letters of commitment have been received from hospitals and health systems, accounting for close to 90 percent of patient encounters in the region.

How will HealthShare Exchange be funded?

HealthShare Exchange’s financial sustainability model is an annual subscription model based on a fair share approach, with contributions from both the insurer and hospital communities.  In December 2012, HealthShare Exchange received a $1.5M grant from the Commonwealth of Pennsylvania to support plans and some costs for start-up and implementation. See Community Share Service grants for more information.

Will all health care stakeholders who use the HIE be required to help fund HealthShare Exchange?

Initial contributions for HealthShare Exchange are being secured from acute care hospitals in Southeastern Pennsylvania and insurance companies that have enrollment in the region. Physicians and primary care providers will be encouraged to participate in HealthShare Exchange but will not be expected to provide a financial contribution during the initial phase. As HealthShare Exchange expands participation to include non-acute care facilities, those entities would be included in the financial sustainability model and would be expected to contribute to HealthShare Exchange. Likewise, as payer participation expands, those companies would be required to contribute to HealthShare Exchange.