Healthcare Data Interoperability

By: Victoria Cheng, Partner at PruVen Capital & Hannah McQuaid, Investor at PruVen Capital

Primer on Healthcare Data Interoperability

The concept of healthcare data interoperability is neither new nor novel. In fact, early attempts of addressing interoperability in healthcare date back to the early 2000s when President Bush formed the ONC (Office of the National Coordinator for Health Information Technology). One of the first undertakings of the ONC was to plan and architect a NHIN (National Health Information Network), which would serve as a mechanism to exchange EMRs (electronic medical records) between healthcare providers and HIEs (health information exchanges). A few failed attempts and defunct 3–5-letter organizations later, the ONC introduced the Standards and Interoperability (S&I) Framework, “a collaborative community of participants from the public and private sectors who are focused on providing the tools, services and guidance to facilitate the functional exchange of health information.” Prior to this, the HHS (Department of Health and Human Services) passed the HITECH (Health Information Technology for Economic and Clinical Health) Act with the goal of encouraging EHR adoption by financially incentivizing providers to make the switch from paper and electronically capture clinical data. This legislation paved way for new sets of rules, regulations and initiatives that would all collectively serve to create standards and promote the exchange of healthcare data.

The Opportunity

Healthcare data interoperability is the cornerstone of addressing whole person health and managing medical costs. Estimates suggest that the lack of healthcare data accessibility costs the nation >$210B annually in unnecessary procedures and treatment in addition to all of the detrimental health effects driven by delays in care. In addition to the more direct costs, ~40% of physicians spend more than half of their day on administrative tasks, leading to burnout and less time spent focusing on patient care. Improving data interoperability in healthcare will improve operational efficiency, achieve more superior care outcomes, decrease costs, and reduce administrative burden. In addition to the benefits named above, we see four macro trends making this issue more pressing and attractive to solve now more than ever before.

1. Drive towards value-based care — The concept of value-based care is to move from quantity of visits to quality of patient outcomes. The Centers for Medicare & Medicaid Services (CMS) introduced an array of value-based care models with the intention to improve patient care, increase population health, and decrease medical spending. As a leader in how insurance operates, CMS has prompted both commercial and private payers to adopt similar models. 2/5 of the U.S. healthcare payments are now being made through value-based care arrangements. Value-based care contracts require more coordination between and within entities with regards to patient health data and trends.[1]
2. Patient data ownership — Consumers and regulations are beginning to demand that patients have a right to access their own data and use it for their needed purposes. We have seen this shift to consumer data rights across multiple industries from advertising to financial services.
3. Proliferation of new digital health solutions — The digital and mobile revolution has given rise to new digital health solutions with targeted and specialized programs across MSK, mental health, pregnancy, etc. As a result of more fragmented solutions, there is a need for better architecture for health data and care coordination.
4. Desire for holistic healthcare by patients and providers — Consumers are wanting to engage in more holistic healthcare with coordination between providers that affect their healthcare including social services, alternative medicine, and other wellness services.

The Challenge

There are many nuances to achieving data interoperability in healthcare, exacerbating the complexity and daunting nature of the goal. This includes the way EHR systems communicate (within and between organizations), the way information gets processed and managed, the way information gets stored and the way patients engage with their own data. There are >700 EHR[2] vendors that specialize in different care settings, resulting in significant variation in the way data gets entered and stored. Within a single hospital, there is an average of 16 disparate EHR implementations. The fragmented nature of these disparate EHR systems make it difficult to share data within or between organizations in the absence of any standardization. Because of this, there are a variety of different ways in which digital health companies are working to solve interoperability.

The Approaches

Data Inbound: Step one is building the infrastructure to access the data. There are different approaches to accomplish this. Companies may use one method or a variety of the methods below:

• Direct Access to EMRs: The first method of access is through direct integrations to EHR vendors either through 1:1 custom integrations or through API access if the EHR vendor provides one. The benefit is having direct access to the EHR is having access to all the raw data. The considerations are that it is not an easy road as even the same EHR vendor implementation at different locations can act as entirely separate systems with their own customizations.
• Patient Portal & Screen Scraping: The next most common are portal integrations where digital health companies leverage the consumer’s right to access their medical records as a means to share data between the consumer and organizations such as providers, health payers and non-covered entities (i.e. life insurance, life sciences, wearables and law firms). These consumer-driven companies require the consumer to grant consent via their provider login credentials, allowing consumers to share health records with their entity of choice. One consideration is that screen scraping to access health data can be unreliable if the website or access point changes and requires frequent maintenance. It also requires consumers to remember each individual provider they have visited and thus, each individual provider’s login (if they even opened a digital account), which can lead to incomplete data.
• Federated HIE (Health Information Exchange)/ HIE Integration: HIEs are regional, government-sponsored organizations that work with providers, health systems and EHR vendors to serve as a single hub to exchange clinical information. Nationwide, there are ~90 active local and statewide HIEs (as of 2019). Because HIEs tend to be regional, data access can be limited and less longitudinal than say direct access or patient portal access.

Data Outbound: Step two is to make data consumable by the client which may be digital health providers, health systems, insurance carriers or health plans. Companies take different approaches to developing use cases that their data interoperability solutions are best suited towards. Particle, for example, focuses on how to make that data easily accessible by any developer in a single, developer-friendly API to use for any accepted use case. Others may focus on supporting health systems in creating their own APIs or enabling providers with new tools for care management.

Coverage Matters

When achieving interoperability, coverage is key. Digital health data companies that have comprehensive breadth and depth of clinical information will stand to benefit most from the regulatory and market tailwinds we’re seeing in this space. Despite the seemingly concentrated market share of EHRs such as Epic, Cerner, Athenahealth, Allscripts, CareCloud, eClinicalWorks and Meditech, etc., there are a long tail of vendors required to achieve comprehensive nationwide coverage. As we saw with Plaid, quality and reliability of data will get you in the door, but coverage is what enables you to stay and scale.

The Cambrian Explosion to Come & Why Now?

As a society, we’ve been slowly inching towards our grand vision of achieving an interoperable, nationwide healthcare system. A world in which our health data is accessible to us as patients and flows seamlessly and securely with our consent between our providers, insurers, and other partners is the north star. There’s undoubtedly a long road ahead, but the prospects of what an interoperable healthcare system will look like and the profound impacts it will have on the quality of care and outcomes are promising.

With new regulatory changes and growing consumer expectations on data ownership, we see the ecosystem opening up to net new innovative use cases that could not have been supported before.

From an infrastructure perspective, we believe companies like Particle Health will be instrumental in making this happen, and we are thrilled to be supporting the team in its journey ahead of becoming the data infrastructure for interoperability in healthcare.

As an early investor in Plaid (in a prior life), we saw the power of enabling data interoperability and serving that data through exceptional APIs and documentation focused on the developer community. Not only did the customer experience for existing use cases improve, but the connectivity unlocked the ability for entirely net new opportunities in financial planning, expense management, banking, lending, payments, risk management, wealth management and more in what we now know as FinTech. We believe Plaid was one of the critical components in enabling the Cambrian Explosion in financial services and expect a similar opportunity to come about through superior access to reliable, cleansed, aggregated and comprehensive health data. At PruVen, we look forward to investing in the new startups and use cases that emerge in this ecosystem.

In our next piece, we’ll share our broader data exchange investment framework and highlight the broader universe of health and insurance data infrastructure companies, which include companies aggregating and democratizing access to health plan data, ancillary plan data, wearables data, claims data, SDoH data, healthcare provider data, billing data, Rx data and pharma data.

Sources

1. https://hitconsultant.net/2013/04/11/history-of-healthcare-interoperability/

2. https://veradigm.com/veradigm-news/evolution-healthcare-interoperability-for-payers/