Researchers say HIEs could save Medicare billions each year

Widespread use of HIEs could save Medicare more than $3 billion each year.

An analysis of Medicare spending shows notable savings in areas of the country that have an operational health information exchange (HIE). Expanded nationally, HIEs have the potential to save Medicare more than $3 billion each year.

That’s according to researchers at the University of Notre Dame and the University of California San Francisco who compared Medicare spending over a seven-year period in areas of the country with and without an operational HIE. They found that areas of the country with a HIE led to $139 in savings per beneficiary per year.

Using 2015 Medicare spending data, that translates to billions in potential savings.

The results will be published later this year or early next year in Information Systems Research. It added to a study published earlier this year that showed HIEs could save Medicare an estimated $63 million in annual outpatient therapeutic procedure costs by reducing the number of redundant and unnecessary tests.   

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The study also showed that cost savings are greater in areas of the country where providers are financially incentivized to share patient data with an HIE. Data sharing platforms that have been around longer are also more effective at reducing Medicare costs.

“Our results focusing on the interplay between HIE value and financial incentives in health care are highly relevant to an active debate on how to best design payment models to incentivize high-quality and cost-effective care,” Idris Adjerid, an assistant professor of management at Notre Dame’s Mendoza College of Business, said in a release. “This research is also important because it highlights the conditions under which HIEs can have the largest impact. Policymakers and health care entities need to ensure that financial incentives align with the goals of HIEs and give them sufficient time to mature before expecting promised value.”

At the same time, health IT vendors have been gradually moving away from the traditional HIE model and toward application program interfaces to enhance data sharing. But large hospital systems continue to connect to HIEs to easily exchange patient information.