Public HIE proving unsustainable without federal funds

On the heels of our story last week about a lack of sustainable health information exchanges comes word that a Tennessee regional health information organization may have to close its doors due to (gasp!) a sub par business model.

CareSpark, the Kingsport, Tenn.-based RHIO, could shut down, primarily due to an inability to function on its own. After six years, the system--which holds records for 1.28 million patients--failed to come up with a viable plan to stay afloat, causing the Health Information Partnership of Tennessee (HIP TN) to pull federal funding this past March, reports Healthcare IT News. The tale is a cautionary one for publicly funded HIEs, which have been under much scrutiny of late, especially compared to their private brethren.

Many local healthcare providers and businesses supported the HIE, CareSpark board chair Jerry Miller told Healthcare IT News, but newly formed private exchanges were able to supply HIE services more cheaply. As the participants battled over how to fund CareSpark through subscription fees, hospitals declined to participate and revenues dropped.

Meanwhile, government grants that CareSpark had expected dried up. Aside from the HIP TN termination, the HIE also lost a contract with the Social Security Administration because it didn't meet SSA's requirements. It also failed to land a coveted Beacon grant from the Office of the National Coordinator for Health IT.

CareSpark covers eight counties in Tennessee and nine counties in Virginia. A few months back, Didi Davis, then acting CEO of CareSpark, told FierceHealthIT that the HIE covered 21 hospitals, and counted 1,500 participating physicians in Tennessee.

Slim hope still remains for the RHIO's survival, though, as CareSpark's board--after voting unanimously in June to shut down--also voted to leave open the possibility of revitalization "should the opportunity arise," according to Healthcare IT News.

To learn more:
- read the Healthcare IT News story
- see this Physician's Practice article from March on federal grants to HIEs (.pdf)