Q&A: The A, B and C of states' HIX IT needs

By Tom Sullivan
09:18 AM

Right now is a once-in-a-career opportunity for states to upgrade IT infrastructure – with federal funding – to bolster the healthcare services they provide, namely with health insurance exchanges (HIX). But they must act wisely, or risk being devastated during the procurement process. And time is everyone’s enemy.

That’s the assertion put forth by Bobbie Wilbur, co-director of Social Interest Solutions. Government Health IT Editor Tom Sullivan spoke with Wilbur about this quandary, why the early innovators did not work out as planned, the downsides to states letting the federal government run their HIX and the risk of hedging bets that a new administration might alter the HIX rules altogether.

Q: In previous discussions, you mentioned a certain quandary states are in: they have to begin establishing health insurance exchanges now – but the guidelines and standards are not fully-baked at this point.
The law gets passed and then the feds issue standards and regulations and the regulations really kind of put the operational considerations around the ‘how’ you implement the law. The feds have made great progress, this is a complex law. They’ve made great progress, but it is 2,200 pages of law, so they still have a ways to go. But the timeline, which is 2014 and actually to have an exchange stood up by 2014, which backs them into the timeline that the exchanges have to be operational by June 1, 2013. The reason for that is so you can load the plans in and provide open enrollment to consumers by October 1, 2013. You’re really looking at June of 2013. So time is the enemy of everyone in this thing because of what’s facing them. The feds are moving as quickly as they can to get the regulations and the standards out, the states are consuming that as quickly as it comes out from the feds and trying to do everything they can to simultaneously get ready. So everybody’s marching against the time. The states, in order to get something stood up in time, have to move. They have to start buying, they have to start developing, they have to start moving or just they won’t make it.

Q: So does this apply to every state? Are any advanced enough that they are not in this situation, or somehow otherwise immune to it?
The feds issued some early financing to a group they called Early Innovators. And they awarded that to seven different states. Those actually started sooner, with funding from the feds, but at the time they got the grant, the only standards the feds had issued were on section 1561. The other regulations and the other information coming from the feds had not yet been published or was not available to the states. So the states agreed to go early, try to get some things stood up, and the idea was that those seven states would provide systems, capabilities, ideas or functionality that would be available to all other states.

[See also: An inside look at Maine's MMIS implementation.]

The problem is, all the other states are at least six months behind them. Nobody’s fast enough, so all the states had to get into this. The group of states that may be somewhat immune to this are the ones that have chosen not to build their own exchanges – and those states are then reliant on the feds to build their exchange. They’re a little bit immune but the difference might be that they all have their eyes pointing toward what the feds will be providing for them. The feds are in almost the same situation as the states are, the only difference being the feds awarded their exchange work, the group that is actually going to build their exchanges about a two months ago.

Q: What’s the downside for states leaving it to the feds?
What I hear from state colleagues is that they’re nervous about leaving it to the feds because of the significant interaction with state systems to make this work. So if you leave it to the feds, you still have to build a lot of capabilities, it’s not like you’re really scot-free.

The second downside is that if the feds don’t get it right, which you hope doesn’t happen, but if the feds don’t get it right, the state is the one that pays the tab of people coming through the federal exchange that they have not effectively determined eligibility correctly on. And states don’t like to be in that position.

Q: Of course not.
And the third part is the constant battle between having the feds be a little too close, a little too inside baseball, which makes a lot of states, in terms of their independence and ability to operate efficiently and effectively, in their opinion, compromised. But a bunch of states have made the decision to go with the fed, and part of the reason why they’re doing that is to make the political statement "We don’t believe in Obamacare," or "That’s your problem, not ours." And some of them are doing it because they really don’t think they have a team they could field that could actually make this timeline.

Q: So is there any hedging of bets, perhaps, that a new administration might change things for HIX, or the forthcoming Supreme Court ruling on the individual mandate?
Yes. I think everybody’s in that watchful mode of "what if?" But what we’re faced with is that the timelimes have not changed yet, they’re written in law, so if you ignore the law and the feds conduct a readiness assessment of you between October and December of 2013 and you’re not ready then by default you’re going to the federal exchange. If you think about that time line, of course, we won’t know if we’re going to have an administration change. States have sued about this law, primarily about the individual mandate, what we don’t know if that succeeds through the Supreme Court whether the whole law will be dismantled, or pieces of it, or what will be left standing. There are a lot of opinions across the board, from zero to 100 percent in terms of where that would land. So any timeline change, new administration, Supreme Court ruling, are not going to happen timely enough for people not to be moving right now.

Q: And what’s your opinion on what might happen?
If you take out the individual mandate, do you really change the dynamics that much? Some say yes, others say no. I think most states believe that a health insurance exchange can really, fundamentally change the landscape not just for consumers but overall in terms of management of costs on the insurance side. A lot of them believe it can make insurance more affordable or at least cap the ever-spiraling increase in insurance costs. If that’s true, it’s still a good thing even without the individual mandate.

Q: How much does the success of a NwHIN depend on states establishing financially sustainable HIEs as well as an HIX?
They’re different birds. I don’t know that they depend on each other. The convenience of a health information exchange is that providers have a visibility into a consumer so that they can deliver higher-quality care because they know the other care that person has accessed or the other places that patient has gone. In Healthy San Francisco, for instance, the entire underpinning of that program was the medical homes, were basically community healthcare clinics that had visibility into the fact that a consumer was assigned to another clinic and that they are accessing services appropriately.

[Related: PwC says states HIX 'flexibility creates complexity' for payers.]

Healthy San Francisco’s results would indicate a dramatic drop in costs along with a dramatic improvement in overall quality to the point where inappropriate access to emergency rooms fell substantially. So the health information exchanges do that at a different pace, it’s usually different groups. But both have an impact on the cost structure that supports those consumers. And then you have the insurance exchange which is really designed to know who consumers are, make sure they have adequate insurance, so that you’re able to access services more rationally, more reasonably. If you combine those two together, the hope is that you drive the overall cost structure down.

So instead of having a person that doesn’t have insurance delay their care longer than they should and therefore it becomes more serious, more costly. They can operate independently of each other, obviously, both of them help drive down the costs. Interestingly enough you’ll find that in the states they’re generally being operated by very different groups within those states. The more that folks in the health delivery systems have access to your data, just logically to me, there’s definitely an advantage to the quality of your care. And hopefully they’re not repeating care that’s already been provided by somebody else.

Q: What makes this the right time for health insurance exchanges?
It’s probably a once-in-a-lifetime – or at least a once-in-a-career – opportunity for states to upgrade their capabilities to deliver services to the low-income families that they are required to support. To do that smartly, to do that wisely I think it’s going to take states to behave: a) they have to move quickly, b) they are going to have to be much more hands-on with the software and the vendors that they use to make sure they know what they’re buying because they don’t have time for mistakes, c) in most procurement operations states send out a checklist to numerous vendors, who check off "Yes, I can do that," or maybe "I can partially do that," or even "No, I can’t do that but I’ll build it for you." I believe that can be devastating in this environment. The states have to see, touch, feel to know what they’re buying and if they don’t have the capability on their own, and since many states have done a lot of IT outsourcing, they don’t know how to buy IT and they might need somebody to help them do it.

[Feature: The 5 roadblocks HIEs face. Also, see Q&A: On the trials and tribulations of unlocking patient data.]

The two other things they need to think about in this process are making sure they do put people on their staff or even hire somebody who has this IT capability. This is not the time to go without somebody who knows application development, applications implementation, IT development, somebody who can challenge if that cloud is well-secured or not if they choose to go that way. And they really need to think through the partnerships that they’re buying to see if they’re real or not. Every vendor in the world is out there looking for a partner that will make the magical solution to these states. They want a piece of the pie. And that’s great, but if they’ve never truly worked together, that means you’re not only forming and storming for your state-level project, but that team is also forming and storming and trying to figure out how to work together. States need to figure out if their partners are really tightly-coupled or if they’re loosely-knit ‘win the biz’ kind of partners. The final thing is that states really need to challenge that they’re getting the A-Team from vendors because the first guys out the door with the RFPs are probably going to get that A Team, while everybody else will get the B, C, D, or E Team. And being on the tail-end of that could be hugely problematic.

Q: What else should states be considering?
: It’s not business as usual. States need some special provisions to behave a little bit differently, to have higher-level communication with their vendors during the procurement process, really really know what they’re buying, and because the time is so compressed, they need the state procurement handcuffs taken off a little bit. Not to violate the principals of what those procurement laws were set up for, but maybe even the opposite, to provision them so the states have adequate information to make decisions they need to make.