John Glaser likes to describe the NEHEN network as “the Napster of health care” data exchange.
As vice president and CIO of Boston-based Partners Health care, a non-profit health care company, Glaser was instrumental in creating the New England Healthcare EDI Network (NEHEN) to allow health care professionals to swap data securely and in compliance with the Health Insurance Portability and Accounting Act.
Partners, which was one of NEHEN’s four founding members, includes Brigham and Women’s/Faulkner Hospitals, Massachusetts General Hospital, The North Shore Medical Center, Newton-Wellesley Hospital, McLean Hospital, Spaulding Rehabilitation Hospital, Dana-Farber/Partners CancerCare, community health centers, and the community-based doctors and hospitals of Partners Community Health Care Inc.
Baseline senior contributing writer Stephen Pizzo spoke with Glaser about the business imperatives that drove NEHEN’s creation and the challenges it posed.
Baseline: Can you briefly explain why Partners decided to join forces with competitors such as CareGroup to form NEHEN?
Glaser: About four years ago, we were actually looking to develop our own proprietary EDI (electronic document interchange) payments system. But it became clear to us that health care better lent itself to a regional rather than a standalone situation or even a value-added network arrangement. So we got together with CareGroup, Tufts and Harvard Pilgrim and began to lay out some governing principles of what later became NEHEN.
Baseline: What about those founding principles do you think most contributed to NEHEN’s success?
Glaser: The logic was straightforward. There were three main areas of mutual interest. First, everyone sitting around the table could see there were potential gains for themand I am talking non-trivial gains. Second, for me to realize my gains I needed Tufts, I needed Harvard Pilgrim, I need CareGroup and so on.
I couldn’t get those gains working unilaterally. So we all understood that we had to work together to see our individual gains. Finally, everyone agreed that we could not view EDI as a competitive weapon. While Partners competes with CareGroup on quality of care and we wrestle with Tufts over insurance matters, it became clear that competing on EDI made no sense. Because of that, NEHEN became a place where it was safe for competitors to sit down around a table and have open discussions on a subject of mutual benefit without getting into collusion territory.
Baseline: If this was not a competitive tool and it was not a value-added network, then how did you visualize NEHEN?
Glaser: We went out and did a review of other competitive enterprise networks that ended up becoming industry utilities; ATM machines that facilitate financial services, swipe-card networks and devices that serve credit card companies or computerized reservation systems for all the airlines. What we saw were systems that, at first appeared to have competitive capabilities, but actually emerged as commodity infrastructures for those industries and did so in a relatively short period. We believed that could be the fate of health care EDI networks as well.
Baseline: So, once the decision was made how did you proceed?
Glaser: We designed the network as a commodity right from the get-go rather than a feature-city where you just link the other guy. We shot for all the attributes that could scale and grow the network into a commodity-class item. Those were low cost of entry, high reliability and reasonable levels of agility.
Baseline: In the past there was reluctance of individual players to join such networks once they saw what it meant to their established ways of doing business. How did NEHEN address these problems?
Glaser: We avoided that problem by making the process minimally intrusive to the other players’ systems. We did not require the participants to throw out their legacy systems, did not require the participants to divert major capital to fund the thing, and we did not require members to comply with an arbitrary feature adoption timeline. Instead, they could move as fast or slow as they wanted and we would simply wrap ourselves around the member’s own technology choices and directions.
Baseline: Partners was one of the founding members of NEHEN. Now with four years of operation under your belt, what kind of ROI have you realized?
Glaser: Between our two biggest operations, Brigham and Women’s and Massachusetts General, we have seen cost savings; we saw $9 million a year in savings. We also saw a one-time savings of about $6 million. It’s particularly impressive when you compare it to the low cost of implementing the system. It has been a superb ROI. One good example of how those savings occur [is that] our average cost of doing an eligibility transaction before NEHEN was $2.62 per transaction. The last time we took a snapshot of those costs was last January, and we had that down to 10 cents.
Baseline: Privacy advocates worry that, while companies like providers and insurance companies harvest larger profits thanks to these savings, those savings may come at the cost of patient privacy. Are their concerns warranted?
Glaser: Those concerns are real and serious. There are massive privacy problems in this industry. The activist’s anxiety is appropriate and correct. I am anxious about it, and you should be, too, because it is scary in many ways. So I’m glad there is anxiety and that people are raising these issue because it will lead to needed changes.
Having said that, electronic insurance EDI transactions are not a great concern on the privacy side. First, the payers already get all that information anyway. Just because we move it electronically does not make it less secure. Nor does it mean that security practices on the receiving end are not any good. In fact, they may be more secure because the nice thing about an EDI network like NEHEN is that there is no central database sitting there in the middle. The information is just passing from one member to another.
Baseline: But once this information is aggregated by different members on the network, what’s to stop them from using it for inappropriate purposes such as direct marketing or selling it to marketing companies?
Glaser: Re-use of medical data for marketing purposes is a real privacy issue. But it’s a separate issue from whether a transaction is paper or electronic. It’s true that you can tell a lot about a patient’s disease just by their insurance bill. But EDI networks neither compounds that problem nor does it make it go away because it is already in place. Most of these companies already maintain large client databases of their own and Medicare of course has one, too.
So, there will be persistent attempts by all kinds of interests to get hold of clinical data. Those attempts will range from legitimate uses such as in research and quality-of-care audits, to all kinds of more gray areas. But, realize that it’s not an easy thing to do. If you [are] outside the clinical care environment I cannot see, how you go about aggregating useful data and [wind up] doing this in very effective way. Still, people will try and it is useful as part of the privacy debate to just keep raising the issue.
Baseline: Privacy advocates worry that, even when individual members of the network do not misuse their own EMRs that a hacker might compromise their systems and gain access to private patient files.
Glaser: It happens. Off the top of my head, I can recall that over the past few years it happened at the University of Washington, the University of Michigan, University of Alaska and the University of Pittsburgh hospitals. It seems we read about one of these a year. But, we all know that whatever the industry involved, when a break-in becomes public it is usually just the tip of an iceberg.
Baseline: Let me ask you now to look a decade down the road. Where is all this taking the health care industry and what will it mean to patients?
Glaser: Today between 16% and 20% of doctors employ [electronic medical records]. In ten years, it will be 50-60%. And, by then a reasonably large percentage of patients will routinely use the Internet to interact with their physicians. It will be common for people with chronic diseases that render them particularly fragile, like congestive heart failure, to be monitored remotely at home with smart-sensors married to Internet technology. We will also have made strides in expert systems that will underpin [electronic medical record] networks assuring that doctors do not prescribe drugs that interact or order radiology or other treatments that might be inappropriate for a particular patient.
Baseline: You have talked about the benefits electronic networks provide the private sector. Does public health care have a stake in this as well?
Glaser: Absolutely. Despite the horror of it all, the events of Sept. 11 had a silver lining for the public health sector. It will bring an investment in public health care infrastructure that has been sorely needed for a very long time The ability of these networks to detect at a very early stages any kind of outbreak, not just anthrax, but salmonella poisoning, or unusually high cancer rates in a certain area, will provide enormous public health benefits in the years ahead.