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					West Michigan Health Information Exchange
Business Plan
October 2008




Version 4.0
Final updated: 10/22/2008
West Michigan Health Information Exchange – Business Plan




Table of Contents
1       Executive Summary .................................................................................................................................. 3
    Background ..................................................................................................................................................... 3
    Concept ........................................................................................................................................................... 4
    Business Model ............................................................................................................................................... 6
    Implementation .............................................................................................................................................. 11
    Research and Community Input .................................................................................................................... 12
2       Background ............................................................................................................................................. 14
    The Problem .................................................................................................................................................. 14
    Need .............................................................................................................................................................. 14
    History of the Alliance .................................................................................................................................... 15
    Health Care Vision 2020 Governance ........................................................................................................... 16
    Work Group Development ............................................................................................................................. 16
    Business Plan Funding .................................................................................................................................. 17
3       Solution Overview ................................................................................................................................... 19
    Opportunities Identified.................................................................................................................................. 19
    The Solution .................................................................................................................................................. 20
    The Vision ...................................................................................................................................................... 23
    Critical Success Factors ................................................................................................................................ 23
4       Market Analysis ....................................................................................................................................... 24
    West Michigan Market ................................................................................................................................... 24
    Stakeholders.................................................................................................................................................. 25
    Transactions .................................................................................................................................................. 28
    Business Environment ................................................................................................................................... 32
5       Industry Analysis .................................................................................................................................... 34
    Industry Overview .......................................................................................................................................... 34
    Representative HIEs...................................................................................................................................... 34
    Funding of HIEs ............................................................................................................................................. 35
    Definition of RHIO versus HIE ....................................................................................................................... 36
    Conclusions ................................................................................................................................................... 36
6       Overall Approach .................................................................................................................................... 37
    Requirements Definition ................................................................................................................................ 37
    Consensus Building ....................................................................................................................................... 37
    HIE Blueprint ................................................................................................................................................. 39
    On-Going Developments ............................................................................................................................... 43
7       Key Assumptions .................................................................................................................................... 46
    Participation ................................................................................................................................................... 46


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West Michigan Health Information Exchange – Business Plan



    Adoption Rates .............................................................................................................................................. 47
    Staffing .......................................................................................................................................................... 48
8       Financial Projections .............................................................................................................................. 51
    Key Assumptions ........................................................................................................................................... 51
    Pricing and Revenue ..................................................................................................................................... 52
    Financial Projections ..................................................................................................................................... 54
    Funding .......................................................................................................................................................... 55
    Options Analysis ............................................................................................................................................ 55
    Benefits Analysis ........................................................................................................................................... 56
9       Risk Assessment .................................................................................................................................... 65
    Risk Criteria ................................................................................................................................................... 65
    Risk Assessment and Mitigation ................................................................................................................... 67
10          Implementation Plan ........................................................................................................................... 71
    Strategy and Tactics ...................................................................................................................................... 71
    Governance ................................................................................................................................................... 73
    Organization Structure................................................................................................................................... 74
    Timeline ......................................................................................................................................................... 76
    Operational Metrics ....................................................................................................................................... 78
11          Supporting Documentation ................................................................................................................ 79
    General Appendix .......................................................................................................................................... 79
    Financial Appendix ........................................................................................................................................ 80
    Benefits Appendix.......................................................................................................................................... 81




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West Michigan Health Information Exchange – Business Plan




1       Executive Summary
Background
In 2007, the Alliance for Health (AFH), a nonprofit organization based in Grand Rapids Michigan, was
approved for a grant from the State of Michigan to support development of a community-wide health
information exchange (“HIE”) to improve quality and contain rising costs of health care. A governance
structure consisting of the Health Care Vision 2020 Governance Board (“Board”) was created to obtain
balanced input and ongoing participation from all interested parties in the West Michigan Medical Trading
Area (“Community”). As defined by the State of Michigan, the Community consists of 13 counties in West
Michigan as depicted below. In addition to the Board, four work groups were formed to provide significant
input into the clinical, technical, legal and business/finance aspects of the HIE. Starting in January 2007, the
Alliance for Health obtained Michigan Health Information Network (MiHIN) grant funding and hired an outside
firm to work with staff to develop a business plan and author a request for information to obtain preliminary
costs for developing an HIE.

                                              West Michigan
                                            Medical Trading Area




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West Michigan Health Information Exchange – Business Plan




Concept
As the Community’s neutral, trusted, nonprofit health information exchange, the West Michigan HIE (WMHIE)
will provide governance, infrastructure, and mechanisms that will offer services to over 20 hospitals, more
than 1,900 physicians, hundreds of other healthcare providers (e.g., labs, diagnostic imaging centers, long
term care providers, federally qualified health centers, etc.), insurance companies and employers in the
Community. In addition to these stakeholder organizations, all 1.5 million citizens in the Medical Trading Area
will benefit through more efficient delivery of care (e.g., cost avoidance) and improved quality of care.

As noted in a Grand Rapids Press article dated August 28, 2008, “The State should continue to work
aggressively with regional groups to develop an electronic medical information network. Moving Michigan
health systems toward sharing electronic medical records can save lives and improve the quality of health
care.” The full press release is included in the General Appendix.

Services
WMHIE services will be available to providers and payers, to include:

        Clinical Messaging (Level 1): results and other key transactions are electronically ‘pushed’ to
        authorized providers. Key senders are hospitals and laboratories and key receivers are physician
        practices; providers are primary beneficiaries. Deployment anticipated in July 2009.
        Federated Repository* (Level 2): supports electronic retrieval and distribution of health information
        from authorized health information sources, starting with medication information as well as transfer of
        consumer’s health information to authorized recipients based on consumer consent. Payers are
        primary beneficiaries. Deployment anticipated in January 2010.
        *Given current CMS incentives, e-prescribing also should be evaluated as part of a Federated
        Repository.
        Central Repository (Level 3): a permanent, longitudinal record of the consumer’s health information,
        starting with medication information. Encompasses centralized storage of patient data; greatest value
        is for data mining and research geared toward quality and population health improvement initiatives.
        Deployment anticipated in July 2011.

WMHIE will focus initially on providing Clinical Messaging and evolve toward a Centralized Repository as
participation increases and benefits are realized. It is expected that value and sustainability will need to be
attained at each level before making a decision to move to the next level.

In order to provide the greatest overall benefit, the West Michigan HIE will address the following:

        Protect the privacy and security of health information as mandated by the Health Insurance Portability
        and Accountability Act (HIPAA) and its implementing regulations.

        Align with State-wide (MiHIN) and national (NHIN) efforts.
        Leverage current investment in information technology infrastructure to minimize capital and
        operating costs required for the HIE.
        Enhance, not replace, current health information technology (HIT) and HIE efforts in the Community.
        Provide a database of clinical data to be used in support of quality improvement initiatives in West
        Michigan (i.e., Aligning Forces for Quality).



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West Michigan Health Information Exchange – Business Plan




Key Benefits
Value to the community and individual patients
      Providers will have access to important and protected patient health information where and when
      needed, improving the quality of care they provide to individual patients. This will improve the overall
      health and the healthcare experience of all patients.
      Provider access to health information will also help reduce the unneeded duplication of lab testing,
      radiology testing, prescription drugs and other healthcare services that are currently ordered due to
      the unavailability of information at the time and place it is needed. This will save patients time,
      medical expenses, travel, potential pain and other inconveniences and medical risks.
      Healthcare systems in the region will be able to leverage their collective existing health information
      exchange efforts to reduce overall healthcare costs and achieve greater efficiencies.
      Data from all healthcare systems can be aggregated and be used in ways to promote improved
      community health. Examples include healthcare research, measuring provider group performance,
      promotion of best practices (e.g. Aligning Forces for Quality) and county health department activities.
      Patients will have greater access to their own healthcare information and best-practice information
      related to their personal medical problems.
Value to employers and payers
      Employers and third-party payers will experience cost savings through the automation of manual
      tasks involved in the receipt and processing of paper-based records.
      Cost savings will also be achieved through the reduction in unnecessary duplicate testing as
      described above. Improved efficiencies and care coordination also will reduce healthcare costs.
      Employees will miss less work time caused by unnecessary and inappropriate care.
      To the extent that the HIE helps improve the quality of care and helps promote more healthy
      behaviors, employees will be healthier and miss less work time due to avoidable healthcare
      problems.
      Payers will not need to duplicate all of their costly efforts to collect and provide information to
      physician groups for patient management purposes.
Value to healthcare systems and physicians
      Like employers and payers, healthcare systems and physician groups will be able to achieve
      significant cost savings through the automation of manual tasks involved in the receipt and
      processing of paper-based records.
      The WMHIE will complement the information exchange work now done in each healthcare system,
      taking over certain functions that are redundant in the overall community healthcare system. This will
      lower the HIE costs of all healthcare systems while improving the reach and effectiveness of their HIE
      efforts.
      Patient healthcare information will be more readily available to enable physicians practicing in offices,
      outpatient centers, urgent care centers, emergency rooms and hospitals to improve clinical decision-
      making and to provide better quality care.
      Physician groups large and small will not be faced with the daunting and expensive tasks of building
      multiple interfaces with multiple healthcare systems and payers operating in their area.
      Physicians will be better able to help their patients avoid the cost of unnecessary care related
      duplication of services.
      Testing results will get to physicians more quickly, speeding up care and helping improve office
      efficiency and productivity and administrative decision-making. The improved flow of referral


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West Michigan Health Information Exchange – Business Plan



        information between primary care and specialist physicians reduce potential errors in transitions of
        care or “hand-offs”.
        Physician groups will not have to review multiple reports from multiple payer organizations in order to
        assess their quality and utilization performance.
        Physicians will be able to enhance the performance of their electronic medical records (EMR) and
        their communication with patients.
Note: These key benefits can be achieved by our regional community only if the health systems, employers
and third-party payers have the collective will to make the commitment do the work required.

Business Model
As a Not for Profit organization, West Michigan HIE will rely on donations, contributions, grants and
sponsorships for initiation and start up. Ongoing operations and provision of services will be funded through
provider revenue, payer revenue and revenues from special services. Hence; a self-sustaining business
model is an imperative.

For business planning purposes, three scenarios were created; details of which are included in the
Appendices relative to High, Medium and Low scenarios. Throughout this plan, the Medium Scenario is
presented as the baseline.

Participation
Physicians will enroll through a sponsoring hospital or health system or directly through the WMHIE. A
community-wide all-channels marketing effort will occur to enable area organizations to access a
demonstration site and use the HIE. To ensure a self-sustaining business model, projected participation is as
follows:

                                West Michigan HIE – Anticipated Participation

    •                                                                Adoption Rate (Percent)
                                      Number         2009         2010         2011         2012        2013
                                                    Level 1      Level 2      Level 3
         Stakeholder Type
    Independent Laboratories             11          18%          27%          27%          36%          45%
       Acute Care Hospitals              24          71%          71%          83%          88%          92%
         Other - Hospitals               32          14%          14%          29%          43%          57%
     Skilled Nursing Facilities          60           0%           8%          17%          33%          45%
       Physician Practices*             797          37%          65%          79%          84%          87%
            Physicians**               1,927         60%          80%          90%          93%          95%
            Health Plans                 12          50%          58%          67%          83%          83%
         Major Employers                 15          23%          38%          54%          62%          62%
                Other
-     Ambulatory Surgical Center       113           20%           50%         75%          90%          95%
  -    Military Treatment Facility      2            50%          100%        100%         100%         100%
-     County Health Departments        13            36%           44%         56%          78%          78%
  -    Federally Qualified Health      32             9%           16%         25%          25%          25%
                 Centers
       -     Dialysis Centers          17            12%          18%          18%          24%          29%
     -     Rural Health Clinics        39             0%           5%           5%           8%           8%
          -    Pharmacy***             322            6%          11%          16%          28%          40%


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West Michigan Health Information Exchange – Business Plan



-      Diagnostic Imaging Centers               15                0%             7%             13%        20%               27%
Note:       Actual participation and contributions will not occur until July 2009 in Year 1.
            It is assumed that ‘adoption’ will mean participation in the HIE, as well as actual live use of the system.
*-represents number of office-based physician practices defined as a group of one or more physicians dedicated to one or
more specialties.
**-represents the number of physicians practicing in office-based practices. Overall, there are 2,897 physicians in the
medical trading area, with 2,344 involved in patient care.
***-represents individual pharmacy locations. Pharmacy is not expected to participate due to electronic prescribing not
being designated as a high priority function of the HIE.



Financial Projections
The financial projections represent a summary of financial information from the detailed pro forma financial
statements included in the Appendix. The summary information represents the Medium Scenario. Detailed
information for Low and High Scenarios is included in the Appendix.

                                                        2009             2010            2011           2012               2013
                                                       Level 1         Level 2         Level 3
Summary Financials
Revenue                                                $2,577,463      $4,456,593      $6,007,373      $6,150,876         $5,956,224
Gross Profit                                           $1,126,467      $1,055,102      $2,018,305      $2,540,136         $1,947,290
EBIT                                                     $501,438         $91,625        $786,511       $742,945            $36,156
EBITDA                                                   $674,959        $437,147      $1,209,657      $1,196,381          $518,572
Net Earnings                                             $501,438         $91,625        $786,511       $742,945            $36,156
Net Cash from Operating Activities                       $532,756        $286,097      $1,186,744      $1,197,375          $532,277
Capital Expenditures                                     $867,606        $860,005        $388,121       $151,449           $144,900
Interest Income/(Expense)                                        $0              $0               $0            $0                 $0
Dividends                                                        $0              $0               $0            $0                 $0
Cash                                                     $665,150        $591,243      $1,389,866      $2,435,792         $2,823,169
Total Equity                                           $1,501,438      $2,093,063      $2,879,574      $3,622,519         $3,658,675
Total Debt                                                       $0              $0               $0            $0                 $0
Ratios
Current Ratio                                                  3.82             2.49            3.70           5.36               6.18
Debt to Capital (LT Debt + Equity)                             0.00             0.00            0.00           0.00               0.00
Profitability
Gross Profit %                                             43.7%            23.7%              33.6%       41.3%              32.7%
Operating Expenses %                                       28.3%            25.0%              23.0%       31.7%              34.6%
Net Earnings %                                             19.5%             2.1%              13.1%       12.1%               0.6%
Returns
Return on Assets                                           28.0%             3.4%              22.4%       17.5%               0.8%
Return on Equity                                           33.4%             4.4%              27.3%       20.5%               1.0%
Return on Capital (LT Debt + Equity)                       33.4%             4.4%              27.3%       20.5%               1.0%



Notes:      Projections are based on assumptions as outlined in this Business Plan.
            Targeting 120 days cash on hand.


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West Michigan Health Information Exchange – Business Plan




Stakeholder Contribution Summary
It is anticipated that stakeholder contributions will be commensurate with overall value received from the West
Michigan HIE; however, due to the inherent variability in the efficiencies of each stakeholder, existing
processes, actual savings are expected to vary. It is anticipated that individual stakeholder investment
summaries will be presented to stakeholders along with this plan. In order to reach sustainability, subscription
fees and transaction fees will be assessed to participants. Startup funding will also be required to reach
sustainability.

Funding
Funding of $1,000,000 in Year 1 of the Plan and $500,000 in Year 2 of the Plan is required to fund
startup activities in order to reach sustainability. With this funding, at least 50% of the cash goal of 120
days worth of expenses is maintained in all years. If it determined that higher levels of cash are required to
ensure sustainability, additional funding in the form of grants, donations and/or fees to participants may be
considered.

It is anticipated that $1,500,000 of funding will be secured through State of Michigan grants.

Additional funding of $1,500,000 is required in the Low Scenario and $2,000,000 is required in the High
Scenario.

Subscription Fee
Subscription fees for the various organization types are as follows:

Annual Membership Fee
Per Physician Membership                                                  $250.00
Laboratories & Radiology Center Memberships                              $5,000.00
Insurer/Payer Membership                                                 $5,000.00
Individual Hospital Membership                                          $25,000.00
Skilled Nursing Facility Membership                                      $2,000.00
Other Healthcare Facility Membership                                     $2,000.00



Transaction Fee
Transaction fees will be established as follows:

Utility                                                           Year 1      Year 2     Year 3      Year 4      Year 5
Clinical Transactions - per transaction*                            $0.27      $0.25       $0.23      $0.21       $0.19
ADT, Transcribed Reports, Labs, Radiology Reports
Per Member Per Month**                                              $0.27      $0.25      $0.23       $0.21       $0.19
Fee Applied to Payer Members Per Member (annual)                    $3.24      $3.00     $2.476       $2.52       $2.28
Note that as membership increases and startup costs are absorbed, transaction fees are lowered for both
clinical transaction fees and per member per month fees.

*-Includes ADT, transcribed reports, lab results, radiology results. Fee assessed to sender, which primarily includes
hospitals, labs and diagnostic imaging centers.
**-Fee assessed to payers, including insurance plans and self-insured employers.


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West Michigan Health Information Exchange – Business Plan



Board Membership
Organizations will be eligible to purchase a seat on the Board of Directors of the WMHIE for a fee of $10,000
per year. It is anticipated that a minimum of 15 paid Board seats will generate $150,000 in annual revenue for
the WMHIE. In addition, two non-paid Board seats will be occupied by representatives from the Community
(e.g., Public Health, etc.), for a total of 17 Board seats.

Benefits Analysis
Case studies and research were conducted to estimate potential return on investment for a variety of
stakeholders, including:

         Hospitals
         Physicians
         Payers
Estimated savings were calculated using available research and data collected from participating
organizations in West Michigan. The following tables represent the estimated cost savings by stakeholder
type.


Hospitals
                      Estimated Annual Hospital Savings* – Level 1 – Clinical Messaging
                                            West Michigan HIE

                                                             Average Hospital Savings (0.70 savings per transaction)
               Hospital Size             Year 1            Year 2         Year 3             Year 4           Year 5
           Small (< 49 beds)            $20,599           $27,465        $30,898           $31,928          $32,614
       Medium (50-99 beds)              $73,535           $98,047      $110,303           $113,980         $116,431
         Medium (100-199)             $292,751          $390,335       $439,127           $453,764         $463,522
       Large (200-399 beds)           $340,649          $454,199       $510,974           $528,006         $539,361
         Jumbo (400+ beds)           $1,830,786        $2,441,047     $2,746,178        $2,837,718       $2,898,744
*-Estimated savings based on anticipated transaction volumes savings of $0.70 savings per transaction.
*-Savings represent average savings of hospitals in MTA in defined size range.


Physicians
                     Estimated Annual Physician Savings – Level 1 – Clinical Messaging
                                           West Michigan HIE
                                           Year 1            Year 2              Year 3          Year 4          Year 5

Transactions (receipt)
- Results Processing Saving            $ 9,249,873       $ 15,961,460        $ 19,423,560    $ 20,701,416    $ 21,626,341
- Missing Results Savings              $ 2,387,064       $ 4,119,086         $   5,012,531   $   5,342,301   $   5,580,991
- Referral Savings                     $    596,766      $ 1,029,772         $   1,253,133   $   1,335,575   $   1,395,248

Note: since much of this savings would be attributable to time and labor, actual savings would only be realized through a
re-allocation of staff to value-added activities and/or reduction in FTEs.




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West Michigan Health Information Exchange – Business Plan




Payers
Estimated savings (per member per month) – Year 1:         $2.51
Estimated savings (per member per month) – Year 2:         $3.35
For example, Priority Health, with 282,000 members in the West Michigan Medical Trading Area, could expect
to save approximately $8,499,840 in Year 1 and $11,336,400 in Year 2, primarily due to a reduction in
duplicate testing.


Alternative Approach
Given that three of the major stakeholders are in the process of deploying their own internal Level 1 – Clinical
Messaging solutions, and all three (including Metro Health, Spectrum Health and Trinity Health) have chosen
the same solution from Novo Innovations (“Novo”), a scenario involving the deployment of Novo across the
entire West Michigan HIE should be considered.

It should be noted that Novo is currently not a cross-community solution and has not been fully deployed as
part of a Level 1, Level 2, or Level 3 approach. In addition, Novo, at the present time, is not capable of
providing all Level 1 functionality as described herein. Therefore, a major assumption for the fourth scenario
would be that Novo can clear these hurdles prior to planned deployment of Level 2; either through further
software development and/or integration with other solutions.

The Novo approach was discussed with CIO representatives from the three aforementioned stakeholders,
and it was decided that the fourth scenario should consider the following:

        Level 1 – Clinical Messaging should be funded primarily by stakeholders not affiliated with Metro
        Health, Spectrum Health and Trinity Health (17 hospitals and 300-400 physicians, payers, etc.)
        through revenue streams.
        Level 2 and Level 3 should be funded by all participating stakeholders through revenue streams.
Given these parameters and current cost estimates, it would be cost prohibitive for non-affiliated stakeholders
to fund Level 1 – Clinical Messaging alone. Thus, the following cost sharing arrangements should be
considered when considering Novo as a potential alternative for Level 1 – Clinical Messaging:

        Discounted software licensing if all hospitals participate.
        Potential transfer of licenses owned by Metro, Spectrum and Trinity such that further discounts can
        be realized, should Novo agree.
        Outsourcing of all Level 1 support (including Metro Health, Spectrum Health and Trinity Health) to the
        West Michigan HIE such that cost saving and economies of scale can be realized.




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West Michigan Health Information Exchange – Business Plan




Implementation
Key Strategies
   Key Strategy #1 – Adopt Multi-Stakeholder Revenue Mix

      Revenue will come from multi-stakeholders including: providers, physicians, employers, health plans
      and board membership.

   Key Strategy #2 – Engage Stakeholders Early

      Engaging stakeholders early in the planning and implementation process will prove to be crucial in
      terms of obtaining the level of commitment of resources to fund the West Michigan HIE. The key
      premise and assumption is that the stakeholder organizations will not compete over data; they will
      collaborate over data.

   Key Strategy #3 – Accelerate Adoption Rate

      Provider adoption will play a major role in delivering the overall benefit of the WMHIE to the
      Community. The more providers that use the HIE for sending/receiving messages; the more cost
      savings and an overall improvement in the quality of health care delivered will be realized.

   Key Strategy #4 – Employ an Incremental Approach

      An incremental approach to rolling out HIE functionality will likely yield more success than a “big
      bang” approach due to the complexities involved. Consensus was reached between the Clinical
      Work Group, Technical Work Group, and the CIO group for this approach.

   Key Strategy #5 – Maintain Some Level of Flexibility

      Given the rapid pace of change relative to best practices, technology and other factors in the HIE
      industry; WMHIE should maintain flexibility in its approach and timing. Strategies and tactics should
      be reconsidered before moving between each Level (e.g., from Clinical Messaging to Federated
      Repository). Given Level 1 structure and performance it may be possible and advisable to proceed
      directly from Level 1 to Level 3.

Timeline
2008 4th Quarter Tactics
      Continue to evaluate Novo capabilities as Level 1 Solution
      Submission of the MiHIN implementation grant proposal.
      Formation of a HIE legal entity.
      Presentation of the HIE business plan to key stakeholders.
      Introduction of a letter of understanding (LOU) which will be require simultaneous signatures by key
      stakeholders in January 2009.
      Identification /assignment of a project director to lead implementation efforts until a permanent
      Executive Director is hired.



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West Michigan Health Information Exchange – Business Plan



2009 1st Quarter Tactics
            Work with Key Stakeholders; simultaneously sign off of LOU. Contribution of initial funding by key
            stakeholders for the WMHIE.
            Conduct the first HIE Governance Board meeting.
            Detail Level 1 Clinical messaging strategy (Request for Proposal).

            Reassess the approach to Level 2 and Level 3.
            Begin search for permanent HIE Executive Director.
2009 2nd Quarter Tactics
            Hire permanent HIE Executive Director.
            Finalize Level 1 Clinical Messaging Implementation work.
            Continue other implementation plan activities.

Research and Community Input
The business plan was developed based on market wants/needs identified through various Health Care
Vision 2020 (“HCV2020”) Work Groups (clinical, technical, legal and business/finance). In particular, the
Clinical Work Group, consisting of representatives from various stakeholder organizations, developed and
prioritized “use cases” for health information exchange, which would reflect the needs of stakeholder
organizations and serve as the basis for a list of services and functions to be provided by the HIE.

The work done by the Clinical and Technical Work Groups was reviewed by an ad hoc group of Chief
Information Officers (CIO) of the five largest health systems and physician organizations in the region. This
group met several times and had other discussions in order to reach a consensus on an HIE approach that all
of them could not only accept, but enthusiastically support within their own healthcare organizations.

In addition, research was conducted to create a business model and to identify and qualify potential solution
partners for the HIE. The research included meetings/discussions with the various work group members,
market research, industry research, as well as phone and paper surveys, and a Request for Information (RFI);
which was distributed to numerous vendors serving the HIE marketplace.

The current technology environment among healthcare providers in West Michigan was examined; elements
of which will play a critical role in the success of an HIE initiative. For example, adoption of fully functioning
EMRs among physician practices in West Michigan is < 20%; similar to the rest of the U.S.;1 this finding does
not dispel the need for an HIE in West Michigan, since an HIE would provide benefit to providers with an
EMR, as well as those without an EMR.

Finally, other HIE‘s across the US were researched in order to determine best practices and potential
governance models. This research was conducted via phone interviews, attendance at industry events and
the Internet. Although helpful, it was concluded that the HIE industry is relatively immature, such that best




1
    DesRoches, C. et. al. Electronic Health Records in Ambulatory Care: A National Survey of Physicians. New England Journal of
Medicine. (2008) 359:50-60.



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West Michigan Health Information Exchange – Business Plan



practices and evidence-based research is not available. Thus, the key strategies, recommendations and
assumptions presented herein are based more on reasonable business practices than on proven studies.




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West Michigan Health Information Exchange – Business Plan




2           Background
The Problem
The U.S. health care system is capable of delivering outstanding medical care but there is also ample
evidence of its overall inefficiency and inconsistency. A new approach to effectively sharing electronic health
information is a critical part of the solution to improving quality and reducing the costs of health care in West
Michigan and throughout the U.S. For example, missing clinical information was associated with 15.6% of all
reported errors in primary care. Physicians report that information is missing 38% of the time for patients with
multiple conditions. The missing information was at least somewhat likely to adversely affect patients in 44%
and to potentially result in delayed care or duplicative services in 59.5% of the situations.2

The national effort to computerize medical records will not be enough to address the problem because more
than half the time the needed information exists outside the doctors’ own organization. In addition, one in
seven admissions to a hospital and one in five laboratory and radiological exams are as a result of the
inability to access information.3

Other studies show that approximately 20% of healthcare costs are consumed by administrative processes
that are not equally matched by the value they provide. The Centers for Medicare and Medicaid Services
projects that this trend will continue through 2015, the year in which healthcare costs in the U.S. are expected
to reach $4 Trillion. At that level, administrative costs will reach a staggering $800 Billion and a mere one
percent reduction in healthcare costs would result in savings in excess of $8 Billion.4

Need
Given these inefficiencies, potential for costly errors and adverse impact on the quality of patient care, there is
a need in the West Michigan Medical Trading Area to develop a self-sustaining health information exchange
(HIE) that will serve the Community by:

            Allowing ubiquitous access to a patient’s complete medical record across the continuum of care;
            Complying with State, Federal and Local regulations (e.g., HIPAA);
            Providing neutral governance to guide the direction for the HIE;
            Allowing access only for authorized individuals by providing a robust security and privacy
            infrastructure;
            Evolving toward a knowledge-based repository of patient data to facilitate quality improvement
            initiatives;
            Leveraging and building upon current information exchange initiatives in the region - not compete with
            them; and
            Solving information access needs of healthcare providers and payers while delivering value.

2
 Smith, P. et al. Missing Clinical Information during Primary Care Visits. Journal of the American Medical Association. (2005) 293: 565-
571.
3
    McGlynn EA, et al. The Quality of Health Care Delivered to Adults in the United States. New England Journal of Medicine. (2003) 348:
635-2645.

4
    Centers for Medicare and Medicaid Services (2008). Retrieved from http://www.cms.hhs.gov/home/medicare


                                                                  14
West Michigan Health Information Exchange – Business Plan




History of the Alliance
The Alliance for Health (AFH) was established in 1948, as a non-profit West Michigan Agency. Leaders put
aside competitive interests to work together for health care quality improvement and cost management. AFH
is managed by a balanced board of directors; representatives from Health Plans, Physician Groups,
Purchasers, Hospitals, Consumers, and Government. In a cooperative effort, AFH objectives are to share
goals, perform and support resource planning, health education and health delivery systems and furthermore,
improve the sharing of health information.

AFH initiated a regional collaboration for the West Michigan Medical Trading Area (MTA) to advance the
value of health care, bring about continuous improvement to healthcare and improve the quality of life for
West Michigan residents. This collaboration known as Health Care Vision 2020 (HCV2020) operates on the
following Health and Human Services (HHS) cornerstones5:

A. Interoperable Health Information Technology
           Design and Implement HIE capability to share information electronically
           Achieve interoperability to exchange data accurately, efficiently and securely
           Create standards for health information exchange and require products to undergo a certification
           process

B. Measure and Publish Price Information
           Implement programs to make available to the public the cost or price of their care
           Engage consumers as informed value based purchasers of health care

C. Measure and Publish Quality Information
           Compare hospitals
           Compare physicians
           Measure Hospital service standards and quality of care

D. Promote Quality, Efficiency & Payment Reform
           Develop approaches that encourage and facilitate high quality cost effective health care
           Develop Pay for Performance (P4P) and payment reform models using consistent measures

With its mission and independence from the provider community, the Alliance for Health and Health Care
Vision 2020 is in a unique position to develop a Business Plan, representing a wide range of stakeholder
interests in order to achieve (A), above, while serving as an important “building block” in the success of
achieving the remaining cornerstones outlined as (B), (C) and (D), above.




5
    Health and Human Services (2008). Retrieved from http://www.hhs.gov/valuedriven/fourcornerstones



                                                               15
West Michigan Health Information Exchange – Business Plan




Health Care Vision 2020 Governance
The Governance Board for HCV2020 is represented in the chart below. Subject matter advisory boards such
as the West Michigan Business Group on Health, Physician Advisory Group and Health Benefits Advisory
Group, along with a variety of program committees, its Board of Directors, Planning and Evaluation boards
participate. The advisory and strategic planning committees have been in place for over 25 years providing
leadership on many different issues addressing health care cost, quality and access for the region. It was the
influence and leadership of the Physician Advisory Group that originated the design for HCV2020. The West
Michigan Health Information Exchange (WMHIE) Work Groups, depicted below, serve to address HIE-specific
planning issues (including development of this Business Plan), as well as lay the foundation for and support
other HCV2020 initiatives, including the Aligning Forces for Quality (AF4Q) effort.



                               Health Care Vision 2020 Organization Structure

                                     Alliance for Health
                                     Board of Directors




                                                                                   Western Michigan HIE
                                                                                      Work Groups
                                     Health Care Vision
                                                                Budget & Finance
                                     2020 Governance
                                                                  Workgroups
                                           Board




                    Performance
   Consumer
                   Measurements/
Engagement Work                           Quality                  Clinical        Technical          Legal
                  Public Reporting
     Group
                    Work Group




During the planning process, it was determined that the AF4Q would be a “customer” of the WMHIE once fully
deployed. The reason is that many of the quality improvement initiatives require access to substantial
databases in order to measure outcomes and other quality metrics. This data could be provided by a central
repository of a patient data, which is one of the goals of WMHIE.

Work Group Development
As depicted above, the West Michigan Health Information Exchange (WMHIE) is supported by the Technical,
Clinical, Legal and Business & Finance Work Groups.

Specifically, the Technical Work Group is responsible for designing recommendations for a robust technical
model for effective health data exchange. They are responsible for recommendations relative to leveraging
current available technology, sources of electronic healthcare information and building upon technical
successes from other implementations to address health data exchange and business needs. The Work
Group is responsible for establishing consensus to ensure appropriate technical standards are applied.




                                                           16
West Michigan Health Information Exchange – Business Plan



The Clinical Work Group is responsible for defining and recommending Health Information Exchange (HIE)
clinical use cases and criteria (reach, feasibility and impact) to prioritize key process flows (e.g. clinical care,
public health, e-Prescribing, etc.) to be implemented. Furthermore, they are responsible for identifying and
prioritizing the use cases and key process flows to be implemented.

The Legal Work Group is responsible for review of federal and state laws affecting health data exchange
and Health Information Technology (HIT), particularly related to confidentiality, use, and disclosure of health
information. They are required to anticipate and communicate any new issues that may arise through health
data exchange and HIT across multiple environments.

The Business & Finance Work Group is responsible for the design of an effective business and financial
model to sustain quality improvement, measurement and public reporting and drive widespread adoption and
diffusion of health information exchange and HIT. Financial incentives must be properly aligned, and a
realistic business case and value proposition should be defined for quality improvement, public reporting,
health data exchange, HIT and Inter-Regional exchange communication.

Extensive communication and review regarding Work Group results was performed in development of this
Business Plan. Ultimately, it is the responsibility of the Business & Finance Work Group to provide critical
input during the business planning process. However, other input, gathered through engagement of CIOs of
the largest stakeholder organizations and participation in other Work Group meetings was instrumental in
development and validation of assumptions made during the planning process.

Business Plan Funding
Under HCV2020, the development of this WMHIE Business Plan has been funded through the Michigan
Health Information Network (MiHIN) planning grant awarded to the Alliance for Health in 2007.

Joining forces of the Michigan Department of Information Technology (MDIT) and the Michigan Department of
Community Health (MDCH), the MiHIN initiative was developed in order to create a roadmap for Health
Information Exchange. MiHIN’s mission is to articulate a path to develop a health information network
connecting health care communities across the State of Michigan, with an infrastructure and governance
model for long term sustainability through public-private partnership. 6

The State put forth a $5 million dollar initiative to support regional initiatives to create a statewide
infrastructure for health information exchange. Funds were allocated to support the MiHIN resource center,
and provide assistance for HIE planning and implementation for designated medical trading areas (MTAs).
The Alliance For Health, representing the West Michigan MTA (including counties of Mason, Lake, Osceola,
Oceana, Newaygo, Mecosta, Montcalm, Muskegon, Ottawa, Kent, Ionia, Barry, and Allegan Counties) was
awarded $677,630 over two fiscal years for HIE planning purposes.

Goals of the planning grant include the development of a Business Plan / feasibility study for the
implementation of an HIE that will follow adopted standards and improve the quality of care in the West
Michigan MTA.




6
    Michigan Health Information Network (2008). Retrieved from http://www.mihin.org



                                                                17
West Michigan Health Information Exchange – Business Plan



The State is currently in year three of fund distribution and it is anticipated that additional grant awards will be
provided by MiHIN relative to implementation. Implementation grants would be awarded based on
documented measurable outcomes, high levels of stakeholder involvement and a realistic plan for long-term
sustainability.

In addition, HCV2020 has been funded by the following sources:

        Robert Wood Johnson Foundation (RWJF) Aligning Forces for Quality Grant
        (Awarded to only 10 communities in the country in 2007 and 4 in 2006)
        Federal Communications Commission State Award
        In Kind Contributions (Provider and Community)
        Alliance for Health Membership Fees




                                                      18
West Michigan Health Information Exchange – Business Plan




3       Solution Overview
Opportunities Identified
The West Michigan Health Information Exchange has the potential to help the community improve quality and
contain the rising costs of healthcare for area consumers, providers and payers. Use cases were developed
by the Clinical Work Group and are demonstrative of the current “pain points” associated with the fragmented
nature of healthcare delivery.

The following narrative serves to describe some of the existing challenges. A complete listing of use cases
can be found in the General Appendix.

Current State Use Cases – Clinical Messaging
The following current state use cases would be resolved by the deployment of a clinical messaging solution
aimed at pushing data electronically.

In general, providers are faced with making clinical decisions without sufficient health information, including
medication information. Information can often times be available, however providers are unable to access this
information as it may be located in several different places (e.g., physician practice vs. acute care facility).
Providers express that they generally experience an unnecessary wait time for results. Duplicative results are
often received and/or missing results are sought after. Clinical and office administrative staffs are burdened
with additional non-value added time to either sort or locate information in preparation for a patient’s visit.

Current State Use Cases – Federated Repository
The following current state use cases would be resolved by the deployment of a federated repository aimed at
pushing data plus data retrieval on demand through linked information systems.

Providers are faced with the inability to access patient information across institutions. Because of this
challenge, ambulatory care providers, inpatient providers and emergency department providers have
difficulties in coordinating care; collaboration between providers/caregivers is diminished. The inability to
facilitate care in mass emergencies exists.

Current State Use Cases – Central Repository
The following current state use cases would be resolved by the deployment of a central repository aimed at
both pushing and pulling data through a regional health information exchange.

Assistance to provide public health surveillance is limited; difficulties exist with data collection relative to
public health case management. Distribution of communicable disease information to providers is limited and
there is poor delivery of newborn screening results. Public health agencies are challenged with distributing
adequate information to providers in order to facilitate care in mass emergencies. Data mining capabilities for
the purposes of conducting research is absent burdening researchers with additional non-value added time to
aggregate data.




                                                      19
West Michigan Health Information Exchange – Business Plan




Current State Use Cases – Other
Having consumers take accountability for their health is a priority; however, technology to enable providers
and consumers to communicate in an electronic world is not available. Demand for e-visits, ability to generate
electronic patient reminders and ability for patients to communicate preferences electronically and contribute
health information electronically is presently non-existent.

E-Prescribing
The Centers for Medicaid and Medicare Services (CMS) is offering an incentive to providers who use
electronic prescribing (e-prescribing) software that meets all of the Physician Quality Reporting Initiative
(PQRI) reporting requirements. In addition to a 2% bonus for regular PQRI reporting in 2009, a 2% bonus for
using and reporting on e-prescribing will be paid to providers. This additional incentive is available in 2009
and 1010. The incentive decreases to 1% in 2011 and 2012 and decreases to 0.5% in 2013. Providers who
do not use e-prescribing by 2012 will be penalized 1% (i.e., they will be paid at 99% for their Medicare Part B
charges).

The Clinical Work Group considered e-prescribing as part of use case development; however, it was not
assigned a high priority for the HIE, versus other use cases, and labeled as “TBD” (to be determined). Given
the CMS developments, availability of e-prescribing as part of vendor HIE solutions, potential revenue stream
and overall benefits of e-prescribing, this plan recommends evaluating e-prescribing as part of the overall
solution evaluation process.

The Solution
West Michigan is ideally suited to develop a sustainable Health Information Exchange (HIE) which will
ultimately integrate with other regional, state-wide and national initiatives. The schematic below represents
present versus future state connectivity for the HIE; including a centralized ‘hub’ in the future state which
provides:

        Clinical Messaging: results and other key transactions are ‘pushed’ to authorized providers. Key
        senders are hospitals and laboratories and key receivers are physician practices. Transactions will
        include:
            o   Discharge Summary Reports
            o   EO Discharge Summary Reports
            o   Inpatient/Outpatient Surgical Reports
            o   Inpatient/Outpatient Lab Reports
            o   Inpatient/Outpatient Radiology Reports
        Federated Repository: supports retrieval and distribution of health information from authorized health
        information sources, starting with medication information as well as transfer of consumer’s health
        information to authorized recipients based on consumer consent. Evaluate e-prescriptions solutions
        at the very least, integration with e-prescription solutions may be necessary such that medication data
        will be included in a Federated Repository.
        Central Repository: a permanent, longitudinal record of the consumer’s health information, starting
        with medication information. Encompasses centralized storage of patient data; greatest value is for
        data mining and research geared toward quality and population health improvement (e.g., clinical
        trials).

                                                    20
West Michigan Health Information Exchange – Business Plan



In all cases, data is accessible when and where it is needed; avoiding the costly effort to manually
assemble prepare and distribute information, and repeat tests.



                                West Michigan HIE – Present Versus Future State

                       Present State                                                    Desired State



                                     Physicians                                                      Physicians
          Patients                                                       Patients
          & Families                                                     & Families
                                                   Public Health                                                  Public Health




                                                     Specialty                                                       Specialty
       Lab tests &                                                    Lab tests &
                                                     Providers                                                       Providers
       XRAYs                                                          XRAYs




                                                  Insurance                                                     Insurance
       Hospitals & Clinics                        Companies           Hospitals & Clinics                       Companies
                             Medications                                                    Medications

                                   Represents a combination
                                                                                                Represents an electronic
                                   of paper-based, f ax,
                                                                                                connection with standard
                                   phone and non-standard
                                                                                                communication and
                                   electronic connections
                                                                                                messaging protocols

                                                                       Source: Adapted from MiHIA

In order to be successful, the West Michigan HIE must address the following:
        Protect the privacy and security of health information as mandated by the Health Insurance Portability
        and Accountability Act (HIPAA) and its implementing regulations.

        Align with State-wide (MiHIN) and national (NHIN) efforts.
        Leverage current investment in information technology infrastructure to minimize capital and
        operating costs required for the HIE.
        Enhance, not replace, current health information technology (HIT) and HIE efforts in the Community.
        Provide a database of clinical data to be used in support of quality improvement initiatives in West
        Michigan (i.e., Aligning Forces for Quality).



Overall Benefits
Value to the community and individual patients
        Providers will have access to important and protected patient health information where and when
        needed, improving the quality of care they provide to individual patients. This will improve the overall
        health and the healthcare experience of all patients.



                                                                 21
West Michigan Health Information Exchange – Business Plan



      Provider access to health information will also help reduce the unneeded duplication of lab testing,
      radiology testing, prescription drugs and other healthcare services that are currently ordered due to
      the unavailability of information at the time and place it is needed. This will save patients time,
      medical expenses, travel, potential pain and other inconveniences and medical risks.
      Healthcare systems in the region will be able to leverage their collective existing health information
      exchange efforts to reduce overall healthcare costs and achieve greater efficiencies.
      Data from all healthcare systems can be aggregated and be used in ways to promote improved
      community health. Examples include healthcare research, measuring provider group performance,
      promotion of best practices (e.g. Aligning Forces for Quality) and county health department activities.
      Patients will have greater access to their own healthcare information and best-practice information
      related to their personal medical problems.
Value to employers and payers
      Employers and third-party payers will experience cost savings through the automation of manual
      tasks involved in the receipt and processing of paper-based records.
      Cost savings will also be achieved through the reduction in unnecessary duplicate testing as
      described above. Improved efficiencies and care coordination also will reduce healthcare costs.
      Employees will miss less work time caused by unnecessary and inappropriate care.
      To the extent that the HIE helps improve the quality of care and helps promote more healthy
      behaviors, employees will be healthier and miss less work time due to avoidable healthcare
      problems.
      Payers will not need to duplicate all of their costly efforts to collect and provide information to
      physician groups for patient management purposes.
Value to healthcare systems and physicians
      Like employers and payers, healthcare systems and physician groups will be able to achieve
      significant cost savings through the automation of manual tasks involved in the receipt and
      processing of paper-based records.
      The WMHIE will complement the information exchange work now done in each healthcare system,
      taking over certain functions that are redundant in the overall community healthcare system. This will
      lower the HIE costs of all healthcare systems while improving the reach and effectiveness of their HIE
      efforts.
      Patient healthcare information will be more readily available to enable physicians practicing in offices,
      outpatient centers, urgent care centers, emergency rooms and hospitals to improve clinical decision-
      making and to provide better quality care.
      Physician groups large and small will not be faced with the daunting and expensive tasks of building
      multiple interfaces with multiple healthcare systems and payers operating in their area.
      Physicians will be better able to help their patients avoid the cost of unnecessary care related
      duplication of services.
      Testing results will get to physicians more quickly, speeding up care and helping improve office
      efficiency and productivity and administrative decision-making. The improved flow of referral
      information between primary care and specialist physicians will reduce potential errors in transitions
      of care or “hand-offs”.
      Physician groups will not have to review multiple reports from multiple payer organizations in order to
      assess their quality and utilization performance.
      Physicians will be able to enhance the performance of their electronic medical records (EMR) and
      their communication with patients.


                                                   22
West Michigan Health Information Exchange – Business Plan




These key benefits can be achieved by our regional community only if the health systems,
employers and third-party payers have the collective will to make the commitment do the
work required.

The Vision
Clinical information is securely available among authorized stakeholders in a consistent,
usable form anytime and anywhere it is needed in order to improve the overall safety,
effectiveness and efficiency of the delivery of care in West Michigan.

Critical Success Factors
There are many different approaches to building an HIE, but to be successful, each HIE must employ a
feasible and sustainable financial model. To that end, the West Michigan HIE must bring healthcare providers,
payers and other stakeholders together in a connected community that uses technology to improve quality of
care, safety, and efficiency. The West Michigan HIE will not only facilitate the exchange of healthcare
information between institutions and practitioners, but also between the insurance companies, third-party
administrators and government healthcare organizations that pay for patient care. As a result, the West
Michigan HIE will improve the quality of care for patients while reducing the inefficiencies and costs of
providing care. These goals are consistent with the Vision for the HIE.




                                                   23
West Michigan Health Information Exchange – Business Plan




4      Market Analysis
West Michigan Market
The target area for the WMHIE includes the Michigan counties of Allegan, Barry, Ionia, Kent, Lake, Mason,
Mecosta, Montcalm, Muskegon, Newaygo, Oceana, Osceola and Ottawa; the West Michigan Medical Trading
Area (MTA). The 13 counties cover a region which includes a mixture of urban and rural areas. Metropolitan
communities include Holland, Muskegon and Grand Rapids.

                              West Michigan Medical Trading Area
                         With Population Density and Hospital Locations




According to the US Census Bureau, the total population in 2007 in the Medical Trading Area is 1,518,986.
The three counties with the highest percentage of total population are Kent (39.79%), Ottawa (17.06%) and
Muskegon (11.48%). Counties with the lowest percentage of total population include Lake (0.73%), Osceola




                                                  24
West Michigan Health Information Exchange – Business Plan



(1.52%) and Oceana (1.83%)7. Specific population numbers for each of the 13 counties is displayed in the
General Appendix, along with a map of population densities.

Consumers
The population of the target area is 86% Caucasian, 7% African American, 6% Hispanic and 1% Native
American or Asian Pacific Islander. Females are 52% of the population; males 48%. Age ranges are 25%
under 18 years of age; 39% are age 19 – 44; 25% is between the ages of 45 – 64, and 10% of the population
is over 65 years of age. The median household income is $39,240 and the median family income is
$45,1188.

Stakeholders
Hospitals and Other Healthcare Facilities
There are a variety of types of hospitals in the target area. Currently, there are 24 short-term acute and
critical access hospitals, two psychiatric hospitals, five long-term hospitals, and one rehabilitation hospital.
The largest health care system is Spectrum Health, which includes eight of the hospitals, several primary care
centers, long term care, home health services, and other ancillary services. Trinity Health System operates
five hospitals and has many primary care physician practices. Metro Health has a large hospital located in
Grand Rapids and several physician practices. The majority of the remaining hospitals are small to mid-sized
community and specialty hospitals9. Several of those hospitals also own and operate primary care physician
practices. The map on the previous page shows specific locations of Hospitals.

Other healthcare facilities currently operating in the West Michigan MTA or Community include:

            60 nursing homes 10
            113 ambulatory surgery centers (ASC’s) 11
            Two Veteran’s affairs clinics 12
            32 federally qualified health clinics 13
            39 rural health clinics 14
            17 dialysis centers 15
            15 diagnostic imaging centers




7
    US Census Bureau (2008). Retrieved from http://factfinder.census.gov
8
    US Census Bureau (2008). Retrieved from http://factfinder.census.gov
9
    American Hospital Directory (2008). Retrieved from http://www.ahd.com
10
     Health Care Association of Michigan (2008). Retrieved from http://www.hcam.org
11
     Michigan Department of Community Health, Bureau of Health Systems (2008). Retrieved from http://www.michigan.gov/mdch
12
     United States Department of Veterans Affairs (2008). Retrieved from http://www.va.gov/directory
13
     Michigan Department of Community Health, Bureau of Health Systems (2008). Retrieved from http://www.michigan.gov/mdch
14
     Center for Medicare & Medicaid Services (2008). Retrieved from http://www.cms.hhs.gov
15
     Center for Medicare & Medicaid Services (2008). Retrieved from http://www.cms.hhs.gov/Dialysis


                                                                  25
West Michigan Health Information Exchange – Business Plan




Physicians
There are approximately 2,897 physicians in the medical trading area. Of this number, 2,344 are involved
with patient care. Eighty two percent of these physicians are in office-based practice; with 338 designated as
primary care and 1,590 as specialty as identified in the tables below16.

                                            Physician Practice Breakdown by Size
                                             West Michigan Medical Trading Area
                    Primary Care                                       Number of Practices       Number of Physicians
                    1 Physician                                                 74                           74
                    2 Physicians                                                25                           50
                    3-5 Physicians                                              27                           80
                    6-9 Physicians                                               9                           53
                    10-19 Physicians                                             4                           46
                    20+ Physicians                                               1                           35
                    Total                                                       140                          338
                    Specialist
                    1 Physician                                                 348                          348
                    2 Physicians                                                118                          235
                    3-5 Physicians                                              126                          379
                    6-9 Physicians                                              42                           250
                    10-19 Physicians                                            18                           234
                    20+ Physicians                                               7                           143
                    Total                                                       658                       1,590

Note: These counts do not include Nurse Practitioners and Physician Assistants, who also will benefit from
using the HIT. It is anticipated that only physicians in office-based practices will use/pay for HIE Services.

There are several large physician networks in the target area; as outlined in the table below:
                              Hospital            Total # of           Hosp-based       PA's         Primary       Specialty
PO - PHO Name               System, City         Physicians            Physicians      & NP's*        Care           Care
MMPC                     Spectrum, GR                212
WMPN                     Spectrum, GR                224                                               170            54
Advantage Health         St Mary's, GR               223                                  24
Metro PHO                Metro, GR                   173                                               79             94

Lakeshore HN             MHP, Muskegon               273                   43             61
Principal Health         HCH, Holland                185
Zeeland PHO              ZCH, Zeeland                 29                   0               4           28             1

Total                                               1,319

Notes:
1. PA's and NP's not included in total physician counts*
2. WMPN totals include POWM and SHP physicians
3. Zeeland PHO number excludes specialist physicians who are also Principal Health members
4. Missing data was unavailable at the time reqested




16
     Smart, D.R., & Sellers, J. Physician Characteristics and Distribution in the US. (2008). The United States of America: American
Medical Association.


                                                                  26
West Michigan Health Information Exchange – Business Plan




Insurance Plans
Overall, there are 13 health insurance plans providing coverage for members in the MTA. Prominent
insurance plans in the region include Priority Health, Blue Cross Blue Shield of Michigan (BCBSM) and Blue
Care Network, representing an estimated total of 855,898 covered lives or 63.34% of the covered lives in the
MTA. There are also 211,251 Medicaid enrollees and 214,463 Medicare enrollees in the MTA.17 There are
also an estimated 65,756 uninsured in the MTA.18 Other insurance plans include Cofinity /Aetna (Commercial
PPO), Health Plan of Michigan (Medicaid HMO), Molina Healthcare of Michigan (Medicaid HMO), and Grand
Valley Health Plans (Staff Model HMO)19 for a total of 1,453,230 insured. Most large national insurers are
represented in the West Michigan market.

Employers
The top employers in the West Michigan MTA, sorted by number of employees in the MTA, are represented in
the table below:

                Employer20                                                              # of                Self-
                                                                                     Employees            Insured?
                                                                                      in MTA
                Spectrum Health Hospitals                                                 12,000              Yes
                Meijer                                                                     8,441              Yes
                Trinity Health                                                             6,467              Yes
                Steelcase                                                                  5,000              Yes
                Axios (Professional Employment Organization)                               4,000              No
                Access Business Group                                                      3,900              No
                Alticor                                                                    3,900              Yes
                Grand Rapids Public Schools                                                3,392              Yes
                Johnson Controls                                                           3,250              Yes
                Spartan Stores                                                             3,040              Yes
                Herman Miller                                                              2,545              No
                Magna Donnelly                                                             2,535              No
                Perrigo Company                                                            2,500              Yes
                General Motors                                                             2,500              Yes
                Metro Health                                                               2,200              Yes
                Gentex Corporation                                                         2,186              No
                Lacks Enterprises                                                          2,175              Yes
                                                            Total                         70,028


The distinction between those that are self-insured and those that are not, is that the self-insured employers
are, in effect, a health plan and would benefit directly from an HIE (in terms of reduction in duplicate tests and


17
     Michigan Department of Labor and Economic Growth, Office of Financial and Insurance Regulation. (2008)

18
     Kaiser Family Foundation (2008). Retrieved from http://www.kff.org

19
     Health Plans of Michigan (2008). Retrieved from http://hpmich.com

20
     Regional Manufacturers Directory of West Michigan, Grand Rapids Area Chamber of Commerce. Michigan Department of Labor and
Economic Growth, Workers Compensation Agency. (2008)


                                                                  27
West Michigan Health Information Exchange – Business Plan



other efficiencies). Also note that several of the largest employers are also Health Plans (i.e., self-insured).
These stakeholders essentially receive increased benefits of being both a Provider and Payer.

Other Stakeholders
The region also includes 321 pharmacies. Approximately half of the pharmacies are either part of a large
pharmaceutical chain or are hospital- based. There are also 838 licensed healthcare laboratories21. Many of
these licensed laboratories are part of a hospital, physician office or other healthcare facility; however, there
are several prominent independent laboratories including Quest Diagnostics. A map showing location of labs
and pharmacies is located in the General Appendix.

Transactions
Calculation of Transaction Volumes
It is important to estimate the volume of transactions that will be processed through the West Michigan HIE in
order to determine both value estimates (i.e., ROI) and revenue; the latter since pricing will be based on a per
transaction fee for clinical messaging. The methodology was to use available data and apply reasonable
assumptions to determine the number of transactions. For purposes of this Business Plan, transactions are
analogous to ‘reports’ (i.e., transcribed reports, lab reports, radiology reports, etc.).

It is anticipated that 95% of transactions will be reports which are pushed to another participant in the West
Michigan HIE. The majority of senders will be Hospitals; however, independent labs, diagnostic imaging
centers and physician practices are expected to push messages through the West Michigan HIE as well.

For transactions originating at hospitals throughout the MTA, report volumes were based on the number of
inpatient discharge summary reports for each hospital. For example, the following factors were used to
calculate the number of lab and radiology reports originating at the hospital which would be available to send
via the West Michigan HIE.

                                     Assumptions Used in Transaction Calculations
                                              Hospital-based Reports
                                                 West Michigan HIE

                                   Report Type                                        # of Reports/IP           # of
                                                                                         Discharge           Reports/OP
                                                                                                                Visit
Lab Reports                                                                                         19.3              2.2
Radiology Reports                                                                                    2.1              0.49
22 23




21
     Michigan Department of Community Health, Bureau of Health Systems (2008).
22
     Gerber Memorial Hospital data (EPSi) for FY 2007-2008
23
     CITL Center for Information Technology Leadership: Improving Healthcare Value. The Value of Healthcare Information Exchange and
Interoperability 2004


                                                               28
West Michigan Health Information Exchange – Business Plan



These factors were applied to estimate the number of reports in the Medical Trading Area that would be
eligible for distribution from hospitals via an HIE. It was determined that there would be 12,816,559 reports
annually, based on available data.24

The following represents a breakdown by report type.

                       Annual Report Volumes-Hospitals
                       Breakdown by Report Type                                                  # of Reports
                       Est. # of Inpatient Discharge Summary Reports
                                                                                                          102,275
                       Est. # of ED Discharge Summary Reports
                                                                                                          715,922
                       Est. # of IP Procedure-Surgical Reports
                                                                                                           32,728
                       Est. # of OP Procedure-Surgical Reports
                                                                                                          177,135
                       Est. # of IP Lab Reports
                                                                                                          789,559
                       Est. # of OP Lab Reports
                                                                                                     8,925,155
                       Est. # of IP Radiology Reports
                                                                                                           85,911
                       Est. # of OP Radiology Reports
                                                                                                     1,987,875
                       Sub-Total
                                                                                                   12,816,559


Next, the number of reports issued by independent labs and diagnostic imaging centers was calculated using
data from various sources. It was determined that there would be 4,023,712 reports annually, based on
available data.

The following represents a breakdown by report type:

                   Breakdown by Report Type (Annual)                                                  # of Reports
                                                         25
                   Est. # of Independent Lab Reports
                                                                                                           3,374,324
                   Est. # of Independent Radiology Reports26
                                                                                                            649,388
                   Sub-Total
                                                                                                           4,023,712


Of these reports, 88% would be distributed to providers within the Medical Trading Area27 and therefore
eligible for distribution via the HIE (the other transactions would be sent to providers outside the MTA using


24
     Annual discharge data provided by American Hospital Directory (ahd.com)
25
     Institute of Medicine (2000). Medicare Laboratory Payment Policy: Now and In the Future.
26
     State of Michigan, Managed Care Data and CITL, Center for Information Technology Leadership (2004)
27
     State of Michigan, IHCS, STATEWIDE MEDICAL TRADING AREA BOUNDARIES, 2006


                                                                 29
West Michigan Health Information Exchange – Business Plan



traditional paper-based methods) bringing the total reports eligible for distribution via the West Michigan HIE
to 14,819,439.

In addition, approximately 740,972 messages (five percent of total reports) would be forwarded from one
provider to another and approximately 231,360 would originate at physician practices, thus increasing the
potential transaction volume to 15,791,771. Total potential transaction growth rate, due to anticipated
increase in volume, is estimated to be 5%. However, the number of transactions is expected to decrease by
6% due to reduction in duplicate testing. Thus, the net decrease each year after the first year is estimated to
be 1%. Since adoption would occur over time, the following represents the projected transaction volumes by
year:

Calendar Year (Clinical Messaging Begins July 1,                       2009          2010                  2011            2012         2013
2009)
Messages delivered through West MI HIE                          4,737,531       10,991,072            13,288,775      14,304,975   14,695,822
Growth Rate                                                                        132.00%               20.91%           7.65%        2.73%
Note: transactions would be distributed via the HIE starting July 1, 2009 so first year projections are 50% of
annual potential volume.

Spectrum Health is expected to deliver the majority of the messages in the MTA, delivering 41% of all the
messages. Trinity Health will have the second largest amount of delivered messages, with 28%. Metro
Health and Holland Hospital follow, each anticipated to capture 7% of the total amount of delivered
messages. The remaining 17% of the messages is expected to be shared among the remaining hospitals.

Validation Summary
This estimate was validated using two methodologies:

A. Comparison to methodology used by Michigan Health Information Alliance.


                                                                              MHIA Calculation          West Michigan HIE
                                                                                                          Calculation
                   Total Population                                                  1,518,986
                                                                                                 28
                   Estimated Number of Outpatient Visits per Person                       3.8
                   Estimated Number of Outpatient Visits in MTA                      5,772,147
                                                                                                 29
                   Results per Visit                                                         3
                   Total Messages Related to Outpatient Visits in                   17,316,440
                   MTA (Annual)
                   Percent of Services Rendered in MTA                                    88%
                   Total Messages in Medical Trading Area                           15,238,468
                   Percent Eligible for HIE Distribution                                 100%
                   Outpatient Messages eligible for HIE Distribution                15,238,468                     15,791,771


Note: Projections used are conservative when compared to these outpatient only estimates.




28
     Michigan Health Information Alliance, 2008
29
     Michigan Health Information Alliance, 2008


                                                              30
West Michigan Health Information Exchange – Business Plan




B. Comparison to benchmark organization: HealthBridge.


Benchmarking

Comparative Analysis                  WMHIE (Year 5)                    HealthBridge             WMHIE %
Population Served                           1,518,986                      2,200,000                  69.04%
Messages (Year 5)                          14,852,160                     24,000,000                  61.88%



Note: HealthBridge, based in Cincinnati, distributes over 24 Million transactions per Year .The Population
Served by HealthBridge = 2.2 M; Physicians = 4,000+. HealthBridge is connected to other providers such as
nursing homes and outpatient facilities30

Note: Comparison to HealthBridge after Year 5 shows that the projected transactions represent 61.88% of the
HealthBridge transactions (comparing same transaction types), while the population of the MTA is 69% of the
population served by HealthBridge. Therefore, the projections used appear to be reasonable.

Please refer to the Appendix for details of the estimated transaction volumes.




30
     www.healthbridge.com



                                                        31
West Michigan Health Information Exchange – Business Plan




Business Environment
Vendor Marketplace
The healthcare technology vendor marketplace is saturated with over 50 health information exchange
systems, over 300 electronic medical record (EMR) systems, and over 75 personal health record systems.31
Of these categories, the EMR marketplace is the most mature since it has been providing solutions the
longest. Consolidation in the EMR marketplace and evaluation of standards is expected to continue to drive
further value, ease fragmentation and enhance interoperability between providers. However, interoperability
will be achieved most efficiently through a Community HIE versus point to point interfaces. In addition, point
to point interfaces would exacerbate fragmentation and lead to lower adoption rates among physicians.

Electronic Medical Records
Within the West Michigan MTA, it is estimated that over 20 EMR vendors are presently implemented based
on preliminary results from an Environmental Scan which was conducted by the Technical Work Group and
follow-up discussions with the CIO group. As the following table shows, it is estimated that 27.14% of
physician practices are currently operating an EMR, with only 10.10% of physician practices using full EMR
functionality.32

All Physicians                                         # Practices            # of               % EMR               % Full
                                                                           Physicians                                EMR
Physician Practices
1 Physician                                                 421                421               24.00%              7.10%
2 Physicians                                                143                285               28.00%              9.70%
3-5 Physicians                                              153                459               30.00%              13.40%
6-9 Physicians                                               51                303               30.90%              16.60%
10-19 Physicians                                             22                280               46.50%              26.60%
20+ Physicians                                               8                 178               46.50%              26.60%
                                            Total           797               1,927              27.14%              10.10%
It is anticipated that the practices with “Full EMR” would automatically receive results into their EMR via the
health information exchange. Over time, those with an EMR not using Full EMR capability would eventually
adopt the added functionality. However, to be conservative, it is expected that the growth rate toward Full
EMR capability is only 8% per year, based on the CDC study.

Personal Health Records
With the recent entry by Google and Microsoft, the personal health record (PHR) space has received
significant attention lately. In addition to 75 other PHR vendors, Google and Microsoft allow consumers to
control storage (e.g., what goes in their medical record) as well as distribution of their electronic medical
record (e.g., who gets to see what).




31
     Plante & Moran industry experience.

32
     Electronic Medical Record Use by Office-Based Physicians and Their Practices. (2006) United States Division of Health Statistics,
CDC.



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West Michigan Health Information Exchange – Business Plan



The Clinical Work Group identified PHR as a functional requirement that would empower consumers to
manage a copy of their own medical records; however, the adoption of which will not occur for several years
as determined by the use case prioritization. Furthermore, adoption of PHR has been relatively low due to
consumer reluctance over privacy concerns. Even employer-sponsored and health plan sponsored “free”
PHRs are having limited success.33

Health Information Exchange
The HIE market is very fragmented with less than 12 “pure” health information exchange products available.
During the past 12-18 months, EMR and other provider-centric technology vendors have built products and/or
formed partnerships to offer a solution for HIEs. Some EMR vendors have deployed HIE-like products;
however, these have been used primarily to connect physician offices using their EMR product.

A request for information (RFI) was issued in May 2008 as part of the planning process to over 20 potential
HIE vendors. The RFI was also posted publicly. Responses were analyzed based on responses from eleven
vendors. The combined Clinical and Technical Work Groups met in June 2008 to select likely candidates
and, specifically, which vendors would be targeted for budgetary pricing. The four that were chosen were:
Axolotl, Covisint, Medicity, and Wellogic. Due to limited response from two of the four, Orion was chosen as a
backup to receive pricing information from. In addition, Novo Innovations (Novo) was contacted to explore
pricing for their clinical messaging solution, based on the fact that Metro Health, Spectrum Health and Trinity
Health have all implemented Novo as part of their internal HIE efforts.

Competition
The West Michigan Medical Trading Area, especially the Grand Rapids area, is intensely competitive with the
three largest providers (Metro Health, Spectrum Health and Trinity Health) having significant presence in
Grand Rapids. Like other urban marketplaces, these providers compete in terms of service offering, quality
(e.g., outcomes), and service level (e.g., wait time, friendliness of staff, etc.). Price is not typically an issue
with consumers; however, with consumers becoming increasingly responsible for healthcare costs, the
emergence of Medical Tourism and other ways to reduce their out of pocket expenses is becoming more of a
concern.

Despite this competitive environment, it is anticipated that many of the key stakeholders in the West Michigan
MTA will participate in a health information exchange if the following are true:

       1. The health information exchange serves the greater good in terms of overall Community benefit.
       2. The health information exchange serves to benefit stakeholders in an equitable manner.
       3. The health information exchange is governed by a neutral body.
       4. The health information exchange complements existing HIE efforts in the Community.
       5. The stakeholders agree not to compete on data.
The purpose of this business plan is to demonstrate that a model exists which will address all four of these
items.




33
     Buxbaum, P. PHR adoption: How’s it going? (2008). Federal Computer Week. Retrieved from http://www.fcw.com



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West Michigan Health Information Exchange – Business Plan




5           Industry Analysis
Several health information exchanges across the U.S. were researched as part of the business planning
process. As well, analysis from publicly available resources such as other HIE business plans and research
studies were considered. This resulting industry analysis highlights several of the key findings and critical
success factors which should be applied in the development of the West Michigan Health Information
Exchange.

Industry Overview
According to HIMSS, there are 475 active RHIOs in the U.S. (26 in Michigan), with another 102 being
proposed.34 Another 112 are designated as “expired”. At the national level, the development of a Nationwide
Health Information Network (NHIN) will provide the foundation for an interoperable, standards-based network
for the secure exchange of healthcare information. The Office of the National Coordinator (ONC) is advancing
the NHIN as a “network of networks” built from state and regional health information exchanges (HIEs) and
other networks to support the exchange of healthcare information by connecting these networks and the
systems they connect.

Representative HIEs
Since the HIE industry is in its infancy, there was wide variation in findings and conclusions regarding
strategic, operational, technology and governance components. Thus, what works for one HIE will not
necessarily work for others. The often used phrase “if you’ve seen one HIE, you’ve seen one HIE applies”.
For example, some HIEs have instituted a Clinical Data Repository (CDR) at inception; a model which was
considered and rejected in the West Michigan MTA by the Clinical Work Group. Thus, this industry research
was used primarily as a sounding board for conclusions drawn during the planning process.

Discussions were conducted with the following health information exchanges:

            Indiana Health Information Exchange (IHIE)35                                 - Indianapolis, IN
                            36
            HealthBridge                                                                 - Cincinnati, OH
                                                                       37
            Delaware Health Information Network (DHIN)                                   - Delaware
                                                              38
            Utah Health Information Network (UHIN)                                       -Utah
In addition, business plans were reviewed for the following HIEs:

            MA-SHARE Clinical Data Exchange39                                            - Massachusetts
            Oregon Health Information Exchange40                                         - Portland, OR



34
 Healthcare Information Management Systems Society (2008). State Dashboard. Retrieved from http:// www.himss.org/StateDashboard
35
     Indiana Health Information Exchange (2008). Retrieved from http://www.ihie.org
36
     Healthbridge (2008). Retrieved from http://www.healthbridge.org
37
     Delaware Health Information Network (2008). Retrieved from http://www.dhin.org
38
     Utah Health Information Network (2008). Retrieved from http://uhin.com
39
     Massachusetts Health Data Consortium (2008). Retrieved from http://mahealhtdata.org/ma-share
40
     Oregon Health Care Quality Corporation (2008) Retrieved from http://www.oregon.gov/OHPPR/HISPC


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West Michigan Health Information Exchange – Business Plan



            Louisville Health Information Exchange (LouHIE)41                                - Louisville, KY
Furthermore, through regular interaction with the State of Michigan – MiHIN Resource Center and attendance
at industry events (e.g., HIMSS, MiHIN conference), an acute awareness of what other HIEs in the State of
Michigan and across the U.S., was obtained.

Each of the HIEs reviewed have overall objectives that are similar to that for the West Michigan HIE. The
components that address containing rising costs and improving quality are fairly common.

Funding of HIEs
According to the Health Care IT Transition Group (2006), few health information exchanges have actually
reached financial sustainability independent of grant funding; however, more than 70% of RHIO income, on
average, comes from grants and other forms of contributed income, in the startup phases.42 Federal, state
and local agencies, foundations, and philanthropic organizations have conventionally been used and act as
vital components in supporting start up and furthermore, supporting ongoing development of the health
exchange. Founding members have also been known to provide start up assistance both monetarily and in
the form of in kind contributions.

There are a number of HIEs and RHIOs that are financially self sustaining. Those self sustaining entities,
model an e-commerce and/or service provision methodology. In addition, those exchanges who have
sustained operations have had the ability to fund and implement additional functionality based on expressed
member needs.

Two of the HIEs reviewed have a history of being financially self-sustainable. These included IHIE and
HealthBridge. Both are primarily focused on providing care providers with cost effective access to selected
medical information (e.g., labs and messages).

IHIE
IHIE serves approximately one fourth of the 6.3 million people in Indiana and was expected to grow to service
one third of the State. There are 27 Indiana hospitals connected to IHIE and seven more were expected to be
connected as of March 2008. IHIE is also connected to over 70 hospitals to monitor the state’s public health
surveillance network. Through IHIE, there are 5,200 physicians who have access to laboratory test results, to
avoid ordering duplicate tests. IHIE started operations in the 1990’s. Initial funding for IHIE came from
government and healthcare foundations.43 IHIE uses a custom-developed technology platform and employs
over 30 staff.

HealthBridge
HealthBridge is the largest health information exchange in the country and has created a sustainable
business model around its clinical messaging system. Within the region, 94% of all test results from hospitals
and national/local labs are distributed electronically. This includes 2.1 million results per month being fed to


41
     Louisville Health Information Exchange (2008). Retrieved from http://www.louhie.org

42
     Funding RHIO Start-Up and Financing for Life. (2006). Healthcare IT Transition Group.

43
     Indiana Health Information Exchange (2008). Retrieved from http://www.ihie.org



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West Michigan Health Information Exchange – Business Plan



25 different electronic medical record (EMR) systems. Hospitals and labs fund the clinical messaging system
from the savings created by the elimination of their paper-related costs. HealthBridge has continued to add
services and has created real-time automated disease reporting to the Hamilton County Public Health
Department. Recently, HealthBridge has been offering their infrastructure and system capabilities to other
HIEs as a potential additional source of revenue. The initial funding for HealthBridge was provided by a
combination of grants, providers and payers starting in the early 1990’s.44 Healthbridge has deployed the
solution developed and supported by Axolotl.45

Definition of RHIO versus HIE
The terms regional health information organization (“RHIO”) and health information exchange (“HIE”) are
often used interchangeably and there are inconsistent opinions on whether the terms mean the same thing.
For purposes of this business plan, the following definitions will apply:

RHIO
A RHIO is a legally defined, neutral organization that adheres to a defined governance structure, which is
composed of and facilitates collaboration among stakeholders in a given medical trading area, community, or
region and is dedicated to the promotion and use of secure digital health information exchange in order to
advance the effective and efficient delivery of healthcare for individuals and communities.46

HIE
An HIE is the sharing action between any two or more organizations with an executed business/legal
arrangement that have deployed commonly agreed upon technology with applied standards for the purpose of
electronically exchanging health related data between the organizations.47

Given these definitions, the “RHIO” for WMHIE will represent the neutral body (“Board”), and the WMHIE
entity providing services. The term “HIE” will represent the sharing action between the participating
organizations, as the definition implies.

Conclusions
Based on industry research, there is no one size fits all business model for HIEs and established entities face
continuing challenges relative to financial sustainability. The good news is that lessons learned were shared
freely; which was helpful in formulating the key strategies and risk assessment presented in this Plan.




44
     Healthbridge (2008). Retrieved from http://www.healthbridge.org
45
     Axolotl (2008). Retrieved from http://www.axolotl.com
46
 Healthcare Information Management Systems Society (2008). Definitions and Acronyms. Retrieved from http://www.himss.org
47
     Healthcare Information Management Systems Society (2008). Definitions and Acronyms. Retrieved from http://www.himss.org



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West Michigan Health Information Exchange – Business Plan




6       Overall Approach
Requirements Definition
As identified in Section 3, the Clinical Work Group developed Use Cases (e.g., “real world examples”) which
would help to identify the key clinical processes (e.g., clinical care, public health, e-Prescribing, etc.) that
would be enhanced through the use of a health information exchange (HIE). A process to prioritize the key
clinical processes was undertaken by the Clinical Work Group which involved definition of criteria for
prioritizing, including: reach, feasibility and impact.

Once key clinical processes were prioritized, it was possible to define the key functional requirements for the
HIE. For example, for one of the key clinical processes, results delivery, it was determined that a Use Case
would involve faster delivery of results. The Work Group quickly determined that the functionality provided by
a clinical messaging system would enhance the results delivery process and allow for faster results delivery,
among other benefits. The Technical, Legal and Business/Finance Work Groups used these Use Cases and
related functional requirements as part of their separate analysis regarding the technical, legal and
business/financial aspects of running an HIE.

Overall, there were 15 Use Cases categorized as “Clinical Messaging” encompassing 7 functional
requirements and 8 Use Cases categorized as “Clinical Repository” encompassing an additional 9 functional
requirements. Furthermore, there were 9 Uses Cases categorized as “Public Health Reporting” and other
(e.g., Personal Health Record, Other). The Clinical Work Group prioritized Clinical Messaging as the highest,
followed by Clinical Repository, then the other categories. Prioritization was based on the degree to which
associated functional requirements addressed identified “pain points” identified in the Use Cases, as well as
other factors such as those mentioned above.

Consensus Building
In April 2008, a group of Chief Information Officers (CIOs) representing various stakeholder organizations
throughout the Medical Trading Area was formed to build consensus and obtain their perspective on
prioritized requirements, technical feasibility and congruence with their own internal efforts. From these
meetings and further research, a preliminary “HIE Blueprint” was created. Further collaboration with this
group resulted in a more defined set of objectives for the HIE and a more refined HIE Blueprint; including
definition of Level 1, Level 2 and Level 3 functionality as follows:

        Level 1 – Clinical Messaging
        Level 2 – Federated Repository
        Level 3 – Central Repository

These three levels were chosen for a variety of reasons including:

        Consistent with HCV 2020 Work Group conclusions
        Consistent with major stakeholders’ current plans for health information exchange




                                                     37
West Michigan Health Information Exchange – Business Plan



             Consistent with State of Michigan, Michigan Health Information Network (MiHIN) initiative48
             Level 1 - Clinical Messaging was identified to have value for both the clinician (quicker delivery) and
             the hospital (lower delivery cost), therefore, as an initial project would result in a “win-win” situation49
             Level 1 - Clinical Messaging was considered to be less complex to implement and was anticipated to
             evolve towards a more complex and costly model over time
             Ease of deployment for Level 1 – Clinical Messaging allows greater probability to achieve ‘critical
             mass’ physician participation (60% participation)
             Experience of sustainable RHIOs and HIEs across the country suggests that each started with the
             functions stakeholders identified as having the highest value and later expanded into other services50

It was decided that the term “Levels” would be used versus “Phases” since the latter implies that the
associated functionality will be rolled out while the former implies that consensus building and feasibility must
be demonstrated before migrating to additional levels (e.g., from Clinical Messaging to Federated Repository).
It is expected that governance, representing the majority of stakeholder interests, will play a critical role in
determining consensus and feasibility of migration.

During the CIO meetings, it was also confirmed that each of three major systems within the Medical Trading
Area had chosen and were at various stages of implementing a Clinical Messaging solution from Novo
Innovations (“Novo”). These stakeholders; Metro Health, Spectrum Health, and Trinity Health, representing a
total of 10 hospitals and multiple physician groups, have all invested in their own intra-system health
information exchange to share information with physician groups. In fact, numerous practices have already
been connected with various stakeholder hospitals to the degree that positive results of HIE are already being
realized; representing an early win for health information exchange in West Michigan.

Therefore, the Business Plan includes a scenario that is inclusive of Novo as the core clinical messaging
service, and a scenario where an integrated solution is used; inclusive of clinical messaging and federated
repository components.

In addition, several funding options will be explored relative to the deployment of the Novo solution, as
described later in this section. It is anticipated that further dialogue with the CIO group and other
stakeholders will be required to fully investigate these options.




48
     Conduit to Care: Michigan eHealth Initiative. (2006) Retrieved from
http://www.michigan.gov/documents/mihin/MiHIN_Report_Compress_v2_180321_7.pdf.

49
     Foundation of Research and Education. Development of State Level Health Information Exchange Initiatives: Final Report. September
1, 2006. Available from: http://www.staterhio.org

50
     Davies, J. (2007). Financing the Mature RHIO. Retrieved from http://www.socialtext.net/rhiowiki/index.cgi?financing_the_mature_rhio



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West Michigan Health Information Exchange – Business Plan




HIE Blueprint
Level 1: Clinical Messaging
Definition
What is it?     Pushing data electronically

Timeframe?      Six months

                July 1, 2009 through December 31, 2009

    Key Tasks                                 Big Wins                       Major Winners

    1. Get everyone connected                 1. Efficiency                  1. Health Systems
                                                                                (hospitals, physicians,
    2. Participation by critical mass of      2. Reduce costs by
                                                                                other providers)
       HC systems                                replacing paper with
                                                 practice e-Inboxes          2. Patients
    3. Participation be critical mass of
       Physicians (at least 60% of all)       3. Foundation for Level 2



Functionality
For Clinical Messaging, it was determined that six major functions would provide the most benefit. Through
research and CIO discussion, it was determined that the most basic clinical messaging solutions would be
able to provide the following six functions: Results Reporting (push), Results Forwarding, Secure Messaging,
Referral/Consult Requests, Diagnosis, Orders and Results, and Prior Results.

For Level 1, “Results” would include the following types of messages: lab results,
admission/discharge/transfer (ADT) information, and transcribed reports (e.g., transcribed radiology reports,
discharge summaries)

In a typical Clinical Messaging scenario, there are “senders” and “receivers” of data. The clinical messaging
solution performs a “catch and release” function. (e.g., data is not stored centrally). Senders of data are
creating “packets” of information in an electronic format which typically utilizes HL7 or other messaging
standards. On the receiving end, most of which will be Physician Practices in Level 1, data can be either,

    a) Imported directly into the practices electronic medical record (EMR) system,

    b) Placed in an electronic “In-Box”, or

    c) Routed directly to a fax or printer (e-Fax).

It is assumed that that in the first year of operation, 10.10% of practices will import directly into an EMR,
84.9% will use an electronic In-Box, and 5% will receive messages via fax/printer based on the EMR adoption
rates presented earlier. It is anticipated that an increase of practices using an EMR will result in more
seamless receipt of clinical messages, which will replace both In-Box and e-Fax mechanisms at a
conservative rate of 2% per year.




                                                      39
West Michigan Health Information Exchange – Business Plan



                               Level 1 – Clinical Messaging Schematic




Level 2: Federated Repository
Definition
What is it?    Pushing data plus data retrieval on demand through linked information systems

Timeframe?     18 months

               January 1, 2010 through June 30, 2011

   Key Tasks                              Big Wins                      Major Winners

   1. Enable inquiry of data from          1. Reduce duplicate          1. Payers (health plans,
      multiple sources                        testing                      employers)
                                           2. Improve quality of care   2. Providers (e.g.
                                              and care coordination        emergency physicians,
                                                                           specialist physicians)
                                           3. Foundation for Level 3
                                                                        3. Patients




                                                 40
West Michigan Health Information Exchange – Business Plan



Functionality
For Federated Repository, it was determined that four major functions would provide the most benefit to
stakeholders in the Medical Trading Area. As depicted in the diagram below, these four are Clinical Abstract
(printed), Historical Patient Inquiry, Normalized Clinical Information, and Continuity of Care Record (or
“CCR”). Unlike Clinical Messaging, where information is “pushed” from the sender (e.g., hospital, lab, etc.) to
the receiver (e.g., physician practice), a Federated Repository uses “edge server” technology to store
pertinent information at the source site. Next, master patient index (MPI) and record locater service (RLS)
technology is used to “pull” information from relevant sources when an authorized user at a physician
practice, emergency department of a hospital, or other site initiates a query for a patient’s record. When fully
functional, a Google-type search reveals all pertinent information about a specific patient (e.g., lab results,
transcribed records, radiology results, etc.) in an easy to navigate, organized fashion.

Some vendors providing a Federated Repository have built-in electronic medical record (“EMR lite”) and/or e-
prescribing functionality. For example, a physician using this functionality may, in addition to querying patient
data from other sources, initiate orders, record history of present illness, view medication history, etc. The
Federated Repository would not replace clinical messaging functionality; rather, it would enhance it by
allowing a single, aggregated view of a patient’s medical history from multiple data sources.

                                 Level 2 – Federated Repository Schematic




Note: Evaluate e-prescribing




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West Michigan Health Information Exchange – Business Plan




Level 3: Central Repository
Definition
What is it?      Data both pushed and pulled through a regional health information organization (RHIO)

Timeframe?       On-Going

                 July 1, 2011 -

    Key Tasks                                   Big Wins                        Major Winners

    1. RHIO formation with connectivity         1. Right information at         Everyone
       to all participants                         right place, at right time
                                                                                1. Patients
    2. Data analysis capability                 2. All previous wins plus
                                                                                2. Payers (health plans,
                                                   improved community
    3. Quality performance standards                                               employers)
                                                   health efforts
    4. Patient engagement                                                       3. Providers
                                                3. Patients: improved
                                                   disease management           4. Public health efforts;
                                                   system; care                    researchers
                                                   coordination



Functionality
For Central Repository, it was determined that six major functions would provide the most benefit. As
depicted in the diagram below, these six are Public Health Reporting, Disease Management, Resource
Management, Newborn Screening Lab (interface), Continuity of Care Record (CCR), and Administrative Data.
It is important to note that Central Repository would be a major component of community-wide quality
initiatives such as the Aligning Forces for Quality (AF4Q) initiative.

One of the characteristics of a Central Repository is, as the name implies, data is stored centrally. Given this
characteristic, there are a myriad of issues which must be addressed, including: enhanced security,
“ownership”, privacy of individually identifiable health information, infrastructure to support, cost, availability,
access, and data integrity. All of these require far greater resources to develop, implement, manage and
support when compared to Clinical Messaging and Federated Repository.




                                                       42
West Michigan Health Information Exchange – Business Plan



                                 Level 3 – Central Repository Schematic




On-Going Developments
As identified throughout this plan, consensus has been reached relative to an HIE Blueprint, which supports
conclusions reached by the stakeholders through their participation in various Work Groups. However, as
mentioned earlier, the HIE industry, as well as progress being made in the area of HIE is changing constantly.
Therefore, it is anticipated that continued involvement by the CIO group mentioned earlier, the various Work
Groups and other stakeholders is necessary to continue to monitor these changes and make adjustments to
the HIE Blueprint, as necessary.

Novo Innovations
The solution from Novo Innovations (“Novo”), currently at various stages of deployment within Metro Health,
Spectrum Health and Trinity Health, could provide an ideal platform on which to base a community-wide
Clinical Messaging solution. Aside from the organizations, the remaining independent organizations could be
linked into these organizations via the Novo solution, thus forming a comprehensive Level 1 – Clinical
Messaging solution. Based on market research and preliminary data gathered from Metro Health, Spectrum
Health, and Trinity Health, the “independent organizations” represent approximately ten hospitals and
between 300 and 500 physicians; all of which would need to be connected via the West Michigan HIE. Each
instance of Novo could be inter-linked with the other creating a community-wide HIE as depicted below.




                                                   43
West Michigan Health Information Exchange – Business Plan



                                              HIE Integration
                                         Novo Innovations Solution




The benefits of using the Novo solution universally are obvious:

        Leverage current investments in technology;
        Provision of a standardized solution allowing for improved integration;
        Potentially reduce the overall cost for Level 1 deployment as several stakeholders have already
        invested in solution; and
        Combine efforts to jointly roll-out practices as part of a single implementation; for example, for
        physicians requiring connectivity to an EMR, activities such as creating a connection profile, training,
        interface to EMR, determining types of documents to be shared and other implementation could be
        provided by the HIE versus each health care system.

Several challenges have been identified relative to the above scenario becoming a viable solution. For
example, physicians must be able to receive messages from multiple sources through a single ‘In-Box’ and/or
interface; which has not yet been proven with Novo. This would be critical to ensuring physician acceptance
and adoption of the solution. Furthermore, the Novo solution currently only addresses Clinical Messaging;
therefore, Level 2 and Level 3, would require a separate solution given that Novo does not support a
federated repository or centralized repository. Novo would need to interface/integrate with such a solution.




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West Michigan Health Information Exchange – Business Plan




Alternative Approach
The Business Plan presents three scenarios, including: Low, Medium and High, with the Medium Scenario
representing the “baseline” in terms of pro forma financial projections. The Medium Scenario is presented
throughout this Plan with the Low and High Scenarios presented in the Appendix.

Given that three of the major stakeholders are in the process of deploying their own internal Level 1 – Clinical
Messaging solutions, and all three (including Metro Health, Spectrum Health and Trinity Health) have chosen
the same solution from Novo Innovations, a fourth scenario involving the deployment of Novo across the
entire West Michigan HIE should be considered.

This approach was discussed with CIO representatives from the three aforementioned stakeholders. It was
decided that the fourth scenario should consider the following:

        Level 1 – Clinical Messaging should be funded primarily by stakeholders not affiliated with Metro
        Health, Spectrum Health and Trinity Health (17 hospitals and 300-400 physicians, payers, etc.)
        through revenue streams.
        Level 2 and Level 3 should be funded by all participating stakeholders through revenue streams.
Given these parameters, it would be cost prohibitive for non-affiliated stakeholders to fund Level 1 – Clinical
Messaging alone. Thus, the following cost sharing arrangements should be considered in the fourth scenario:

        Discounted software licensing if all hospitals participate.
        Transfer of licenses owned by Metro, Spectrum and Trinity such that further discounts can be
        realized.
        Transfer of Novo support staff from Metro, Spectrum and Trinity to the HIE such that cost saving and
        economies of scale can be realized.




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West Michigan Health Information Exchange – Business Plan




7       Key Assumptions
Participation
Participation in the West Michigan Health Information Exchange (WMHIE) is expected to be influenced by
several drivers: the entity’s perceived and actual benefit from participation, awareness, price, geographic
location, the parent company, and the level of feasibility of successful implementation.

Benefit & Awareness
The extent to which the organization believes that participating in the WMHIE will benefit the organization and
its stakeholders greatly influences whether it will participate in the WMHIE. It is assumed that negative
perceptions of received benefit to its stakeholders will discourage participation. This driver is closely linked to
awareness, and the WMHIE’s responsibility of communicating the benefits of being a participant to the
organization and its stakeholders.

Price
The monetary price that an entity will pay to become a participant in the WMHIE will drive participation levels.
This driver will be especially critical for entities with weak financial positions with insufficient funds to invest in
joining the WMHIE. This is assumed to deter small, rural entities more often than large, urban facilities from
participating in the WMHIE. It is also assumed that as price decreases (e.g., affordability), participation levels
will increase.

Geographic location
Many rural entities are relatively small and operated independently. It is assumed that many of these entities
do not have a strong desire to be a part of an HIE due to their size, independence, and lack of strong need to
be connected with other healthcare-related entities distant to them. Therefore, it is assumed that many of
these will not be an initial or early participant in the WMHIE.

Ownership Companies
The values and operating traits of the ownership companies will be an important driver of participation.
Companies which hold and practice values aligned with joining the WMHIE, such as utilizing cutting-edge
technology, being recognized as a leader, and of increasing value to their stakeholders, will encourage or
mandate that their operating facilities join the WMHIE. It is assumed that large, well-established ownership
companies, such as Metro Health, Spectrum Health and Trinity Health, have these values and traits.

Feasibility
The ability to successfully implement the technology will drive participation. Factors such as adequacy of
existing technology, availability of space within the facility, the culture of the organization, or having the
necessary personnel and funds to maintain it, will factor into each facility’s decision to participate in the
WMHIE. It is assumed that large ownership companies, such as Spectrum Health and Trinity Health, will not
be deterred from participating in the WMHIE for this reason. It is also assumed that several small to midsize
rural entities will be discouraged due to feasibility concerns.




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West Michigan Health Information Exchange – Business Plan




Adoption Rates
Based upon influencers described earlier and expected beneficiaries of the West Michigan HIE, the following
table displays expected initial participators in the WMHIE:

Organization Type                    Initial Participation
Short-term Acute Hospitals           All hospitals included in the Metro Health, Spectrum Health and Trinity
                                     Health System; several others will follow closely
Physicians                           Physicians associated with large, urban physician practices or networks;
                                     target 60% in Year 1, 80% in Year 2
Laboratories                         Several major independent reference labs, including Quest
Health Plans / Payers                Medicaid, Blue Cross Blue Shield of Michigan and Priority Health
Other Providers                      As shown below

The expected participation percentages for the various levels by organizational type are as follows:

                                West Michigan HIE – Anticipated Participation

    •                                                                    Adoption Rate (Percent)
                                         Number          2009        2010         2011         2012            2013
                                                        Level 1     Level 2      Level 3
         Stakeholder Type
    Independent Laboratories                11           18%          27%         27%          36%             45%
       Acute Care Hospitals                 24           71%          71%         83%          88%             92%
         Other - Hospitals                  32           14%          14%         29%          43%             57%
     Skilled Nursing Facilities             60            0%           8%         17%          33%             45%
       Physician Practices*                797           37%          65%         79%          84%             87%
            Physicians**                  1,927          60%          80%         90%          93%             95%
            Health Plans                    12           50%          58%         67%          83%             83%
         Major Employers                    15           23%          38%         54%          62%             62%
                Other
-     Ambulatory Surgical Center           113           20%          50%          75%          90%         95%
  -    Military Treatment Facility          2            50%         100%         100%         100%        100%
-     County Health Departments            13            36%          44%          56%          78%         78%
  -    Federally Qualified Health          32             9%          16%          25%          25%         25%
                 Centers
       -     Dialysis Centers              17            12%          18%         18%          24%             29%
     -     Rural Health Clinics            39             0%           5%          5%           8%              8%
          -    Pharmacy***                 322            6%          11%         16%          28%             40%
-     Diagnostic Imaging Centers           15             0%           7%         13%          20%             27%



Note: actual participation and contributions will not occur until July 2009 in Year 1.

*-represents number of office-based physician practices defined as a group of one or more physicians
dedicated to one or more specialties.



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West Michigan Health Information Exchange – Business Plan



**-represents the number of physicians practicing in office-based practices. Overall, there are 2,897
physicians in the medical trading area, with 2,344 involved in patient care.
***-represents individual pharmacy locations. Pharmacy is not expected to participate due to electronic
prescribing not being designated as a high priority function of the HIE.


Staffing
The staffing plan assumes that the West Michigan Health Information Exchange will be a freestanding self-
sufficient organization that relies primarily on staff from its internal organization, as well as outside consultants
and legal experts. Use of staff from stakeholder organizations as “in-kind” contributions is contemplated,
especially during initiation.

Staffing levels and salary rates were compared with other health information exchange for reasonableness of
the staffing levels and local (e.g., Grand Rapids) salary market conditions. Specifically, data was obtained
from various Form 990 submissions51, review of HIE business plans52, and discussions with representatives
of other HIEs throughout the U.S. Salary data was adjusted for local market using a cost of living comparison
calculator.53 General findings included that there were no consistent staffing models for health information
exchanges. Examples are as follows. Delaware Health Information Network (DHIN) outsources all of its
information technology function to Perot Systems; however, has plans to transition to an internal staffing
model in the future. Minnesota Health Information Exchange (MNHIE) has a small internal staff consisting of
management and client/operational support, while technology and legal are outsourced. The Indiana Health
Information Exchange (IHIE) employs all staff primarily due to its deployment of full Central Repository
functionality as part of its HIE with its Aggregated Patient Repository.

A review of staffing also showed that among 50 regional health information organizations (RHIOs)54,
administrative staff makes up the majority of employees; there is a pattern of mixed employee/contractor use
for technical personnel. It is anticipated that the West Michigan HIE would be similarly staffed in Year 1
relative to 25% of the RHIOs throughout the U.S. The following represents data taken from 50 RHIOs across
the U.S.




51
     Indiana Health Information Exchange (2005) Form 990, Quality Health Network (2004) Form 990, Greater Rochester Regional Health
Information Organization (Form 990), MedSouth eHealth Alliance (2005) Form 990.

52
     Oregon Health Information Exchange Options. Oregon Health Care Quality Corporation. Retrieved from http://q-corp.org

53
     Cost of living comparison calculator. (2008) Retrieved from http://www.bankrate.com/brm/movecalc

54
     Funding RHIO Start-Up and Financing for Life. (2006). Healthcare IT Transition Group.




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West Michigan Health Information Exchange – Business Plan



                                    U.S. Health Information Exchanges
                                          Distribution of HIE Staff


                                                    Percentage of HIE Staff at Each Level

Number of HIE Staff                Zero               Up to 2                 >2, < 5                  >5
Employed
Administrative Staff               30%                   45%                 15%                 10%

Technology Staff                   62%                   20%                 5%                  13%
Contract
Administrative Contract            62%                   23%                 15%                 0%

Technology Contract                67%                   20%                 8%                  5%



Staffing is phased in during the implementation phases as needed, as shown in the table below. Some
positions may need to be filled on an interim basis or with contracted services from another organization or
consultants in order maintain the timetables. Specifically, the CEO position is budgeted starting in month one
of the mobilization period. It may take the governing board some time to recruit and hire an appropriately
qualified person for the CEO position. The budget for the CEO position could be used to appoint an Interim
CEO or to contract with another organization to provide the interim leadership for the HIE while the
recruitment process in underway. Sample Job descriptions are provided in the General Appendix

                                             West Michigan HIE
                                          Projected Staffing Levels

                                                    Projected HIE Staffing Levels by Year
                                             Year 1      Year 2     Year 3     Year 4     Year 5
            Total Gen & Admin                   3          5          7            10       10
            Total Operations                    3          4          5            5         7
            Total R & D                         0          0          0            0         1
            Total Sales & Marketing             2          2          3            4         4
            Total Help Desk                     3          4          6            7         8
            Total Human Resources               1          1          1            1         1
            Total                              12         16          22           27       31




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  West Michigan Health Information Exchange – Business Plan



                                                  West Michigan HIE
                                                Projected Staffing Costs


                                                    Projected HIE Staffing Costs by Year
                                 2009                2010           2011            2012          2013
Total Gen & Admin
                                    $ 200,170         $ 391,541         $ 490,985    $ 853,641     $ 874,982
Total Operations
                                    $ 210,530         $ 294,263         $ 371,997    $ 381,297     $ 545,703
Total R & D
                                          $ -                 $ -             $ -           $ -     $ 80,933
Total Sales & Marketing
                                    $ 146,642         $ 150,308         $ 189,624    $ 230,811     $ 236,582
Total Help Desk
                                    $ 124,404         $ 166,749         $ 261,404    $ 309,160     $ 359,141
Total Human Resources
                                     $ 57,417          $ 58,853          $ 60,324     $ 61,832      $ 63,378
Total Salary Costs
                                    $ 739,163       $ 1,061,714     $ 1,374,334     $ 1,836,742   $ 2,160,719
Total Personnel Benefits
                                   $ 206,966          $ 297,280         $ 384,814    $ 514,288     $ 605,001
Total Salary & Benefit Cost
                                   $ 946,129        $ 1,358,994     $ 1,759,148     $ 2,351,030   $ 2,765,720




  A detailed Staffing Analysis is included in the Financial Appendix.




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West Michigan Health Information Exchange – Business Plan




8       Financial Projections
Key Assumptions
As with any financial model, there are many variables which can drive both revenue and cost in order to
present a variety of scenarios. For this Business Plan, three scenarios were created which represent “High”,
“Medium” and “Low” scenarios.

The following assumptions have been applied to the financial model for the development of pro forma
financial statements (including Low, Medium and High Scenarios).

Financial Assumptions
 Component                                              Value         Comments

 Non-HIE Interfaces

 Cost per interface (Hospital)                            $30,000     Includes Hospital HIS side interface only; HIE
                                                                      side interface is included in vendor cost
 Cost per interface (EMR)                                  $7,500     Includes EMR side interface only; HIE side
                                                                      interface is included in vendor cost
 Cost per practice (training)                              $1,000
 Year 1 - Interface combination factor                       20%      Multi-hospital systems will use the same
                                                                      interface; thus reducing interface cost to this
                                                                      percentage
 Year 2 - 5 Interface combination factor                        50%   Some probability that stand-alone hospitals
                                                                      can share interface cost; thus reducing
                                                                      interface cost to this percentage
 Operating Expenses
 Commissions % of Revenue                                     2%
 All other S&M expenses % of Revenue                          1%
 All other R&D expenses % of Revenue                          2%
 All other G&A expenses % of Revenue                          1%
 System Testing as % of Revenue                             0.5%


 Cost of Revenue
 Vendor Services - Consulting                            $250,000

 HIE Vendor Costs
 High represents high-end HIE Solution              $13,612,856       Five Year
 Mod represents Novo Solution; + Average             $7,711,063       Five Year
 Federated
 Low represents average of HIE Solution              $5,991,910       Five Year
 Costs

 Clinical Data Repository (Hosted)                       $500,000     Per Year; In Addition to other HIE Costs


 Extraordinary
 Consulting - NFP Startup                                 $35,000


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West Michigan Health Information Exchange – Business Plan



 Component                                               Value         Comments


 Taxes
 No Taxes Assessed Due to NFP Status                             0%


 Office Space                                                  200     square ft./person
 Rent                                                       $25.00     per square ft.
 Utilities                                                   $6.00     per square ft.
 Office Furnishings                                         $4,500     per Staff

 Information Technology
 IT Infrastructure for HIE
 Laptops/Docking Station                                    $2,000     per Staff
 LAN/Hardware                                              $51,000
 Internet                                                  $250.00     per month
 Office Software                                           $40,000
 Other System Costs                                        $50,000
 Phone System                                                 $500     per Staff/year


 Personnel
 Annual Salary Inflation                                          3%
 % of Befits to Salary                                           28%



Pricing and Revenue
Subscription Fee
A basic subscription fee is assessed upon a participant joining the West Michigan HIE and is assessed on an
annual basis on the participant’s anniversary date. A discount could be considered for pre-payment of
subscription fees. These subscription fees will be determined based upon the type of the organization.

Subscription fees for the various organization types are as follows:

 Annual Membership Fee
 Per Physician Membership                                             $250.00
 Laboratories & Radiology Center Memberships                        $5,000.00
 Insurer/Payer Membership                                           $5,000.00
 Individual Hospital Membership                                    $25,000.00
 Skilled Nursing Facility Membership                                $2,000.00
 Other Healthcare Facility Membership                               $2,000.00




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West Michigan Health Information Exchange – Business Plan




Transaction Fee
Charges for specific services will be assessed based on transaction volume; e.g., a utility model will be
employed. Each services that is in place will be defined in a service level agreement (SLA) so that the
WMHIE and participants clearly understands what is being delivered and for what cost. These transaction-
based fees may be incorporated into subscription fees whereby members pay a set monthly fee which is
determined by the service package being purchased. For example, fees may be classified as gold, silver and
platinum based on the number of transactions that are anticipated and the member would therefore pay a
monthly or annual subscription based on those numbers of transactions. Any additional transactions outside
of that number defined in the subscription, would be charged at the specific rate per transaction.

For purposes of business planning, there are two types of transaction fees:

    1. Clinical Transaction Fee – Assessed to sender upon distribution of clinical message. For purposes of
       business planning, evolution toward Level 2 – Federated Repository could result in a fee to requester
       of information; however, these fees are not included in the financial model in order to remain
       conservative.

    2. Per Member Per Month Fee – Assessed to payers on a monthly basis, starting with the month they
       subscribe to WMHIE.

Transaction fees will be established as follows:

Utility                                                      Year 1      Year 2    Year 3   Year 4   Year 5
Clinical Transactions - per transaction*                        $0.27      $0.25    $0.23    $0.21    $0.19
ADT, Transcribed Reports, Labs, Radiology Reports
Per Member Per Month**                                          $0.27      $0.25    $0.23    $0.21    $0.19
Fee Applied to Payer Members Per Member (annual)                $3.24      $3.00   $2.476    $2.52    $2.28


Note that as membership increases and startup costs are absorbed, transaction fees are lowered for both
clinical transaction fees and per member per month fees.

Board Membership
Organizations will be eligible to purchase a seat on the Board of Directors of the WMHIE for a fee of $10,000
per year. It is anticipated that 15 Board seats will generate $150,000 in annual revenue for the WMHIE.

Other Service Fees
As the WMHIE evolves, consideration for additional value-added service offerings will be considered to
generate additional revenue for the WMHIE. Potential services may include:

        Aforementioned query fees associated with Federated Repository
        Data backup and recovery services
        HIE implementation and training service fees
        Data mining/warehousing services/custom report generation
        Advertising

At this time, the financial projections will not include Other Service Fees.

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West Michigan Health Information Exchange – Business Plan




Financial Projections
The following represents summary information for the Medium Scenario. A complete set of pro forma
financial statements for Medium, Low and High Scenarios is presented in the Appendix.

                                               2009           2010           2011           2012           2013
                                              Level 1        Level 2        Level 3
Summary Financials
Revenue                                       $2,577,463     $4,456,593     $6,007,373     $6,150,876     $5,956,224
Gross Profit                                  $1,126,467     $1,055,102     $2,018,305     $2,540,136     $1,947,290
EBIT                                           $501,438        $91,625       $786,511       $742,945        $36,156
EBITDA                                         $674,959       $437,147      $1,209,657     $1,196,381      $518,572
Net Earnings                                   $501,438        $91,625       $786,511       $742,945        $36,156
Net Cash from Operating Activities             $532,756       $286,097      $1,186,744     $1,197,375      $532,277
Capital Expenditures                           $867,606       $860,005       $388,121       $151,449       $144,900
Interest Income/(Expense)                               $0             $0             $0            $0             $0
Dividends                                               $0             $0             $0            $0             $0
Cash                                           $665,150       $591,243      $1,389,866     $2,435,792     $2,823,169
Total Equity                                  $1,501,438     $2,093,063     $2,879,574     $3,622,519     $3,658,675
Total Debt                                              $0             $0             $0            $0             $0
Ratios
Current Ratio                                         3.82           2.49           3.70           5.36           6.18
Debt to Capital (LT Debt + Equity)                    0.00           0.00           0.00           0.00           0.00
Profitability
Gross Profit %                                    43.7%          23.7%          33.6%          41.3%          32.7%
Operating Expenses %                              28.3%          25.0%          23.0%          31.7%          34.6%
Net Earnings %                                    19.5%           2.1%          13.1%          12.1%           0.6%
Returns
Return on Assets                                  28.0%           3.4%          22.4%          17.5%           0.8%
Return on Equity                                  33.4%           4.4%          27.3%          20.5%           1.0%
Return on Capital (LT Debt + Equity)              33.4%           4.4%          27.3%          20.5%           1.0%



For business planning purposes, the goal was to ensure a sustainable business model such that sufficient
cash would be generated to fund on-going capital and operating expenses and maintain a cash balance of
120 days worth of expenses (minus depreciation). As the following table shows, for the Medium Scenario,
sufficient cash is generated in Years 1, 4 and 5 (i.e., at least 100% of goal is reached). However, in years 2
and 3, between 61% and 93% of the cash goal is reached. In addition, the Medium Scenario requires
additional funding of $1,000,000 in Year 1 and $500,000 in Year 2 to reach these levels. Additional funding
could be generated in Years 1, 2 and/or 3 in order to reach the 120 days level, if desired.




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West Michigan Health Information Exchange – Business Plan




 Medium Scenario
                                           Year 1           Year 2       Year 3       Year 4        Year 5
 Cash                                     $665,150         $591,243    $1,389,866   $2,435,792    $2,823,169
 Total Revenue                           $2,577,463       $4,456,593   $6,007,373   $6,150,876    $5,956,224
 Total Exp (less depr)                   $2,007,504       $4,169,446   $4,947,716   $5,104,495    $5,587,652

 Cash On-Hand Required                     $669,168       $1,389,815   $1,649,239   $1,701,498    $1,862,551

 Excess/(Deficit) of On-Hand
 Required                                   ($4,018)      ($798,572)   ($259,372)     $734,293      $960,618
 Percent of Cash On Hand Required               99%             43%          84%         143%          152%



Funding
Additional funding of $1,000,000 in Year 1 of the Plan and $500,000 in Year 2 of the Plan is required to
fund startup activities in order to reach sustainability. With this funding, at least 50% of the cash goal of
120 days worth of expenses is maintained in all years. If it determined that higher levels of cash are required
to ensure sustainability, additional funding in the form of grants, donations and/or fees to participants may be
considered.

It is anticipated that $1,000,000 of funding will be secured through additional State of Michigan grants, and
that $500,000 will be raised through additional fund development efforts of the West Michigan HIE.

Additional funding of $1,500,000 is required in the Low Scenario and $2,000,000 is required in the High
Scenario.

Options Analysis
As discussed earlier, three scenarios were created which represent Medium, Low and High Scenarios. The
information presented in the majority of the Business Plan represents the “baseline” or Medium Scenario,
while detail financial information for Low and High Scenarios are included in the Appendix.

To create these scenarios, a variety of factors were applied to certain variables in the financial model, such
that certain margins of error could be created as follows:

 Factors                                                           Low                High             Medium
 Membership Pricing Projection Factor                              0.90               1.50               1.00


 Membership Clinical Adoption Project Factor                       0.80               1.20               1.00


 Operating Expense Projection Factor                               0.90               1.10               1.00


 Transaction Clinical Pricing Projection Factor                    0.95               1.15               1.00
 (Clinical Messaging)
 Transaction Clinical Volume Projection Factor                     0.90               1.10               1.00
 (Clinical Messaging)

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West Michigan Health Information Exchange – Business Plan



 Factors                                                                        Low                   High               Medium


 Transaction Clinical Pricing Projection Factor                                 0.95                   1.15                 1.00
 (Per Member Per Month)
 Transaction Clinical Volume Projection Factor                                  0.95                   1.10                 1.00
 (Per Member Per Month)

 All Other Costs as a % of Revenue                                             2.0%                   6.0%                 4.0%


 Cost of Revenue Projection Factor                                              0.90                   1.15                 1.00


 Personnel Expense Projection                                                   0.80                   1.20                 1.00


 Vendor Price Negotiation Factor                                                70%                   100%                  85%



Benefits Analysis
Many healthcare information technology initiatives that are implemented to improve efficiencies, improve
safety and reduce cost, lack a measureable financial return on investment (ROI). This is based on the fact
that many of the benefits cannot be quantifiably measured. The Center for Information Technology
Leadership (CITL) and the Rand Corporation examined different types of transactions between providers and
stakeholders where health information is exchanged. Models to identify potential costs and benefits of health
information exchange at different levels of complexity were created. Different levels of complexity included
standard fax, email and electronic messaging and interoperable data exchange with standardized message
formats and context.55 There has been debate regarding the efficacy of both studies; however, to date, the
models provide the most current methodology.

A derivative of these models was created to project the benefits of health information exchange in West
Michigan. This model projects the benefits resulting from:

       1. A reduction in labor costs to manually process paper results

       2. A reduction in duplicate testing

Data collected from on-site interviews and statistical information was applied to a labor savings model and a
duplicate testing model. Projected financial benefits are for illustration only. Estimates are based on several
assumptions noted in the Appendix.

Projected financial benefits are discussed in conjunction with qualitative benefits of the strategic value of
health information exchange at each of the levels defined for the West Michigan HIE.



55
     CITL Center for Information Technology Leadership: Improving Healthcare Value. The Value of Healthcare Information Exchange and
Interoperability 2004




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West Michigan Health Information Exchange – Business Plan




Level 1 - Clinical Messaging Benefits
Methodology
The following approach was utilized to project quantitative Level 1 - Clinical Messaging benefits. Use cases
provided by the Clinical Work Group were reviewed for any associated financial impact. Potential savings for
each use case were categorized into each of the following areas:

            Processing Results
            Missing Results
            Non-Routine and Routine Chart Review (e.g. Prescription Refills, Quality Reporting, Disease
            Registry, etc.)
            Referrals (Outgoing and Incoming)

The measurable outcome calculated for each area was identified as a reduction in labor cost. Historically, in
the earliest stages of information technology investments, the most common type of investment is one which
substitutes computing capability for manual labor. Although the substitution of IT for labor continues to be
important, emphasis on the ability to impact productivity and furthermore improve quality is also considered. 56

A survey was constructed to gather data based on the model supplied by CITL and the clinical use cases
identified by the Clinical Work Group. It was anticipated that this data would be utilized to project total savings
across the entire MTA based on a statistically meaningful sample size; however, participation in the survey
was low. To compensate for the lack of data, a series of on-site meetings with hospitals and practices were
conducted. It was determined that projected benefits were directly related to workflow and efficiencies unique
to each hospital or practice. Data was collected and input into the survey and furthermore into a “benefits
tool”, to calculate costs of disseminating information. Current state process flows were mapped and
associated times to complete process steps and associated labor costs were applied.

The benefits tool calculates savings based on two possible future state scenarios for clinical messaging: a)
the reduction in labor relative to information flowing to a provider’s inbox, and b) the reduction in labor relative
to information which is available via the providers electronic medical record (EMR) via the HIE. Although the
data is deemed to be accurate, as it was provided by actual personnel, it is noted that a time and motion
study would enhance the accuracy and validity of the data. Data is presented on a case study basis in the
Appendix.

The benefits tool will be made available to all stakeholders through the Alliance for Health in the event that
they would like to calculate their own return on investment analysis.

Hospital Case Study
It was determined that hospitals incur significant costs in attending to missing results and compiling and
sending emergency department (ED) visit summaries and associated documentation and hospital discharge
summaries to other providers in the community (e.g., physicians, hospitals, home health, etc.). Manual
processing of paper reports was identified as involving staff time to receive the request, locate the record,
prepare the information for distribution and transmit/confirm transmission of the health information.


56
     Vogel, L. (2003) Finding Value from IT Investments: Exploring the Elusive ROI in Healthcare. Journal of Healthcare Information
Management. Volume 17:4.



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West Michigan Health Information Exchange – Business Plan



The case study was for a 77 bed community hospital in the MTA. Data provided relative to wages was
estimated at $12.00 per hour. (Bureau of Labor statistics medical records wage is $14.70 per hour57). The
medical records department receives 125 calls per week for missing results. Time to process a missing
results (take phone call, pull chart, retrieve report, fax report) was reported at 15 minutes.

Time to process an emergency department report (retrieve, copy, fax, file, etc.) was 15 minutes. Although the
hospital had e-faxing capabilities, reports were typically faxed manually. 100% of requests for missing reports
were processed by fax, and 75% or ED discharge summaries were processed by fax. Projected savings for
Level 1 - Clinical Messaging were $54,363 and for Level 2 Federated Repository were $77,622. These
benefits can be extrapolated either up or down (based on the size of the hospital) to determine further
benefits to the West Michigan Medical Trading Area. These estimated projected benefits can be found in the
Benefits Appendix.

Aggregate Hospital Savings
Estimated savings for processing results are calculated using the estimated number of transactions per
hospital in the medical trading area. It is anticipated that patient discharge summaries, emergency department
summaries, surgical/procedural reports and laboratory and radiological results/reports would be distributed via
the HIE. There were 136,366 inpatient hospital discharges and 954,562 emergency department visits per year
estimated in the MTA58. It is assumed that 75% of these visits would require that a summary report be
distributed to a physician or other provider5960. $0.42 to $0.95 could be saved per result based on literature
and anecdotal findings provided by existing health exchanges and health exchange vendors. This data
suggests that electronically transmitting reports would generate an average savings of $0.70 per report or
transaction.

Literature supporting claims transaction savings and case study information were reviewed. Based on
estimates provided by the Workgroup for Electronic Data Interchange (WEDI), Health and Human Services
(HHS) estimates that electronic processing would generate a savings of $1.00 per claim for health plans,
$1.49 for physicians and $0.86 for hospitals61. Healthbridge estimated a savings of $0.70 per report, IHIE
estimated $0.81 per report, and Catholic Health Partners estimated $0.42 per report. Anecdotally, Axolotl
provided estimates $0.95 to $1.75 per transaction. Low medium and high savings benefits were calculated
based on the estimated number of transactions for the MTA presented earlier. The following table provides
estimated savings for small, medium and larger organizations, using a benchmark of $0.70 savings per
transaction.




                         Estimated Annual Hospital Savings* – Level 1 – Clinical Messaging



57
     Retrieved from www.bls.gov
58
     Retrieved from www.ahd.com
59
     Retrieved from Plante & Moran benchmark data provided by GMHS.
60
     The Economics of Electronic Efficiency. Health Management Technology. February (2004).
61
     Retrieved from www.aspe.hhs.gov


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West Michigan Health Information Exchange – Business Plan



                                                       West Michigan HIE
                                                               Average Hospital Savings (0.70 savings per transaction)
                 Hospital Size              Year 1           Year 2         Year 3             Year 4           Year 5
             Small (< 49 beds)             $20,599          $27,465        $30,898           $31,928          $32,614
         Medium (50-99 beds)               $73,535          $98,047      $110,303           $113,980         $116,431
           Medium (100-199)              $292,751         $390,335       $439,127           $453,764         $463,522
         Large (200-399 beds)            $340,649         $454,199       $510,974           $528,006         $539,361
           Jumbo (400+ beds)            $1,830,786       $2,441,047     $2,746,178        $2,837,718       $2,898,744

*-Estimated savings based on anticipated transaction volumes at $0.70 per transaction62.
Note: Actual savings would only be realized through a re-allocation of staff to value-added activities and/or reduction in
FTEs. Also assumes active use of the HIE by physicians; understandably, processes vary greatly from practice to
practice so actual savings would vary as well. In addition, extent of process change undertaking should not be
underestimated.



Physician Practice Case Studies
Several practices were also studied to capture annual savings. Reported wages were in accordance with the
bureau of labor statistics ($12.08) for office personnel and ranged between $12.00 and $14.00 per hour. Total
time to process a report (retrieve, sort, distribute, retrieve, file) ranged from 24 to 33 minutes each. Total time
to process missing results ranged from seven minutes to 17 minutes. Missing results processing for practices
utilizing an EMR were seven to ten minutes and those without were 11 to 17 minutes; hence demonstrating
achieved efficiencies for EMR utilization. Benefits were noted to be unique per practice based on workflow
and current level of workflow efficiency. Annual results processing savings based on the case studies ranged
from $31,000 to $107,000 per practice (studies involved physician practices ranging from three to 17
physicians, including those with and without an EMR). Annual missing results retrieval and processing
savings were estimated to be between $8,000 and $25,000 and referral savings were projected to be
between $2,000 and $20,000. Estimated projected benefits for the case studies can be found in the Benefits
Appendix.

Given the data from the case studies, estimated projected savings to physicians for the Medical Trading Area
were calculated. First, it was assumed that projected savings would be based on the low end of savings for
each range. When applying these conservative savings estimates across all physician practices in the MTA,
the following estimated savings can be calculated:

                        Estimated Annual Physician Savings – Level 1 – Clinical Messaging
                                              West Michigan HIE
                                              Year 1             Year 2             Year 3             Year 4             Year 5

Transactions (receipt)
- Results Processing Saving                $ 9,249,873       $ 15,961,460       $ 19,423,560        $ 20,701,416       $ 21,626,341



62
     Presentation prepared by Axolotl/Healthbridge estimates $0.70 per report; Health Management Technology. The Economics of
Electronic Efficiency, February (2004) estimates $0.42 per report. Health Information Exchange Projects; What Hospitals and Health
Systems need to know published by the American Hospital Association (2006); IHIE estimates $0.81 per message.




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West Michigan Health Information Exchange – Business Plan



- Missing Results Savings               $ 2,387,064       $ 4,119,086        $   5,012,531   $   5,342,301   $   5,580,991
- Referral Savings                      $   596,766       $ 1,029,772        $   1,253,133   $   1,335,575   $   1,395,248

Note: since much of this savings would be attributable to time and labor, actual savings would only be realized through a
re-allocation of staff to value-added activities and/or reduction in FTEs.




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West Michigan Health Information Exchange – Business Plan




Qualitative Benefits
The following summarizes the potential qualitative benefits of a Clinical Messaging solution as part of a health
information exchange.

Patient Benefits

            Improved coordination of care
            Reduction in laboratory tests, radiological imaging studies resulting in a reduction of payment for
            avoidable services
            Reduction in repeating health information to multiple providers

Qualitative Physician Benefits

             Improved access to information; completeness of health information
             Improved clinical decision making and care planning
             Reduction in time required to obtain patient health information
             Access to medication lists; improvement in medication reconciliation efforts
             Reduction in risk
             Improvement in office staff productivity

Qualitative Health System/Hospital Benefits

             Improvement in Emergency Department productivity
             Reduction in duplicative, unnecessary or uninsured services
             Improvement in medical records staff productivity

Level 2 - Federated Repository Benefits
Methodology
Generally speaking, the methodology used to calculate Level 2 – Federated Repository benefits takes the
number of tests per person and reduces this number based on a redundancy factor.63 A conservative
redundancy factor of 6% was applied based on findings from the RAND64 study (in comparison to 12% in the
CITL study). The average cost per tests was applied and the savings based on a reduction are calculated.
The number of covered lives65 and an assumed average number of transactions per beneficiary (e.g.
laboratory, radiology) 66 are utilized in addition to billed fees per test of $40.00 and $82.00 for laboratory and
radiology respectively. As mentioned, it is projected that 6% of all tests are redundant and with full




63
     CITL Center for Information Technology Leadership: Improving Healthcare Value. The Value of Healthcare Information Exchange and
Interoperability 2004
64
     Girosi, Federico, Robin Meili, and Richard Scoville.2005. Extrapolating Evidence of Health Information Technology Savings and Costs.
Santa Monica, Calif.: RAND Corporation.
65
     Michigan Department of Labor and Economic Growth, Office of Financial and Insurance Regulation
66
     Michigan State University Institute for Health Care studies


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West Michigan Health Information Exchange – Business Plan



interoperability, 95% of redundant testing can be avoided.67 Utilizing the methodology provided by CITL and a
per test cost of $40.00 for laboratory testing and $265.00 for radiological testing, it is anticipated at 60%
adoption that Payers can save $2.51 per member per month.

Payer Case Studies
Using the methodology and projected savings, based on adoption rates in Year 1 and 2 the projected savings
for various Payers is provided in the summary below.

                         Estimated Annual Payer Savings – Level 2 – Federated Repository
                                              West Michigan HIE
                                                           # of           Year 1               Year 2
                                                         Members
Projected Physician Adoption Rate                                           60%                 80%
Savings per Member Per Month (PMPM)                                        $2.51                $3.35
Plans
Blue Care Network HMO                                        54,756      $1,649,251               $2,201,191
Blue Cross Blue Shield                                      167,093      $5,032,841               $6,717,139
Health Alliance Plan HMO                                     80,063                               $3,218,533
Medicaid                                                   211,251       $6,362,880               $8,492,290
Priority Health                                            282,000       $8,493,840              $11,336,400



Qualitative Benefits
The following qualitative benefits are identified in addition to the cost savings benefits from a
reduction in duplicate testing.
Laboratories/Radiological Imaging Center Benefits

             Reduction processing results and distribution of results
             Reduction in duplicate testing
             Reduction of errors/prevention of errors of omission

Payer (Health Plan and Employer) Benefits

             Reduction in duplicate testing
             Improvement in Quality Reporting/Pay for Performance Initiatives

Pharmacy Benefits

             Avoidance of Adverse Drug Events
             Reduction in medication related phone calls
             Improvement in Medication Reconciliation




67
     CITL Center for Information Technology Leadership: Improving Healthcare Value. The Value of Healthcare Information Exchange and
Interoperability 2004.



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Other Tangible Benefits – For Future Measurement
Adoption of pay-for-performance programs by both Medicare and private payers has had a powerful affect on
the benefits of health information exchange and the potential return on investment. Purchasers, health plans,
and employers have initiated quality-based reimbursement programs; rewarding practices for publishing
performance reports, mandating specific quality improvement actions or use of specific IT applications.68

Section 1848 (k) of the Social Security Act, as added by Division B, Title 1, Section 101, of the Tax Relief and
Health Care Act of 2006 (TRHCA), mandates the establishment of a physician quality reporting system. CMS
has titled this system the Physician Quality Reporting Initiative (PQRI). The PQRI is a voluntary program that
will provide a financial incentive to physicians and other eligible professionals (EPs) who successfully report
quality data related to covered services provided under the Medicare Physician Fee Schedule (PFS). 69

2008 PQRI consists of 119 quality measures, including 2 structural measures. One structural measure
conveys whether a professional has and uses electronic health records and the other electronic prescribing.

It is anticipated that improvements in pay for performance will ultimately have a positive impact on the payer,
provider and consumer community.

Labor Measures and Potential Benefits
Many organizations are sold on IT initiatives based on the assurance that there will be reductions in
administrative and operational costs. When an organization follows through with staff reductions and/or
reassignment to value added work or restructuring of workflow, a business case can be developed for IT
expenditures. A reduction in the number of staff members required to support the delivery of patient care,
whether it is in the inpatient setting or physician’s office is anticipated subsequent to the implementation of an
exchange which automates information electronically. Responding to requests or missing results requests,
chart pulls, chart copying, manual distribution of results; the time to “hunt and gather” and distribute
information will be greatly reduced as online access to a patient’s health information will be readily available.
Because salary and benefits make up a significant fraction of a health care organization’s expenditures, a
reduction in staffing will have a significant effect on their revenue. Anecdotally, it was reported that a 150
physician’s office, was able to reduce its medical records staff from 8 members to 370. Implications on
personnel would indicate that there would be a reduction or reallocation in responsibilities in order to provide
the following benefits.

Patient Benefits

       •     Improved coordination of care
       •     Reduction in testing (laboratory, radiological) resulting in a reduction of non value added time for
            patient to have testing completed and reduction in payments for avoidable services
       •     Reduction in the frequency of communicating historical health information to multiple providers
Provider (Physician) Benefits



68
     D. Doolan and D. Bates, “Computerized Physician Order Entry Systems in Hospitals: Mandates and Incentives,” Health Affairs
(July/Aug 2002): 180–188; and R. Galvin and A. Milstein, “Large Employers’ New Strategies in Health Care,” New England Journal of
Medicine 347, no. 12 (2002): 939–942.
69
     www.cms.gov
70
     Provided by Axolotl. Santa Cruz Health Information Exchange


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West Michigan Health Information Exchange – Business Plan



   •   Improved access to information; comprehensiveness of health information
   •   Improved clinical decision making and care planning
   •   Reduction in time required to obtain patient health information
   •   Improvement in access to medication lists; improvement in medication reconciliation efforts
   •   Reduction in risk
   •   Improvement in office staff productivity
Health System/Hospital Benefits

   •   Improvement in hospital/departmental productivity; reassignment to value added activities
   •   Reduction in duplicative, unnecessary or uninsured services
   •   Improvement in medical records staff productivity; reassignment to value added activities




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West Michigan Health Information Exchange – Business Plan




9       Risk Assessment
Risk Criteria
For any new initiative, it is important to attempt to identify, quantify and prioritize any potential risks that could
affect a business plan, and to develop appropriate strategies to mitigate and manage those risks. The West
Michigan Health Information Exchange must consider the following risk criteria (e.g., “critical success factors”)
and pursue the appropriate mitigation strategies in order to lower the overall risk to the organization.

Leadership, Support and Buy-In
Leadership in the West Michigan Community understand and support of the goals and benefits of the HIE.
Leadership should include CEOs of Hospitals and Health Systems, Insurers, Employers, and Physician
Groups. Other leaders whose support must be obtained are CIOs and CFOs of the aforementioned
stakeholders.

Established Governance
The existence or potential for an effective administrative team to guide the on-going operations of the HIE.
Should include a Board (consisting of key leaders), established bylaws, organization structure, participation
agreement and policies and procedures.

Credibility
Established credibility will be an important factor in garnering support and buy-in among leadership in the
West Michigan Community. Early success will be crucial, as well as demonstrated success among other
HIEs throughout the State of Michigan and U.S. The Business Planning process and results will assist, as
well.

Scope of the HIE
Identification and management of an agreed-upon scope, in terms of functionality, participation and operation
of, the HIE must build off Work Group and Community input; yet be managed within a realistic framework.

Adoption
Adoption involves both participation (e.g., contracting) and actual use of the HIE over time. Adoption builds
off many of the aforementioned risk criteria and is essential for sustainability.

Alignment
In the West Michigan Medical Trading Area, several of the major stakeholders have on-going intra-system
HIE efforts underway. The West Michigan HIE must align with and augment these current initiatives.

Shared Vision
A shared vision for what the West Michigan HIE will be is important because it will provide focus on what is
important, taking in account a variety of interests among stakeholders.




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Sustainability
Financial self-sustainability involving contributions from the West Michigan Community versus outside funding
are crucial.

Allocated Staffing
The West Michigan HIE must be staffed appropriately, both in terms of competency and numbers, to ensure
success. Some level of ‘in-kind’ contribution from the Community, which may involve work group
participation, project staffing, etc., will be necessary to ensure success.

Cost
Cost containment and strong fiscal management must be present to ensure success.

Project Management
A contributor toward credibility (e.g., early success), strong project management must address:
communication, issues, change, schedule, budget, risk and other factors.

Quality of Solution
The quality of not only the chosen vendor solution, but operation of the West Michigan HIE will be important.
Operations must address appropriate service levels in order for reasonable adoption to occur; the solution
must work or people will not use it.

Emerging Technology
The HIE vendor landscape is constantly changing. The West Michigan HIE must remain flexible and nimble
to take advantage of rapid advancements; while ensuring quality (e.g., becoming a beta site has its
advantages but introduces certain risks).

Evolving Standards
Interoperability and other standards are constantly evolving. The West Michigan HIE must maintain a
reasonable path toward standardization, in terms of the HIE solutions (e.g., HL7 version X), communication
(e.g., managing expectations) and roll-out/support (e.g., consistent, repeatable, well-coordinated physician
enrollment process).




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West Michigan Health Information Exchange – Business Plan




Risk Assessment and Mitigation
Each of the above risk criteria was evaluated to determine the level of risk (e.g., Risk Assessment), priority,
potential negative impact and risk mitigation strategy. The following table presents this analysis. Bolded print
indicates the current level of risk as determined by the Business and Finance Work Group.

                 Risk
Risk Criteria    Assessment          Priority   Potential Negative Impact        Risk Mitigation

Leadership,      High, Moderate,         A      The project lacks                Stakeholder engagement exists
Support and      Low                            Stakeholder participation by     on the project with individuals
Buy-In                                          key decision makers (e.g.,       that have key decision-making
                                                contribution) resulting in the   authority within the Community.
                                                inability to fund the HIE
                                                                                 The Business Plan
                                                                                 demonstrates an acceptable
                                                                                 ROI for the Stakeholders.
                                                                                 A Communication Plan is
                                                                                 accepted and executed to
                                                                                 create awareness and build
                                                                                 momentum for the HIE within
                                                                                 the Community.

Established      High, Moderate,         A      No formal governance             A Communication Plan is
Governance       Low                            structure exists and lack of     accepted and executed to
                                                participation by key             create awareness and build
                                                decision makers leads to         momentum for the HIE within
                                                no emergence of a                the Community.
                                                governance structure.
                                                                                 The Business Plan
                                                                                 demonstrates an acceptable
                                                                                 ROI which creates interest
                                                                                 among strong leaders in
                                                                                 governance.




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West Michigan Health Information Exchange – Business Plan




                Risk
Risk Criteria   Assessment          Priority   Potential Negative Impact        Risk Mitigation

Credibility     High, Moderate,        A       The project lacks credibility,   Establish Governance with
                Low                            which contributes to             representatives committed to a
                                               marginal participation.          successful HIE (in terms of
                                                                                contribution and support).


                                                                                Establish a separate entity and
                                                                                hire an Executive Director to
                                                                                lead the HIE.


                                                                                Demonstrate early wins through
                                                                                scope management and
                                                                                demonstration of value at each
                                                                                “Level” (e.g., Level 1, 2, 3).

Scope of the    Satisfactory,          A       Due to miscommunications         Ensure that frequent
Project         Not Satisfactory,              between the Community            discussions are held between
                Poor                           and the HIE, the scope of        the key Stakeholders and the
                                               the project is                   HIE to confirm project scope for
                                               underestimated resulting in      the project including modules
                                               an RFP and solution that         and technologies to be included.
                                               does not represent the total
                                               scope of work required by
                                               the Community.                   Clearly understand the role
                                                                                Novo could provide in the “Level
                                                                                1” solution (e.g., clinical
                                                                                messaging).


                                                                                Separate HIE from other efforts
                                                                                (e.g., AF4Q) until risks
                                                                                associated with scope
                                                                                management are lower.




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West Michigan Health Information Exchange – Business Plan




                 Risk
Risk Criteria    Assessment       Priority   Potential Negative Impact      Risk Mitigation

Adoption         Exceed Goal         A       Due to a variety of factors    Execute engagement strategy.
                                             (e.g., poor execution,
                 At Goal                                                    Mitigate risks associated with
                                             issues with solution, etc.),
                                                                            implementation to avoid issues
                 Below Goal                  HIE adoption rates among
                                                                            through rigorous quality
                 Far Below Goal              providers do not meet
                                                                            assurance.
                                             expectations.
                                                                            Dependent on Quality and
                                                                            Stakeholder engagement to
                                                                            some degree.
                                                                            Deliver on promises (e.g.,
                                                                            timing, etc.)

Alignment        Aligned,            A       HIE blueprint is misaligned    Gain consensus on HIE
                 Misaligned                  with stakeholder               blueprint with CIOs
                                             initiatives/interests.
                                                                            Build business plan around this
                                                                            consensus

Shared Vision    Aligned,            A       HIE blueprint represents       Ensure stakeholder
                 Misaligned                  the “vision” the Community     engagement and acceptance
                                             has for a model HIE
                                                                            Align Work Group vision with
                                                                            what chosen solution will deliver
                                                                            Ensure physicians perceive
                                                                            value with what will be delivered

Sustainability   Adequate            A       HIE relies primarily on        Validate assumptions in
                 Funding                     government grants/other        association with a sustainable
                                             sources of non Stakeholder     Business Model and Plan.
                 Insufficient
                                             contributions to sustain
                 Funding                                                    Relies on Adoption and other
                                             itself.
                                                                            factors to ensure funding
                                                                            through sustained stakeholder
                                                                            contributions.
                                                                            Diversify funding sources and
                                                                            demonstrate value to a variety
                                                                            of stakeholders.

Allocated        Adequate,           B       Inadequate levels of           Adequate levels of staffing are
Staffing         Not Adequate                staffing are assigned to the   defined and allocated to the HIE
                                             project resulting in key       to ensure that key project due
                                             project due dates being        dates are achieved.
                                             missed and delaying the
                                             entire HIE implementation
                                             project.                       Build support for in-kind
                                                                            contributions from Stakeholders.


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West Michigan Health Information Exchange – Business Plan




                Risk
Risk Criteria   Assessment        Priority   Potential Negative Impact        Risk Mitigation

Cost            On Budget or         B       Costs are higher than            Solidify costs during RFP
                Not On Budget                anticipated due to improper      process.
                                             scoping of project and/or
                                             misaligned requirements.
                                                                              Ensure consensus among key
                                                                              stakeholders relative to scope.

Project         On Track,            B       Due to lack of proper            Ensure that proper project
Schedule        Behind Track or              project management               management practices are
                Ahead of Track               oversight on the project, the    applied to the project as well as
                                             project schedule is not on       proper monitoring of the project
                                             track.                           schedule and critical path.

Quality of      Excellent,           B       Due to insufficient skill-sets   Through proper due diligence,
Solution        Satisfactory,                of the solution providers on     ensure that the selected
                Adequate, Fair,              the project, the quality of      solution provider(s) have the
                Poor                         project deliverables is poor.    appropriate skill-sets and
                                                                              experiences required by the
                                                                              Community.


                                                                              Ensure participation in the
                                                                              evaluation process by key
                                                                              Stakeholders.


                                                                              Negotiate terms which ensure
                                                                              quality of solution by the
                                                                              solution provider(s).



Emerging        High                 B       HIE Technology is relatively     Negotiate upgrades with HIE
Technology                                   immature and is rapidly          vendors.
                Low
                                             evolving causing significant
                                                                              Anticipate future changes by
                                             deployment issues and
                                                                              researching leading vendors
                                             rapid obsolescence.
                                                                              and national, state and local
                                                                              strategies.

Evolving        High                 B       Standards are continually        Adopt most recent standards
Standards                                    evolving causing significant
                Low                                                           Ensure standards are supported
                                             deployment issues and
                                                                              by the chosen vendor(s) as well
                                             incompatibilities.
                                                                              as other primary vendors in the
                                                                              medical trading area.




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West Michigan Health Information Exchange – Business Plan




10 Implementation Plan
Strategy and Tactics
There following strategies will contribute to a successful health information exchange in the Medical Trading
Area. All three have been identified through numerous planning discussions and review of findings related
other HIEs throughout the U.S.

    Key Strategy #1 – Adopt Multi-Stakeholder Revenue Mix

        Assume revenue will come from multi-stakeholders including: providers, physicians, employers,
        health plans and board membership. The following tactics will help to ensure proper engagement
        and commitment from these stakeholders.

            a. Contributions among stakeholders should be commensurate with value received from the HIE
               (e.g., ROI should be equitable)

            b. Communicate expectations as clearly and concisely as possible relative to anticipated
               stakeholder contributions; state assumptions

    Key Strategy #2 – Engage Stakeholders Early.

        Engaging stakeholders early in the planning and implementation process will prove to be crucial in
        terms of obtaining the level of commitment of resources to fund the West Michigan HIE. The
        following tactics will help to ensure the appropriate level of commitment is reached:

                Execute a communication plan to build awareness of the HIE among stakeholder
                organizations

                Develop a sustainable business model and incorporate into a Business Plan

                Articulate investment to each stakeholder organization; include initial and on-going cost
                estimates along with reasonable assumptions

                Articulate benefits (e.g., return on investment) to each stakeholder organization

                Obtain letters of commitment from key stakeholder organizations (e.g., CEOs)

                Propose recommended governance, bylaws, participation agreement and policies/procedures

    Key Strategy #3 – Accelerate Adoption Rate.

        Provider adoption will play a major role in delivering the overall benefit of the WMHIE to the
        Community. The more providers that use the HIE for sending/receiving messages, the more cost
        savings and quality improvement will be realized. The following tactics will help to ensure the
        appropriate level of adoption is reached:

                Execute a communication plan to build awareness of the HIE among provider decision
                makers and champions

                Identify and coach champions who will lead local efforts and generate enthusiasm


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West Michigan Health Information Exchange – Business Plan



              Develop a coordinated approach for deployment which balances stakeholder interests

              Demonstrate early success and build on them through pilots and measured deployment

              Deliver on promises; choose partner organizations which will do the same

              Involve physicians/other clinicians when prioritizing functions of the HIE

              Ensure data access, ease of use and workflow are present and consistent; regardless of
              where data is accessed from

              Ensure confidentiality, integrity and availability

              Anticipate and address clinician concerns

   Key Strategy #4 – Employ an Incremental Approach

      An incremental approach to rolling out HIE functionality will likely yield more success than a “big
      bang” approach due to the complexities involved. Consensus was reached with the Clinical and
      Technical Work Groups, as well as the CIO group that this approach makes the most sense. The
      following tactics will help to ensure long-term success:

              Define levels (e.g., Level 1, Level 2, Level 3)

              Gain consensus on approach with key stakeholders

              Define expected timeframes

              Tailor request for proposal(s) to vendors so that they can tailor their solution and pricing

   Key Strategy #5 – Maintain Some Level of Flexibility

      Given the rapid pace of change relative to best practices, technology and other factors in the HIE
      industry; WMHIE should maintain flexibility in its approach and timing. Strategies and tactics should
      be considered before moving between Levels (e.g., from Clinical Messaging to Federated
      Repository). The following tactics will help:

              Negotiate flexible terms (e.g., payment, acceptance, delivery) with HIE solution vendor(s)

              Evaluate strategy and tactics and each Level

              Re-visit assumptions made in business plan at least every six months; adjust as necessary

              Commit to a direction once a decision is made; measure success




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West Michigan Health Information Exchange – Business Plan




Governance
The West Michigan HIE will establish an effective organization designed for high performance in terms of:

    1. Trust. Establishing and building trust is important in any collaborative effort. Governance for the
       West Michigan will build upon trust garnered through current collaborative efforts; while maintaining a
       healthy competitive environment relative to ‘core business’ of stakeholders.

    2. Community-Focus. A shared vision for what the West Michigan HIE will be will strike a balance
       between what is right for the Community and individual stakeholder interests.

    3. Capability. Ensuring a high-performing HIE organization will drive participation and ensure value;
       both contributors toward sustainability.

Several HIEs throughout the U.S. were contacted regarding their governance structure and overall
effectiveness of governance. HIEs contacted included Indiana Health Information Exchange (IHIE), Delaware
Health Information Network (DHIN), and HealthBridge. In addition, governance material for RHIO/HIEs such
as Minnesota Health Information Exchange (MN HIE), Bronx RHIO and New York eHealth Collaborative were
reviewed.

Governance will consist of organization structure, including:

        A multi-stakeholder Board of Directors that includes representation from all key segments (health
        systems, physicians, health plans, employers and others)
            o   There will be 15 paid Board seats and two non-paid Community seats
            o   Paid Board seats are $10,000 per year
        An Executive Steering Committee that includes representation from all key segments (health
        systems, physicians, health plans, laboratories, diagnostic imaging centers, employers, consumers,
        etc.)
        Operational Steering Committees
        An Executive Team, consisting of CEO, CFO, CIO.

A diagram depicting the governance model in included in the next page.

As well, the governance model will include bylaws, Participation Agreement and Policies and Procedures,
which will all be defined during the HIE initiation process. Samples are provided in the Appendix.




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West Michigan Health Information Exchange – Business Plan



                                                        Board of Directors/Executive Sponsors

                    [Health System]               [Physician Group]                [Health Plan]                    [Employer]                    [Community]
                    Chief Executive                Chief Executive                Chief Executive                 Chief Executive                Chief Executive
                      Officers (n)                   Officers (n)                   Officers (n)                    Officers (n)                   Officers (n)

                                                                   Provide high level guidance and support

                                                               Executive Steering Committee

                    [Health System]             [Physician Group]                 [Health Plan]                    [Employer]                    [Community]
                      CFO/CIO (n)                  CFO/CIO (n)                     CFO/CIO (n)                     CFO/CIO (n)                    CFO/CIO (n)


                       [Lab/Rad]                                                                                           [Pharma]
                      CFO/CIO (n)                 Oversee the performance of the Agreements and relationships             CFO/CIO (n)
                                            Make strategic and tactical decisions for budgeting and implementations
                                       Monitor and resolve disagreements regarding the Agreement and delivery of services



                                                             Operational Steering Committees

                                                                         […..]                                                                                         […..]
           […..]                           […..]                                                       […..]                           […..]
                                                                    Lab/Rad Director                                                                              Lab/Rad Director
       Controller (n)                 IT Director (n)                                              Controller (n)                 IT Director (n)
                                                                          (n)                                                                                           (n)

                                                                          […..]                                                                                        […..]
          […..]                            […..]                                                      […..]                           […..]
                                                                      Nurse/Clinical                                                                               Nurse/Clinical
      HR Director (n)                  Physician (n)                                              HR Director (n)                 Physician (n)
                                                                           (n)                                                                                          (n)


                              Applications & Technology                                                                      Operations & Fiscal

         Provides strategic support and vision for the HIE                                          Identify and develop framework for approved procedures
         Has overall responsibility for the project and work requests , including                   Review and approve policies and procedures
         realization and reporting of benefits                                                      Review/approve budget and financial reporting
         Determine priorities for work request and projects                                         Monitor budget versus actual
         Authorize start/stop of individual projects                                                Oversee adherence to Federal, State and Local compliance
         Determine technical standards for hardware and software , etc.                             requirements (e.g., HIPAA)
         Ensure alignment with State (MiHIN) and NHIN initiatives                                   Monitor HIE performance and provide direction relative to performance
         Approve all technical change to the environment                                            improvement plans
         Review projects for adherence to standards.                                                Oversee establishment of participation requirements /Agreements
                                                                                                    Alignment with quality initiatives (e.g., AF4Q)
                                                                                                    Oversee execution of communications and marketing plans

n = Number of representatives from participating organizations; will evolve as HIE evolves through three Levels: I-Clinical Messaging; II-Coordination of Care;
III-Quality and Value
[…..] = organization type to be determined, but will likely coincide with the organizations represented on Executive Steering Committee




Organization Structure
The West Michigan HIE will be established as a nonprofit organization. HIEs may qualify under Section
501(c) (3) if they act in a charitable manner by conducting their activities for community benefit rather than
private benefit. HIEs do not conduct their activities in a commercial manner, and are in fact financially viable
only because they are subsidized by other components of the healthcare industry, including tax-exempt
entities and the Federal and state governments.

Many HIEs do not have the financial sustainability to operate on a commercial basis. This applies as to
obtaining initial capital, due to the absence of reasonable prospects for a return. It also applies to long-term
operating revenue in that the benefits of the systems formed and operated by RHIOs and HIEs are so
dispersed throughout the community that users who receive only incidental benefits may not be willing to pay
the full price of the systems. Most HIEs that begin life with charitable donations adopt revenue-producing
business models, but continue to require regular infusions of charitable funding, which are not available to for-
profit organizations. In effect, they operate at a substantial loss to achieve their public benefit.

Community benefits are achieved by HIEs due to the core objectives they achieve. These organizations:

             Provide a vehicle to support improved patient care quality and safety through access to timely and
             accurate information


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West Michigan Health Information Exchange – Business Plan



      Provide a mechanism to reduce duplication of services and unnecessary services
      Facilitate operational and administrative efficiencies resulting in reduced operational costs, also
      reducing overall healthcare costs
      Enable the integration of sick (illness) care with well-care
      Link first-responder teams with trauma care teams
      Enable public health initiatives at local, state and national levels
      Stimulate consumer education and involvement in the healthcare process
      Facilitate the efficient deployment of emerging technology and healthcare services, such as e-
      prescribing
      Provide the backbone technical infrastructure for leverage by the NHIN and state level initiative



                                                    WMHIE Organization Structure

                                                            WMHIE
                                                       Board of Directors




                    Standing                                                               Executive Steering
                                                           WMHIE CEO
                  Committees*                                                                 Committee*


                  Business/Finance
                  Governance
                  Compensation
                  Operations



                                                          WMHIE Staff
                 Level 1                                 Level 2                                    Level 3
           Clinical Messaging                      Federated Repository                        Central Repository
       G&A (3 FTE)                              G&A (4 FTE)                               G&A (7 FTE)
         CIO                                      CEO                                       CEO            Security Officer
         Accounting                               CIO                                       CIO            CFO
         Secretarial                              Accounting                                Accounting     Billing/Acctg
                                                  Secretarial                               Secretarial
       Technical (1 FTE)
         Tech Support                           Technical (2 FTE)                         Technical (3 FTE)
                                                  Tech Support (2)                          Tech Support (2)
       Sales & Marketing (2 FTE)                  Help Desk Coordinator                     Help Desk Coordinator
          Sales Manager
                                                Sales & Marketing (2 FTE)                 Sales & Marketing (3 FTE)
       Operations (1 FTE)                          Sales Manager                             Sales Manager
         Project Analyst                           Customer Services                         Customer Services (2)

                                                Operations (1 FTE)                        Operations (6 FTE)
                                                  Project Analyst                           Project Analyst (2)
                                                                                            Quality Assurance
                                                                                            Database Manager
                                                                                            Operations Manager
                                                                                            R&D Manager

       * Participation will vary over time based on level / technical expertise required as HIE evolves




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West Michigan Health Information Exchange – Business Plan




Timeline
The key tactics, implementation plan and corresponding timeline are depicted below. Milestones or goals
included in the timeline consist of the establishment of an organizational and governance structure,
development of a communication plan, and performance of a readiness assessment. Implementation
activities include the design, build, test, train and pilot live phases of implementation. Furthermore,
measurement of milestone achievement and identification of funding are identified in the timeline.

A detailed implementation plan is presented in the Appendix.

Tactics
2008 4th Quarter Tactics
        Submission of the MiHIN implementation grant proposal.

        Formation of a HIE legal entity.

        Presentation of the HIE business plan to key stakeholders.

        Introduction of a letter of understanding (LOU) which will be require simultaneous signatures by key
        stakeholders in January 2009.

        Identification /assignment of a project director to lead implementation efforts until a permanent
        Executive Director is hired.

2009 1st Quarter Tactics
        Work with Key Stakeholders; simultaneously sign off of LOU. Contribution of initial funding by key
        stakeholders for the WMHIE.

        Conduct the first HIE Governance Board meeting.

        Detail Level 1 Clinical messaging strategy (Novo Request for Proposal).

        Reassess the approach to Level 2 and Level 3.

        Begin search for permanent HIE Executive Director.

2009 2nd Quarter Tactics
        Hire permanent HIE Executive Director.

        Finalize Level 1 Clinical Messaging Implementation work.

        Continue other implementation plan activities.




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West Michigan Health Information Exchange – Business Plan




Implementation Plan
  Implementation Plan
  Last updated:                          8/15/2008
                                                                                                                     Year 1      Year 2     Year 3
                                                                                                          2008        2009        2010       2011
                                                                                                                     Level 1     Level 2  Level 2 & 3
Goals                                                           Objectives                            Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

A: Business Planning                     (1) Develop project charter
                                         (2) Establish teams
                                         (3) Develop business plan

B: Establish Organization and            (1) Finalize Organization Plan & Legal Structure
Governance                               (2) Not-For-Profit Status
                                         (3) Fill Open Positions

C: Execute Communication Plan            (1) Create Awareness
                                         (2) Educate the Community
                                         (3) Build Community Support

D: Financing                             (1) State Implementation Grant
                                         (2) Board Seat Fees
                                         (3) Subscription Fees
                                         (4) Transaction Fees

E: Assessment                            (1) Confirm Current State of IT
                                         (2) Determine Overall Readiness

E: Design                                Develop future state design

F: Implementation Planning               Create Implementation Plan

G: Physician Education                   Educate physicians

H: Level 1 – Clinical Messaging          (1) 60% of all physicians are electronically connected
                                         (2) Turn on pilot for physicians not part of health system

I: Level 2 – Federated Repository        (1) ROI for stakeholders
                                         (2) Evidence of coordinated care
                                         (3) 80% physician adoption
                                         (4) Reduction in duplicate testing

J: Central Repository                    Outcome based for providers, public health,
                                            consumer, researchers
K: Identify additional funding sources   (1) Identify additional funding sources
                                         (2) Continue ongoing Network sustainability




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West Michigan Health Information Exchange – Business Plan




Operational Metrics
It is imperative that the HIE demonstrate its value due to the significant level of investment required by
stakeholder organizations. There is considerable focus on the importance of measuring performance and the
HIE should ensure that there is no disconnect between the stakeholder expectations and the type of
performance measures. The following scorecard for clinical messaging has been developed to effectively
demonstrate the value realized from the health exchange.

     No                          Metrics Description                        Target    Target    Target 2011-
                                                                            2009-10   2010-11       12

     1    Number of acute care facilities participating                       9         21          24

     2    Number of laboratories-diagnostic imaging centers participating     10        20          24

     3    Number of physician offices participating                          149       407          571

     4    Number of clinicians participating                                 574       1342        1631

     5    Number of transactions                                              9M       12M          13M

     6    System up-time                                                    99.9%     99.9%        99.9%

     7    System performance/response time                                   Tbd       Tbd          Tbd

     8    Positive return on investment – hospitals

     9    Positive return on investment – payers

     10   Positive return on investment – physicians

     11   Percent of support calls returned within ___ hours

     12   Percent of major issues resolved within ___ hours

     13   Financial results (Cash Flow, EBIT)

     14   Budget versus Actual




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West Michigan Health Information Exchange – Business Plan




11 Supporting Documentation
General Appendix
   A. Clinical Use Case
   B. Population Detail
          a. Map - Population Density with Hospital Locations
          b. Map - Population by County
          c.   Map- Physicians By County
          d. Map - Labs and Pharmacies
   C. Sample Job Descriptions
          a. Director of Health Information Exchange
          b. Medical Director of Health Information Exchange
   D. Letters of Support
   E. Glossary of Terms
   F. References
   G. Timeline Detail




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West Michigan Health Information Exchange – Business Plan




Financial Appendix
   A. Detailed Participation Projections
   B. Detailed Staffing Projections
   C. Key Assumptions (Financial & Non-Financial)
           a. Financial Assumptions
           b. Transaction Volume Assumptions
   D. Financial Expenses
           a. (Medium) Cost of Revenue
           b. (Medium) Extraordinary
           c.   (Medium) Operating
           d. (Medium) Property & Equipment
           e. (Medium) Taxes
   E. Financial Projections
           a. Income Statement
           b. Statement of Cash Flow (Plus Cash Analysis)
           c.   Balance Sheet




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West Michigan Health Information Exchange – Business Plan




Benefits Appendix

   A. Case Studies
          a. Hospital
          b. Physician Practices
   B. Aggregate Analysis
   C. Tools




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