eHealth Exchange

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eHealth Exchange

by Faulkner Staff

Docid: 00011293

Publication Date: 2007

Report Type: TUTORIAL


After years of development, the US National Health Information Network
shed government control to become a non-profit organization, the
eHealth Exchange. Development work will continue, but the final form
of the network and its prospects for success remain uncertain. What is a
safe bet, however, is that the network’s progress over the coming years
will be important for a wide range of stakeholders across the health care
industry. In May 2018, The Sequoia Project reported plans to update its
corporate structure to reflect two subsidiaries: eHealth Exchange and
Carequality. In 2020, eHealth Exchange launched new gateway technology to
provide connectivity for its participants via a single connection.

Report Contents:

Executive Summary

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Today, patients visiting new doctors often have to verbally provide their
medical histories, including treatments received, medications taken,
conditions experienced, and surgeries undergone.

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Providing this history completely and accurately from memory can be
difficult, particularly for patients with degraded faculties. But for the
past several years, an effort launched by the US government has aimed to
solve this problem by giving all (or, more realistically, most) patients a
single electronic health care record (EHR) that would include a complete
medical history. All doctors, health care facilities, and pharmacies will
be able to use the nationwide network to quickly access this EHR and
update it based on the services they provide.

The network is now called the eHealth Exchange and is run by a non-profit
public-private partnership called The Sequoia Project (formerly
Healtheway). While the goal remains the creation of a nationwide network
for electronically exchanging healthcare information, a significant amount
of development work is necessary to bring this idea to fruition.


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An electronic healthcare record (EHR) is a complete, computerized history
of a patient’s medical background, including doctor’s visits,
surgeries, and medications taken, regardless of when these services were
received or which provider delivered them. A computerized patient record
maintained by a single facility does not constitute an EHR. To be an EHR,
a record must be in a common format that enables it to be shared among
disparate providers and it must include information from all (or most) of
the providers with whom the patient has had contact. In order for this
vision to be fully achieved, a national network for exchanging such
information is needed. The eHealth Exchange aims to meet this need.

The Exchange began as a government initiative with the goal, as stated by
President George W. Bush in 2004 and re-affirmed by President Barack
Obama, of providing most Americans with their own EHR. These records are
intended to be shared easily and quickly among hospitals, doctors,
pharmacies, and medical laboratories. EHRs would not only improve
efficiency and reduce costs, but they would also improve patient safety.
Patients frequently have difficulty remembering every aspect of their
medical backgrounds. For instance, they might forget the name of a
prescription or might neglect to mention that they had suffered from a
particular condition as a child. Whereas the traditional system relies
heavily on patients’ memories and their ability to describe their
backgrounds, EHRs could provide accurate and complete information. This
would help to avoid problems associated with medication interactions,
allergic reactions, and other issues. The Office of the National
Coordinator for Health Information Technology (ONC) worked across the
federal government to develop the Federal Health IT Strategic Plan, which
identified the federal activities necessary to achieve the nationwide
implementation of this technology infrastructure throughout both the
public and private sectors. Over the years, much of the state-level work
was done by regional healthcare information networks (RHIOs), which are
groups of hospitals and other stakeholders working together to select and
implement standards, technologies, and methods for exchanging patient

In some cases, RHIOs span entire states; in more populous states, there
are multiple RHIOs. Typically, RHIOs are funded cooperatively by
states, healthcare providers, and private companies. They do not
necessarily store patient data centrally. Although some oversee the
maintenance of patient data, others take the approach that data is
stored at individual providers, and the RHIO only provides the means to
perform a single search across all these sources.

As was long planned, the government-led effort was transformed into a
non-profit, The Sequoia Project (formerly Healtheway), that is guided and
supported by public and private entities. The founding members of The
Sequoia Project were the American Medical Association,
Epic, Informatics Corporation of America, Kaiser Permanente,
MedVirginia, Mirth Corporation, New York eHealth Collaborative, Orion
Health, and WEDI.

The American Recovery and Reinvestment Act of 2009, commonly known as the
“stimulus bill,” provided $17 billion in increased Medicare and Medicaid
reimbursements for healthcare providers that use the electronic records
system. This funding encouraged the use of electronic records to help spur
the development of a unified network. However, one aspect of the Recovery
Act that had confused healthcare providers and impeded some progress
toward electronic recordkeeping was the requirement that EHRs must be used
in a “meaningful” way. After much controversy and criticism, the
Department of Health & Human Services defined “meaningful use” as

HITECH’s incentives and assistance programs seek to improve the health of
Americans and the performance of their healthcare system through
“meaningful use” of EHRs to achieve five healthcare goals:

  • To improve the quality, safety, and efficiency of care while reducing
  • To engage patients and families in their care.
  • To promote public and population health.
  • To improve care coordination.
  • To promote the privacy and security of EHRs.

In the context of the EHR incentive programs, “demonstrating meaningful
use” is the key to receiving the incentive payments. It means meeting a
series of objectives that make use of EHRs’ potential and related to the
improvement of quality, efficiency and patient safety in the healthcare
system through the use of certified EHR technology.1

In 2014, the Exchange began to certify products as meeting guidelines
specified for the network. The aim of such certification is to encourage
the development of products that enable participants to easily join the
Exchange. The first two products to be certified were Medicity Network v7
and Informatics Corporation of America CareAlign 3.0.2

Current View

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The eHealth Exchange aims to help create communications infrastructures
that provide data search, retrieval, and publishing among private and
public agencies that handle EHRs. A sample application of the network is
the Social Security Administration’s use of it to gather evidence in
support of disability claims. It launched as an ONC initiative in 2008 and
was taken over by the Sequoia Project in 2012. In October 2018, the
network became a standalone non-profit.

In February 2019, eHealth Exchange reported plans to upgrade its health
IT infrastructure to reduce costs and expand its reach. This upgrade will
also support such new capabilities as a national record locator service.
It will integrate its Fast Healthcare Interoperability Resources (FHIR)
Healthcare Directory with InterSystems health IT offerings for
patient-centric services. eHealth Exchange is also working to implement
the Carequality interoperability framework to enhance health data exchange
standardization for users.3

In August 2019, eHealth Exchange launched new gateway technology to
provide connectivity for its participants via a single connection. It
offers reduced information sharing expense, expansion of its national
footprint, and faster implementation of such capabilities such as
real-time content quality validation and a national record locator

In April 2020, eHealth Exchange reported that ts newest network
participant is ADVault, Inc., which offers MyDirectives. This platform
allows users to develop, upload, store, and share advance directives, and
advance care plans and portable medical orders, such as POLST forms.
ADVault is allowing personal COVID-19 statements to be added as a type of
advance care planning document that consumers can store for free.

eHealth Exchange currently facilitates connections between federal
agencies, 75 percent of hospitals across the country, tens of thousands of
clinics, and 59 regional and state health information exchange (HIE)

Figure 1 provides a visual depiction of the eHealth Exchange.

Figure 1. eHealth Exchange

Figure 1. eHealth Exchange

Source: eHealth

While the eHealth Exchange moves forward, there are many RHIOs working
independently to accomplish similar goals. Many of these RHIOs are more
mature than the planned nationwide network, and their goals of connecting
small regions rather than the entire US population could be a better
recipe for success.


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In June 2015, when the organization that runs the exchange changed its
name to The Sequoia Project, it updated its strategy.4 In
addition to continuing its support for the eHealth Exchange, the
organization will undertake other efforts to promote and facilitate the
sharing of health data. These other efforts could support and add to the
exchange, or they could point it in different directions. The eventual
impact of the updated strategy is hard to predict at this time,

Another consideration is that there are some observers who are skeptical
that a nationwide, truly complete healthcare network will come to
fruition, especially within the next few years. There are some legitimate
reasons to be skeptical:

  • The funding required for the network would be enormous, and only a
    moderate amount of funding has been delivered so far. Even the RHIOs are
    uncertain of whether they will find ongoing funding.
  • The effort would require a large and diverse group of participants to
    come to agreement on numerous policy and technology decisions. This
    agreement would have to be reached in the face of the competing
    priorities of private technology developers, hospitals, physicians, and
    even patients.
  • It will be difficult to get disparate RHIOs to agree on which
    standards to use. Currently, different sets of standards are being used
    in different regions, impeding or preventing information from being
    exchanged among organizations in different regions.
  • Privacy and security issues are thorny and are a long way from being
    settled. Patients might be uncomfortable with the concept of electronic
    healthcare records, even if the conventional paper records used by
    individual doctors frustrate them.

The eHealth Exchange is not the lone hope for electronic
healthcare records. For instance, Dell formed a collaboration with
WebMD, called Well at Dell, through which it offers its US-based employees
access to Web-based health records that can import data from multiple
sources. In implementing the program, Dell joined IBM and Cisco as companies
offering e-health services. If such private, employer-led programs become
widespread, it is unclear whether they would serve as a catalyst to the
development of the eHealth Exchange or offer an alternative that
diminishes the demand for such a network.

Similarly, several insurance companies, spearheaded by America’s Health
Insurance Plans and the Blue Cross Blue Shield Association, have a program
to make personal health records (PHRs) shareable among multiple insurers.
This gives patients the option of transferring their records to a new
company if they switch insurers. PHRs are based only on claims submitted
by patients and therefore are not as complete as electronic health
records. These records and the methods that are developed to safely share
them could, however, be used as a basis for parts of
the eHealth Exchange. There has also been speculation within the
sector that the insurers’ network could be connected with
the eHealth Exchange in the future, which would be beneficial to
both insurers and healthcare facilities.

The Sequoia Project and DirecTrust have reported that they have been
exchanging more health records and connecting more providers than before.
Carequality, eHealth Exchange, and RSNA Image Share Validation have grown
in by health organization participants, by geographic reach, and by the
number of health records exchanged electronically. The Carequality
Interoperability Framework is deployed at more than 2,800 hospitals,
50,000 clinics and 600,000 providers.


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In considering how to approach electronic records, healthcare providers
must consider the Recovery Act funding that is now available. The
potential funding, particularly in the form of greater reimbursements, is
significant, and organizations that do not adopt electronic records could
be penalized, such as by having their Medicare reimbursements lowered.

Facilities can begin preparing themselves for using electronic records by
participating in RHIOs and other local efforts. Since some plans will
change in the coming years, organizations might temper their spending to
ensure that they do not invest heavily in technologies and standards that
will not be used well into the future. If connectivity to one of the more
mature RHIOs is available, however, organizations may consider investing
somewhat more aggressively.

In addition to participating in local programs, facilities can help
prepare themselves for future compliance by taking the following two

  • Establish a monitoring program – Hospitals should
    designate an employee or group of employees to continually monitor new
    developments toward a nationwide network, including standards efforts.
    This monitoring should cover not just local efforts in which the
    hospital may be participating, but also efforts across the US that might
    have a broader impact in the future.5
  • Participate in the planning process – The
    eHealth Exchange and the various RHIOs that are working to develop
    a nationwide network are making extensive use of input from hospitals
    and other facilities. Participating in these efforts will help
    organizations to stay informed about developments and potentially
    influence them to their benefit.


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