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E-HEALTH SNARE -- The employer-led electronic health records project known as Dossia is in disarray, as its partners fight over money and deliverables. Will the industry ever get this right?
[July 16, 2007]

E-HEALTH SNARE -- The employer-led electronic health records project known as Dossia is in disarray, as its partners fight over money and deliverables. Will the industry ever get this right?


(Information Week Via Thomson Dialog NewsEdge) An ambitious program to provide electronic health records to more than 2.5 million people is starting to unravel, as the partners in the multimillion-dollar initiative turn to legal action against each other.



Dossia, a coalition that includes Wal-Mart, Intel, Pitney Bowes, Applied Materials, British Petroleum, and Cardinal Health, quietly filed suit late last month against Omnimedix Institute, the nonprofit group it had contracted to build a data warehouse of medical records for employees, retirees, and dependents. Dossia filed a temporary restraining order against Portland-based Omnimedix in an Oregon circuit court in an attempt to keep Omnimedix from filing a suit of its own.

According to court papers, the contract signed by Dossia and Omnimedix on Dec. 14, 2006, required Dossia to pay Omnimedix a total of $15 million, in quarterly installments of $1.25 million over the three-year life of the agreement. Omnimedix was to build a federated database system, to be enhanced by third-party application vendors and others, that would help Dossia member employees lead healthier lives and make better health care purchasing decisions, while cutting employer health care costs in the process.


Dossia maintains in the court filing that Omnimedix failed to achieve the March 31 "milestones" set in the agreement. Omnimedix, meantime, claims Dossia is in default on the $1.25 million installment due April 1.

In its court papers, Dossia says it took pre-emptive action because it will "suffer immediate and irreparable harm" if Omnimedix files a suit that reveals confidential details of the parties' agreement. Dossia is seeking to settle the dispute through arbitration, according to the filing.

By mid-2007-about now-it was expected that some Dossia members would begin using the system. Omnimedix CEO J.D. Kleinke confirmed that the system has yet to go online, though he declined to elaborate on the project's status.

A source close to the project says Omnimedix "hasn't delivered anything" related to the system, demonstrating only a prototype of how it will work. The source says the effort seems to be sidelined by poor project management and a lack of clearly defined milestones.

Kleinke says public documents, including recent testimony before a U.S. health department subcommittee by a Wal-Mart executive, confirm that each Dossia company was to chip in $1.5 million, with the coalition expected to grow to at least 10 members. Only six companies are now publicly involved. A Dossia spokeswoman, while denying that the coalition ever set a 10-member goal, says two additional companies are on board and will announce their membership at some point.

Dossia's business plan was to launch with seed money from the founding members, then convert to a "revenue model" in three years, with positive cash flow within six years. The vision was for Dossia to function as something of a public utility, eventually charging application, personal health record, disease management, and other vendors to offer services of their own.

Despite all the legal hand-wringing, "Dossia is committed to providing lifelong health records to its employees," says the spokeswoman, who wears dual hats for Dossia and Intel. Dossia always "knew we'd need multiple vendors," she says, adding that the coalition is talking with other vendors about providing technology and other services for the project. Dossia, the spokeswoman says, remains committed to offering e-health records to at least some employees by the end of this year.

HISTORY OF DISAPPOINTMENTS

Dossia is the largest employer coalition attempting to provide workers with private (the companies won't have access to patient data), secure electronic health records. But it's not the first e-health program to encounter major problems, which have included lack of funding, doctor apathy, concerns about patient privacy and medical liability, and technology glitches.

Among the highest-profile disappointments was the Santa Barbara County Care Data Exchange, a $10 million project launched in 1999 to let doctors, labs, hospitals, and other health care providers in Southern California share patient data over a secure, interoperable network. The project, which served as a model for other regions developing health data exchanges, had ushered into the national spotlight Dr. David Brailer, former CEO of software developer CareScience, the prime contractor on the project. Brailer in 2004 was named the country's first national health IT czar, a sub-Cabinet position created by President Bush to help meet his goal of creating electronic health records for most Americans by 2014.

The Santa Barbara exchange-which was much further along in development than Dossia's system is now-eventually got dragged down by legal issues and competitive concerns among health care providers. The exchange folded last year after doctor interest and funding waned.

When the Dossia project was announced last December (around the same time the Santa Barbara exchange was shut down), health officials from across the country lauded the effort as a major step toward digitizing the industry. Dossia's blue-chip companies, which spend billions of dollars a year on health care, were seen pressuring tech-laggard medical providers into adopting e-health systems of their own.

BABY STEPS

In testimony before a subcommittee of the U.S. Department of Health and Human Services in January, Carolyn Walton (no relation to Mr. Sam), Wal-Mart's VP of information systems, talked about the company's high hopes for Dossia.

"Dossia is a first-of-its-kind collaboration between Wal-Mart and other employers, and it represents an important first step toward bringing greater efficiency, quality, and transparency to the U.S. health care system," Walton testified. "Dossia will provide Wal-Mart associates and employees at other founding companies with a framework through which they and their doctors can both build and maintain private electronic personal health records. With employers paying almost half of all U.S. health care costs, Dossia will be an important component in making the health care system more efficient and effective, eliminating waste and duplication of effort on behalf of consumers and providers."

For Dossia to move forward in eliminating that waste and duplication of effort, it will have to get its internal house in order. If history is any guide, that's a lot easier said than done.

Write to Marianne Kolbasuk McGee at mmcgee@cmp.com.

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InformationWeek.com

SLOW GRIND

Progress on health e-records is worse than you think: informationweek.com/1140/ehealth.htm

DOSSIA LAUNCH

Intel, Wal-Mart lead employer initiative: informationweek.com/1118/datapool.htm

HAIL TO THE CHIEF

CIO pushes transformation: informationweek.com/1117/drawbaugh.htm

Copyright 2007 CMP Media LLC. All rights reserved.

Copyright 2007 CMP Media LLC

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