Outlook for state-designated health information exchange: Learning from the information systems and economics literatures

Some states used Health Information Technology for Economic and Clinical Health Act funds to create Public-Private Partnerships to deliver health information exchange services to end users. As these entities work to identify sustainable business models within increasingly competitive markets, the states and partnerships face three issues. First, while the partnership structure offers potential advantages and disadvantages for exchanges facing competition, they must position themselves strategically to enjoy the potential benefits. Second, the choice of technical architecture has important implications for the partnership’s market niche; thus, exchanges should view the selection as a business, rather than a technical, decision. Third, states face potential conflicts of interest as they participate on partnership governing boards, purchase exchange services, and regulate providers of exchange services. These potential conflicts require careful consideration of funding for last-resort services, pricing for services purchased to support state programs, and separation of the regulatory function from business functions.