As CEO of the Indiana Health Information Exchange (IHIE), Dr. Marc Overhage presides over the largest health information exchange (HIE) in the country, one that encompasses roughly 20,000 providers, more than 100 hospitals and includes electronic medical records (EMRs) for over 11 million patients. With federal incentive payments for the meaningful use of EMRs set to begin this year, I caught up with Overhage to discuss exchange design, the role of state and local government and the ways in which EMRs have transformed Indiana's approach to public health. Here's an abridged and edited transcript of our conversation.

This is the year that federal incentive payments start to flow to doctors and hospitals who can demonstrate the meaningful use of EMRs. What impact will that have?

The HITECH ACT [that created, among other things, EMRs incentives] has already focused attention on health information in a way that wasn't the case in the past. The incentives and the possibility of disincentives for hospitals in particular, have led leaders in the health-care industry to be prepared to invest in capital. At the same time, the Office of the National Coordinator and CMS [Centers for Medicare & Medicaid Services] have set the tone well by stating that it's not enough to own health information technology, it's got to be used in a way that improves patients' care.

Last month, I spoke with former Tennessee Gov. Phil Bredesen, author of a new book, Fresh Medicine. He talked about how strange it was that we have to pay providers to use EMRs and health technology. The federal government doesn't pay Boeing to invest in computer-assisted design. Why does it have to do so with health IT?

The current payment models encourage consumption, not effective delivery. It's as if we were paying Boeing for man-hours staffed. What's the incentive to be efficient about building the plane when every man hour brings in an extra dollar of revenue? That's the difference.

There's a general agreement that EMRs have numerous benefits, but there's also been kind of a sustained and minor dissent saying that benefits are overstated. What's your assessment of the pros and cons of EMRs?

The task we give health-care providers is well beyond the capability of human providers. Even if they are the best-trained, best-intentioned and best-incentivized providers in the world, they're not going to do a great job on their own because [the practice of medicine] is very data intensive, information intensive and computationally intensive. So, we must have clinical-decision support in a whole variety of forms to do a good job of taking care of our patients. That's a pro. There's no other way to do it.

There also is, with any technology, potential for problems. That's true whether it's a surgical procedure or a diagnostic test. This is an exceedingly complex field and an exceedingly complex technology. What we have to do is not say, "Well, a car operated in error can run over a curb, crash through the bushes and kill people. So, we better not have cars." We put in stoplights and we put in drivers' training. So, we need to be proactive about continuing to evolve the tool, and put in the safety checks.

What is the role of government in supporting health exchanges like yours?

This will sound funny, but government can make big contributions in small ways. So for example, early on in the mid '90s, when we were applying for a grant from the National Library of Medicine to help support some of the early work, the mayor of Indianapolis took time to meet with the review team, and he told them about why this was important to him and to the city. This was in 1996 -- long before it was a hot topic --and, [as a result], we got that grant. It helped support a lot of work that we have done.

The Indiana state health commissioner was actually the former chief medical officer for the IHIE. Before he worked for the IHIE, he was the head of employee health care for Eli Lilly. He brings a very broad perspective. There's a whole variety of ways government can be supportive. It's helping breakdown barriers, facilitating communication and things like that.

How does having a network like IHIE affect the provision of public health?

There's a whole variety of ways that this infrastructure facilitates population-level public health. With the flow of clinical data and the right privacy protections and permissions, we're able to measure and describe in much more robust ways what the health of the population looks like.

For example, you may have read Atul Gawande's piece in The New Yorker talking about how Camden, N.J., found hotspots of patients who were high-cost patients. We're doing similar things, like looking for hotspots of poor diabetes control and then correlating that with data from the environment. Are there real grocery stores in that area, in that ZIP code where these people are poorly controlled, or are they all convenience stores? Do they have access to parks and walking paths?

To add to that, a second set of things is monitoring in real time for problems in care. Our PHESS, or Public Health Emergency Syndromic Surveillance System, is the largest and most sophisticated system for monitoring symptoms and diagnoses as they're presenting. For example, on December 23, 2005, it turned out that the number of people being seen for gastrointestinal complaints went up by a factor of three in this particular geography. Our public health department did their usual good shoe leather epidemiology, called up these people, said, "What's going on? What's in common? Where have you been to eat?"

Well, it turns out there was a grocery store that was improperly storing and handling cream filled donuts. The next day, they had identified that source and remediated it.

I'd like to ask you to give some very explicit advice to other states who are thinking about HIEs.

No. 1 is don't try to reach too far. I think you find organizations that try to solve the world. They try to meet everybody's needs day one. You don't see any forward progress, and people become disengaged. The corollary to that is keep it simple. Build on national standards. Don't wait for the perfect answer or the perfect standard because it'll never happen. Pick what is well thought out and rational, and build from it. Organizations that try to find "the" answer, spend a long time waiting to find perfection.

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