Is This Failure Really Necessary? Another HIE Closes Its Doors

For several years, I’ve been watching health information exchanges struggle to birth themselves. Despite ongoing support from state and local governments, HIEs continue to fade away, few having found a business model that works. And no workable business model seems to be on the horizon yet, either, despite efforts by thousands of providers to keep their HIE afloat.

This week, I was sorry to read about the death of yet another HIE.  CareSpark, a Kingsport, TN-based network which has been in existence for six years, announced on July 11th that it would be ceasing operations.  CareSpark, whose age makes it almost a young adult in HIE years, holds records for 1.28 million patients.

According to a piece in FierceHealthIT, CareSpark was forced to close because it couldn’t come up with a viable plan to sustain itself.  The group’s leaders had hoped to move from a grant-supported non-profit to one-funded by payments from subscribers, but apparently, they just couldn’t attract enough cash to survive.

The group began its final descent in March, when Health Information Partnership of Tennessee pulled federal funding from CareSpark.  The closing leaves 38 participating healthcare organizations in the lurch.

Given you don’t have a mature EMR if you can share health information freely — at least according to HIMSS Analytics — you’d think that providers would finally be ready to dish out enough money to support their local HIE.  But apparently, they aren’t.

The question is, why?  Do hospitals and medical practices think of HIEs as “nice to have” rather than “need to have”?  Do providers only kick in money when they can control the whole exchange (such as linking up hospitals within a single chain)? Have any of them done a cost/benefit analysis which suggests HIEs *aren’t* a good investment?

All I know is that if 38 providers spend six years building up trust, it doesn’t make much sense to cheap out now, especially if it shuts down critical linkages between their EMRs. I’d really like to know why they don’t want to pay for this. Don’t you? After all, it’s about time we figure out what kind of HIE model does work.

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.


  • Carespark is a HIE in an underserved area. Financial sustainability was already going to be a challenge when they started. Given that meaningful use stage 1 doesn’t require HIE Standards to be used nor more than one exchange demonstration, it doesn’t surprise me that already struggling organizations wouldn’t see the value of an HIE. There isn’t enough certainty about what is coming in stage 2 to encourage support. It is sad though, and I hope that some miracle happens for the healthcare consumers in this region.

  • No sympathy for the HIEs. They need to provide a cost effective product. I don’t profess to be well versed on HIEs but I wonder if they are a victim of too much “central planning” and not enough asking the providers what they want. I would not pay one thin dime for an HIE in my market unless it reliably provided most of the outside records I needed.

    It is also possible that we are pushing HIEs too hard too soon. It’s hard to make a railroad profitable when there are no cities to connect yet.

  • Interesting story and quite frankly I’m not sure we’re going to see a successful HIE model. I don’t see where the money could come from.

    I wish the government had chosen to spend the ARRA money to stimulate exchange of patient records. Pay the doctors to participate in the exchange of patient records. By doing so, you’d be stimulating something that would provide value for which the doctors don’t currently have much financial incentive to participate in. Plus, it would have the side benefit of stimulating EHR adoption since doing the exchange without an EHR would be nearly impossible. At least if it was structured properly.

  • Very thoughtful post. As a physician I value what HIEs have to offer clinically and as a CMIO I agree we have to find sustainable models. A recent article in CMIO Magazine discussed three successful HIEs. I thought you might find it interesting.

  • Thank you for the link — great to hear from a CMIO with a direct stake in the matter.

    Do you have any thoughts about what a sustainable model would look like for your organization specifically?

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