Idaho should consider withdrawing its support for a bankrupt government-created but tough-to-regulate health data sharing service supported by $94 million in tax dollars, a top health official told lawmakers on Wednesday.
Idaho officials are in talks with the Idaho Health Data Exchange about what changes are needed for the state of Idaho’s continued support, Idaho Department of Health and Welfare Interim Director Dean Cameron told Idaho legislators on the Joint Legislative Oversight Committee.
The Idaho Health Data Exchange was supported by almost $92 million in federal tax funds and $2 million in state tax funds, according to a watchdog report by the Office of Performance Evaluations released in November 2023.
Though the exchange was supported by tax dollars, “there’s no oversight, there’s no transparency, there’s no compliance with” Idaho law requiring government-decision making be public and that government records be publicly available, Cameron said.
The Office of Performance Evaluations found in a report released in November 2023 that Idaho created and managed the Idaho Health Data Exchange, a nonprofit meant to make health data more widely available, in a way that made regulation difficult. The report outlined how the exchange, as a nonprofit, was not subject to transparency and oversight rules government agencies operate under. Idaho law “gave the state no meaningful oversight mechanisms for the exchange,” the report said.
The exchange filed for bankruptcy in fall 2022, emerging this year with a plan to repay 25% of its debts, according to the report. In an investigation published in June, the Idaho Capital Sun found that the exchange ran into financial troubles after its leadership made funding deals that fell through, leading to a bitter feud over a contract.
“We are at a crossroads, where in my opinion the state has to determine if it can continue to operate and participate in the data exchange. And my recommendation at this stage is not. However, we still have some work to do,” Cameron said.
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Exchange operations not ‘materially’ impacted, director says
Cameron said withdrawing Idaho’s support only requires a letter signed by him saying so.
Idaho Health Data Exchange Executive Director Jesse Meldru, in an email to the Idaho Capital Sun, said the move would not “materially impact” the exchange’s ability to operate. But the state could lose out, he said.
“The relatively small amount of fees that IDHW pays for its access to the Health Information Exchange … offer IDHW the opportunity to extract more value from (the exchange) than they have at any point in their relationship with (the exchange),” Meldru said.
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Cameron also said the state needs to know about whether the exchange’s data is secure. The report didn’t find evidence that the data’s exchange is vulnerable, but identified a potential conflict of interest in a third party that attested to its security in 2021. Meldru previously defended the exchange’s data security as “top notch,” citing external reviews.
The exchange didn’t receive all of the nearly $94 million in taxpayer funds identified in the watchdog report. The biggest pool of funds was about $65 million of federal grants given to health care providers to develop electronic health record systems.
FINAL_INFOGRPHX_DATA_5X3 1THIRDOfficials in talks about path for affected hospitals, providers
Idaho’s health data exchange is among several health information systems across the country meant to help health care providers, insurers and others share patient’s medical data more effectively.
Officials know some health entities that rely on the exchange “would potentially be in an awkward situation should the state withdraw,” Cameron said. Officials are talking about a path for hospitals and providers if the state does withdraw support, he said.
Cameron said some other states have shifted from state-run data exchanges to privately run exchanges.
Joint Finance-Appropriations Committee co-chair Sen. Scott Grow, R-Eagle, told Cameron he appreciated him taking a stand.
Grow said he has long questioned the need for the exchange, given that private health systems have their own and that he has heard providers were slow to pay for the Idaho Health Data Exchange. He said hopes the state can recover data from the exchange, and that the private market could address the needs of health care entities.
“If we already put in $100 million and it isn’t working, I can’t see that more money from the state would work,” Grow said.
Since late 2020, the Idaho Health Data Exchange has operated without state or federal grants, Meldru said. And since the nonprofit exited its bankruptcy reorganization process last year, he said the exchange has been “financially sustainable and growing business exclusively from fees generated” from reportedly more than 190 clients.
Exchange staff were “saddened to see this response from the IDHW as it disadvantages the IDHW at a time when more technological intervention with more access to relevant data is necessary for effective operation within a public health focused department,” Meldru said.
Former state health department director Dave Jeppesen, in a letter responding to the report last fall, disagreed with some findings in the report but said the agency “did not have statutory or regulatory authority” over the exchange, and that it shouldn’t have been created as an independent entity.
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