Who Pays for PHRs?

Posted by Lygeia Ricciardi on November 13, 2007

RTI International participates in numerous efforts that ultimately support PHRs and the electronic exchange of health information, including the multi-state security and privacy collaboration (HISPC) and a variety of research topics on health and communication. A recent study by Barbara Massoudi of RTI—who is a Project HealthDesign grantee--confirms a number of consumer attitudes toward PHRs you might expect. For example, consumers want:

• User-friendly tools and interfaces
• Control of who accesses their information
• Strong security measures
• Regular backups of PHR data
• Enhanced communication with their care providers via a PHR

None of these findings particularly surprised me, though I am pleased to see them. One thing I am puzzling over, though, (and I know I am not alone) is how the money that supports PHR development and use will flow.

On the one hand, Dr Massoudi’s findings show that “consumers agree that some cost [to consumers] is probably necessary to make the system work.” Some survey participants said that they don’t value things when they are free, and most were willing to pay about $10/month for basic PHR subscription services.

On the other hand, study participants want financial incentives for using a PHR. They suggested discounts on health insurance premiums or income taxes, or at least the ability to use flex spending to pay for PHRs. Another option is to base consumer incentives on “pay for performance” rather than technology use. Health insurance companies could reward consumers for good behaviors that might be enhanced through use of a PHR (eg regular exercise) or even positive outcomes (eg improving cholesterol levels), though they’d have to be careful to avoid penalizing people for random chance (say, getting hit by a bus) or genetic bad luck (like a predisposition to develop breast cancer).

Perhaps some combination of asking consumers to pay for PHRs and paying them for using them well would make indeed sense. But then of course there’s the question of who should create the incentives—payers, employers, government? A number of stories about dentists paying their patients to stop them from eating excess candy circulated post-Halloween, but providers are sufficiently hampered by misaligned financial incentives that it doesn’t make sense for them to pay for PHRs—unless, as in the case of the Halloween candy—it can generate some good press.

In the absence of a complete health financing overhaul, perhaps the best strategy to promote PHRs is to design tools that really “work”. If well-designed and user-centric PHRs can indeed create a track record of improving health, I think it will be easy to get people—even consumers—to pay for them. Isn’t better health the ultimate incentive?

See Barbara Massoudi’s full slide deck from her recent “Steering Committee on Telehealth and Healthcare Informatics” briefing on Capitol Hill.