The Role of State Policy in Fostering Health Information Exchange in the United States

It is widely agreed that health information sharing holds enormous potential to improve health care productivity. Although the adoption of electronic health records in the United States over the past 15 years has been impressive, the use of data — and subsequent improvements in health care productivity — has been disappointing. This article considers the role that state policy plays in the adoption and use of health information exchange (HIE) across providers. The authors built a novel database of state laws from 2000 through 2019 that tracks 12 dimensions of policies that may facilitate HIE usage. The dimensions fall along four categories: clarifying HIE governance, strengthening financial stability, specifying the uses and users of an HIE, and protecting the underlying data. The authors find that regulations related to privacy protections and HIE financial viability have substantial effects on information sharing. The category that has the strongest relationship with health information sharing is related to data protection. In states that add a dimension making the protection of data less costly, HIE usage increases by 18%. Within the category of data-protection measures, one stands out: enacting legislation that has patients participate by default leads to a 16% increase in usage. Adding a dimension for each of the other three categories leads to a 4% increase in HIE usage, although only the relationship with financial sustainability is measured precisely enough to be statistically significant. In particular, states that set up the ability to charge participant fees and authorize the HIE to request state, federal, and private funding achieve greater HIE. These results point to policy levers that can catalyze the use of digital tools to improve health and lower health care costs.