A United States consumer group is calling for Californians to boycott a US$80 million computer system underpinned by software supplied by Auckland firm Orion Health.
Orion Health announced the California Integrated Data Exchange (Cal Index) had gone live on Monday, saying it was a major project for the company that would allow the medical records of 9 million Californians to be shared between healthcare providers.
But Consumer Watchdog, a non-profit organisation based in Santa Monica, urged Californians to "opt-out" of the system until the health insurers that funded it answered "key questions" about patient privacy.
The Wall Street Journal reported in August that insurers Blue Shield and Anthem Blue Cross were spending US$80 million (NZ$103m) on the exchange and on its first three-years' running costs.
The group said a comprehensive medical exchange might ultimately help patients, but it needed to be transparent about its purposes before people agreed to share their medical records.
"If the exchange will do so much to benefit our health care, Cal Index should make that case and ask us to 'opt-in'," Consumer Watchdog privacy project director John Simpson said. "Instead, Blue Cross and Blue Shield are telling enrollees they can 'opt-out' during the busy holiday season when we are all distracted. Consumers can't make an informed decision based on what they have said so far," he said.
The US government earmarked US$550m for such data exchanges in 2009 in a bid to improve the efficiency of healthcare. The Wall Street Journal reported 315 had been set up, of which Cal Index was one of the largest, but it said dozens had closed or merged because of "funding and logistical woes". Previous efforts to create a statewide health-data network for California had floundered, it said.
Orion Health said Cal Index was a major project for the Auckland company and had been completed on time. The system was being delivered as a rented software service "with the majority of revenues received in the next financial year and beyond," it said.
Chief executive Ian McCrae said health information exchanges tended to reach "critical mass" much faster if patients had to opt-out rather than opt-in. "We have been doing these projects for 10 to 15 years and particularly in the early days there were always patient advocacy groups that were concerned, and quite rightfully so, about the protection of patient data," he said.
He could not comment on the specific criticisms of Cal Index made by Consumer Watchdog but said Blue Shield and Anthem Blue Cross were well-resourced and in his opinion would be "on top of it".
The effective sharing of medical records was to patients' advantage, particularly if they had chronic conditions or needed to visit a specialist, he said.
Orion Health became the largest technology firm to float on the NZX this year when it listed last month with an initial market capitalisation of $915m.
Its offer of shares at $5.70 was over-subscribed and Orion's share price jumped to a high of $6.79 but that premium has since dissipated.
Its shares have drifted back to $5.72 and touched their original offer price of $5.70 during intraday trading yesterday.