Blue Shield of California and Anthem Blue Cross say they will initially fund an index designed to hold as many people’s health records as possible. They hope other insurers will join in. Privacy issues are raised.

The medical records of millions of Californians could soon be literally at the fingertips of doctors and hospitals statewide with the advent of a centralized computer database to be funded by two of the state's largest health insurance companies.

Blue Shield of California and Anthem Blue Cross, ferocious competitors in the state's health care marketplace, said Tuesday they are joining forces to launch a nonprofit called the California Integrated Data Exchange, or Cal Index. They hope it will contain the medical histories of 9 million insured members – about a quarter of California's population – by the time it goes live at the end of this year.

The two insurers will invest $80 million to get the exchange off the ground and keep it running for the first three years.

Their announcement quickly raised concerns about the privacy of medical data.

Consumer groups questioned whether patients' interests would be sufficiently aired in an organization founded by private-sector insurance companies with the collaboration of hospitals and big health systems.

Those who don't want their records in the database will be able to opt out.

Proponents say the exchange, which might be the largest such effort among hundreds in the United States, can improve the quality of care and reduce health costs by avoiding duplicate lab tests, preventing adverse drug interactions and quickly alerting doctors or nurses who are seeing a patient for the first time to any conditions or prior surgeries they need to know about.

It might even save lives if ER doctors, dealing with unconscious patients, are able to pull up such information immediately and make better-informed treatment decisions.

And it puts California front and center in the growing trends toward digitized data and integrated care, which are an important part of the Affordable Care Act, or Obamacare.

"I think this could really be a milestone moment for health care in the U.S., simply because of the scale of the collaboration," said Jennifer Covich Bordenick, CEO of Washington, D.C.-based eHealth Initiative, a nonprofit
organization that conducts an annual survey of more than 300 health information exchanges nationwide.

Anthem, Blue Shield and medical providers collaborating with them hope Cal Index will ultimately attract all health plans, hospitals and medical groups in the state. It could hold the medical records of all Californians who don't choose to be excluded.

"Ultimately our goal is to have all payers and all providers participate and truly make it a utility for the health industry in the state," said Paul Markovich, CEO of Blue Shield.

Some observers questioned whether Cal Index can succeed when so many other attempts to create such information exchanges – including one in California known as Cal eConnect – have failed.

About a dozen regional information exchanges exist in California. Kaiser Permanente has its own system that contains the records of its more than 9 million members statewide. But hospitals and physician groups, especially ones that compete with each other, have traditionally resisted sharing data, which has left a fragmented patchwork of health information.

Kaiser declined to comment on whether it would join Cal Index. Health Net, another major insurer, "thinks it's a good idea, and we are always open to evaluating good ideas," said spokesman Brad Kieffer.

The new exchange is certain to face resistance from privacy advocates, who fret about the darker possibilities associated with putting so much intimate personal information out there. The same day as the announcement, the New York Times reported that a Russian gang had gained access to 1.2 billion Internet passwords. Last year, Anthem Blue Cross accidentally posted online the Social Security numbers or tax ID numbers of 25,000 doctors.

Consumer groups voiced concerns about the organization's five-member board, which will be dominated by insurers and medical providers, with only one seat for consumers.

"This is the real double-edged sword of the modern medical system," said Jamie Court, president of Consumer Watchdog, a Santa Monica-based advocacy group. "We want the convenience of electronic medical records that can help us no matter what ER we land in, but we have to be very cautious about the way health insurance companies and medical providers use the information."

Betsy Imholz, director of special projects at Consumers Union, said that for consumers to buy in to the idea, "people need to feel their privacy is protected, and with a private sector endeavor and without all the details, we just don't know."

People who do not want their records included in the database will receive information later this year telling them how they can opt out online or by calling a designated phone number, said Mark Morgan, president of Anthem Blue Cross.

Imholz said patients' access to their own records would be a selling point, "so I wish they were able to get to that more quickly." Blue Shield's Markovich said patients will have such access "ultimately."

Perhaps the most daunting challenge in setting up the exchange will be the technical task of getting all the computer systems of hospitals and medical groups statewide to mesh with the centralized database. That "is a challenge and will continue to be a challenge for awhile," said Simon Jones, a Blue Shield vice president for health information technology.

Blue Shield and Anthem plan to fund Cal Index for the first three years, working with 30 large medical groups who will in effect be subsidized in exchange for putting their patients' records into the system. After that, the exchange will be funded by annual subscription fees paid by participating health plans and medical providers.

One of the early participants will be the St. Joseph Health System, which operates three hospitals and has eight physician groups in Orange County.

"This will allow us to fill in the gap," said Darrin Montalvo, president of integrated services at St. Joseph. "So if patients had lab services somewhere else, we will be able to add that to their medical record to have complete view of their medical history."

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