Skip to content

Instantly share code, notes, and snippets.

@jmandel
Last active May 22, 2025 17:59
Show Gist options
  • Save jmandel/4e3bcb71e96a87e0e4c3ba00a7be1868 to your computer and use it in GitHub Desktop.
Save jmandel/4e3bcb71e96a87e0e4c3ba00a7be1868 to your computer and use it in GitHub Desktop.
TEFCA Patient Credential Economics

Let me search for data on legitimate use cases where patients share their full EHR with third parties.## Legitimate Patient Use Cases for Sharing Full EHR: Economic Analysis

Based on my research, here's a comprehensive analysis of legitimate use cases where patients would share their full EHR and the economic implications:

Major Use Cases & Market Sizes

1. Social Security Disability (SSDI/SSI) Applications

  • Annual Volume: ~2-2.5 million applications filed annually
  • Medical Records Need: Many states waive or limit fees for disability claims, with free copies for SSI/SSDI claims
  • Current Process: Manual requests, paper forms, state-specific pricing
  • Estimated PDC Users: 200,000-300,000 (10-15% of applicants)

2. Life Insurance Underwriting

  • Market Size: Life insurance companies routinely request medical records for underwriting, with companies accessing records through MIB or direct requests
  • Annual Applications: ~15-20 million life insurance applications
  • Full Records Needed: ~30% require APS (Attending Physician Statement)
  • Estimated PDC Users: 150,000-200,000 annually

3. Personal Injury Litigation

  • Annual Volume: Approximately 400,000 personal injury cases filed annually in the US
  • Medical Records Critical: Nearly 100% require comprehensive medical documentation
  • Current Cost: Often $500-2,000 per case for records retrieval
  • Estimated PDC Users: 100,000-150,000 cases

4. Workers' Compensation Claims

  • Annual Volume: ~1 million new claims filed
  • Records Requirements: Insurers request extensive medical records to verify work-relatedness and assess pre-existing conditions
  • Estimated PDC Users: 100,000-150,000 claimants

5. Long-Term Disability Claims

  • Annual Volume: ~600,000-800,000 new claims
  • Documentation Need: Insurers often request excessive, old medical records when evaluating claims
  • Estimated PDC Users: 60,000-80,000 claimants

Total Addressable Market

Conservative Estimate: 710,000-980,000 legitimate use cases annually Realistic PDC Adoption: 350,000-500,000 users (assuming 50% adoption)

Economic Impact Analysis

Cost of Moving Data (Infrastructure)

Per-Query Costs for QHINs:

  • Compute/bandwidth: ~$0.05-0.10 per query
  • Full EHR retrieval: ~$0.50-1.00 (larger payload)
  • Annual cost for 500,000 PDC users × 5 queries each = $1.25M-2.5M

Infrastructure Already Exists: QHINs must provide Individual Access Services free of charge anyway

Lost Revenue Analysis

Traditional Commercial Path Revenue:

  1. Law Firms: Would pay $2,500-10,000/year for HIE access
  2. Insurance Companies: Pay $5,000-50,000/year for network access
  3. Disability Evaluation Firms: $2,500-5,000/year

Actual Revenue Impact:

  • These entities currently use manual processes (fax, mail, portal downloads)
  • Only 10-20% would become paying QHIN participants
  • Lost revenue: ~$5-10M annually across all QHINs
  • Per QHIN (5 QHINs): $1-2M annually

But Consider:

  • Global HIE market is $2.02 billion
  • US portion ~$800M-1B
  • Potential "lost" revenue is 0.5-1% of market

Who Bears the Costs?

1. QHINs - Minimal Impact

  • Already required to provide free Individual Access Services
  • Infrastructure costs are marginal (already built)
  • Lost commercial revenue <1% of total market

2. Current Medical Records Vendors - Major Disruption

  • Companies charging $1/page for first 10 pages, then $0.50/page
  • Industry worth ~$500M-1B annually
  • Would lose 30-50% of revenue if PDC widely adopted

3. Healthcare Providers - Net Benefit

  • Currently spend millions on records request processing
  • Staff time reduced dramatically
  • Better data quality for treatment decisions

4. Patients - Clear Winners

  • Save $100-1,000 per use case
  • Faster access (days vs. weeks)
  • Complete, computable data
  • Control over their information

Market Forces & Natural Limits

Self-Limiting Factors:

  1. Complexity: Managing full EHR data requires technical sophistication
  2. Privacy Concerns: Many patients won't want to handle their own data routing
  3. Legal Requirements: Courts/insurers may still require "official" records
  4. Rate Limiting: 100 queries/day would handle personal use but prevent industrial scale

Market Response:

  • New intermediary services will emerge (patient-authorized aggregators)
  • These will likely become commercial QHIN participants eventually
  • Creates innovation and competition in the market

Conclusion

The PDC "arbitrage" concern represents a feature, not a bug. The economic impact is:

  • Infrastructure costs: Negligible (~$2-3M total)
  • Lost QHIN revenue: Minimal (~$5-10M across all QHINs)
  • Disruption to rent-seekers: Significant (current medical records industry)
  • Patient benefit: Enormous (faster, cheaper, better access)
  • Innovation catalyst: Creates new market opportunities

The real "losers" are incumbent medical records retrieval companies charging high fees for poor service. QHINs lose minimal revenue while potentially gaining legitimacy and patient trust. The market will self-regulate through natural limits and the emergence of value-added services that justify commercial participation fees.

### Introduction & game plan Your colleague worries that high‑volume commercial requestors (life‑insurance examiners, SSDI representatives, mass‑tort law firms, etc.) will use “free” Patient‑Developer Credentials (PDCs) to dodge the per‑query and membership fees they currently pay to their QHIN. If that happens, the remaining health‑system members could see their costs spike.

To test the risk we will:

  1. Size the population whose records are routinely pulled by those third‑party actors.
  2. Estimate today’s QHIN cash flows from those requests.
  3. Add up the actual costs QHINs would face if every one of those requests shifted to patient‑fronted PDCs.
  4. Translate both the uncovered costs and the lost revenue into the fee increase that would hit the 11 700 provider‑side participants who cannot leave TEFCA.
  5. Compute two possible patient‑credential feesa) to cover costs only, b) to replace costs + lost revenue—making sure each fee also includes the wholesale price of high‑assurance identity verification (IDV).
  6. Compare the numbers and decide whether any new fee is warranted.

## 1. How many patients are in play?

Use case Annual individuals whose records are pulled
Life‑insurance & long‑term‑care underwriting ~ 10 million
SSDI / SSI disability claims ~ 2 million
VA disability / pension ~ 1 million
Workers‑comp & personal‑injury litigation ~ 2 million
Total (rounding, overlaps ignored) **~ 15 million patients / year**

Each case typically triggers a bundle from ~ 5 provider systems ⇒ **~ 75 million TEFCA queries per year**.


## 2. What those 75 million queries are worth today

Stream Working price Annual $
Per‑query fee, Initiating QHIN → Participant $0.15 $11.3 M
Membership dues from ~ 1 000 niche participants $15 k $15.0 M
Total revenue at risk $26.3 M / year

## 3. What it would cost to serve those queries via PDCs * Variable network & compute: $0.001 × 75 M = $75 k * Extra audit storage: $1 k * Help‑desk & compliance: $150 k * Uncovered variable cost = $226 k / year

Identity‑proofing cost is separate—each PDC demands NIST IAL‑2 proofing purchased from an IDV vendor (CLEAR, ID.me, etc.). Wholesale volume pricing ≈ $4 per patient. For 15 M credentials: $60 M / year.


## 4. If we charge patients nothing, who pays?

Item shifted to the 11 700 provider‑side participants Pool $ Per‑org hit
Uncovered variable costs only $226 k +$19 / org / yr (negligible)
Variable costs + IDV bill (but no revenue replacement) $60.2 M +$5 150 / org / yr (~ 20 % of a $25 k hospital membership)
Variable costs + IDV + lost revenue $86.5 M +$7 400 / org / yr (~ 30 % jump)

## 5. Two patient‑credential fee options (IDV included)

Goal Cash to raise Fee for 15 M creds (rounded) Patients pay Providers pay
Cover costs only (IDV + network) $60.2 M ≈ $4.25 each $4.25 once a year $0 extra
Cover costs + lost revenue $86.5 M ≈ $6.00 each $6 once a year $0 extra

* Both fees allow 1 000 free queries per year. * Overage pricing (e.g., $0.05 per extra pull) can be added but is not required to hit the dollar targets.


## 6. Which path makes sense?

  • The real financial threat is the $60 M ID‑proofing bill, not the $75 k in bandwidth or even the $26 M in foregone mark‑ups.
  • Spreading $60 M across 11 700 hospitals would force dues up ~ 20 %.
  • A ~$4.25 credential fee keeps the network 100 % cost‑neutral and meshes with TEFCA’s “reasonable, cost‑based, non‑discriminatory” standard.
  • Charging $6 to preserve old per‑query profit is optional—and hard to justify when TEFCA purposefully bans toll‑gates on IAS traffic.

### Conclusion Arbitrage is real, but the numbers are small once we separate expense recovery from profit preservation.

  • If regulators do nothing: providers eat ~$5 k/year each to cover IDV—annoying but hardly catastrophic.
  • If regulators levy a ~$4–$4.25 PDC fee (identity proof + pennies for traffic): every stakeholder breaks even, with minimal burden on genuine DIY patients.
  • A $6 fee to restore lost mark‑ups is possible but unnecessary and risks undermining the principle that patient access should not subsidize commercial margins.

In short, cover the IDV cost and the system stays financially healthy; chasing the lost revenue isn’t essential.

Sign up for free to join this conversation on GitHub. Already have an account? Sign in to comment