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As several prominent health-care construction projects take shape in West Des Moines, a more subtle build-out is taking place statewide in health-care information technology.

Iowa Health System and the Iowa Hospital Association are in the early stages of separate projects to connect health-care providers throughout Iowa through data networks. In December, the Federal Communications Commission awarded the two organizations more than $17 million in grants to fund the “last mile” connections between health-care facilities and the networks. The statewide networks in turn are expected to eventually connect all Iowa hospitals, clinics and physicians’ offices to a planned nationwide health-care data network.

The separate projects highlight the philosophical differences between Iowa Health, which plans to build an extension of its private network that will be accessible to any health-care provider, and the Iowa Hospital Association, which plans to connect its member hospitals using the state-owned Iowa Communications Network (ICN).

Jim Mormann, Iowa Health’s chief information officer, said his organization has tried “several times” to work with the hospital association, “but we’re really working in two different directions.” Because two systems will be built rather than one, “There’s probably going to be some overlap back and forth,” he said. The key difference, he said, is that Iowa Health’s project will be a private network, rather than state-run.

“We just don’t feel the taxpayers should pay for it,” he said. “We’re saying, don’t use the state’s assets when private business can do it.” As for the federal funds it’s receiving, he said those come from an FCC subsidy program for telecom companies, which has had a surplus for the past three years.

The Iowa Hospital Association “has always been a proponent of a statewide network for all Iowa hospitals,” said Perry Meyer, the IHA’s senior vice president. “We have been a backer of the ICN since its inception for health care uses, since it is the only statewide fiber optic backbone,” he said. “In the 1990s we successfully worked with the governor and Legislature in getting all hospitals access. (This is) just a difference in philosophy with Iowa Health System, as they prefer a private network versus the ICN.”

Iowa Health and the Iowa Hospital Association were among 69 organizations across the country awarded more than $400 million in grant funding for the FCC pilot project. Though federal grant money is funding most of the infrastructure cost, Iowa Health officials say commercial partners such as Google Inc. or Microsoft Corp. could provide a revenue stream to help pay for the annual operating costs of its network. Both technology companies

have announced their interest in entering the health-care data business.

Building a secure, private medical network opens up an entirely new realm of capabilities for health-care providers, Mormann said. For patients, it’s a step closer to the day when their electronic medical records will be accessible to any health-care provider who needs to access them for care. For physicians and hospitals, it means better access to the latest medical research data and continuing education materials, as well as the ability to provide remote care for rural patients.

By early April, Iowa Health, which will receive $7.8 million in FCC funds over the next three years, expects to begin seeking bids for a contract to connect an initial 29 hospitals to the HealthNet Connect system. And it’s not just Iowa Health-owned facilities that will be connected, Mormann said. “We’re open to any hospital, any physician office, any pharmacy, any (insurance) payers. That’s important, because if we’re going to improve care, we can’t have islands of technology.”

Iowa Health operates hospitals in seven Iowa cities, including Iowa Methodist Medical Center, Iowa Lutheran Hospital and Blank Children’s Hospital in Des Moines and the Michael R. Myers Hospital now under construction in West Des Moines. Iowa Health also supports a system of rural hospitals in 14 Iowa communities and partners with physicians and clinics in more than 80 communities in Iowa, western Illinois and eastern Nebraska.

According to Meyer, 82 of the IHA’s 117 member hospitals so far have asked to join the Iowa Rural Health and Telecommunications Program. In that project, the $9.9 million in FCC funding will be used to lay fiber-optic lines from current ICN locations to the hospitals. A steering committee comprised of a broad cross-section of hospital representatives across Iowa is establishing a request for proposal and a build-out plan, with competitive bidding to begin this spring, Meyer said.

Iowa Health currently operates one of the nation’s largest privately owned medical data networks, using fiber-optic lines it purchased from McLeodUSA in 2005. The Iowa Health System Network, which has been in operation for two years, handles roughly 9 million transactions a day, using more than 3,200 miles of fiber-optic cable.

For the FCC pilot program, Iowa Health has actually built a second network, or fiber backbone, called HealthNet Connect, Mormann said. Rather than using ordinary Internet connections, this network will use Internet 2, a system reserved for health-care providers. The FCC funds should pay for 85 percent of the cost of connecting more than half of the state’s hospitals to the network. Mormann said Iowa Health is picking up the remaining 15 percent of the project cost, as well as the cost of the underlying fiber network.

Mormann said the initial 29 hospitals should be connected by the end of June, with a total of 78 hospitals to be connected at the end of three years.

Iowa Health estimates the cost of operating its new system at between $3 million and $4 million per year. Finding a model that helps pay for those costs may be where companies such as Microsoft and Google could fit in, Mormann said. Iowa Health has discussed potential partnerships with both companies, he said.

Google recently announced its plans to launch Google Health, an online health-records repository on which individuals would be able to store their electronic medical records securely.

The ability to universally share electronic medical records between hospitals and hospital systems is a vital part of realizing the benefits of evidence-based medicine, said Dr. Kent Bottles, Iowa Health’s chief medical officer.

“As new evidence comes up, our whole understanding of diseases changes,” Bottles said. “That means you’ve got to keep up-to-date with all of the new discoveries that are coming out. There’s one estimate there are 6,000 new articles every day that would affect how doctors treat patients.”