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RHIOs: The keys to sustainability

Marybeth Regan, PhD, and Robin Randall-Lewis, for HealthLeaders Media, January 15, 2008

"Circuitous" is a very appropriate term to describe the regional or state health information movement over the past several years, according to Patrick O’Carrell in his book Public Health Informatics and Information Systems. But make no mistake, healthcare and health information sharing is a top priority for many organizations. More than 200 state and regional health information organizations—considered the foundation on which to build a national health information network—are in various stages of formation across the nation.

They have not, however, taken a cookie-cutter approach to establishing electronic ties among payers, providers and other organizations involved in delivering healthcare. While they share a common goal, they are using a variety of business and information technology strategies to get there.

The typical mission is to support the healthcare stakeholders committed to developing a centralized healthcare data repository for the purposes of quality improvement, provider performance measurement, and public reporting.

Sustainability for RHIOs
To be self-sustaining, regional or statewide health information organizations must implement a funding model which is supported by the healthcare community they serve, and which provides an adequate source of funds to cover development and operation. The best opportunities for funding come from those most likely to benefit from a tangible return on investment.

Many health information organizations have the luxury of public and private grants to provide the required capital for startup. To remain successful, however, a sound business plan and strategy should be developed to maintain long-term viability. The business plan should demonstrate a sound return on investment.

Of course, the biggest challenge in becoming self-sustaining is implementing a model where the funding is endorsed by the healthcare stakeholders being served. The model must provide enough funding to cover development and operation of the RHIO. Successful business models have used technology to connect and support patients, consumers, providers, payers, and employers with tools to improve their lives and businesses. Several business models have been designed to simplify and reduce the administrative burden. There are various revenue models that can be considered, including:

  • Employers pay a per employee/per month fee
  • Payers pay a per claim fee
  • Providers (physicians & hospitals) pay a monthly access fee
  • Other transaction fees--i.e. lab report, per EMR, per medication history, etc
  • Access fees from public safety reporting organizations (i.e. Center for Disease Control, Homeland Security)
  • Hybrid models combining some or all of the above funding opportunities.

Another aspect of a sustainable funding model is to create both product and service offerings that add value to the healthcare system by improving the affordability, quality, usability, and accessibility of healthcare. For example, web-based portals and workflow processes that support administering clinical care and improve healthcare quality, such as:

  • Clinical consults and referrals
  • Presentation of patient centric clinical data for routine and emergency care
  • Integrated practice management and office workflow systems
  • E-prescribing and prescription refill requests
  • Transactional and historical electronic and personal health records
  • Availability of diagnostic test results
  • Electronic order entry capabilities

Reduction of clinical burden
Providing physicians with quality reporting materials, and subsequent access to the details behind these reports is a great place to start funding sustainability. A monthly membership fee can be considered for participating providers.

To improve the value of the solution to providers, it is also important to add lab results to the database sooner rather than later. This data would serve two purposes, the first providing availability to the physician, and secondly the ability to improve the quality reporting measures beyond the base administrative data claims set. Offering the lab data to providers could add an increased monthly premium to the membership fees.

Implementing personal health records is also an important step in the process. According to a recent HIMSS survey, only 32 percent of hospitals had reached a full implementation of electronic medical records, and only 37 percent of the remaining hospitals were involved in EMR development. In addition, a far smaller number of individual practitioners and physician groups have actually implemented EMRs at any stage. When you have the administrative claims data, you are already 90 percent of the way to having an on-line PHR tool available for providers and consumers.

Additionally, RHIOs will continue to increase their value proposition with assisting in reducing healthcare costs. For example, TennCare reported a 17 percent decrease in costs on patients who did not have access to a PHR in 2005 but did have a PHR in 2006. By adding PHRs sooner in the cycle, providers set up for the next logical step of receiving government and private funding by providing this tool for consumers.

Public good
Evaluating the need for providing population based health reporting is a means for government funding, and for serving the public. Strengthening the public facing story can be enhanced by adding the PHR as noted in the section above.

The first step is the expansion of the vision to accommodate the "public good" in a more robust manner. Hiring a professional fund-raising staff member can be a great start. Given there are more than a million charitably supported nonprofit organizations nationwide who have sustainable business models, it is not hard to see that this model can extend to RHIOs. Data suggests that an RHIO might expect that as much as one-third of the total RHIO revenue will continue to come from government grants and philanthropy in the foreseeable future. Our recommendation is to apply dedicated focus on receiving grants and philanthropic efforts as natural expressions of community support that can be developed and maintained over time.

Reduction of the administrative burden
Many RHIOs have already outlined plans for supporting providers by reducing the administrative burden via real-time Electronic Data Interchange and Claims Clearinghouse solutions. This is a viable funding model based on transaction fees.

From a phasing perspective, it is recommended that RHIOs continue implementing solutions that reduce the clinical burden. This does not preclude a RHIO from running a parallel project to implement EDI solutions that can add even more value for providers, and assist in providing an additional funding source. It is important to phase in the functionality in a manner that will balance the needs of a successful pilot, value for the providers, and technical constraints that may exist for each option.

RHIOs in the community
The U.S. Department of Health and Human Services lists three primary roles for Health Information Organizations--whether state-wide or regional in the community:

  • Provide governance and serve as a trusted intermediary
  • Facilitate consumer interactions
  • Support the financial, organizational, legal, technical and clinical processes

Healthcare Consumers are asking for:

  • High-quality, affordable healthcare
  • Availability of accurate data in a timely manner
  • Faster HC delivery
  • Ability to view claims history
  • Improved quality and safety of care, and access to quality data to support their care decisions

These roles have been discussed at length in articles and papers. However, to be economically viable and sustainable, the organization must go beyond them. Successful Health Information Organizations must also incorporate the following roles and goals:

  • Educate the community
  • Connect the community
  • Develop a solid organizational foundation
  • Establish community standards for information exchange.
  • Select the right vendor partners for information technology
  • Perform pilot projects
  • Act as a facilitator
  • Cut healthcare costs by 20 to 30 percent
  • Improve reimbursement process
  • Implement a comprehensive solution


Marybeth Regan, PhD, is an expert in disease and care management. She has written numerous articles on strategies for care and disease management. She may be reached at mb@yleen.com. Robin Randall-Lewis is an expert in Consumerism and Transparency strategy, which extends into RHIO's and the associated funding models. She may be reached at robin.randall-lewis@reden-anders.com.
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