RHIOs hit financial stumbling blocks on path to national network

Researchers find regional health information organizations are struggling to obtain permanent sources of funding.

By Pamela Lewis Dolan, AMNews staff. Nov. 12, 2007.

Unless regional health information organizations tap into additional funding sources, establishing a national health information exchange will be more difficult than initially predicted.

That's the conclusion some researchers and those in the business of RHIOs have reached, as the young industry looks for long-term financial sustainability.

The Healthcare IT Transition Group, a Tulsa, Okla.-based research group, recently released its 2007 study, "Sustainable RHIO Funding and the Emerging Business Model." Researchers found a need for RHIOs to rethink funding strategies and focus on educating those outside the industry on the benefit of a sustainable RHIO program.

RHIOs are being counted on as the underpinning of the proposed national health information network. This year, high-profile failures of RHIOs in California and Pennsylvania have put more of a spotlight on the sustainability of locally run RHIOs.

The problem, experts say, is too much reliance on federal and state money and not enough fundraising and support building on the local level, including tapping hospital systems and physicians for financial support.

"RHIOs will start getting their message out when RHIOs stop just preaching to the choir," said Michael Christopher, senior development analyst for Healthcare IT Transition Group.

RHIOs in the startup phase reported that 84% of their revenue came from gifts and grants. But those in the production phase -- considered to be when a RHIO is mature and working -- rely on gifts and grants heavily as well. Those RHIOs reported that 34% of their revenue came from that cash stream, making gifts and grants the greatest contributor to their finances.