There has been a lot of discussion about the “demise” of CalRHIO. Perhaps it would be helpful to give an insider’s view of what transpired. I want to be both very clear and very accurate when I say that CalRHIO did not fail, but simply decided to support and transition into the newly formed state governance entity. To better explain why this happened, I think it is important to provide a historical context.
When CalRHIO was formed in 2005 there was no hope of sustained funding from either the state or federal government. The challenge was CalRHIO’s to develop a strategy for sustainability of a statewide HIE as well as a model for achieving HIE across California within a seven-year period. Significant resources were directed toward this effort.
In early 2007, CalRHIO conducted an extensive and open RFP process to select a technology and business partner to help create a statewide HIE. In a rigorous process that involved 11 vendors, Medicity eventually was selected as CalRHIO’s partner. I think it is notable to mention that some of the very people involved in that selection process are now responsible for forming the new state entity. I believe Medicity proved itself to be a dedicated and capable partner for the task at hand. I am also comfortable that anyone involved from CalRHIO’s staff or active board would echo the same sentiment.
The resulting work done by CalRHIO and Medicity was validated by many of the nation’s and state’s most significant health care purchasers, providers, payers, and consultants to those groups. The plan was for a privately funded model that would be phased in such a way as to generate positive cash flow necessary to support the many existing and soon-to-be-formed regional HIE efforts. Those who worked on the initiative and those who reviewed the results believed the model was both creative and executable. During this time, the state showed support and curiosity but little appetite or budget for meaningful participation.
In February of 2009, CalRHIO announced a collaboration with the Orange County Partnership RHIO to launch its HIE in 23 emergency departments in Orange County and was very close to securing the final buy-in from key participants necessary for taking the HIE statewide. However, the entire landscape changed rapidly when ONC announced funding for state governments to plan and implement HIE services. This meant approximately $40M for the State of California. States had an option to either designate a qualified governance entity or retain the governance within the state. At that point, it was immediately clear to CalRHIO that to continue its mission and to implement its model, it would be necessary to become the governance entity for California. When the state issued an RFI process for a governance entity, CalRHIO responded. Of the many organizations that submitted proposals, the state determined that only two had met enough of the state’s criteria to warrant further discussion – CalRHIO and CAeHC. After reviewing additional information and meeting individually with both organizations, the state requested that CalRHIO and CAeHC work together to form a new organization that would serve as California’s governance entity and provide some statewide HIE shared services. The state requested that neither CAeHC nor CalRHIO compete with the new entity in providing HIE services.
Much could be written about the motives and “behind-the-scenes” players that influenced the failed negotiations between the two groups, but it would be mostly speculation and conjecture. What can be said is that CalRHIO, with direction from its board of California’s leading health care stakeholders, decided it was in the state’s best interest to transition CalRHIO’s efforts to supporting a new HIE governance entity formed by the state. As part of that decision, CalRHIO committed to not continue as a competing HIE service provider. The CalRHIO board agreed to continue to work with the state for the successful formation of the new governance entity. It is expected that many of the organizations that were represented on the board of CalRHIO will also be represented in the new governance entity. So, although it doesn’t make for a salacious headline (and lord knows there aren’t many in health care IT), CalRHIO has, in effect, transitioned its efforts, work, and stakeholder support into the new governance entity to be announced by the state. This is hardly a failure of CalRHIO but simply a realistic acknowledgement of the impact of ARRA, the HITECH Act, and subsequent federal funding to the state. Neither is this a victory or failure for CAeHC. If CAeHC continues as an organization, its leadership and the entrepreneur who funds CAeHC will have to decide how to add value to the state process as well.
Medicity joins the existing CalRHIO board members in urging all California health care stakeholders to support the new state governance entity as it moves forward in building a safer, more efficient, and better-connected health care system for all Californians. Medicity also looks forward to continued participation in the California journey towards achieving HIE.