CalRHIO disbands, in lieu of new ARRA-funded statewide HIE

The State of California Health and Human Services Agency has decided to form a new governance entity for California health information exchange (HIE). The California Regional Health Information Organization (CalRHIO) board of directors is honoring its commitment to the state not to compete with a new governance entity established for this purpose by disbanding.

The members of the CalRHIO board of directors said they support the state in its efforts to establish a governance entity for HIE and plan for HIE services in the state. The board of directors also said it will be “an active partner with the state in working toward a successful conclusion for the governance of HIE services in California.”

CalRHIO was created in January 2005 to provide a public HIE, electronically connecting California’s patients, physicians, hospitals and other providers and sources of clinical information. In 2009, federal legislation was passed to provide funding for states to establish HIEs under the American Recovery and Reinvestment Act (ARRA) of 2009.

CalRHIO participated in California’s RFI process to be designated as the governance entity for HIE, including state-directed negotiations with the California eHealth Collaborative in an effort to form a new governance entity. CalRHIO recently reported to the state that the parties were unable to reach an agreement.

“CalRHIO was created long before anyone ever thought federal government money would be available for health information exchange. It is an example of early social entrepreneurship—private sector leaders gathering to form a nonprofit organization to accomplish a public good with private resources,” said Don Crane, CalRHIO board member and CEO of the California Association of Physician Groups.

CalRHIO’s “shared savings” model was based on agreements between providers and payors that HIE will create improvements in quality while reducing expenditures. This value, along with the savings for health plans, provided an ongoing source of funding for HIE that was reflected in endorsement of CalRHIO by CalPERS in the spring of 2008. In April 2009, UnitedHealthcare became the first U.S. commercial health plan to agree to pay for HIE services for their members in California.

“CalRHIO is grateful to the hundreds of stakeholders who worked with us over the past five years to build awareness and support for HIE in California,” said Duane Dauner, president of the California Hospital Association and CalRHIO board chair.