Failed RHIO spent more on attorneys than technology

August 24, 2007

Fears about violations of patient privacy—a speed bump in the road to electronic health records—contributed to the death of a much ballyhooed regional health information organization in California.

Fears about violations of patient privacy—a speed bump in the road to electronic health records—contributed to the death of a much ballyhooed regional health information organization, or RHIO, in California last December.

The Santa Barbara County Care Data Exchange, founded in 1997, was the brainchild of internist David Brailer, who served as the first national coordinator for health information technology in the U.S. Department of Health and Human Services. The Santa Barbara RHIO intended to share patient data maintained by hospitals, pharmacies, physician offices, and payers through a peer-to-peer network technology (members of Napster use something similar to share music).

Brailer, who resigned from his HHS job in April, wrote an autopsy of the Santa Barbara RHIO in the August online issue of the journal Health Affairs (www.healthaffairs.org). Amazingly, he reveals that he foresaw the project's demise as early as 2002, when he left the tech company that was attempting to build the RHIO.

A big challenge for the RHIO was ensuring the confidentially of patient information. Project participants disagreed on how to interpret and apply state and federal privacy rules. "More money was spent on attorneys' fees than on technology, consulting, or any other line item," Brailer wrote. And the attorneys couldn't agree, either.

Brailer pointed to other problems that doomed the RHIO. The data-sharing technology was "an overengineered, overly complicated product that had little regard for how physicians and consumers would use it." Hospitals and physicians dominated the project, and largely failed in their efforts to accommodate consumers, employers, and health plans. At the same time, dependence on subsidies to finance the RHIO left local healthcare providers with no skin in the game, diminishing their sense of ownership. "Santa Barbara providers had nothing at risk and no hurdle of commitment in the project; they bore no cost for the philanthropic capital and faced no adverse consequences for how it was spent."

In his Health Affairs article, Brailer noted that he applied the lessons from Santa Barbara in his IT initiatives at HHS, such as stressing user-friendly technology, market incentives over subsidies, and stakeholder diversity. "Santa Barbara…was a learning zone for me."