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Time Capsule: Brailer’s Santa Barbara RHIO Baby Goes Down the Tubes

March 30, 2012 Time Capsule No Comments

I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).

I wrote this piece in March 2007.

Brailer’s Santa Barbara RHIO Baby Goes Down the Tubes
By Mr. HIStalk


The nation’s first RHIO is officially defunct. The Santa Barbara County Care Data Exchange (SBCCDE) locked its doors and quickly took down its website last week. David Brailer’s child star died an ugly, lonely death at age nine.

SBCCDE was a “big hat, no cattle” kind of project that left two sad legacies: (a) it blew millions in grant money,  and (b) it seduced politicians and reporters into thinking they’d seen the Second Coming of CHINs, only destined for success this time. They were half right.

It wasn’t for lack of trying by the California HealthCare Foundation (CHCF). That organization gave CareScience, of which Brailer was then CEO, $10 million to create and run SBCCDE. Uncle Sam chipped in a few more bills along the way.

CHCF bragged, incorrectly as it turned out, that SBCCDE had solved the funding model issue, based on the assumption that providers would happily pony up to keep the lights on. They were wrong. With only two organizations sharing data, neither was willing to fund SBCCDE’s ongoing operation.

Actually, SBCCDE left one other lasting legacy. It focused nearly all the government’s interest in healthcare IT on interoperability to the exclusion of everything else. That’s hardly surprising since Brailer got the healthcare IT czar job riding his SBCCDE credential, with few critics remembering CareScience’s 2001 struggles, shareholder lawsuits, and eventual sale to Quovadx for just $14 million over its cash reserves in 2003.

Perhaps Brailer provided some hints of a cloudy future for his RHIO. In an early SBCCDE presentation, he listed “substantial first-mover disadvantage” as a concern. He was right: new entrant CalRHIO is hot stuff now, planning to spend $300 million to blanket California in interoperability. SBCCDE was suddenly yesterday’s news, falling behind even upstart RHIOs in actually moving data around to anyone’s benefit. For that reason, no one is mourning the dearly departed SBCCDE very much.

Brailer also hinted more than once that the entire RHIO movement could be a throwaway technology, an interesting experiment to kill time until the massively more expensive Nationwide Health Information Network comes online. We’ll have to see if he was right about that.

In any case, I predict that at least one-fourth of RHIOs will fail within 1-2 years. Not because they don’t have noble goals or sound technologies, but because reality is working against them just like it did SBCCDE and CHINs before them.

  • Like the many other misaligned incentives in healthcare, providers have to pay for the common RHIO plumbing, but get little value from it. Patients and insurers get a free ride in many cases.
  • A mishmash of federal and state privacy laws ensures that expensive lawyers will guarantee nothing when it comes to avoiding HIPAA violations, opt-in guarantees, and privacy lawsuits.
  • Back-end interfaces are expensive and difficult to maintain.
  • The lack of an information sharing pipeline wasn’t the only reason competitors didn’t hold hands and sing Kumbaya before.
  • The primitive state of most provider computer systems means that information is often not available electronically. The least-capable hospital or practice reduces the value for everyone else. Clinical information is always of suspect quality and completeness.
  • Providers have many more projects that are more fundamental to their survival that will always take precedence.

In other words, RHIOs have all the same threats that CHINs had, other than the advantage of using the Internet for connectivity.

Perhaps the best lesson from SBCCDE’s flameout is the one we’ve already learned from failed physician order entry, enterprise resource planning, and physician electronic medical records system implementations. Technology is rarely the problem.

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