1. Regional Health Information Organizations Governance and Board Structure
Bruce Merlin Fried, Esq.
Get Connected Knowledge Forum June 28, 2005

2. RHIOs: Governance and Board Structure
Objective: A sustainable business model
Initial Stages
Business Plan
Corporate and Board Structure

3. Governance and Board Structure
Initial Stages
There is no template, all health care is local
Early discussions
Who - Providers, Physicians, Plans, Purchasers, Consumers?, Vendors?
Why – Administrative efficiency, patient safety, clinical performance, quality measurement, P4P, surveillance
How – Developer or Operator
Statement of Purpose and Objective
Reducing Concepts to Writing is Important
Keep It Simple

4. Governance and Board Structure
Initial Stages
Memorandum of Understanding
Further Clarification of Purpose
Relationship among the parties
Everyone signs
Initial Structure
Informal, but…
Someone Has to take the lead

5. Governance and Board Structure
Creating a Business Plan
Statement of need
How the RHIO will address the need
Timeline
Who will be involved?
Staff or other human resources
Budget requirements
Sources of Funding

6. Governance and Board Structure
Corporate Structural Alternatives:
Informal Association
Sponsoring Organization
Non-Profit Corporation
For-Profit Corporation
Public Utility Model
Federal RHIO Definition May Impact Structural Choice?

7. Corporate Structure Informal Association No legal structure.
Initial structure while testing the waters.
A venue for early discussions, framing of ideas, clarification of need, purpose and objectives.

8. Corporate Structure Sponsoring Organization
Existing entity sponsors – “A Project of…”
Separate and distinct accounts and budgets.
Separate leadership and governance.
Sponsor could be a trade association, community fund or group, etc.
Must consider perception and political consequences.

9. Corporate Structure Non-profit Corporation
Preferred when seeking charitable grants or public funds.
May qualify for 501(c) status.
Must have a clear charitable purpose.
Can sponsor and/or operate the RHIO.
Non-profit is still a business.

10. Corporate Structure For –profit Corporation
Owned and controlled by shareholders.
Shareholders will select board.
Unlikely to receive charitable contributions or public funds.
May attract other funding (angel, investor, etc.)

11. Corporate Structure Public Utility Model
Governmentally chartered (local, regional or state).
Public financing may be available.
Possible long term, stable financing and structural model.

12. Corporate Structure
Government may define RHIOs is a way that directs a particular corporate model and governance.
What is a region? A community?
Tax status requirements?
Required participation by various sectors?

13. Board Structure Driven to some degree by corporate structure.
Balance between efficiency and political expediency.
Board members should possess a range of skills needed to support the board’s functions.
Fiduciary duties to RHIO, to employer.

14. Bruce Merlin Fried, Esq. Sonnenschein Nath & Rosenthal LLP
1301 K Street, NW
Suite 600 East Tower
Washington, DC 20005