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

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

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

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

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

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?

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.

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.

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.

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.)

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

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?

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.

Bruce Merlin Fried, Esq. Sonnenschein Nath & Rosenthal LLP 1301 K Street, NW Suite 600 East Tower Washington, DC 20005 202-408-9159 bfried@sonnenschein.com