Archive for April, 2006

Governance of Community Health Information Infrastructures

Monday, April 17th, 2006

One of the most critical elements in developing a health information infrastructure (HII) in a community is establishing an organization that can earn and maintain the trust of the community. Such trust is promoted by assuring that

  • consumers have complete control over their own information
  • the architecture of the information system is trustworthy
  • the organization itself is trustworthy
  • Here we focus our attention on the last of these requirements, a trustworthy organization. What are the elements of a trustworthy organization in the context of a community HII?

    The organization operates solely in the interest of consumers

    Given the potential conflict between the interests of shareholders and consumers in a for-profit firm, most communities have chosen non-profit organizations to govern their HII. To maximize return on investment, the shareholders of a for-profit entity would naturally seek to generate substantial fees from granting access to the community’s healthcare information. The fiduciary responsibility of the corporate officers to the shareholders would in fact require this. Allowing the customers to have complete control over their own information would interfere with the ability of the organization to profit from it, creating a natural conflict. This problem is avoided in a non-profit, given that the key stakeholders (particularly consumers) are able to exercise control. Also, a non-profit can be operated primarily for the benefit of the customers, without reference to the need for adequate return on investment for shareholders.

    Among the multiple types of non-profit organizations, those commonly encountered in the community HII domain are the charitable organization {501(c)(3)} and the “social welfare” organization {501(c)(4)}. The major difference is that all the activities of the charitable organization must be for “public benefit,” while the social welfare organization is not held to such a strict standard in this regard (more info). As a result, contributions to a charitable organization are tax deductible, while those made to a social welfare organization are not. Another key difference is that charitable organizations are prohibited from engaging in lobbying activities.

    One consequence of these differences is that it is more difficult to establish a charitable 501(c)(3) organization, since the Internal Revenue Service (which must approve the designation) must be convinced about the pure “public benefit” of all the proposed activities. Because of this, and also the perceived need of HII organizations to be able to lobby, the 501(c)(4) social welfare organization is now being used more frequently. To my knowledge, the Indiana Health Information Exchange (IHIE) was the first HII to choose this latter form. Although contributions to such organizations are not tax deductible, the funds collected by an HII are typically for services rendered and therefore are deductible as business expenses in any case.

    In addition to being a non-profit organization, the HII’s membership agreement should ensure that the organization’s fiduciary responsibility is solely focused on consumers. It has even been suggested that a formal “trust” agreement would be appropriate, wherein the HII organization becomes the legal “trustee” of the consumer’s medical records, and therefore legally bound to act exclusively in the interest of the consumer (Kostyack P: The Emergence of the Health Information Trust).

    The leaders of the organization are representative of all community stakeholders

    Creating a Board of Directors for the HII organization that is representative of the community is a difficult and politically sensitive task. No established formula has yet emerged for accomplishing this, and each community has so far approached this issue a bit differently. However, it is possible to identify the key stakeholders that should be represented:

  • consumers
  • physicians
  • nurses
  • allied health professionals
  • pharmacists
  • hospitals
  • clinics
  • health plans & insurers
  • employers
  • Medicaid
  • government (as employer)
  • existing HII activities
  • medical school(s)
  • public health
  • privacy advocates
  • In considering Board membership, the issue of including health information technology (HIT) vendors often arises. In general, it is problematic to include them on the Board because of its role in developing and issuing RFPs that vendors may bid on. However, when a potential vendor is also a large employer in the area, the issue of Board membership becomes more complex since employers must have representation.

    In Louisville, the creation of the Board is based on four groupings of stakeholders suggested by complexity science research. These groups are:

  • 1) purchasers of care (consumers, employers, Medicaid)
  • 2) producers of care (hospitals, clinics, long-term care facilities, pharmacies)
  • 3) practitioners (physicians, nurses, public health)
  • 4) resources for care (health plans, payers, HIT vendors, medical school)
  • These four groups are given equal representation to create a balanced Board.

    The operations are subject to continual independent oversight with respect to privacy and confidentiality

    To earn and maintain public trust, it is imperative that HII organizations submit themselves to continual audit of their privacy and confidentiality practices. This is analogous to the requirement for financial audits of organizations — in this case, the valuable commodity that must be monitored involves information rather than money. Such an audit function can be established by creating an independent committee of the Board. Such a committee would ideally include representation from those in the community who are the strongest advocates of privacy. This group should be empowered to receive and investigate complaints, and issue public “report cards” detailing the performance of the HII in safeguarding medical information. Funding for this activity must not be dependent in any way on the content of its reports.


    Community support for developing an HII must be reflected in the development of an organization capable of guiding and governing the required activities. While a universally successful formula for creating such organizations has not yet emerged, using what has already been learned by others can shorten the process and increase the likelihood of a positive outcome.

    Next time: Managing Change in the Context of a Community Health Information Infrastructure