U.S. RHIO market slowly evolving

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The regional health information organization (RHIO) market in the United States is demonstrating slow growth, and will continue to need the infusion of grant capital to develop, according to a survey conducted by the Tulsa, Okla.-based Healthcare IT Transition Group.

The survey sample included 23 percent of the U.S. RHIO cohort. Respondents were located in 28 U.S. states and territories; 52 percent reported being in the startup stage, 24 percent in a transition stage, and 24 percent in production.

The report’s financial analysis of the RHIO space includes an examination of revenue streams, service offerings, stakeholders as sources of revenue, value creation, and capital development strategies. Investigators studied contributed, earned, and other income, including loans and investor proceeds.

Based on data on RHIO budgets and technology spending, the estimate for 2007 indicates a scant $128.6 million total U.S. RHIO technology shopping cart, according to the report. With slow growth reported by respondents (averaging 2.3 percent from 2006 to 2007), this remains a modest market — about seven-tenths of a percent (0.7 percent) of the total U.S. health information technology market, the Healthcare IT Transition Group said.

The analysis stated that between 80 percent and 90 percent of respondents across all lifecycle stages reported that they continue to anticipate the need for grants. Even when investigators considered only those fully operational RHIOs (self-identifying as having reached full maturity), and then further refine the sample to look only at those who state that they are now self-sustaining, fully 60 percent said that they still anticipate the need for grants.

The Healthcare IT Transition Group said contributed income continues to dominate RHIO revenues. Startup-stage RHIOs reported increased percentages of income from grants, up from 73 percent for 2006 to 84 percent for 2007.

However, with recent high-visibility announcements of nine-digit RHIO development plans, this segment appears to be poised for rapid growth, provided that reported challenges can be met, according to the Healthcare IT Transition Group.

The survey found that RHIOs are reporting frustrations relating to data controls, security, and privacy issues. In addition, approximately 53 percent of respondents reported that cash flow was a significant challenge; it led the list of non-technology challenges, followed by partner relations, privacy concerns, and legislative/political issues.

The full report is available at http://rhio.hittransition.com.