Should RHIOs Become ASPs?

I have posted a few previous notes about regional health information organizations (RHIOs) and the links can be found here. I don't have confidence in most of these initiatives. How can one integrate health information across a region when the providers of that information, the hospitals and health systems within a region, are themselves not well integrated within their own enterprises. Most tertiary care referral hospitals are also not highly motivated to share their clinical information.

However, on the theory that there has to be a pony in here somewhere, the idea now surfaces that RHIOs could succeed as ASPs of EMR software for small hospitals. Here are some previous notes about ASPs. Here is the link to the story and below is an excerpt from the article (boldface emphasis mine):

When he was US Health-IT czar, David Brailer stressed solving problems with interoperability, and as a result there are now several regional health information organizations (RHIO) in development...Unfortunately, the  most important healthcare providers -- small physician clinics that deliver most care -- are essentially off the information grid. So is the next logical step for RHIOs to become application service providers (ASP)?...Another consultant... believes that most big hospitals have little to gain from data exchange other than emergency-room information. [He] is working with the Great Plains Healthcare Alliance, which is securing a USDA loan to provide shared lab, pharmacy, radiology, and EMR applications to 26 small hospitals and their attached clinics in Kansas. While this model may make sense for rural providers, can a typical RHIO provide these services in a competitive market when local hospitals and technology vendors offer other options? The jury is still out. Although RHIOs have no experience in providing EMRs, for example, if RHIOs can subsidize the cost of an EMR, they may have an advantage.

The article does a good job of hitting all of the points why RHIOs will not succeed as ASP providers of EMR software to small hospitals even though the author tries to maintain a positive attitude toward the idea. Below is a summary of these points:

• The RHIOs have no experience in providing EMR software any form. It's even less likely that they would be successful using the ASP model that entails not only providing the application but also running it on remote servers for clients.
• Where would the RHIOs obtain the requisite EMR software in the first place? They don't have the expertise or time to write it and why would the for-profit companies that control such products lease them to a competitor.
• The article concedes that the RHIOs might have a chance if they obtain government subsidies to offset the true cost of the software. It would make much more sense for government grants such as those from the USDA to go directly to the companies that have developed the software. Such companies would have a better chance at running multiple instances of the EMR software for small hospitals using the ASP model. However, my guess is that such companies would prefer to lease their software to medium-size or large hospitals that can afford to pay for it and have the hospital personnel run it locally.