Grants are still a crucial source of funding for regional health information networks, and these organizations are slow to realize that they may need to depend on outside sources of funding to sustain operations.
The 2007 survey from the Healthcare IT Transition Group found that RHIO initiatives expect to need seed money to get started, said Michael Christopher, a senior development analyst for the Tulsa, Okla.-based consulting and research firm, and the author of the report.
"RHIOs continue to rely on grants for the lion's share of revenues," Christopher said. "RHIOs at all stages of development continue to anticipate the need for ongoing grant income, cited by between 80 percent to 90 percent of respondents across startup, transition and production stages."
The research classifies RHIOs into six categories, depending on their stage of development. Only 24 percent of respondents fell into the most advanced category, that of "production" or mature RHIO initiatives. The survey involved responses from 23 percent of all U.S.-based RHIOs, the analysts estimated.
Even among the few RHIOs that described themselves as operational and self-sustaining, 60 percent reported that they still anticipated the need for grants.
"It's not clear why RHIOs don't understand that their organizations exist for the public good," Christopher said.
There's a reluctance among RHIOs about actively seeking grants for operations, said Christopher, who estimated that there are about 50,000 private foundations, and community-based and corporate giving programs that could fund RHIO initiatives.
"Clearly, RHIOs are missing the boat," he said. It would be a totally different market if this were tapped. Many RHIOs come out of a culture of healthcare IT folks that are used to having to show a return on an IT investment. They really need to look at a different model."
This year's survey, the second by Healthcare IT Transition Group, estimated that spending for technology by RHIOs in 2007 would total only $128.6 million for goods and services in seven categories.
"It's a predictable stage of evolution - we're looking at a baby market," Christopher said. "Spending in these markets tend to look this way until they take off and explode."
However, recent predictions that technology spending for a statewide RHIO in California could reach $300 million shows the potential for eventual spending in the RHIO market, he said.