clients | case study

CalRHIO: Gearing up for Success

CalRHIO was ready to ramp up things. For years, the farsighted nonprofit had laid the groundwork necessary to become a statewide health information exchange in California—an innovative organization that would allow health-care providers to access background information regarding their patients’ medical histories, thus improving care and lowering costs. With the pieces in place, the CalRHIO Board was ready to enter the operational phase of its evolution.

On the path to becoming fully operational, two crossroads lay in front of CalRHIO: it needed to determine how the organization would be financed, and what its board of directors should look like. CalRHIO asked Mark Harrison to help lead it across those crossroads, which required multidisciplinary knowledge of the health-care market, extending from finance to tax to corporate governance.

In addressing the financial structure, Harrison understood that a nonprofit such as CalRHIO, with multiple funding sources and promising future financial performance, could make a mistake in going straight from first gear to fourth. Instead, with Harrison’s help in evaluating the landscape of financing models, CalRHIO opted to arrange private bridge funding for the early stages of its operation phase, which kept options such as tax-exempt financing, which could have been closed off by other choices, as possibilities on the horizon.

To formulate the best structure for the board, Harrison—and CalRHIO—had to first understand the critical factors that would drive success and the board-level competencies and perspectives that would support these critical drivers. Harrison designed an interview protocol, which he used with board members to identify what success meant to them—on financial, political, organizational, and other levels. Harrison also evaluated the world of new risks CalRHIO faced as it proceeded (including regulatory, implementation, and operational risks) and took into account how those could affect its board structure. Informed by an analysis of analogous organizations in the private sector (for-profit health IT entities) and the public sector (government health information exchanges), Harrison made his recommendations. Harrison’s report assisted the board in identifying the skills and viewpoints that should be represented on the board, as well as its structural attributes, including its optimum size and committee structure.

The board used Harrison’s recommendations in its succession planning, stepping on the gas toward its evolution as a pivotal leader of health-information exchange capability in California. At the conclusion of the engagement, Harrison was invited onto the board, and he subsequently became a board member.