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**American Health Information Community Successor**

**White Paper**

August 6, 2007

**Table of Contents**

[Introduction 1](#introduction)

[Vision and Attributes 2](#vision-and-attributes)

[A. Purpose and Scope 2](#a.-purpose-and-scope)

[B. Governance Objectives 3](#b.-governance-objectives)

[C. Business and Operating Objectives
6](#c.-business-and-operating-objectives)

[D. AHIC to AHIC Successor Transition Objectives
8](#d.-ahic-to-ahic-successor-transition-objectives)

[E. Legal Considerations 10](#e.-legal-considerations)

[Value Proposition 12](#value-proposition)

[AHIC Successor Implementation Strategy
16](#ahic-successor-implementation-strategy)

[Appendix -- Examples of Public-Private Partnerships
17](#appendix-examples-of-public-private-partnerships)

**List of Figures**

[Figure 1. Illustration of Membership Sectors and Definitions
3](#__RefHeading___Toc173834503)

[Figure 2. Illustration of Membership Classes
4](#__RefHeading___Toc173834504)

[Figure 3. Illustration of Membership Sectors and Board Composition
5](#__RefHeading___Toc173834505)

[Figure 4. Illustration of AHIC Successor Management and Staffing
Structure 7](#__RefHeading___Toc173834506)

[Figure 5. Value Proposition Across the Health Care Community Sectors
14](#__RefHeading___Toc173834507)

[Figure 6. AHIC Successor Implementation Strategy
16](#__RefHeading___Toc173834508)

# Introduction

This white paper describes the vision for and attributes of a successor
to the American Health Information Community (AHIC). Specifically, it
describes the purpose and scope of a successor entity, presents
governance, business and operating, and transition objectives, and
highlights several legal considerations associated with the formation of
the AHIC successor.

The AHIC seeks public comment on the contents of this white paper.
Specific instructions for providing comments are available on the AHIC
successor web page: [http://www.hhs.gov/
healthit/community/background/AHICsuccessor.html](http://www.hhs.gov/healthit/community/background/AHICsuccessor.html).

The Office of the National Coordinator (ONC) for Health Information
Technology at the Department of Health and Human Services (HHS)
recognizes that interoperability is critical to realizing both
improvements in quality and efficiency in the US health system, and
understands the importance of continuity of leadership to maintaining
the AHIC's momentum toward achieving interoperability. Therefore, ONC
will engage with the private sector to seamlessly transition the locus
of activity from a Federal advisory committee to an independent
public-private partnership that is focused on achieving interoperability
across the health care system.

Between now and the Spring of 2008, the AHIC will continue efforts to
identify obstacles to the adoption of interoperable health information
technology (IT) and make specific recommendations to the Secretary of
HHS. At the same time, HHS has embarked upon an effort that will
facilitate the development of an independent public-private partnership
that is results-oriented, inclusive, and coordinated with quality and
transparency initiatives. The new entity will build on the AHIC
achievements and will require exceptional leadership as well as a broad
base of both public and private support to realize the vision of an
efficient, secure, interoperable health care system.

The AHIC successor will bring together both public and private,
not-for-profit and for-profit entities that represent all sectors of the
health community. It is essential that the Federal government play a
substantial role in order to accelerate the emergence of an
interoperable nationwide health information system. Designing and
establishing an AHIC successor is neither an effort to privatize the
role of AHIC, nor is it an effort to minimize the role of the Federal
Government. Instead, it is an effort to establish a balanced, effective,
public-private collaboration among organizations and individuals in all
sectors of the health community to reduce fragmentation of efforts
toward realizing an interoperable nationwide health information system
that enables improvements in health care quality, safety, and
efficiency.

# Vision and Attributes

At their meeting in June 2007, the AHIC approved a set of principles to
guide the work of defining and implementing the AHIC successor. Between
April and June of 2007, ONC requested and received input[^1] from three
organizations on potential business models and an organizational design
for an AHIC successor. Between June and July of 2007, ONC reviewed the
input and, working with an industry subject matter expert, consolidated
the recom­mendations from the three proposals. This process led to the
development of the vision and key attributes of the AHIC successor that
are presented in this white paper.

The AHIC successor will be designed, established, and ready for
operation by Spring 2008. The process and schedule for designing and
establishing the new entity is described in later sections of this white
paper.

## A. Purpose and Scope

The AHIC successor will be an independent and sustainable public-private
partnership that brings together the best of the public and private
sectors into a trusted, decisive, effective organization for the
creation and use of an interoperable nationwide health information
system to improve and maintain the health and well-being of all
individuals and communities in the United States. Beyond benefits to the
individual, the AHIC successor is envisioned to realize interoperability
in the health care system that will improve quality, safety, and
efficiency.

The proposed scope for the AHIC successor includes, but is not limited
to, the following:

-   Accelerate and coordinate current AHIC interoperability initiatives
    including standards harmonization and certification of health
    IT;[^2]

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-   Prioritize stakeholder requirements for nationwide health IT
    interoperability;

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-   Advance the harmonization of technology standards and policies,
    including those to protect confidentiality, privacy, and security;

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-   Oversee and facilitate the Nationwide Health Information Network
    (NHIN -- a network-of-networks), including necessary governance
    and/or accreditation of participant organizations;

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```
-   Advance the certification of products, network participants, and/or
    operations.

The key attributes, objectives, and/or considerations related to
governance, business and operations, transition, and legal issues of the
envisioned AHIC successor are presented in the following sections.

## B. Governance Objectives 

The following statements of objectives pertain to processes that
determine how authority will be exercised, how members of the
organization will be classified and represented, and how decisions will
be made on issues of nationwide concern.

### Membership

1\. The AHIC successor should be open to membership by all individuals
and organizations in all sectors of the health community.

The health community should be organized into membership sectors that
may be defined in any way the AHIC successor chooses but must be
inclusive of all relevant and affected parties in the health community.
AHIC members have noted the importance of consumer representation.

The concepts described in this white paper were refined using an
illustrative prototype business model. Figure 1 presents the membership
sectors that were identified as part of the AHIC successor prototype.
These sectors were designed to support the creation of a governance body
that includes all relevant stakeholders, and to inform decisions made by
a governance body, such that no single sector controls or dominates the
governance.

  --------------------------------------------------------------------------
  **Sector Name**   **Sector Descriptions**
  ----------------- --------------------------------------------------------
  Ancillary Health  Those engaged in developing analysis, data or other
  Services          tools relevant to health care, and those engaged in the
                    retail dispensing of drugs and/or devices which legally
                    require prescriptions (labs, pharmacies).

  Clinicians        Physicians or medical groups, nurses, or other providers
                    licensed or certified by an appropriate authority.

  Consumers         Individuals who agree to seek medical or other health
                    care from participating members.

  Employers/        Organizations that purchase/arrange for medical or other
  Purchasers        health care or assistance.

  Government        Representatives of Federal, State, City, Community, and
                    Tribal governments.

  Health            A multi-stakeholder entity that enables the movement of
  Information       health-related data within state, regional, or
  Exchange          non-jurisdictional participant groups.

  Institutional     Hospitals, long term care facilities, home health
  Providers         agencies, clinics, and other facilities licensed or
                    certified by an appropriate authority.

  Payers /\         Organizations providing/administering resources to
  Health Plans      sustain or improve health and well-being through payment
                    of the costs of health care.

  Pharmaceuticals & Organizations engaged in the research, manufacture or
  Devices           wholesale distribution of drugs and/or devices which
                    legally require prescriptions.
  --------------------------------------------------------------------------

> []{#__RefHeading___Toc173834503 .anchor}Figure 1. Illustration of
> Membership Sectors and Definitions

Diversity of members within a membership sector should also be
considered when designing membership sectors. For example, Clinicians,
as a membership sector, could range from small to very large physician
practices, just as Institutional Providers could include major health
care systems and smaller long-term care facilities. Similarly, a
Consumer Sector would need to address the needs of the healthy
population as well as those of the vulnerable, disadvantaged, and
chronically ill populations.

2\. The AHIC successor should have differing classes of membership with
differing rights and obligations to provide for both *loosely*-bound and
*tightly*-bound members.

Classes of membership are used in conjunction with membership sectors to
provide as many pathways as possible for stakeholder participation.
There will be situations when an organization will be a Direct Member of
the AHIC successor, and situations where the same organization will be a
Participating Member. For example, as illustrated in Figure 2, the Elm
Street University System is a Direct Member representing the
Institutional Provider Sector. The doctors, labs, pharmacies, and
patients that comprise that system would be loosely-bound to the AHIC
successor through the Direct Members commitments. These Participating
Members would not have separate voting rights or membership fees, and
their obligations would be limited to the obligations of the member
hospital system. Yet a Direct Member, such as the hospital system in
this example, is not likely to always represent the exact interests of
all of the affiliated participating members. Therefore, each of the
Participating Members has multiple ways to directly connect to the
successor organization. For example, the Main Street Physicians could
also be a Direct Member through affiliation with the Clinician Sector.
This complexity of membership mitigates the risk of any single sector
dominating decisions that have nationwide impact.

> Membership fees, if any, cannot become a barrier to participation.

![](media/image2.wmf){width="5.996527777777778in"
height="2.5833333333333335in"}

> []{#__RefHeading___Toc173834504 .anchor}Figure 2. Illustration of
> Membership Classes

### Governing Body

3\. The governing body (i.e., Board of Directors) should be selected by
elective or appointive methods that result in a balanced representation
of members in all sectors.

4\. The structure of the AHIC successor should ensure that the views of
all sectors will be adequately conveyed to any governing body and that
its deliberations and decisions are neither dominated nor controlled by
any single interest or sector.

5\. Eligibility to be elected or appointed to the board should be
clearly defined.

Figure 3 illustrates one method used to constitute a board that could
represent all member sectors in a balanced manner. In this illustration,
members self-select a membership sector and each sector's members play a
role in filling a specific number of "seats" assigned to their sector.

> ![](media/image3.wmf){width="6.25in" height="2.7708333333333335in"}
>
> []{#__RefHeading___Toc173834505 .anchor}Figure 3. Illustration of
> Membership Sectors and Board Composition

### Decision-Making Process

6\. AHIC successor bylaws should have clear delineation of voting
rights, if any, of members and clear delineation between voting rights
of members and the board.

7\. Fiduciary duty of board members should be specified, whether to the
constituency (sector) from which they were appointed or elected, or once
appointed and elected, to the best interests of the whole of the AHIC
successor.

8\. Authority of the AHIC successor board as well as the rights and
obligations of members should be clearly delineated. Specifically, the
following should be delineated:

-   Authority of the board, if any, to set service fees or pricing of
    services to set service fees binding on members including
    limitations and methods to prevent abuse of such authority;

-   Authority of the board, if any, to adopt operating procedures and
    standards binding on members;

-   Authority of the board, if any, to adopt sanctions, fines, and/or
    penalties for violation of operating procedures;

-   Whether or not different classes of members should have different
    rights and obligations and, if so, whether they should be common
    within each class.

9\. In order to ensure proper restraints on authority and protection of
member rights and proper obligations of Members, the decision-making
process of the AHIC successor should specify the use of quorums of board
members, board voting procedures, and types of issues and decisions that
require double majorities or super majorities of the board for adoption.

## C. Business and Operating Objectives

The following statements of objectives pertain to protections,
incorporation, financial considerations, and indirectly, legal aspects
of an operating business entity.

### Protections and Incorporation

1\. The AHIC successor should operate under a certificate of
incorporation, detailed bylaws, and initial operating regulations and
membership agreement(s) that reflect the most appropriate type of legal
entity for the successor (e.g., for-profit, not-for-profit, stock,
membership, partnership, government instrumentality).

2\. Protection of the AHIC successor structure should be built into the
certificate of incorporation and bylaws to govern and restrict changes
that would radically alter the structure and operations of the board or
the protection of members who were relying on the structure as a
condition of their membership. This is not meant to prevent changes
necessary for the AHIC successor to grow, adapt, and remain agile.

3\. The AHIC successor should identify and address all relevant
attributes of business operations, including but not limited to,
corporate law, best jurisdictions for incorporation or other legal
formation, securities law, antitrust law, trademark and intellectual
properties law, Federal and state law regarding membership by government
entities and other legal issues affecting legal and successful
operation.

4\. The AHIC successor structure should allow for and encourage
self-organization of members into health information exchange entities
(HIEs) or other types of sub-organization at any time, on any scale, for
any reason consistent with AHIC successor policy and procedures without
loss of the member rights and obligations of the constituent parts of
the HIEs or other sub-organizations.

### Management and Staffing

5\. The AHIC successor operating structure could include, but not be
limited to, (a) Chief Executive Officer; (b) Treasurer, CFO or
equivalent for accounting, budgeting, financial control, capital
formation to support automation at the clinical and institutional level,
and all other similar or related activities; (c) Secretary and Counsel
for legal advice and coordination of outside counsel, Board and Board
committee minutes, evolution of bylaws and other corporate documents,
voting lists and procedures, elections, and all similar or related
activities; (d) Senior Membership Officer for membership and
recruitment, publicity, advertising, marketing, public relations, and
all other related activities; (e) Chief Operating Officer for personnel,
internal operating matters, security, fraud, system operating procedures
and all other related activities; (f) Senior Technology Officer for
standards harmonization, certification, network services, and all other
related activities; (g) Senior Data Uses Officer for data stewardship,
privacy policy, accreditation, and uses of data for purposes such as
public health, research, quality, and all other related activities.

![](media/image4.wmf){width="3.9659722222222222in"
height="4.132638888888889in"}

> []{#__RefHeading___Toc173834506 .anchor}Figure 4. Illustration of AHIC
> Successor Management and Staffing Structure

6.  The AHIC successor should establish standing or ad hoc advisory
    committees to bring the best possible expertise of members to bear
    on substantive matters in all areas of activity. The AHIC successor
    should identify methods whereby Management, under the direction of
    the board, can define the committees by establishing the charter,
    appointing committee members, determining the functions, and
    coordinating the activities of new committees.

7.  The AHIC successor structure and operations should be, at a minimum,
    as innovative, decisive, and operationally efficient and effective
    as any private or public sector organization.

8.  The structure and operations of the AHIC successor should be
    reliable and durable in purpose and principles of organization, yet
    malleable in form and function in order to evolve as rapidly as the
    technology the AHIC successor must use and the conditions in which
    it must operate.

9.  The AHIC successor, to ensure its successful implementation,
    balanced governing structure and sustained operating success, should
    recruit a substantial portion of organizations in each sector of the
    health community, secure their membership agreement and accept them
    as members in 2^nd^ quarter 2008.

10. The AHIC successor should provide methods by which all organizations
    and individuals eligible to become members could be accommodated, if
    and when they voluntarily choose to become members, as well as
    multiple paths and choices for participating.

11. The AHIC successor should document a simple, non-punitive method by
    which members can choose to leave the system should they decide the
    benefits do not substantially exceed the obligations of membership.

### Revenue, Costs, Budgets and Capital 

12\. The AHIC successor should, no later than 1^st^ quarter 2008,
identify and obtain secure commitments for the necessary funding for
operation throughout 2008 and 2009.

13\. The AHIC successor should, by the middle of 2009, have developed
methods and means to become financially and operationally sound and
secure for the years 2010 through 2014.

[]{.mark}

## D. AHIC to AHIC Successor Transition Objectives

The transition objectives will ensure an orderly hand-off from AHIC to
the AHIC successor, and that the highly successful work of standards
harmonization and adoption will be sustained. AHIC Workgroup activities
will be ongoing until their charges are met in the months between now
and 4^th^ quarter 2008, and a future path has been charted. AHIC
recommendations resulting from workgroup efforts are expected to
continue and will be addressed by Secretary Leavitt.

The following statements of objectives pertain to an initial operating
period defined by the transition of leadership and priority-setting from
the Federal Advisory Committee effort (i.e., AHIC) to the new,
independent public-private partnership.

### General Transition 

1\. The AHIC successor should obtain a majority of eligible charter
members from each sector who have applied for and met the criteria for
membership, or at least a sufficient number to demonstrate that the AHIC
successor will become a balanced, multi-stakeholder entity that
represents all relevant and affected parties. AHIC members have noted
the importance of having an organizational design that ensures
representation of consumer interests in particular. Consideration should
be given to establishing a governance structure and processes that
ensure consumer interests are served.

2\. The AHIC successor should document the anticipated accomplishments
in each of its first three years of operation to clearly establish its
credibility and enhance its ability to attract members, secure resources
and increase the rate of accomplishment in subsequent years through
2014.

### Continue and Accelerate Current AHIC Interoperability Initiatives (Initial Operations Stage)

3\. The AHIC successor should analyze current AHIC initiatives and
functions to determine the best method and means to assume
responsibility for interoperability initiatives between March 31, 2008
and October 31, 2008, the initial AHIC successor operations stage.

4\. The AHIC successor should be structured, staffed, and operated so
that assumption of revenue streams and/or direction of present AHIC
activities will not only be effectively transferred and continued, but
also improved and accelerated.

### Identify and Address Obstacles 

5\. Upon successful transition of AHIC responsibilities related to the
advancement of the harmonization and adoption of standards and
acceleration of efforts to achieve interoperability, the AHIC successor
should identify existing obstacles to the emergence of an effective
interoperable nationwide health information system, including but not
limited to:

-   Limited technical capacity for harmonization and specification of
    standards;

-   Disincentives;

-   Legal impediments;

-   Conflicting state and Federal laws;

-   Availability of capital needed by members for implementation and
    adoption of electronic health information systems;

-   Absence of critical infrastructure needed to connect members.

6\. The AHIC successor should prioritize identified obstacles in order
of importance, and identify means and methods to overcome each obstacle.

7\. The AHIC successor should identify the time and resources required
to remove each obstacle, and demonstrate how the AHIC successor would be
effective in obtaining resources and removing obstacles.

8\. The AHIC successor should document which obstacles the AHIC
successor could remove in each of its first three years of operation
that would clearly establish its credibility and increase the rate of
accomplishments in subsequent years through 2014.

### Identify and Realize Opportunities 

9\. Based upon a sound policy framework to ensure confidentiality,
privacy, and security, the AHIC successor should identify opportunities
to create and use interoperable health information for clinical care and
for purposes in addition to informing direct clinical care. These uses
of health information may include but are not limited to: clinical care,
biosurveillance, mobilization of clinical and related response to
emergencies, post-market surveillance of medical products, clinical
research including clinical trials for medical products, tracking of
fraud and abuse in health care, remote delivery of clinical care,
population and health services research, measurement and reporting of
provider performance, and personal health management.

10\. The AHIC successor should prioritize opportunities in order of
importance, and identify means and methods to realize each.

11\. The AHIC successor should identify the time and resources required
to realize each opportunity and demonstrate how the AHIC successor could
be effective in obtaining resources and realizing the opportunities.

## E. Legal Considerations

In order to successfully implement the vision described in this paper,
the AHIC successor will need to consider organizational issues which
have legal implications in three primary areas: the successor
organization's structure, anti-trust issues, and government
participation.[^3]

### Organizational Issues

In the planning and design phase, options relating to formation, tax
status, governance structure including the membership and the board, and
the timetable will need to be considered in establishing a successor
organization.

1\. **Formation and tax status.** The entity's form and tax status will
be determined as the organization is being designed in accordance with
the adage that "form follows function." There could be reason to
consider forming the AHIC successor as a non-profit (non-stock)
membership corporation. Some of the factors related to this
consideration are:

-   The principal purpose of the public-private partnership;

-   Governance rules are more established for a corporate entity than
    they are for an unincorporated association or partnership;

-   Membership (non-stock) corporations are a recognized form that
    afford an opportunity for participation to a broad array of
    participants, yet flexible enough to enable the structuring of a
    governing body, once elected, that is empowered to make timely
    decisions;

-   The members are not likely to invest funds in the AHIC successor for
    purposes of a direct financial return (so that non-profit status
    should not adversely affect access to capital);

-   Some of the early funding may need to come from foundations and
    others who will be required to make initial funding available to a
    non-profit.

2\. **Membership.** The membership would consist of those organizations,
entities and persons who want a voice in the running of the AHIC
successor and a vote in its affairs (including the election of its
governing board), who would become members of an applicable stakeholder
sector and agree to pay dues and make initial capital contributions
(members). All members in all categories would be expected to sign
Participation Agreements that bind them to using the AHIC successor's
standards, policies, and procedures when transacting business with the
AHIC successor or another member of the AHIC successor. In order to
induce broad and robust membership in the AHIC successor, any member
would have the right to withdraw from the AHIC successor at any time in
its discretion, on designated written notice, without adverse economic
consequences to that member.

3\. **Board.** The AHIC successor would be governed by a board
consisting of high-level representatives of the multiple stakeholder
interests, preferably senior executives with experience in running
organizations, developing innovative new models, and participating in
board-level activities. Directors would be expected to serve in both
representative and fiduciary roles -- with responsibilities to consult
with their sector constituencies and, at the same time, expected to make
determinations in the course of Board deliberations in what they
determine to be in the best interests of the AHIC successor, and the
broad public and stakeholder interests to be served.

4\. **The Timetable.** Not later than the Spring of 2008, the AHIC
successor, with its governing documents, will need to be formed after
vetting with a broad array of stakeholder sectors and interest groups,
together with a budget, a sustainable business plan, and realizable
funding commitments that assure the financial and operational viability.

### Antitrust Issues

Many of the AHIC successor's members will be competitors or potential
competitors. This means that competitors will be collaborating in
numerous ways. Such collaborations raise the possibility of violations
of the antitrust laws by the AHIC successor and/or some of its members.
However, given the benefits of an interoperable nationwide health
information system to market competition (pro-competitive benefits) and
assuming that the AHIC successor is structured carefully and properly,
the federal antitrust laws should not be a problem for the AHIC
successor.

Antitrust law would likely treat the AHIC successor as a joint venture.
Integrated joint ventures which promise pro-competitive benefits such as
the AHIC successor are evaluated under the rule of reason. Rule of
reason analysis focuses on the state of competition with, as compared to
without, the relevant agreement. The central question is whether the
joint venture is more likely to benefit or harm competition. In an
efficiency-enhancing joint venture, participants collaborate to perform
one or more business functions, such as research and development or
production, and thereby benefit consumers by reducing price or enhancing
quality, service, or innovation. Typically such a joint venture combines
technology or other complementary assets to achieve pro-competitive
benefits that the participants could not achieve separately. Such is the
situation here. The AHIC successor is intended to create a unified
platform to accomplish a task---creation of an interoperable nationwide
health information system---that no single entity could coordinate on
its own.

Moreover, the efficiencies that the AHIC successor could bring to health
care in the United States are enormous. There are three types of
efficiency that pertain to antitrust law: innovation efficiency (e.g.,
making new inventions); production or process efficiency (e.g., changing
an assembly line so that it can produce more output with the same level
of inputs); and allocative efficiency (e.g., furnishing consumers with
the good or services that they most value and are willing to pay for).
Accordingly, these efficiencies should furnish substantial justification
for the venture. Indeed, the basic proposed mission of the AHIC
successor is strikingly original and should pay large dividends in all
three of the relevant efficiencies.

### Government Participation

The Federal Government does not intend to establish the AHIC successor,
nor does it anticipate that the functions of the AHIC successor include
any that are inherently governmental. The Federal government though does
intend to participate in the anticipated activities of the AHIC
successor, such as those pertaining to voluntary consensus standards,
consistent with its statutory authority. In fact, the National
Technology Transfer and Advancement Act of 1995 (NTTAA) is relevant to
the proposed purpose and actions of the AHIC successor by providing that
all Federal agencies and departments shall use, unless inconsistent with
applicable law or impractical, data and technical standards that are
developed or adopted by voluntary consensus standards bodies, using such
technical standards as a means to carry out policy objectives or
activities determined by the agencies and departments. The Office of
Management and Budget (through OMB Circular A-119, as amended) has
defined voluntary consensus standards bodies as domestic or
international organizations which plan, develop, establish, or
coordinate voluntary consensus standards using agreed-upon procedures.
Further, they have the following attributes:

-   Openness;

-   Balance of interest;

-   Due process;

-   An appeals process;

-   A consensus process.

To increase the likelihood that the standards named or recognized will
meet both public and private sector needs, both the NTTAA and the
Circular encourage the participation of federal representatives in these
bodies, to the extent that the participation is compatible with the
mission and authorities of the representative's agency and is in the
public interest. In the planning stages of the AHIC successor and as
governing documents are developed, these attributes can be considered in
consultation with the Federal Government to ensure compliance with the
OMB definition of a voluntary consensus standards organization.

There are a number of existing public-private partnerships that feature
the participation of the Federal Government as a member of a
non-governmental organization and the service of government employees as
board members. In some cases, government employees play a formal role in
governance as representatives of government agencies; in other cases,
they serve as board members on a more informal basis. Examples of such
organizations include the National Quality Forum, the American National
Standards Institute, and the North American Energy Standards Board.
Please refer to the appendix for more information.

Federal employees participating in the AHIC successor would remain
subject to the applicable ethics laws, including those pertaining to
conflict of interests and appearance of partiality, as they would be
taking such actions in their official capacity as Federal employees.
Federal employees who participate with the AHIC successor as board
members may have certain fiduciary obligations to the successor
organization. This may give rise to certain conflict of interest issues
with respect to their actions as Federal officials. These employees
should consult with their agency ethics officials prior to accepting a
position as a board member.

# Value Proposition

Historically, there has been a competitive and growing market for health
IT. There is a market emerging, to a lesser degree, for regional and
specialty HIEs. The dynamics and forces at work in these markets are
producing health information network elements but are not yet converging
into an interoperable nationwide network-of-networks on their own. These
regional and specialty HIEs need incentives to become interoperable on a
nationwide level.

The President's call for most Americans to have access to electronic
health records (EHRs) by 2014 and the formation of the AHIC and the
Office of the National Coordinator for Health IT have acted as catalysts
for interoperability. As a result, through June 2007, several major
milestones have been achieved. Specifically, the HHS Secretary is poised
to recognize 30 interoperability standards and detailed implementation
guidance that have been harmonized through the work of the Health
Information Technology Standards Panel (HITSP), and he has recognized
the Certification Commission for Healthcare Information Technology
(CCHIT). Subsequently, CCHIT has certified over 80 ambulatory EHR
products, which can now be donated to health care providers as specified
in final regulations that create a Stark exception and an anti-kickback
safe harbor. This progress clearly demonstrates the value of a focused
set of nationwide priorities and provides the incentive to take the AHIC
process to the next level of refining priorities and accelerating
actions. Moreover, the successor entity will undoubtedly have the full
support of the Secretary of HHS and the necessary participation of
government executives and experts. The support and future actions of the
Secretary will reinforce the adoption of standards to accelerate
nationwide interoperability.

In addition, future progress will be supported through the broad reach
of Federal procurement. As specified in Executive Order 13410,
*Executive Order: Promoting Quality and Efficient Health Care in Federal
Government Administered or Sponsored Health Care Programs* on August 22,
2006, recognized interoperability standards will be required for use by
each agency that implements, acquires, or upgrades health information
technology systems used for the direct exchange of health information
between agencies and with non-Federal entities. Similarly, each agency
will require compliance with interoperability standards in contracts or
agreements with health care providers, health plans, or health insurance
issuers such that as each provider, plan, or issuer implements,
acquires, or upgrades health information technology systems, it shall
utilize, where available, health information technology systems and
products that meet recognized interoperability standards.

Through the AHIC successor, all organizations in the health community
will have an unprecedented opportunity to continue the role of community
leader and change agent that was initiated by the Secretary of HHS via
the AHIC. Through the AHIC successor, organizations from across the
health care community will have a direct opportunity to set priorities
for the nation as part of balanced public-private collaboration. With
the expanded role of the private sector and its best practices, the AHIC
successor can accelerate decisions on health IT that support quality
programs that are collaborative, standardized, and transparent to
consumers and promote quality and efficiency of care. With the continued
strong participation of the public sector, the AHIC successor will have
a high likelihood of successfully securing government actions to adopt
these same standards. The AHIC successor can ensure alignment of
certification criteria with nationwide priorities to achieve
interoperability, and accelerate adoption of best practices and policies
to ensure privacy and security.

To be successful, the AHIC successor must overcome a significant
barrier: how to demonstrate the value that could accrue from
interoperability and the sharing of information across EHRs, HIEs, and
the NHIN. Studies exist on the return on investment of health IT, but
most are narrow in scope and focused on the providers of care.
Demonstrating that value can be created and captured more broadly across
stakeholder groups is critical to widespread adoption and use. Based on
anecdotal evidence and expert opinion, the nature and level of benefits
that can be achieved with a fully interoperable nationwide health
information system will vary across health care sectors, as illustrated
in Figure 5 below.

+-----------+----------------------------------------------------------+
| **Stake   | **Value Proposition**                                    |
| holders** |                                                          |
+===========+==========================================================+
| Ancillary | -   Advanced interoperability between EHRs, NHIN, and    |
| Health    |     specialty networks specific to ancillary services    |
| Services  |     (e.g., labs, radiology and pharmacy)                 |
|           |                                                          |
|           | -   Decreased operating costs due to automated           |
|           |     interactions directly with providers                 |
+-----------+----------------------------------------------------------+
| C         | -   Interoperable health IT (Clinical Decision Tools)    |
| linicians |     that allow them to deliver the highest quality       |
|           |     health care to their patients                        |
|           |                                                          |
|           | -   Unprecedented opportunity to participate in priority |
|           |     setting, ensuring that priorities are informed by    |
|           |     clinically relevant expertise and to advance the     |
|           |     level and quality of patient care                    |
|           |                                                          |
|           | -   Mitigation of risks to clinicians associated with    |
|           |     liability, privacy, and security stemming through    |
|           |     advancement of the appropriate exchange of data      |
+-----------+----------------------------------------------------------+
| Consumers | -   Recipient of markedly improved quality, safety,      |
|           |     efficiency, and convenience of health care;          |
|           |     dramatically increased continuity of care across     |
|           |     their care providers                                 |
|           |                                                          |
|           | -   Increased ability to manage their health and         |
|           |     well-being                                           |
|           |                                                          |
|           | -   Defined and influential role in advancing            |
|           |     interoperability of health IT                        |
|           |                                                          |
|           | -   Increased role in the development of privacy and     |
|           |     security policies and practices                      |
|           |                                                          |
|           | -   Robust, comprehensive, and interoperable Personal    |
|           |     Health Record                                        |
+-----------+----------------------------------------------------------+
| Employers | -   More efficient, higher quality, lower cost care for  |
| and Other |     their employees resulting in significant reductions  |
| P         |     in the rate of increase in health care premiums      |
| urchasers |                                                          |
|           | -   Increased participation in setting unified           |
|           |     nationwide health IT priorities                      |
|           |                                                          |
|           | -   Improved ability to manage constituents' health and  |
|           |     associated costs through incentives for preventative |
|           |     treatment of chronic conditions                      |
|           |                                                          |
|           | -   Healthier employees and their families will result   |
|           |     in fewer sick days and lower use of family leave for |
|           |     health related issues, thereby improving employee    |
|           |     productivity                                         |
+-----------+----------------------------------------------------------+
| G         | -   More efficient, higher quality, lower cost care for  |
| overnment |     their employees and beneficiaries resulting in       |
| Agencies  |     significant reductions in the rate of increase in    |
|           |     health care costs paid for with public funds         |
|           |                                                          |
|           | -   Vastly improved Public Health information systems,   |
|           |     with highly effective surveillance and emergency     |
|           |     response capabilities resulting in healthier         |
|           |     populations and communities                          |
|           |                                                          |
|           | -   Reduced entitlement costs due to fraud detection     |
+-----------+----------------------------------------------------------+
| Health    | -   Increased voice in nationwide decision-making        |
| In        |                                                          |
| formation | -   Increased ability to share aggregated data for       |
| Exchanges |     quality measurement and reporting, which is an       |
|           |     element of sustainable business models for HIEs      |
|           |                                                          |
|           | -   Development of a competitive marketplace for HIE     |
|           |     technology and services                              |
+-----------+----------------------------------------------------------+
| Inst      | -   Health IT solutions that allow them to deliver the   |
| itutional |     highest quality health care to their patients        |
| Providers |                                                          |
|           | -   Improved ability to measure and manage provider      |
|           |     performance through certified EHRs and HIE           |
|           |                                                          |
|           | -   Accelerated development of interoperable network     |
|           |     services to share data across care settings to       |
|           |     improve continuity and quality of care               |
+-----------+----------------------------------------------------------+
| Payers/   | -   More efficient, higher quality, lower cost care for  |
| Health    |     their beneficiaries                                  |
| Plans     |                                                          |
|           | -   Improved ability to measure and manage provider      |
|           |     performance                                          |
|           |                                                          |
|           | -   Ability to facilitate disease management and provide |
|           |     other value-added services                           |
+-----------+----------------------------------------------------------+
| Pharmac   | -   Reduced cost for research due to rapid access to     |
| euticals/ |     standardized, interoperable data in clinical trials  |
| Devices   |                                                          |
|           | -   Potential to automate enrollment of patients in      |
|           |     clinical trials from EHRs and/or PHRs                |
|           |                                                          |
|           | -   Potential to expedite development of targeted        |
|           |     therapies                                            |
|           |                                                          |
|           | -   Enhanced post-marketing surveillance and risk        |
|           |     management of marketed products                      |
+-----------+----------------------------------------------------------+

[]{#__RefHeading___Toc173834507 .anchor}Figure 5. Value Proposition
Across the Health Care Community Sectors

From a cross-sector perspective, the AHIC successor will provide a forum
outside of Government, but with the active participation and input of
Government, that allows members to build on progress made and expand the
priorities to align with market demand and at the same time to improve
the health and well-being of individuals and communities. As an
independent public-private partnership that would qualify as a voluntary
consensus standards organization, the AHIC successor can move swiftly to
make decisions (not just recommendations) and with public sector input,
the decisions that are acted upon can have a significant market impact.
Consequently, the AHIC successor can act as a guarantor of the
efficiency and integrity of an interoperable nationwide health
information system, mitigating risk to adopters of health IT.

The AHIC successor must recognize that there are different perspectives
on the value of health IT and acknowledge the constructive tensions that
exist among different sectors. Although an interoperable nationwide
health information system should bring substantial benefits to all
sectors, no member of the AHIC successor can expect that on every
occasion, decisions that need to be made will be beneficial to every
sector. The problems of the health care system simply cannot be
addressed without some effort and temporary sacrifices for the common
good. For example, if approximately 20% of lab tests are needlessly
repeated due to lack of interoperable, transportable information, then
any loss of volume due to reducing redundancy will have a negative
impact on the revenue of laboratories and providers. In addition, in the
institutional provider and clinician sectors, there is a questionable
business return on the investment associated with adopting technology to
enable interoperability in certain circumstances.

To be credible, the AHIC successor must fully appreciate and openly
acknowledge that member rights cannot be ensured without obligations,
and that the public good associated with interoperable health
information cannot be obtained without effort and sacrifice.

# AHIC Successor Implementation Strategy 

For the purposes of facilitating the establishment of the AHIC successor
and convening a planning board, HHS will award a Cooperative Agreement
that allows for substantial involvement by the Federal Government. HHS
will solicit interest through public comment on this white paper and
through a public meeting on August 17, 2007. A subsequent meeting in
early September will provide more detailed information for prospective
grant applicants. ![](media/image5.wmf){width="3.4180555555555556in"
height="3.1034722222222224in"}

HHS will seek a multi-stakeholder coalition with the stature and
capacity to create an AHIC successor that functions as a corporate
democracy, open to all individuals and organizations who meet the
membership criteria, and that realizes the vision described in this
white paper. This coalition should fully embrace the overarching goal of
improving quality, safety, and efficiency of health care through
interoperability.

During Fall 2007, HHS will select a grantee that has organized a
coalition of stakeholders from the private and public sectors to design
and establish the AHIC successor. As indicated in Figure 6, HHS and
other Federal Agencies and Depart­ments will parti­cipate in the design
process and fully leverage the prior and on-going work of HHS and AHIC.
The public input received from this white paper will also inform the
design process.

Once a new legal entity is established and after certain conditions are
met, HHS will support that entity through additional funding that will
enable initial operations and transition of specific AHIC
responsibilities by late Fall 2008.

# Appendix -- Examples of Public-Private Partnerships

The following organizations are relevant models for the Federal
Government's participation as a member of the AHIC successor and the
service of Government employees as AHIC successor board directors.

-   **National Quality Forum (NQF).** NQF is a not-for-profit membership
    organization created to develop and implement a national strategy
    for health care quality measurement and reporting. Established in
    response to a formal recommendation from the President's Advisory
    Commission on Consumer Protection and Quality in the Health Care
    Industry in 1998, it has broad participation from all parts of the
    health care system, including government. Its functions include
    endorsing voluntary consensus standards and it explicitly relies on
    the NTTAA in performing its functions relative to government. See
    McLean, The Implications of Patient Safety Research & Risk Managed
    Care, 26 S.Ill.U. L.J. 227, 241-2 (Winter 2002). Its Board includes,
    among others, the Administrator of the Centers for Medicare and
    Medicaid Services, the Director of the Agency for Healthcare
    Research and Quality, and the Under Secretary for Health in the
    Veterans Health Administration.

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-   **American National Standards Institute (ANSI).** ANSI oversees the
    creation, promulgation, and use of thousands of norms and guidelines
    across nearly all business sectors. Founded in 1918 by five
    engineering societies and three government agencies, it is a
    private, nonprofit membership organization "supported by a diverse
    constituency of private and public sector organizations." Its Board
    includes the Standards Executive for the Environmental Protection
    Agency.

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-   **North American Energy Standards Board (NAESB).** NAESB serves as
    an industry forum for the development and promotion of standards
    that will lead to a seamless marketplace for wholesale and retail
    natural gas and electricity. It was created as a result of an order
    of the Federal Energy Regulatory Commission (FERC) in 1992. There
    are no Federal Government employees on the Board at this time,
    although the Board does include state government representation.

[^1]: Materials prepared by Alchemy LLC, Avalere Health LLC, and Booz
    Allen Hamilton, Inc. are available at
    <http://www.hhs.gov/healthit/community/background/AHICsuccessor.html>.

[^2]: The relationship between the AHIC successor, Health Information
    Technology Standards Panel (HITSP), and Certification Commission for
    Healthcare Information Technology (CCHIT) will be determined as the
    organization is designed.

[^3]: **Disclaimer:** This section is intended to provide general
    information to assist in discussions regarding an AHIC successor
    entity. The section may contain general legal information and should
    not be construed as legal advice to be applied to any factual
    situation. HHS makes no claims, promises, or guarantees about the
    accuracy, completeness, or adequacy of the information contained in
    this section.