Cal eConnect, Beacon Communities Set IT Pace in California

The Health Information Technology for Economic and Clinical Health, or HITECH, Act — part of the American Recovery and Reinvestment Act of 2009 (ARRA) — allocated approximately $36 billion to a broad range of health information technology initiatives.

Part Two of this two-part issue brief summarizes how ARRA funds for health IT initiatives have been allocated in California for:

  • Establishing a state health information exchange;
  • The Beacon Community Program, recognizing and supporting communities at the cutting edge of EHR adoption and health information exchange;
  • Broadband, telehealth and distance learning; and
  • Investments in Federally Qualified Health Centers (FQHCs).

Promoting Health Information Exchange

ARRA called for the development of a nationwide health IT infrastructure. To support the development of this infrastructure, ARRA created the State HIE Cooperative Agreement Program, which provides federal funding to states and “state-designated entities” to establish and implement statewide HIE networks.  Under this program, states must create strategic and operational plans that comprehensively outline the actions they will take to develop and implement their HIE networks.

The plans must be approved by the Office of the National Coordinator for Health IT and must address five specific domains:

  • Governance;
  • Finance;
  • Technical infrastructure;
  • Business and technical operations; and
  • Legal and policy.

California’s HIE Strategic Operational Plan plans were approved by ONC on June 16, 2010.

As the state-designated entity in California, Cal eConnect, a newly established not-for-profit public benefit corporation, was awarded $38.8 million in federal funds to lead a collaborative statewide process to develop California’s statewide HIE network.

Cal eConnect will work to establish policies, procedures and services that support the appropriate, private and secure exchange of electronic health information between clinicians, hospitals, health plans, patients and government agencies (e.g. the California Department of Health Care Services) to improve health care safety, quality, access and efficiency.

Cal eConnect’s work is based on the following guiding principles:

  • Improving the health status of Californians through the use of HIE services that meet the diverse needs of the population;
  • Enabling patients to have secure access to their personal health information;
  • Designing and using HIE and technology to improve health care quality, safety and efficiency;
  • Creating achievable, actionable and practical initiatives;
  • Leveraging existing policies, partnerships and capabilities;
  • Ensuring sustainability of HIE services;
  • Facilitating appropriate use of data exchanged through Cal eConnect-funded services and programs; and
  • Enabling the “meaningful use” of electronic health information exchanged in a technical environment that promotes patient privacy and security.

California’s Beacon in San Diego

ARRA also established the Beacon Community Cooperative Agreement Program, which provides funding to select communities to strengthen their existing health IT infrastructure and exchange capabilities. The program supports communities at the cutting edge of EHR adoption and HIE and is designed to push them to new levels of health care quality and efficiency while showing other communities how they can use health IT to achieve similar goals.

Since May 2010, ONC has awarded more than $200 million to 17 qualified not-for-profit organizations or government entities.

In California, the UC-San Diego Health System and its partners (the San Diego Beacon Collaborative) received an award of $15.2 million.  The Collaborative — which includes the Council of Community Clinics, Family Health Centers of San Diego, The Naval Medical Center-San Diego, Rady Children’s Hospital-San Diego, San Diego County Public Health Services, San Diego Fire-Rescue/Medical Services agency, Sharp Healthcare, Scripps Health and the VA San Diego Health Care System in addition to UC-San Diego — will work to improve patient care, safety and efficiency by helping local health care providers adopt EHRs and use them to engage in HIE.

The Collaborative will work to achieve the following quality improvement goals:

  • Health Quality: Improve cardiovascular and cerebrovascular disease, reducing rates of morbidity and mortality;
  • Population Health: Increase rates of pediatric and adult immunizations and enhance public health surveillance tracking for preparedness and response; and
  • Cost Efficiency: Reduce unnecessary emergency department visits, redundant testing and hospital readmissions.

Broadband, Telehealth, Distance Learning

ARRA also allocated a total of $7.2 billion to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS) to support projects to expand access to the Internet via broadband services.  NTIA received $4.7 billion. RUS received $2.5 billion.

NTIA administers the Broadband Technology Opportunities Program, which focuses on three main areas: developing comprehensive community infrastructure; expanding access to public computer centers; and supporting sustainable broadband adoption. NTIA also administers the State Broadband Data and Development Fund, through which it invests in projects that facilitate the integration of broadband and information technology into state and local economies.

The RUS provides loans and grants for rural infrastructure projects via the Broadband Initiatives Program (BIP).  BIP improves broadband infrastructure by supporting projects that: provide services to end users in remote areas (“last mile” projects); enhance internet connectivity but expclitly exclude end users (“middle mile” projects); and connect rural libraries to the Internet or develop regional broadband strategies in rural areas.

BTOP & SBDDF Awards:

NTIA has awarded more than $200 million to projects in California.  Selected broadband projects are described below, by project type.

Public Computing Centers

  • The Monterey County Office of Education was awarded $3.6 million to establish new centers to increase public computer access and provide training in digital media production.


  • The Los Angeles Regional Interoperable Communications System Authority (LA-RICS) was awarded $154.6 million to deploy a public safety mobile broadband network.
  • The Central Valley Independent Network and the Corporation for Education Network Initiatives in California was awarded $46.6 million to provide Internet service via a 1,371-mile fiber backbone network through 18 Central Valley counties.

Sustainable Adoption

  • UC-Davis was awarded $9.1 million to increase institutional use of the California Telehealth Network, a broadband network initially established with funding from the Federal Communications Commission’s Rural Health Care Pilot Program.


  • The California Public Utilities Commission was awarded $7.9 million in ARRA funds to focus on broadband capacity building, outreach and coordination, and to promote deployment and application usage throughout California.

BIP Awards:

A total of six BIP awards have been made in California, consisting of grants and loans totaling $24.4 million. The projects will advance broadband access in San Joaquin Valley, Calaveras County, North Central Siskiyou County, Millerton, Grass Valley and Galt.

Federally Qualified Health Center Investments

ARRA included three primary funding streams that are administered by the Health Resources and Services Administration and dedicated to advancing health IT efforts within FQHCs. They are:

  • Capital Improvement Grant Program (CIP);
  • Facility Investment Program (FIP); and
  • Health IT Systems/Networks.

The Capital Improvement Program, the Facility Investment Program and the Health IT Systems/Networks grants all support health center efforts to modernize facilities and systems and in turn enhance access to quality and affordable primary and preventive care for medically underserved populations.

CIP funds health center improvements such as construction, repair, renovation and equipment purchases, including health IT systems.

FIP supports major facility investments including construction, repair, renovation and equipment purchases.

Health IT Systems/Networks grants are targeted specifically at health IT improvements.

At $109.2 million in California, CIP represents the most significant investment of the three. So far, 115 grantees received CIP funding in California, with grants ranging from a low of $250,000 to All for Health, Health For All in Glendale, to a high of $2.5 million for Alta MED Health Services Corporation in Commerce.

FIP represents the second largest funding stream in California, with $65.6 million supporting 11 grantees throughout the state. Grants ranged from $953,000 to $12 million. Finally, eight California grantees received a total of $6 million to support health IT implementation under the Health IT Systems/Networks funding stream.

California Must Leverage, Coordinate Efforts

ARRA made unprecedented investments in expanding national health IT efforts, as well as in supporting states in their development of policies and systems to transform health care delivery. California is using this funding to address the most pressing obstacles to the development of a fully operational health IT infrastructure.

To achieve its goals, California must continue to leverage available stimulus funds, focus on coordination across programs, and support policy development activities that will guide optimal use of the broad range of health IT investments.


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