For two decades, electronic health records have been the Next Big Thing in health care: a way to simultaneously improve care and reduce waste in a system clogged with paper and manila folders. In 1994, President Bill Clinton announced that all doctors would use computerized records within 10 years. In his 2004 State of the Union, President Bush called for universal use of digital health records.
The result of all these grand declarations: 90 percent of U.S. doctors and more than two-thirds of U.S. hospitals still use paper for patient records.
"Health care is at least a generation behind the rest of society in terms of technology," says David Merritt, director of the Center for Health Transformation, a leading think tank based in Washington. "Doctors and hospitals don't use the technology we take for granted everywhere else."
The reasons for this lag are many: a colossal, inertia-filled health care system, a paucity of good software, no incentives to adopt new technology, and a lack of government leadership. There is also concern, which advocates of digitization say is overstated, about the security and privacy of records containing the most intimate of personal details.
But almost everyone agrees that moving from paper to bits will improve health care. Numerous studies and reports, including one last month from the Maryland Health Care Commission, have found that electronic health records can reduce medical errors, save lives, and save perhaps hundreds of billions of dollars if all doctors and hospitals went digital and were networked together.
Electronic health records also speed up service. After the emergency room at Beth Israel Deaconess Hospital in Boston went completely digital, the average length of stay dropped by 45 minutes.
"You can get any information, on any patient, when you want it," says John Halamka, an ER doctor there, as well as the hospital's chief information officer who oversees the e-records of 3 million patients. "There's no more 'I can't find this patient's chart.'"
But the transformation hasn't spread far, at least in the U.S. In Denmark, 90 percent of the health system is computerized. Germany completed its health care digitization two years ago.
"Pretty much every country in the developed world is doing better than we are," says David Lansky, director of the health program at the Markle Foundation, a nonprofit technology think tank in New York.
Of course, unlike every other developed country, the U.S. does not have nationalized or otherwise closely coordinated health care. The U.S. system is also much larger and more unwieldy than any other: a $2 trillion industry, staffed by 700,000 doctors, most of them essentially small, independent business people who are generally paid not by their customers, but by insurance companies.
"It's such a convoluted system," Merritt says. "When you think about changing that kind of behemoth, it's daunting."
Even so, he and other experts say, the federal government could do much more to encourage doctors and hospitals to leave paper behind.
"It's hard to believe that America lags behind the world in adoption of the information technology that can save lives and make health care more affordable -- yet that's exactly the case today," Massachusetts Sen. Edward M. Kennedy, who has been pushing the issue for years, said through a spokesman. "Congress and the administration should make a commitment to bringing the nation's health system into the information age."
One key is incentives. For an individual doctor or a small practice, switching from paper to digital costs between $40,000 and $60,000. For most doctors, this is a lot of money: The average physician pulls in about $150,000 a year. And the savings from going digital mostly accrue to the insurance companies, Merritt said.
"There's no incentive to adopt the technology," Merritt says. "No one helps them offset these costs."
The government says it's picked up the pace. "We've made good progress over the past couple of years," says Department of Health and Human Services official Herb Kuhn, who's heavily involved in health information technology.
Last year, the federal agency began a program that offered to cover 85 percent of hospitals' cost for going digital. And last week, the department rolled out a pilot program that will pay most of the costs for 1,200 small practices to install electronic records. That program is budgeted to spend up to $150 million over the next five years.
If that sounds like a lot, it isn't, many experts say. Lansky points out that the few thousand doctors affected by the program are a tiny percentage of the total. He says the government should do much more.
"These are small businesses," he says. "To ask individual businesses to spend $40,000 on a technology that doesn't make them money is not fair."
Some major institutions have decided on their own to modernize, partly because going digital on a large scale can save millions. The Department of Veterans Affairs, which for decades had a reputation as a backwater of bad care, has transformed itself. It is now fully electronic and networked.
Kaiser Permanente, which takes care of almost 9 million Americans, is spending $3 billion to digitize itself: 430 clinics and offices, as well as 32 hospitals. In Maryland, Johns Hopkins Hospital and the University of Maryland Medical Center are in the midst of switching; Hopkins says it will be finished by 2011, Maryland by 2015.
But these islands exist amid a sea of medical paper.
Meanwhile, other countries are moving ahead. In 2002, The United Kingdom allocated more than $11 billion to computerize its health system. Canada, which began the process a decade ago, is spending a billion dollars, and expects to be halfway done by next year. According to a 2006 study, Britain is spending almost $200 per citizen on its e-health care system while Canada is putting up more than $30. In the U.S., meanwhile, it's less than a dollar.
One development that will likely spur digitization: Several big companies see electronic health records as a huge moneymaker, and are now trying to entice consumers to upload and store health information online.
Microsoft has launched a site called HealthVault and has formed partnerships with the Mayo Clinic and New York Presbyterian Hospital, among others; Google's version, Google Health, just announced a venture with the Cleveland Clinic to computerize records of as many as 10,000 patients. And Revolution Health, AOL founder Steve Case's startup, has signed up "tens of thousands" of consumers for its online service.
"We've just scratched the surface," says the president of Revolution Health, Tim Davenport, who says Revolution can attract "millions" of customers.
None of the sites charge fees -- they plan to make money from Web advertising. If enough people decide to store health records online, the revenue could be enormous. "As people are able to do the same things online with health care that they do with travel and banking, the pie gets very, very large," says Sean Nolan, the chief architect of HealthVault.
Some experts worry that these operations might end up infringing on patients' privacy. Unlike doctors and hospitals, privately held online record warehouses are not covered by stringent federal health privacy laws. So it wouldn't be illegal for Microsoft or Google to sell access to drug companies or insurers. All three companies have vowed not to exploit customers this way.
There is also another, larger privacy issue: Some fear that digital health records, wherever they exist, could end up in the hands of insurance companies, employers, or drug companies -- entities that don't always have patients' best interests at heart. While even proponents of computerization agree that limiting access is crucial, most say the problem is not insurmountable.
Halamka, the Beth Israel info czar, argues that paper is actually less secure than digital. "There is no way to restrict who sees it, or to audit where it's been," he says. "With electronic records, there's always a digital trail."