D G If the health care IT market worked, it would have worked by now dity of it. In his 2005 State of the Union address, President George W.Bush reiter ated his earlier call for the creation of a personalized and universally accessible health record for every American and called for a strong federal role in developing it. That an avowed champion of free markets and states' rights would call for an expanded federal role-in a speech otherwise dominated by privatizing Social Se curity-illustrates how desperate we are for just such a solution to this intracta ble problem. Small wonder that observers left, right, and center agree that a fully wired health care system would be more efficient, more transparent, less danger- ous, less maddening, and-after an enormous initial investment-far less costly in the aggregate than the tangle of antiquated mainframes, miserable PCs, unread- able handwriting, handwork, and guesswork that holds"the system"together to day. In Gingrich's succinct words, "Paper kills. "9 Against this gloomy backdrop, the purposes of this paper are()to illustrate how the failure of the health care IT market is rooted in economic problems unique to health care and business strategy problems typical of fragmented indus tries; (2)to show how this failure is exacerbated by U.S. reliance on the zigzag of market forces to generate technology standards for infrastructure development and (3)to suggest ways in which the federal government can and should inter vene, beyond its current strategy of trying to talk HiT vendors into voluntarily adopting technical standards and providers into voluntarily buying the industry's products Health Care's Blue Screen Of Death: Reboot or Reform? The compulsion today is to find the elusive"business case"for health care IT. D Legions of IT vendors and consulting companies have struggled to cobble together the Roi"(consultantspeak for"return on investment")to prove that an individ ual health care organization would benefit by investing in better IT and that the failure to date has been merely a cultural problem on the demand side " the do tors won't use computers")or a sales problem on the supply side("it's all vapor- ware"). These objections are hardly sufficient to stop a force as revolutionary as IT. The practical reality is that the typical roi is modest at best, ephemeral for most, and attainable only well past its investment horizon-a dressed-up way of saying that it exceeds the political capital of its current CEO and CIO. If there were a strong business case for a health care organization to break from the pack and build out a twenty- first-century IT system, we would have no need for this pa- ket worked, it would have worked by now ealth Affairs. If the health care IT mar per-or, for that matter, this entire issue of The ability of the gambling industry to liquidate Joe Wilson's assets within HEALTH AFFAIRS Volumc 24, Number 5 1249D o T - G o V "If the health care IT market worked, it would have worked hy now.'' dity of it. In his 2005 State of the Union address. President George W. Bush reiter￾ated his earlier call for the creation of a personalized and universally accessible health record for every American and called for a strong federal role in developing it.^ That an avowed champion of free markets and states' rights would call for an expanded federal role—in a speech otherwise dominated by privatizing Social Se￾curity—illustrates how desperate we are for just such a solution to this intracta￾ble problem. Small wonder that observers left, right, and center agree that a fully wired health care system would be more efficient, more transparent, less danger￾ous, less maddening, and—after an enormous initial investment—far less costly in the aggregate than the tangle of antiquated mainframes, miserable PCs, unread￾able handwriting, handwork, and guesswork that holds "the system" together to￾day.^ In Gingrich's succinct words, "Paper kills."^ Against this gloomy backdrop, the purposes of this paper are (1) to illustrate how the failure of the health care IT market is rooted in economic problems unique to health care and business strategy problems typical of fragmented indus￾tries; (2) to show how this failure is exacerbated by U.S. reliance on the zigzag of market forces to generate technology standards for infrastructure development; and (3) to suggest ways in which the federal government can and should inter￾vene, beyond its current strategy of trying to talk HIT vendors into voluntarily adopting technical standards and providers into voluntarily buying the industry's products. Health Care's Blue Screen Of Death: Reboot Or Reform? The compulsion today is to find the elusive "business case" for health care IT.'° Legions of IT vendors and consulting companies have struggled to cobble together "the ROI" (consultantspeak for "return on investment") to prove that an individ￾ual health care organization would benefit by investing in better IT and that the failure to date has been merely a cultural problem on the demand side ("the doc￾tors won't use computers") or a sales problem on the supply side ("it's all vapor￾ware"). These objections are hardly sufficient to stop a force as revolutionary as IT. The practical reality is that the typical ROI is modest at best, ephemeral for most, and attainable only well past its investment horizon—a dressed-up way of saying that it exceeds the political capital of its current CEO and CIO. If there were a strong business case for a health care organization to break from the pack and build out a twenty-first-century IT system, we would have no need for this pa￾per—or, for that matter, this entire issue of Health Affairs. If the health care IT mar￾ket worked, it would have worked by now. The ability of the gambling industry to liquidate Joe Wilson's assets within HEALTH AFFAIRS - Volume 24, Number 5 1249