H IT POLICY Dot-GoV Market Failure And The Creation Of A National Health Information Technology ystem The market has failed to produce a viable health information technology system; we need government intervention instead. by」D. Kleinke ABSTRACT: The U.S. health care marketplace's continuing failure to adopt information technology(Im)is the result of economic problems unique to health care, business strategy problems typical of fragmented industries, and technology standardization problems com- mon to infrastructure development in free-market economies given the information inten sity of medicine, the quality problems associated with inadequate i t, the magnitude of U. S health spending, and the large federal share of that spending, this market failure requires aggressive governmental intervention. Federal policies to compel the creation of a national health IT system would reduce aggregate health care costs and improve quality, goals that cannot be attained in the health care marketplace OE WILSON, A THIRTY-EIGHT-YEAR-OLD software engineer from Pitts burgh on his first trip to Las Vegas, is feeling out of sorts as he walks into the ca- sino. The free drinks help his mood, and he discovers after his third that he has a serious gambling problem. At the casino's cage, where cash, credit card capacity, and creditworthiness are turned into chips, Joe liquidates the $6, 324 in his check ing and savings accounts and another $8, 121 from his credit cards. twenty hours and ten drinks later, this money runs out on the craps table, but Joe secures an other $24,983 in cash, which represents 40 percent of his retirement account and 30 percent of the equity in his home. The casino was able to find out this informa tion about him-as well as his marital status, the names of his last three employ ers, the number of years he has lived at his current address and worked for his cur rent employer, the lapsed status of an earlier life insurance policy and the pai status of another, and the absence of liens against his assets-in less than five min J.D. Kleinke(idk@omnimedixorg)is executive director ofOmnimedix Institute, a nonprofit health care research and information technology development organization based in Portland, Oregon, and funded by foundations, corporations, and private individuals and vice chairman of HealthGrades Inc, a publicly traded health information company based in Lakewood, Colorado, September/october 2005 DOI 10 1377/hithaff. 24.5.1246 o2005 Project HOPE-The Peopie-to-Pcople Health Foundation,Inc.H I T POLIC Y Dot-Gov: Market Failure And The Creation Of A National Health Information Technology System The market has failed to produce a viable health information technology system; we need government intervention instead. by J.D. Kleinke ABSTRACT: The U.S. health care marketplace's continuing failure to adopt information technology (IT) is the result of economic problems unique to health care, business strategy problems typical of fragmented industries, and technology standardization problems com￾mon to infrastructure development in free-market economies. Given the information inten￾sity of medicine, the quality problems associated with inadequate IT, the magnitude of U.S. health spending, and the large federal share of that spending, this market failure requires aggressive governmental intervention. Federal policies to compel the creation of a national health IT system would reduce aggregate health care costs and improve quality, goals that cannot be attained in the health care marketplace. J OE WILSON, A THiRTY'EiGHT'YEAR'OLD Software engineer from Pitts￾burgh on his first trip to Las Vegas, is feeling out of sorts as he walks into the ca￾sino. The free drinks help his mood, and he discovers after his third that he has a serious gambling problem. At the casino's cage, where cash, credit card capacity, and creditworthiness are turned into chips, Joe hquidates the $6,324 in his check￾ing and savings accounts and another $8,121 from his credit cards. Twenty hours and ten drinks later, this money runs out on the craps table, but Joe secures an￾other $24,983 in cash, which represents 40 percent of his retirement account and 30 percent of the equity in his home. The casino was able to find out this informa￾tion about him—as well as his marital status, the names of his last three employ￾ers, the number of years he has lived at his current address and worked for his cur￾rent employer, the lapsed status of an earlier life insurance policy and the paid status of another, and the absence of liens against his assets—in less than five min￾J.D. Kleinke (jdk@omnimedix.org) is executive director ofOmnimedix Institute, a nonprofit health care research and information technology development organization based in Portland, Oregon, and funded by foundations, corporations, andprivate individuals; and vice chairman ofHealthGrades Inc., apublicly traded health information company based in Lakewood, Colorado. 1246 September/October 2005 DOI 10.1377/hlthaff.24.5.1246 O2005 Project HOPE-The Peopk-to-Pcop/c Health Foundation, Inc