HIT POLICY tion infrastructure and a nineteenth-century health information infrastructure. 2 Given what is at stake, health care should be the most IT-enabled of all our indus tries, not one of the least. Nonetheless, the "technologies"used to collect, manage and distribute most of our medical information remain the pen, paper, telephone, Eax, and Post-It note. Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on propri- etary clinical IT products that barely work and do not talk to each other. Health care organizations do not relish the problem, most vilify it, many are spending vast sums on proprietary products that do not coalesce into a systemwide solution, and the in- vestment community has poured nearly a half-trillion dollars into failed HIT ven tures that once claimed to be that solution. Nonetheless, no single health care orga nization or hit venture has attained anything close to the critical mass necessary to effect such a fix. This is the textbook definition of a market failure All but the most zealous free-market ideologues recognize that some markets simply do not work. Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning. The most obvi ous examples of such failures(such as public transit and the arts )are subsidized by society at large because such subsidies yield benefits to the public that out weigh their costs. Economists refer to these net benefits as"positive external- ties, "defined as effects that cannot be captured through the economic equation of direct cost and benefit. The positive externalities of an HIT system approaching he functionality of our consumer finance IT system include reduction of medical errors like the one that killed Joe Wilson; elimination of tens of thousands of re dundant and expensive tests, procedures, and medications, many of which are not only wasteful but harmful; and the coordination and consistency of medical care in ways only promised by the theoretical version of managed care. These public health benefits are well beyond the reach of a health care system characterized by the complexities of medicine and conflicts of multiple parties working at eco- nomic cross-purposes.They are trapped outside the economic equation, positive externalities of a stubbornly fee-for-service health care system that inadvertently rewards inefficiency, redundancy, excessive treatment, and rework a Bipartisan agreement. The U.S. health care marketplace's continuing failure adopt IT on a scale approaching that of other industries has been egregious enough to elicit the unthinkable: bipartisan political agreement. How else to explain the specter of Sen. Ted Kennedy(D-MA)and Newt Gingrich(former Republican Speaker of the House)sharing a public forum and agreeing not just on the problem but on the solution: federal funding of an interoperable HIT infrastructure. Accord ing to one press report, "The politi ut their party differences aside to tout electronic prescriptions, online patient records and an integrated, paperless health-care system. 6 Such a rare convergence of opposing political belief may be less useful for un- derscoring the seriousness of the problem than for highlighting the utter absurH I T POLIC Y tion infrastructure and a nineteenth-century health information infrastructure.^ Given what is at stake, health care should be the most IT-enabled of all our indus￾tries, not one of the least. Nonetheless, the "technologies" used to collect, manage, and distribute most of our medical information remain the pen, paper, telephone, fax, and Post-It note. Meanwhile, thousands of small organizations chew around the edges of the problem, spending hundreds of millions of dollars per year on propri￾etary clinical IT products that barely work and do not talk to each other. Health care organizations do not rehsh the problem, most vihfy it, many are spending vast sums on proprietary products that do not coalesce into a systemwide solution, and the in￾vestment community has poured nearly a half-trillion dollars into failed HIT ven￾tures that once claimed to be that solution. Nonetheless, no single health care orga￾nization or HIT venture has attained anything close to the critical mass necessary to effect such a fix. This is the textbook definition of a market failure. All but the most zealous free-market ideologues recognize that some markets simply do not work. Indeed, reasoned free-market champions often deconstruct specific market failures to elucidate normal market functioning.^ The most obvi￾ous examples of such failures (such as public transit and the arts) are subsidized by society at large because such subsidies yield benefits to the public that out￾weigh their costs. Economists refer to these net benefits as "positive externali￾ties," defined as effects that cannot be captured through the economic equation of direct cost and benefit.'' The positive externalities of an HIT system approaching the functionality of our consumer finance IT system include reduction of medical errors like the one that killed Joe Wilson; elimination of tens of thousands of re￾dundant and expensive tests, procedures, and medications, many of which are not only wasteful but harmful; and the coordination and consistency of medical care in ways only promised by the theoretical version of managed care. These public health benefits are well beyond the reach of a health care system characterized by the complexities of medicine and conflicts of multiple parties working at eco￾nomic cross-purposes.^ They are trapped outside the economic equation, positive externalities of a stubbornly fee-for-service health care system that inadvertently rewards inefficiency, redundancy, excessive treatment, and rework. • Bipartisan agreement. The U.S. health care marketplace's continuing failure to adopt IT on a scale approaching that of other industries has been egregious enough to ehcit the unthinkable: bipartisan political agreement. How else to explain the specter of Sen. Ted Kennedy (D-MA) and Newt Gingrich (former Repubhcan Speaker of the House) sharing a public forum and agreeing not just on the problem but on the solution: federal funding of an interoperable HIT infrastructure. Accord￾ing to one press report, "The political partisans put their party differences aside to tout electronic prescriptions, online patient records and an integrated, paperless health-care system."^ Such a rare convergence of opposing political belief may be less useful for un￾derscoring the seriousness of the problem than for highlighting the utter absur- 1248 September/Octobe r 2005