According to Health care industry leaders at the Third Annual Health Legacy Partnership (HELP) Conference and eHealth Initiative Annual Meeting (Oct, 2002), the nation's health care is in "Critical Condition". Part of the problem is that the health sector lags significantly behind the financial and retail sectors in using existing information technology. This is in spite of major investments made in health care information systems throughout the eighties and nineties. There is a need for an interconnected electronic health information infrastructure supporting payer-provider transactions (e.g., eligibility, referral, claims) and electronic health records. This system would offer the potential for significant increases in provider revenue, reductions in transaction costs, and improvements in service quality to patients and providers. Industry leaders estimate savings up to $80 billion per year. The Federal government through HIPAA has mandated a compliance timetable for the implementation of transaction standards for electronic medical records to enable this intercommunication between systems. But many systems still being used were built in the late 70's and early 80's. They are unable to meet these standards. Currently HIPAA requirements are being met by sending claims through claims clearing houses at a charge of between 35 cents and $1 per transaction. 

The Employment Policy Foundation’s (EPF) analysis of data comparing states with and without limitations on damage awards in malpractice cases found that capped damage awards could save $54.8 billion to $97.5 billion annually—7.2 percent to 12.7 percent of the $764.8 billion spent on hospital and physician services each year.

Research reported in the Quarterly Journal of Economics found defensive medicine adds $50 billion to the cost of health care every year.

Because of the crisis in health care costs, there is presently tremendous pressure to move towards government sponsored payment and control of health care. This is exemplified by the recently passed $500 billion Medicare bill, by Hilary Clinton's proposed legislation for a government created health care information infrastructure, and by the Institute of Medicine's recommendation for a government provided universal health insurance. 

It's clear from the current condition of the health care information infrastructure and from the expensive failure of many of the information initiatives undertaken in the nineties that the proprietary model used to develop and provide applications for the last thirty years hasn't worked for the health care industry. It's fragmented the health care information infrastructure and made it much more expensive than it needed to be. At this point it has failed to provide even the beginning of the standardized infrastructure needed for information systems to make its proper contribution to high quality, affordable health care.

So, there remains only two alternatives. Allow the open source software model to do for the health care industry what its done for the Internet and is in the process of doing for operating systems (Linux). Or have the federal government control the health care system including creating and controlling its information infrastructure.