Credit: Tim Martin | Dreamstime.comCredit: Tim Martin | Dreamstime.comHealth care only got two mentions in President Obama’s first inaugural address: One was a declaration that “our health care is too costly,” the other was a promise to “wield technology’s wonders to raise health care’s quality and lower its costs.”

A few weeks after giving the speech, Obama would follow through on the promise by signing the American Recovery and Reinvestment Act—the $833 billion law commonly known as the stimulus.  The stimulus included about $20 billion in funding for incentives designed to spur the adoption of electronic health records.

The hope was that converting the nation’s health records to electronic systems would make health care cheaper and more efficient. Analysts at the RAND Corporation estimated that adoption of the new computerized systems could save about $80 billion over a decade. Similar studies concluded that not only would adoption of the new systems result in savings, they would promote health by enabling better preventive care and chronic disease management.

But four years later, the projected benefits have failed to materialize. Earlier this year, RAND researchers released a follow up study concluding that the savings just aren’t there.

One big problem: Small practices, older practitioners, and specialists have been slow to adopt the systems, despite the existence of taxpayer-backed incentive payments of up to $44,000. Simply installing those systems—which can be quite expensive, costing even more than the incentive itself—isn’t actually enough. In order to get the incentive payment, providers must meet “meaningful use” standards. And according to the New England Journal of Medicine, fewer than 10 percent of specialists and 18 percent of primary care providers were using the technology well enough to get the federal bonuses.

Another problem is that a lot of doctors don’t seem to particularly like the new systems. Among the doctors who are using new records technology, many complain that it actually slows them down or makes it harder to interact effectively with patients because they’re stuck typing on keyboards and staring at computer screens.

Interoperability, or rather the lack of it, is also a big problem—and perhaps the biggest snafu of all.

Photo credit: The Doctr / Foter.com / CC BY-NC-NDPhoto credit: The Doctr / Foter.com / CC BY-NC-NDThe systems were supposed to produce digital records that could be shared across providers and move with patients as easily as email. But RAND’s follow up study states flatly that “the health IT systems that currently dominate the market are not designed to talk to each other. A big part of the issue is that IT vendors have sold providers systems designed to lock them into business with a single vendor, not easily communicate with records created and maintained on other systems. RAND’s study likens the current system to frequent flier cards usable only with a single company rather than ATM cards usable anywhere.

You can imagine a number of reasons why this might have happened: The stimulus was passed fairly quickly, so mandatory interoperability slipped through the cracks; hospitals and other health providers each bought and managed their own systems rather than attempting to coordinate; doctors are independent operators focused on health more than on technology and administrative efficiency.

But why it happened is in some ways less important that the simple fact that it did. We blew a sizable chunk of taxpayer money on getting providers to install these systems, and we’re not seeing the results we were promised. In fact, if anything, we’re seeing the opposite: The new systems actually appear to help doctors bill better navigate Medicare’s complex billing system, making it easier for them to charge the federal government more.

This is why I’m so skeptical of Obama’s more recent promises to control Medicare spending through “modest reforms” that tweak incentives and payment systems. We’ve been trying modest reforms for a while. And in many cases they just don’t work.

(Thanks to Aaron Caroll for pointing out the NEJM letter.)