Mike Leavitt, Secretary of the U.S. Department of Health & Human Services (HHS), launched the first-ever, 12-community project to increase the use of electronic medical records (EMRs).  Secretary Leavitt's 5-year project will pay each doctor up to $58,000 per year for electronically monitoring and recording as many as 1,200 practices affecting up to 3.6 million patients. 

Have you ever wondered why physicians are the only significant group of professionals in our society who do not keep their client records on computers? Why is it that doctors don't do what lawyers, accountants, architects and engineers all do?

The answer, according to National Center for Policy Analysis President Dr. John C. Goodman, is: Medicare. Or more precisely, the way Medicare pays doctors-which is also the way Blue Cross and almost all other health insurers pay.

"Doctors use antiquated record keeping because we have an antiquated payment system," said Goodman. "Other professionals use electronic record keeping because they reap benefits from greater efficiencies. In medicine, perversely, the reverse is true.  Doctors who are efficient get less income."

Goodman points to Geisinger Health System in central Pennsylvania as an example of what is wrong with the payment system. Geisinger offers heart patients a warranty on their surgeries; patients and their insurers who choose to participate do not have to pay for readmissions. Whereas most hospitals make money on their mistakes, Geisinger loses money on its mistakes. This creates an incentive to use computer technology to reduce errors but, since Medicare won't pay anything for the warranty, Geisinger and other hospitals have little incentive to boost quality without any financial rewards.

"While we applaud the government effort to promote EMRs," said Goodman, "more progress could be made by changing the way Medicare pays for health care."

"It reminds me of a line from Shakespeare," he said. "'The fault, dear Brutus, lies not in the stars, but in ourselves.'"