The Dubious Promise of Digital Medicine

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We have more clients doing more orders than anybody," Patterson says. "If I had a systemic problem, you'd be reading about it on the front page."

The U.S. Food & Drug Administration has been considering whether to regulate health technology in the manner it oversees medication and implants. That decision now falls to the Obama Administration, which faces opposition from industry groups arguing that additional red tape would impede adoption of helpful technology.

Companies are lobbying the Administration to keep product-testing and standard-setting within the sole jurisdiction of a nonprofit body called the Certification Commission for Healthcare Information Technology. Founded in 2004 with industry money and grants from nonprofits, CCHIT has received $2.5 million a year under a contract with the federal government. The other half of CCHIT's $5 million budget comes from fees paid by companies.

Mark Leavitt, chairman of CCHIT, is a former tech vendor. He sold his electronic health-records company to GE (GE) in 2002 and later became chief medical officer of the Healthcare Information & Management Systems Society, a trade group in Chicago. Seven of the CCHIT's 19 voting members work for vendors or for-profit tech consulting firms. "We try to strike a fair balance between medical providers and vendors," Leavitt says. "People need to trust what we do."

But another commissioner at the CCHIT, Michael L. Kappel, the senior vice-president for government and industry relations at McKesson Technology Solutions, acknowledges that preserving purely private-sector oversight will be tough in the wake of the financial crisis. "I'm having a hard time with this issue because people read about these financial companies, and there is a feeling that government lacks enough regulation," Kappel says. But regulating health info tech "is a recipe for disaster," he adds. "I am very sensitive to criticism that [CCHIT] is vendor-dominated. That couldn't be further from the truth."

Blumenthal, the new Obama health-tech chief, declined to comment on CCHIT. But in an article published this month in the New England Journal of Medicine, he said the body needs to set stricter standards: "Many certified [electronic health records] are neither user-friendly nor designed to meet [the stimulus law's] ambitious goal of improving quality and efficiency in the health-care system."

Sharona Hoffman, a professor of law and bioethics at Case Western Reserve University in Cleveland, says CCHIT's product testing, typically completed in a single day, isn't rigorous enough. In an article last December in the Harvard Journal of Law & Technology, she and a co-author faulted the group for telling vendors the testing scenarios in advance and for not conducting ongoing monitoring. Without better oversight, she argues, hospitals and doctors probably will not spend their stimulus money wisely.

Barry Hendrix, a primary-care physician in Paragould, Ark., says he paid dearly for just such a mistake, wasting $100,000 on an electronic records system. "It was a complete disaster," he says of the equipment he bought from NextGen in 2005 and abandoned within months. The system generated patient notes with stray asterisks and other gibberish, he says, and it didn't work properly with NextGen's billing software. Hendrix says he couldn't get technical support from the company or its authorized reseller. NextGen, a unit of Quality Systems (QSII) in Horsham, Pa., counters that Hendrix is a rare exception among thousands of loyal customers. It adds that it has terminated the reseller that served him.

Hendrix, however, has advice for doctors looking to go electronic: "Never believe a slick salesman."

Editor's Note: "The Dubious Promise of Digital Medicine" gave erroneous contract and budget figures for the Certification Commission for Healthcare Information Technology. The group has received $2.5 million annually under a three-year contract with the federal government; its annual budget is $5 million.

Terhune is a senior writer for BusinessWeek based in Florida. Epstein is a correspondent in BusinessWeek's Washington bureau. Arnst is a senior writer for BusinessWeek based in New York.

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