Looking out his office window in Seattle, Thomas Payne can see two hospitals that use the same electronic record system as his own. And yet, says Payne, medical director of information technology services at the University of Washington, they all still exchange information by fax or paper.

That situation is the norm in today's fragmented and distributed health-care universe, where electronic medical records (EMRs) must increasingly draw on information from the multiple health-care institutions--clinics, hospitals, and specialists--where people receive care. But giving physicians access to the right information at the right time could dramatically streamline medical care. An estimated $77.8 billion, or about 5 percent of health-care costs, could be saved each year in the U.S. if a fully interoperable record-sharing system were in place, according to a 2005 study in Health Affairs. Most of the savings would come from preventing duplicate testing.

Michael Zalis, a radiologist at Massachusetts General Hospital, has experienced the drawbacks of the splintered system firsthand. He says gathering data on particular patients is a huge time sink for physicians, taking as much as 20 percent of their time. Even with an EMR, medical records are spread over multiple databases that don't necessarily communicate with each other. Older, less relevant test results could turn up as frequently as new ones, says Zalis, requiring the doctor to visually scan all of them. The problem will likely grow as many of the nation's hospitals and doctor's offices use new stimulus funding to implement EMR systems.