JF: This is a subset of the general brokenness of the medical marketplace, right?

DB: Yes. There are many problems that come from the brokenness of the health-care market. To put it another way, if the medical market functioned like the car industry or the computer industry or the service industry, with true competition based on quality and price, providers would have adopted electronic records long ago. I’m not advocating pure market competition in health care. But there are many ways in which the medical marketplace should work better, and this is one of them.

JF: What’s the best thought-experiment example of medical-marketplace incentives working the right way? The VA?

DB: When the benefits of using better technology are “internalized,” as the economists would say, there has been much more rapid, complete, and effective adoption of electronic medical records. So, the VA: the benefits are internalized, because the VA has to live within a budget. In private health-care organizations like Kaiser or the Geisinger plan in Pennsylvania, or the Group Health Cooperative in Puget Sound, electronic medical records were adopted decades ago, and are widely used and highly effective. You don’t need a thought experiment to find living, breathing examples of what happens when the incentives work right.

JF: What’s the connection between the electronic-records effort you directed and the larger Obamacare strategy?

DB: This may be a Beltway detail, but the law that I implemented was not in the Affordable Care Act. It was actually part of the earlier and much maligned stimulus bill. The hope was that promoting medical records would lay the groundwork for a more efficient health-care system, and thereby make universal coverage more affordable to the country—

JF: And—

DB: And you’re about to ask whether it did.

JF: Yes.

DB: It would have. And it will. But it needs time to realize its potential.

I think the parallel is the time it took from when computerization became prevalent in other industries to the time when worker productivity improved. We are only three years into the process of making digital information widely available in health care. And health care is an extraordinarily complex, knowledge-intensive industry. If you want a thought experiment, you could ask yourself how good modern medicine is when physicians and nurses know nothing at all about the patient. So information is absolutely the critical resource in health care, more important than steel in making cars. When you change the way information is used and collected in medicine, you change everything about the way work is done. It is an enormously disruptive process within the health-care system. It takes time to accommodate. In places like Kaiser and Geisinger, electronic medical records are already making a big impact. But that is mostly because those organizations started using them a long time ago.