INFORMATION TECHNOLOGY's FAILURE TO DISRUPT HEALTH CARE* Nicolas P. Terry** CONTENTS I. Introduction .............................................. 722 R II. Incumbents and Sustaining Technologies ................... 724 R III. High Technology Medicine vs. HIT....................... 727 R IV. Health Care, HIT, and Their Market Failures ................ 731 R V. The Value of Waiting (for New Health Care Constructs) ...... 738 R VI. Flawed Data Models: PCAST and the Parable of Google Health .... ......................................... 742 R VII. Disruptive Channel Innovation and Personal Health Technologies ........................................ 749 R VIII. Conclusion ............................................ 756 R I. INTRODUCTION In 2001, the Institute of Medicine cut to the chase. Its canonical Crossing the Quality Chasm argued that information technologies (IT) "must play a cen- tral role in the redesign of the health care system if a substantial improvement in health care quality is to be achieved during the coming decade."' Three years later, President Bush made his optimistic commitment that, "[w]ithin 10 years, every American must have a personal electronic medical record." 2 In 2005, an oft-cited RAND study estimated that $80 billion per year would be saved with a ninety-percent adoption of electronic medical records (EMRs). Yet, faced with a pitiful single-digit adoption rate for EMRs,4 the Obama Administration * @ 2013 Nicolas Terry. All rights reserved. Hall Render Professor of Law & Co-Director of the Hall Center for Law and Health, Indiana University Robert H. McKinney School of Law. Email:
[email protected]. Nathan Cortez, Rajiv Mehta, Efthimios Parasidis, Frank Pasquale, and Mark Rothstein generously made time to comment on early drafts. Professor Miriam Murphy helped immeasurably with research, and Alex Smith assisted with timely edits.