When people talked about the promise of electronic medical records, Santa Barbara County usually came up as a role model. In 1999, a nonprofit was created to connect hospitals and doctors' offices in the California region using interoperable e-records to share patient data across practices, with the goal of improving care and cutting costs.

The effort launched to national prominence Dr. David Brailer, a physician and former CEO of CareScience, a health care quality-measurement software provider that was the prime contractor of the project. Brailer went on in 2004 to spend two years as the first national health IT coordinator, leading the charge for electronic medical records, or EMRs. Hundreds of health care execs studied the exchange with an eye on adopting its approach.

In December, however, the Santa Barbara County Care Data Exchange quietly died. A $10 million grant ran out, and the health care community didn't see enough value to keep it going. There are still plenty of doctors using e-records in the area, but the dream of sharing data across practices, easily following patients where they're treated, has faded.

Santa Barbara serves as a reality check on the U.S. health care system's slow progress toward a real EMR network. The diagnosis: It's worse than you think.

Despite several years of concerted national effort, including President Bush's rallying cry in 2004 to get most Americans on e-health records by 2014, the use of digital records is at a precarious place. Just 10% of doctors' offices use them. And while hospitals are expanding their use, the most difficult work--the exchange of data among health care providers, especially with rivals--has barely begun. Technology itself has caused problems, such as a system outage last year of a medical records network run by health care company Kaiser Permanente. There are legal questions, privacy issues, and competitive pressures surrounding the technology, as well as concerns about return on investment. And data-sharing practices have yet to be widely tested in the real world.

It's not hopeless, and a number of ambitious projects for sharing health data show signs of progress. There's the occasional clear success, like a long-running Indiana data exchange. There's also growing interest among big employers to give personal health records to their employees, though it's not clear how those private efforts will mesh with the efforts of regional health information organizations, known as RHIOs. Still, failures like Santa Barbara's make it harder to build the trust and financial support needed to make regional data sharing work.

"I feel the spotlight is on us," says Micky Tripathi, CEO of Massachusetts eHealth Collaborative. Backed by $50 million from Blue Cross Blue Shield of Massachusetts, the collaborative is part of a promising RHIO effort in the Boston area. It's on pace to have the majority of doctors in a three-community pilot area on e-records next month, though Tripathi worries such efforts won't spread to smaller medical offices beyond the pilot, since there aren't financial incentives for those practices to invest. If the Massachusetts effort falters, with its combination of money, top-tier health care, and a tech-savvy population, it'll set the entire industry back. Says Tripathi, "It was said to me by someone from the top national level--with a smile, but he wasn't kidding--'Don't screw this up. It sets a tone.'"

There's a troubling lack of urgency in much of the industry toward EMRs and data sharing, despite the lives being lost to mistakes that IT-enabled health care might help prevent and the potential for cost savings. We all have a stake, as users of the health care system. Companies want more progress because they're feeling the pain of rising health care costs for employees, and they believe in IT's role in lowering that--just as they've applied tech to improve processes at their own companies. Anyone who's pushed tech-driven transformation can understand why it's difficult.

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