As part of his economic revival measures, President-elect Obama wants to computerize all health records within five years. The intention is to modernize a fragmented, costly and error-prone system to one that improves quality of health and saves everyone money.

The vision has received a broad welcome, but even its most ardent proponents are aware of the costs of implementing such a system. Perhaps of greater concern are the costs of such a system failing both in terms of its security and,...