By Glen Tullman, MD

Almost 20 years ago close to 4,000 people from 200 companies gathered in San Diego for a conference to discuss the future of health-care information technology. This was before the Web. This was back when computers in physicians’ offices, to the extent they were present at all, were used only for scheduling and billing patients. Paper charts bulged out of huge filing cabinets.

It was one of the first big conferences held by the Healthcare Information and Management Systems Society (HIMSS). I was among a grab bag of physicians, technologists, visionaries, engineers and entrepreneurs who shared one idealistic goal: to use information systems and technology to fundamentally change health care.

We didn’t just want to upgrade those old systems. We imagined a future that looked a lot like what we were being promised throughout the economy as it sped into the Internet era. Computers would enable improvements in the practice of medicine—and make it safer, higher quality, more affordable and more efficient—all at the same time. We wanted people to be healthier.

Not long after that conference, a group of us began building a company called Allscripts that initially focused on electronic prescriptions. Old jokes about illegible doctor handwriting belied serious safety issues. The Institute of Medicine calculated that 7,000 Americans were dying each year from preventable paper prescription errors.

In rural New Hampshire, an innovative physician named Azar Korbey transmitted the first fully electronic prescription using our system. Today, according to industry source SureScripts, about 600 million prescriptions out of 1.5 billion in the U.S. are written electronically. That’s substantial progress. Electronic prescribing is saving lives. But there is more to do.

The next phase was electronic health records. Allscripts and rivals like Cerner and Epic found ways to automate a complicated clinical encounter. It became a national goal to make all physician practices and hospitals digital.

This didn’t seem out of reach. After all, computer visionaries like Bill Gates and Michael Dell talked about how computers would change everything. But we (and they) soon realized that putting PCs on every desk was only the first step in the information revolution. It wasn’t until we connected those computers together using the Internet and developed “apps” that everything changed about the way we work and play. Remember Amara’s Law: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”

Two decades later the question is being asked: Did our industry succeed in doing what we said we would do?

The process of getting from zero to nearly half a million physicians using electronic health records systems has been arduous. To paraphrase Churchill, this is not the end. It is not even the beginning of the end. But is it, perhaps, the end of the beginning of the electronic health revolution.

We’ve seen people knock the value of our investments in these systems, criticize the government’s stimulus, and question the return on investment. David Kibbe, a physician and technology advisor to the American Academy of Family Physicians, wrote in an open letter to President Obama that electronic health records are “notoriously expensive” and “difficult to implement.” Arguing against subsidies, Kibbe wrote: “Nor is there conclusive evidence that the use of EHRs improves patient care quality.”

But does anyone really believe we should go back to paper? In fact, more than ever, people understand that making digital records work is critical to fixing health care. The annual Healthcare Information and Management Systems Society (HIMSS) conference, held last week in New Orleans, expected 35,000 people and 1,000 vendors to focus on that task.

The President’s Council of Advisors on Science and Technology concluded in a recent report that “the impact of IT on health care over the past decade has so far been modest.” The key words: so far. Investors and the industry would be wise not to underestimate what’s coming. It is nothing short of an explosion in innovation and creativity, facilitated by open systems and connectivity.

What the Council found is that the technology can fix itself. As these systems, which doctors and hospitals have spent billions to install, begin to talk to each other and to patients, everything will change. Right now, as the report says: “The ability to integrate electronic health information about a patient and exchange it among clinical providers remains the exception rather than the rule.” This is exactly what needs to change.

Remember when the RAND Corporation predicted $80 billion a year in annual savings and 285 million fewer sick days? I’m here to tell you that will happen, and sooner than you think. Intelligent policies out of Washington that force vendors to connect and interoperate (just like our bank ATMs and phones do) and hospitals and physician buyers demanding the same will fuel this revolution. Most important, patients will not be patient anymore. They will begin to demand access to their own information and their own records.

So what does our community need to commit to accomplishing?

First, we have to finish the job of getting physicians on board. The CDC reported in December that 73 percent of physicians now use electronic health records, up from about a third two years ago. So we have made great progress, but still have too many physicians using paper.

Then we have to get these records connected to each other. The industry, through HIMSS, and the government, through the Office of the National Coordinator, are pushing for interoperability. With the exception of one or two, most vendors are falling in line. Medicare, insurers and consumers will have to exert pressure, since individual players may benefit from locking down their own data. But once the network is open, we’ll see the same exciting progress that we’ve witnessed in our lives outside of health care.

Meanwhile, the systems that have already been installed need to work better. They’re still not easy to use, and this is coming from someone who spent 15 years developing and selling them. The industry can do better, and the industry will, especially with the development of new iPad and other mobile apps. And we have to fundamentally change the electronic health records. Today, they tend to be “information retrieval” tools. “What you see is what you just wrote,” is not the kind of value we should be adding. The computer does not help the doctor practice better … yet. The patient does not learn much from the data … yet.

But once records are open, connected, and more user-friendly, we can start to add intelligence to the network that will help doctors, nurses, care coordinators and patients all do a better job improving health, not health care.

We see it happening. Innovative companies like dbMotion are connecting disparate systems across health care organizations. Other innovators, like Humedica (recently acquired by OptumHealth), are learning how to mine data for insights that will help physicians and care coordinators keep track of large panels of patients. Health care will soon be brimming with similarly exciting start-ups producing apps that change everything.

Medical apps that dial into electronic health records are finally starting to become ubiquitous. This will impact cost and quality in very significant ways. For example, a physician’s $199 iPhone device can avoid orders for $150 electrocardiograms. (See this video for a demonstration by Dr. Eric Topol). Or a wireless scale can notify a nurse when a congestive heart failure patient gains weight indicating dangerous fluid retention.

Think about wearing a device that allows your vital signs to be remotely monitored all the time, rather than at a once-a-year doctor visit. Pair that data with intelligence from IBM’s Watson, being used by innovative health-care organizations like Memorial Sloan Kettering to provide their teams with better information to provide better care, and the result is a whole new system of care.

Arthur C. Clarke said, “Technology, properly applied, is indistinguishable from magic.” It is the “applied” part of that dream we are still working on. But I’m confident we’ll get there. A connected system will help patients take responsibility for their health. Strong teams of physicians, nurses and caregivers will use an intelligent network to make their results better and their jobs easier. It does sound like magic. And we are getting closer each year. Just take a walk around HIMSS and you’ll see the future.

Glen Tullman is the founder of 7Wire Ventures, an investment firm that creates new businesses and invests in early and growth stage companies. He was previously CEO of electronic health record company, Allscripts. This post originally appeared in Forbes.