When hurricane katrina devastated the Gulf Coast region, the paper medical records of thousands of people were destroyed in the muck and ruin. Gone were file cabinets full of family medical histories, prescription drug records, X-rays and laboratory charts. The only fortunate people, it seemed, were those who had served in the U.S. military: The health records of veterans are stored in electronic databases, accessible through any computer with an Internet connection.

The potential for big personal problems when medical records aren’t kept high and dry is only one of the obvious reasons why it’s important that the U.S. health care system move more aggressively to put all patients’ medical records into searchable — and, one would hope, secure — databases. But the effort to create an electronic “national health information infrastructure” remains in the waiting room. In the last Congress, the House and Senate passed legislation that would foster the adoption of health information technology, but the bills were so different that they never made it to a conference committee.

With the Democrats now in charge of Congress, the future of e-health legislation is no clearer. Although House Democrats appear more motivated to enact a bill than their predecessors, they had very little input into last year’s measure and will probably start from scratch. But they’ll have to hash through the same serious issues that tripped up the previous effort, including how to pay for all the new computer gear and software needed to convert paper records into electronic, and how to make sure computers and software can operate together to access the often incompatible data sitting in every hospital, doctor’s office and insurance company. Democrats also are more interested in lingering privacy questions, such as how to protect the patients flocking to new private firms offering to put their medical records online.

One issue, though, stands out as fundamental: how to make this country’s health care system catch up with the rest of the developed world when it comes to electronically recording and indexing the millions of diagnoses and procedures that take place every day.

In most U.S. clinics and hospitals, every such action is assigned a common unique code that is used for everything from tracking diseases to paying out Medicare benefits. The problem is that the American health care system still relies on an outdated coding method, known as ICD-9, which tracks 24,000 diagnosis and procedure codes. Every other developed country since 1992 has been using the next-generation standard, ICD-10, which indexes more than 200,000 ways to describe ailments and therapies.

Such granular data, most health care practitioners agree, will improve patient care, reduce medical errors, provide more accurate billing, and lead to better decision-making and policy making.

The newer standard, for example, could vastly improve our understanding of basic trends in what makes us sick — or dead. ICD-9, for example, may attribute certain causes of death broadly to “heart disease,” while ICD-10 allows more specific causes to be cited. Indeed, sometimes the newer standard appears to take granularity to an extreme: While ICD-9 has but a single code for “asphyxiation and strangulation,” ICD-10 has 39 — including four codes for dying while trapped in a refrigerator: from assault, by accident, due to “intentional self-harm” or for no determinable reason.

ICD-9 “should have been replaced nearly 10 years ago,” Linda Kloss, chief executive for the American Health Information Management Association, said at a hearing nearly two years ago. “Each year that passes results in further deterioration of the classification system and the data that it produces.”

Why is the United States so far behind? The simple answer is that it’s easier for socialized health care systems to impose new standards than it is for the United States, which relies mostly on the free market for medical care. But another culprit is the industry’s burden of complying with the 1996 health privacy overhaul known as HIPAA (the Health Insurance Portability and Accountability Act). “After HIPAA there wasn’t a whole lot of interest” in tackling ICD-10, said one House aide closely involved with the issue.

Objections by the health insurance industry also slowed the rollout of ICD-10. Insurers cite a study commissioned by Blue Cross Blue Shield that estimated the cost to companies ranging from $432 million to $913 million. A different report, by the Rand Corporation, put the price at between $150 million and $362.5 million.

They now seem to be resigned to the need for the upgrade. But they say they’ll need plenty of time to make it happen.

Last year’s House bill would have given the industry until October 2010 to implement ICD-10. The companion Senate measure had no rollout plan for ICD-10. The trade group America’s Health Insurance Plans wants Congress to give its members until 2012 to get right with ICD-10.

They’ll need more time than that, of course, if Congress doesn’t move to unstick electronic health records from the legislative mud.

Mike Mills is CQ’s executive editor for electronic publishing.