Welcome to Health Reform Watch, Jason Millman's regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Jason with questions, comments and suggestions here. Check back every Tuesday and Thursday afternoon for the latest edition, or sign up here to receive it straight from your inbox. Read previous columns here.

We were all supposed to have our health records online by now — the past two presidents told us as much. Why that hasn't happened yet isn't a surprise, but the country has made some good progress toward that goal, a new report finds.

Ten years ago, then-President George W. Bush set a goal for most Americans to have an electronic health record by 2014. Five years later, President-elect Obama doubled down on that just before he took office, calling for all Americans to have a digital health record by this year.

The perceived benefits of electronic health records are many: safer and better coordinated care, a reduction in unnecessary and duplicative procedures, and a new wealth of health-care data. These systems don't come cheap, though. For a five-person practice, the first-year investment costs $162,000 on average, plus nearly $85,000 in maintenance fees, according to one study. The costs could run into the millions for hospitals.

Though there's been a recent shift toward electronic health records — thanks in good part to a federal investment of about $25 billion so far — this latest report from the Robert Wood Johnson Foundation shows significant challenges ahead for getting paper out of the health-care system.

Less than 10 percent of hospitals had at least a basic electronic health system in 2008, according to the report. You can start to see rapid adoption, though, after the 2009 stimulus authorized Medicare and Medicaid payments to doctors and hospitals to purchase electronic systems:

There's been similar uptake for doctors' offices:

We're still far from the digital vision shared by Bush and Obama, but that's no surprise to those who have been working day in and day out on the complicated policy and technical considerations surrounding the digitizing of sensitive health-care data.

"Those were aspirational goals. Most of us thought there's no way we're going to get close [in 2014]," said Harvard School of Public Health professor Ashish Jha during a panel discussion on Thursday. Still, there has been "phenomenal progress" so far, he added. "There is no country in the world that has moved this far, this fast on EHR adoption."

It's one thing to have patient information in digital form, but what really counts is what happens after that. The Medicare and Medicaid payment programs outline "meaningful use" standards to make sure the federal investment is promoting certain goals. In order to continue receiving the payments, doctors and hospitals have to meet gradually tougher standards on how the patient information is being used and shared.

The next round of requirements is proving particularly tough for hospitals, according to Thursday's report. Just six percent of hospitals are ready for the second stage of the program this year, when they also face the risk of penalties for not meeting the program's requirements. The survey found that while most hospitals can meet many requirements — such as sending online data to public health agencies and recording patient information — they're still struggling on one key function: sharing information with patients. Just 10.4 percent of hospitals can do that now.

The sharing portion is critical, obviously, if you're going to have electronic health records that really can go anywhere. However, hospitals may have not viewed this as a priority in the past, or there may have been little demand from patients, according to RWJF.

But these functions, as well as the rate of doctors and hospitals investing in electronic records, are likely to increase as health care continues to shift to a system that is rewarding providers for better care, said University of Michigan public health professor Julia Adler-Milstein.

"If you don't have this data to know how you're performing, it's going to be hard to figure out how to improve value," she said.

Top health policy reads from around the Web:

Federal report finds insurers overbilling Medicare. "Analyzing government data never before made public, Department of Health and Human Services researchers found that many plans exaggerate how sick their patients are and how much they cost to treat. Medicare expects to pay the privately run plans — an alternative to traditional Medicare — some $160 billion this year. The HHS study does not directly accuse any insurers of wrongdoing or name specific plans that were scrutinized." Fred Schulte for the Center for Public Integrity.

Individual mandate exemptions are adding up. "Almost 90% of the nation's 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement. The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions." Stephanie Armour in the Wall Street Journal.

Why are so many people leaving hospices? "At hundreds of U.S. hospices, more than one in three patients are dropping the service before dying, new research shows, a sign of trouble in an industry supposed to care for patients until death. When that many patients are leaving a hospice alive, experts said, the agencies are likely to be either driving them away with inadequate care or enrolling patients who aren’t really dying in order to pad their profits. The number of 'hospice survivors' was especially high in two states: in Mississippi, where 41 percent of hospice patients were discharged alive, and Alabama, where 35 percent were." Peter Whoriskey and Dan Keating in The Washington Post.