Why does American medicine still run on fax machines?

Sure, but it's incredibly rare that such a neat dichotomy exists. In reality, there are plenty of alternatives, yet we stick to ones we perceive as more secure. I've heard the argument that fax is preferred over email because "you can just edit an email", and this highlights the issue. The difficulty bar is raised just a tiny bit for fax, yet the scrutiny is dropped right down.

America's infrastructure is behind in many ways.

Bank transfers are arcane, no chip n pin, fax machines, etc. etc.

I'm moving through West Africa, where these problems have been solved 2+ years ago.

All western countries had faxes, magnetic strip cards, paper check payments, etc. And most of them have no traces of that.

I think there must be some other element to it as well, and it's probably not only "well US is big". I think one is the diversity of states and companies. Having tons of systems and businesses communicating over several state borders with varying regulations, it's very easy to just settle with the lowest common denominator which might be faxes, cash etc.

Second I think it's a big cultural difference. In the EU for example (Which is looked on with at least as much suspicion as "federal government" in the US) we see it as an important job of central government to put agressive timelines for introduction of modern tech. Because things like this (chip + pin) for example is a herd immunity thing where the cost to upgrade is only motivated if customers actually have the cards etc - so we are very happy to see legislation requiring non-chip credit cards to be phased out, for example. Technological advance like this, or environment rules etc., is NOT seen as overreach, where a lot of other laws would be.

Third it's the power of corporations in relation to government. If corporate lobbyists see that a regulation will affect their bottom line (such as all of retail having to buy chip+pin equipment within 3 years) they protest. In the EU, there is just no chance that a retail lobby would be able to resist EU legislation that was advertised as good for consumers.

It's a bit more complicated than that. The real story is a combination of:

1. US health care privacy law (primarily HIPAA) has an "analog hole" of sorts. Basically, the security rules around phone/fax communications are far simpler and easier (and thus cheaper!) to comply with than the rules around things like digital networking. So people look at this, see that faxing things and then scanning them (or even paying people to do manual data entry) is cheaper than using more modern techniques and incurring compliance costs for the stricter security rules.

2. Doctors don't upgrade technology unless they have to. New systems cost money, and they don't want to spend money. Fax machines are established, understood, cheap. And they are actually one of the least scary things about the health system -- you don't want to know how many doctors are managing their records and interacting with insurance websites through IE on Windows XP, or even worse setups.

3. For all the crap you might throw at faxing as a way to do things, you have to admit it's easy. Electronic health record systems are a nightmare of badly-specified, horrendously complicated formats that no two vendors ever implement the same way. When consumers of electronic records, like insurers, sign up for clearing-house services a good bit of what they're paying for is getting to make this someone else's problem.