What makes it so hard for innovation is all the rules and regulations like being HIPAA compliant etc.... Regulations are a tax on innovation and a floor on prices dropping (usually leading to prices increasing).
Not true. HIPAA was a non-issue for my team. Mid 2000s. Further, having any kind of regulations, rules, procedures whatsoever would have been a huge boon. Instead, we had to invent everything ourselves. I actually called up lawyers (and others) involved in court cases, asking for pointers. "Try harder" was the answer. Sadly, I could never figure out how to code "try harder".
It's been a while, but I remember thousands of pages of granular user-interface-level requirements (think 'display of telephone number icons') to quality for federal recognition as an electronic medical record system. Hospitals/clinics not using a federally-approved vendor received increasing % penalties to their reimbursements as deadlines passed. Forcing through EMR adoption was meant to improve outcomes.. or something.
Some of the requirements are defined by references to standards prepared by consulting companies, which charge for access to these standards. Additionally, certification of compliance with standards was farmed out to a couple consulting companies.