Since 1989, Beth Israel Hospital has been deploying an extensive online patient record (the OMR), which augmented a heavily used integrated hospital information system. Initially begun in a large primary care practice, the system is now used to share patient records among 36 practices on three campuses. Although the system was intended to eliminate the need for paper, we have found that it has, in the short term, increased the amount of paper produced. Elimination of paper record in ambulatory care has saved us $56,000, but we have yet to realize the savings of an additional $200,000 per year. We explore the factors that contribute to this "paper paradox" and discuss the costs associated with increased paper production, areas in which we have reduced paper handling, and strategies for reducing our reliance on paper.