Introduction: The high cost of healthcare information systems (HIS) is driven by a number of factors. Proprietary systems drive the cost of interchanging data much higher than if the systems implemented standard interfaces, by not being able to leverage competitive reusable components. The HL7 data standards have been an excellent help, but provide only partial solutions, because of the normal customization that occurs at each organization. The monolithic nature of most large HIS systems make it difficult for them to be best of breed in an area and very expensive to upgrade or replace. Service-oriented, component-based technologies enable systems to be constructed of replaceable, best-of-breed components. This enables much more competition on lower-cost components, with the promise of much lower overall costs. This lower cost is driven not just by competition, but also by providing a mechanism to deal with change, by replacing software parts as newer more powerful ones become available without having to replace the entire system. The value of components is not just in their modularity, but also in the use of standard interfaces to facilitate interoperability. In addition, the ultimate value to the consumer of components is to enable the ad hoc assembly of a patient's virtual medical record over the Internet across multiple healthcare organizations. Los Alamos National Laboratory (LANL) describes the successful implementation of standard components in an open-source system, called OpenEMed, which can be used for a variety of healthcare related applications.