I couldn't agree more, Scott. The reality is, that a large segment of healthcare and insurance still rely on fax type transmissions in their day to day operations. So unfortunately the "fax" is not going away any time soon.
What is happening is a migration to digital/online faxing solutions that offer encrypted transmission, secure retrieval, and secure portals.
In my situation, I can't do a thing about eliminating faxes, but what I can do is require they be done using secure methods. Online digital fax solutions, like eFax, goldfax, etc... can bridge this gap, and let me do away with the physical fax machine. My only problem is making a case for this migration with those that hold the purse strings.
Easy to quantify economically, but much harder to convey the security issues and still ensure day to day operations.