Why The Healthcare Industry Doesn't Want Electronic Medical Records
from the it-would-reveal-the-business-model dept
I've been really confused by the whole push for "electronic healthcare records" as some sort of big step for improving our healthcare system. It's such a minor part of what's needed that it seems to be looking at curing a cough when someone has terminal cancer. The cough isn't the issue. Also, it's never been quite clear why hospitals didn't move to electronic healthcare records in the first place. Lots of other businesses with tons of paper records long ago realized that moving to electronic records and making things more efficient wasn't just a fantastic way to make money, but a way to expand their own market. The switch from paper stock certificates to electronic ones didn't just save printing costs -- it enabled the stock market to change in a massive way (perhaps too much, many will note).Andy Kessler, who's been thinking an awful lot about these issues (and whose book The End of Medicine hasn't received nearly the attention it deserves) has an interesting article discussing why the industry has resisted the move to e-healthcare records. While it would save some money, he notes, it would also expose the entire scam of the healthcare system: which is that they make a ton of money from inefficiencies baked into the system, which are totally hidden from view. It's a massive boondoggle for the industry, and e-healthcare records would actually make it easier for people to understand that the healthcare system profits from people being sick and not from having them be well.
The incentives are totally screwed up for everyone.
Healthcare providers make more money the sicker you are. Pharmaceutical companies make easy money with gov't monopolies limiting the ability to spread useful drugs. The actual costs are nearly totally hidden from most consumers, so they don't make smart choices at all. There's a lot of built in artificial scarcities in the system, and opening up the flow of information changes that.
Of course, in the grand scheme of things, this is dumb. Focusing on preventative care and actually keeping people healthy would actually provide a massive economic benefit not just to the healthcare industry, but to the economy as a whole. More healthy people contributing to production, output and consumption can do quite a lot for the economy. The numbers on some studies are staggering (we're talking trillions of dollars). If the incentives could be aligned such that people paid for staying healthy, rather than having illness treated, then there's a ton of money to be made without resorting to the old inefficient mess that is today's healthcare system.
But rather than tackle any of that, we get attempts to fix the cough in the terminally ill patient -- and the patient likes the morphine drip so much that he'll do anything to avoid getting healthy. It's time to fix the healthcare system. And while I don't necessarily believe that a small step like electronic medical records is all that meaningful, if Kessler is right and it actually drives some awareness to the underlying mess, perhaps it's at least a good start.
Filed Under: economics, electronic healthcare records, healthcare industry, incentives
