September 19, 2006
Good News about Inefficient Health Care
The very real problems with the health-care system mask a simple fact: Without it the nation's labor market would be in a deep coma. Since 2001, 1.7 million new jobs have been added in the health-care sector, which includes related industries such as pharmaceuticals and health insurance. Meanwhile, the number of private-sector jobs outside of health care is no higher than it was five years ago.
....Both sides can agree that more spending on information technology could reduce the need for so many health-care workers. It's a truism in economics that investment boosts productivity, and the U.S. lags behind other countries in this area. One reason: "Every other country has the payers paying for IT," says Johns Hopkins' Gerard Anderson, an expert on the economics of health care. "In the U.S. we're asking the providers to pay for IT" — and they're not the ones who benefit.
He then provides some interesting insight into the reasons for this inefficiency and some of the problems it causes:
The fact that this inefficiency means we employs a lot more people than we would if we had a rationally run system is hardly a great rallying cry for the status quo. A national healthcare system, besides being tremendously beneficial for the actual consumers of healthcare, would also align the market incentives more reasonably and reduce costs considerably. I'm willing to take the risk that we'll somehow figure out what to do with all the jobs and money we save along the way.
September 19, 2006 | Permalink
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