How the world really works

by Russ Roberts on May 17, 2009

in Politics, Regulation, Stimulus

Is it a good idea to have medical records stored in electronic form rather than paper? Maybe. One argument is that if there are stored electronically, it will help us find the "best" treatments because we will have all kinds of data. This optimism may be warranted. Against it, is the consideration that "best" is often unclear, depends on the individual, depends on the cost, and is subject to political manipulation if the determination of the "best" treatment is a government decision.

Another argument often advanced for electronic records is cost-saving. It will prevent needless duplication. But of course mobilizing the medical profession to do something they don't seem to think worthwhile doing on their own will have its own costs as well.

This article in the Washington Post deserves to be read in its entirety. It explores how implementing electronic records became part of the stimulus bill. Not because it's a great idea but because the people who would profit from it lobbied like crazy. It may be a great idea. Suffice it to say that the evidence is highly biased.

HealthLobby
At the center of this picture is the proposed savings in costs of $77 billion.  But as the Post reports:

The stimulus bill suggests that the government will recoup about a third of the spending allocated for electronic health records over the next decade, an assumption that some health-care observers question, in part because of a critical analysis by the Congressional Budget Office last year.


The CBO, then led by Orszag, examined the industry-funded study behind the $77.8 billion assertion, among other things, and concluded that it relied on "overly optimistic" assumptions and said much is unknown about the potential impact of health information technology.


A CBO analysis of the stimulus bill this year projected that spending on electronic health records could yield perhaps $17 billion in savings over a decade.

This is how the world really works. When Obama says that electronic record-keeping is a crucial way to control costs, it seems like a really cool idea. It may be. But I doubt it. And the real reason we're going this route isn't because a wise President sees a cost-saving opportunity. It's a lot uglier than that.

As for this being part of the stimulus plan, what a joke. The main thing that will be stimulated are the bank accounts of the people who make the products that help computerize the records.

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