Jonathan Cohn's story about the potentially transformative impact of information technology on the health care sector is a must-read. I wrote recently about how nurse-practitioners are just as good as doctors for many routine care scenarios, at least in the places where they're allowed to practice. So imagine the potential extra capacity that could be unlocked by equipping nurse-practitioners with Watson-style supercomputers to do basic diagnostics. You could even go further down the training hierarchy than that, and open a world of much more plentiful diagnostic and basic treatment.
A good question to ask about this is what are the implications for the big macro-policy questions about "costs" (i.e., aggregate spending volumes) and "waste" that drive a lot of discussion in Washington. My guess is that if anything, this technology panning out is going to drive spending up. We do a lot of de facto rationing in the United States right now by making it inconvenient to get health care services. Instead of one doctor working 8 hours a day five days a week, you might have one robot working with a rotating team of nurses 24/7. Unit prices for diagnostic services would fall, but the quantity of services consumed would rise and the total volume of spending might go up. If you think about the smartphone industry, for example, it's clear that the falling price of high-quality mobile computers has led to a huge increase in smartphone-related spending since now that people can get more bang for their buck they find it much more worthwhile to spend.
Which is a longwinded way of saying that I think health care IT may make a huge difference in what I personally consider to be the most serious health policy issue in America—the fact that being ill sucks and it would be great if more people could get more and better treatments more conveniently and effectively—but it probably won't make a huge difference in terms of DC's obsession with "bending the curve."
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