Information, Technology, and Innovation: Resources for Growth in a Connected World

CHAPTER 20

Healthcare

The solution seems obvious: to get all the information about patients out of paper files and into electronic databases that … can connect to one another so that any doctor can access all the information that he needs to help any given patient at any time in any place.

—“Special Report: IT in the Health-Care Industry,” The Economist, April 30, 2005

There's no question that U.S. medicine is approaching a crisis. Depending on who's counting, tens of millions of Americans carry no health insurance. Between 44,000 and 98,000 people are estimated to die every year from preventable medical errors such as drug interactions; the fact that the statistics are so vague testifies to the problem. The United States leads the world in healthcare spending per capita by a large margin ($7,500 versus about $5,000 for the runners-up: Norway, Canada, and Switzerland), but U.S. life expectancy ranks twenty-seventh, near that of Cuba, which is reported to spend about 1/25th as much per capita. Information technology (IT) has made industries such as package delivery, retail, and mutual funds more efficient; can healthcare benefit from similar gains?

Any assessment of the impact of information and communications technologies on the U.S. healthcare system must consider their effects on the multiple business models already in place. Unlike, say, Napster and the music industry or even the multithreaded issues of news, publishing companies, and the Internet, U.S. healthcare is so incredibly ...