walter russell mead peter berger lilia shevtsova adam garfinkle andrew a. michta
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Another Central Planning Fail: Costly Misfire on Electronic Patient Records

Healthcare policy experts have long predicted that electronic medical records would allow us to streamline and modernize much of our healthcare system. But despite some encouraging signs, many of the promised benefits of the new technology have yet to materialize:

The conversion to electronic health records has failed so far to produce the hoped-for savings in health care costs and has had mixed results, at best, in improving efficiency and patient care, according to a new analysis by the influential RAND Corporation.

When electronic medical records were first coming online in 2005, RAND published a study saying they could save the healthcare industry $81 billion per year. On the basis of the first study, the federal government put in place massive incentives to help the tech spread.

Nearly one decade later, RAND admits that its initial hopes were overly optimistic. But now some critics are taking the argument one step further:

Evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services.

The main lesson is that bureaucrats and politicians tend to sorely underestimate the difficulty of running something as complex as the American health care industry by a system of incentives, mandates, administrative decrees, and central control. The industry can only transform if we find a way to make consumers more sensitive to prices. That isn’t easy when much of the care is subsidized and when elements of a market system and a state-run system exist, dysfunctionally, side by side.

But the failure of the health care system to reap the rewards so confidently predicted by the experts and bureaucrats is one more sign that this country has a long way to go before we have a system that’s truly gold standard rather than just gold plated.

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