According to the Economist magazine (“Bit by bit“), firms such as Wal-Mart, Pitney Bowes, and Intel are announcing plans to launch an online patient-information service next year with the non-profit firm Omnimedix Institute. The consortium aims to develop Dossia, which—according to the institute—is “a secure, private, independent network for capturing medical information and delivering it to patients and their families.”
Why are firms willing to incur such high costs on behalf of their employees without any compensation in return? According to the Dossia group “with employers paying almost half of all US healthcare costs, Dossia will be an important component in making the healthcare system more efficient and effective, eliminating waste and duplication.” In other words, not only will the patients benefit, but the firms will be able to cut costs. The Economist is not entirely convinced that the consortium’s plans will work since the health care market is so fragmented on the supply-side. In fact, the greatest advances in healthcare IT have occurred within consolidated entities such as Kaiser-Permanente and the VA.
Capitalism certainly creates the best incentives for innovation, but government mandates—while often putting a damper on technological advancement—are able institute important standardization measures. Some national standard of electronic patient medical records would certainly be Pareto-improving for society. Government controlled patient health information would create to significant privacy issues and lack of flexibility on the part of providers; however, a government mandate to standardize patient records using input from insurance companies, physicians, and patients should lead to a superior outcome for all of society.