Health and Finance: where innovation is less than it could be

This is a note to myself, which I hope to come back to. The internet has the power to revolutionise a lot of industries. Print and software are two that have been revolutionised – and, in areas that could be ‘commoditised’ have led to plummeting costs. In health and finance, there’s plenty of innovation of various kinds, including using the internet. But there are no huge areas where costs are plummetting (that I know of). Much more could be happening but isn’t. If you want a one word explanation – it’s government and regulation. OK – a three word, one and a half concept explanation but no-one expects the Spanish Inquisition.

I’ve argued that payments could be commoditised here.

And a lot more could be being done in healthcare as this abstract suggests.

Where Are The Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care by David M. Cutler – #16030 (HC HE IO PR)

Abstract:

Medical care is characterized by enormous inefficiency. Costs are higher and outcomes worse than almost all analyses of the industry suggest should occur. In other industries characterized by inefficiency, efficient firms expand to take over the market, or new firms enter to eliminate inefficiencies. This has not happened in medical care, however. This paper explores the reasons for this failure of innovation. I identify two factors as being particularly important in organizational stagnation: public insurance programs that are oriented to volume of care and not value, and inadequate information about quality of care. Recent reforms have aspects that bear on these problems.

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