Obama is wrong.

maybe, he is smart.

In the United States, about 85 cents out of each dollar spent on healthcare goes directly towards the healthcare expense while about 15 cents goes for administrative and other non-healthcare expenditures. This is actually quite a good ratio when compared with the other developed nations of the world. In fact, the United States has a better ratio when compared to European countries and also has a greater penetration of information systems for healthcare.

Further, the direct return on investment for implementing something like the EHR is impossible to calculate. Even if the calculations are done, the cost of such an implementation will fail to completely take into account the diversity of the the platform — at the payers’ end, at the providers’ end and for the end patient. Simply because, the nature of incentives for each entity is often in direct conflict with another. Which is the reason why payers dislike such systems since it only quickens the process of money leaving their pockets. It is a fact that about three out of four dollars paid out by large plans go towards treating diabetes and heart diseases. The current system deals with such a scenario in a specific manner that aims to cut down costs for the payer and thus for everyone else along the chain. It enrolls such members in a disease management program and further has an Underwriting/Predictive Modeling software which decides on premiums.

Now, Senator Obama wants an EHR for this entire continuum made mandatory [I think that is what he means, though he does not say anything for sure anyway]. How that will magically improve efficiency is something that people have to ask IT vendors who seem to have sold the line quite successfully to several customers and now to the presumptive nominee. IT improves efficiency — but in terms of process. Healthcare is hardly that — because life is hardly that.

Now, given this background, people will obviously ask: Europe spends less than America on Healthcare both in absolute terms and as a percentage of GDP; surely, they are more efficient and hence we can become that too. That may or may not be true. But even if it is, I do not see how the EHR is going to affect the 85 cents  part on actual healthcare expense which is what constitutes bulk of America’s problems. If anything, it will bring more people into the same net and worsen the financial burden. Maybe the Republicans are right in claiming that frivolous law suits are the reason. Even if they aren’t, at least they are aiming at the right slice.

The correct question though, happens to be, why should everyone afford healthcare?

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