Jonathan Cohn writes in the The Atlantic (March 2013) about the synergy of technology and economics. More specifically about the medical profession and the above.
An intriguing part of Mr. Cohn's article is something called "Baumol's Disease" or "the Braumol effect". Essentially in most jobs, wages increase as productivity rises. We know that today there are many exceptions due to the uniqueness of the current economic environment. Productivity in the United States is rising but wages are not and in many instances because of low consumer and government spending along with bank parsimony demand is down. I digress, but another exception is the exorbitant bonuses and 'golden parachutes' given to CEO's whether productive or not. Hopefully to end soon? Anyway, in a perfect world, this is how it is supposed to operate.
The relevance of Baumol's Disease to the medical profession is that in good times and bad as productivity goes down, wages rise. Cohn explains that the medical field is very labor intensive and demand is high and increasing. Employers must retain their personnel, especially the highly trained, by continually raising their compensation. Now we come to the impact technology can have on Baumol's Disease. It can increase productivity in several ways. Highly trained physicians and highly trained support staff can increase productivity (diagnosis and execution of treatment protocals) by increasing their use of technology. Less trained staff can have skills upgraded to the point where some burdens are removed from doctors. This increases productivity.
I am not saying that technology will lower medical costs. But, what it may do is give the profession more bang for the buck. Today as Mr. Cohn notes: "… a doctor in a clinic still sees patients individually, listens to their problems, orders tests, makes diagnoses - in the classic economic sense, the process of an office visit is no more efficient the it was 10, 30, or 50 years ago."
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