One unlikely shovel wielding aggregate demand was health information technology. The Health Information Technology for Economic and Clinical Health (HITECH) Act passed in 2009 directed 5 % of the stimulus towards digitizing medical records.
Computerization of medical records doesn’t induce the images of public works as building freeways during the Great Depression does, but the freeway is a metaphor for exchange of information between electronic health records with the implication that such an exchange is a public good and so government intervention is justified.
It was Bush Jr., not Obama, who started the digitization. Seeking bipartisanship after the war in Iraq, Bush was inspired by his closest ally, Tony Blair, who was wiring the National Health Service (NHS) – a $16 billion initiative which has since failed, spectacularly.
Bush founded the Office of National Coordinator of Health Information Technology (ONC) and appointed David Brailer – a physician, quant and entrepreneur – as head. Brailer wanted interoperability so that hospitals shared information. It is because of interoperability that we can use our debit cards in New York and Singapore. The market must agree on a common language, such as the TCP/ IP for the internet, to achieve interoperability.
Patients suffer when systems can’t talk. Were patients, not a third party, bearing the full costs of care – a free market – they might have forced hospital information systems to talk. Rightly or not, healthcare is not a free market and hospitals have little motivation in making cross-talking simpler.