Why Health Care Costs so Much

Wired Executive Editor Thomas Goetz, writing for The Huffington Post on Tuesday, explained why health technology, unlike, say, advancing computer technology, doesn't bring health costs down, but actually causes them to increase - a lot. Here's his reasoning:

The answer boils down to what's called "scale" -- the notion that technology, thanks to Moore's law and other exponential improvements, gets progressively cheaper, better and thus more accessible. Cheaper and faster chips, sensors and storage mean that digital technology is constantly scaling up and out, touching the lives of more people. . . .

In healthcare, technologies that scale are suspiciously hard to find. There's no lack of technology, it's just that they don't seem to get cheaper and better at the same exponential rate as in the rest of the universe.

That accounts for a significant amount of the 10 percent annual growth rate of health care spending, he argues.

But take heart, Goetz reassures us.

At long last, though, that's changing, and scalable technologies are coming to health care. But there's a twist: Instead of coming from your doctor or hospital, they're going straight to consumers. Digital monitoring tools like the Nike+ system, which uses a little accelerometer sensor in your running shoe, let people make more informed choices and pursue better health behaviors. . . .

In the world of insurance and care providers, some folks already understand this, and are way ahead of Washington policy makers in tapping cheap technologies to improve health care. In Hawaii, Kaiser Permanente has started a pilot project that churns through its database of patient data to predict which patients might need which tests -- and then sends individuals email alerts suggesting they come in for a test or checkup. It's the same sort of technology that Netflix uses to recommend movies.

The question is: Can we wait that long?