Computer Care Crisis?

One piece of evidence for the existence of a health care crisis is that the spending on health care has grown very fast. Implicit in the claim is that increasing cost, and not increasing demand, is the main cause for the rise in expenditures. Such an upward shift in supply might be a concern. Yet there is considerable evidence that new treatments, drugs and levels of care have increased the quality of care. Just how much would you be willing to pay for one more QALY? This upward shift in demand is simply the reward to providers for doing a better job.

To make the case more forcefully, one can compare healthcare expenditures with computer expenditures. The Bureau of Economic Analysis (BEA) website with the Industry Economic Accounts (IEA) contains data on the dollar value of output by industry over time. I aggregated the industries that I consider to be "Health" and "ICT," basically computers, software and telecom. (Since I am not familiar with the health data, I could be missing some industires.) Normalizing 1998 = 100 you get:
















I doubt policy makers would claim that computer costs are "out of control" requiring an overhaul of the "computer care system" with more direct government intervention in the "computer services delivery." I suspect that nearly all of the growth in computer output is due to greater demand from ever better products and services from amazing innovations. In fact, there would be a fear that more government intervention might stifle the flow of yet-to-be-developed innovations. Might the same apply to healthcare?