![]() ![]() Just like the factory owners, there is a significant cost to this change but now there is an incentive that will outweigh that cost: The carrot and stick of ARRA created rapid adoption of EMRs which means all major healthcare providers now have access to the healthcare information “electricity.” So where are the efficiency gains that factories saw in the 1920s? They are coming, but first healthcare systems will need to rethink the entire process and even where care is delivered. As a result, systems were built around this power. We are now 25 years from when EMRs began to communicate providing the power of information anywhere. This very detailed cumbersome flow of information requires significant coordination, process, and administration. For the last 250 years, that power has been transmitted by oral and paper communication. For that reason, most healthcare became concentrated geographically with specialists in close proximity to generalists. ![]() If you look at the US Healthcare system, the flow of information (Patient History, Physician Knowledge, Outcomes Data, etc.) is the power that produces care for patients. The lessons of history can be our guide to our future. Demand: The run up to World War One created a global demand for manufactured goods, and each factory sought efficiency to ramp production to meet the need.Profitability: The run up to World War One was an age of protectionism and saw a significant reduction in immigration causing wages to rise, thereby sharply reducing profits.As you can imagine there was a resistance to change. Socially: electricity would empower workers and spread them across the factory which would require more training and different management.Financially: the infrastructure was in place for steam power and would require factories to rebuild for electrical power.With all of these advantages, why did it take factories almost three decades to adopt this new technology of electricity? Paul David explains as an economist, that is was a balance of cost and incentive that created the change. Adopting electricity allowed the factory to open up it allowed the factory to have a varied speed of outputs, it allowed the factory to organize for efficiency, not power. Electricity would have let power go when and where it was needed. The timing of production, the layout of production, the placement of workers all were dictated by the position and speed of the steam engine. The factories were all centered around a large steam engine that drove wheels and belts at a constant pace down a single line through the factory. ![]() ![]() In 1879 New York City had electrical power plants, however, a full 25 years later 94% of US factories looked no different than they did in 1879. However, he puts the pivotal change into a timeline that is quite surprising. In his paper, he looks at the impact of electricity in industrial outputs. Paul David, an economic historian, wrote a research paper that looked at the rate conversion from the use of steam power to electricity, titled " The Dynamo and the Computer." The research recently popularized by Tim Hartford shows a very different perspective on the rate of change that we have come to believe from our textbooks. ![]()
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