The Evolution of Healthcare Infrastructure From Physical Centers to Logical Agreements

Healthcare is the largest industry in the country, but its infrastructure is undergoing a radical transition. This transition is being caused by the shift in demographics to an aging population, in turn causing a shift in character from acute illness in hospitals to chronic illness in homes. This shift in character is typical of providing service in an infrastructure, as the transition from station-to-station into point-to-point. As the volume of service required increases, economy of scale dictates that the bulk of the service moves down the provider pyramid, from few large providers to many small providers, to place the bulk of the responsibility on the consumers themselves. The fundamental nature of healthcare infrastructure will thus follow a typical path. By examining the same transition already taken in other infrastructures, we can outline the future evolution of healthcare infrastructure. First, we examine railroads, the transportation infrastructure of the 19 century, which have a physical infrastructure similar to the present healthcare infrastructure of acute care in hospitals, and which did not make the transition from station-station to point-point. Next, we examine telephones, the communications infrastructure of the 20 century, which have a logical infrastructure similar to the future healthcare infrastructure of chronic care in homes, and which did make the transition to point-point service. Telephones are a logical infrastructure of numbers laid lightly over a physical infrastructure of wires. Finally, we examine banks, a financial infrastructure, which are a purely logical infrastructure based on agreements. Banks have successfully established a complete provider pyramid, from national reserves to regional centers to local branches to grocery stores to home services. Economics dictates that healthcare infrastructure will establish a similar pyramid, to implement agreements on acceptable daily status for the chronic health conditions of an aging population. This trend has major policy implications to insure that the public good is served. Just as the Federal Reserve Board makes money policy by varying interest rates, a Federal Health Agency could make health policy on a national scale by varying acceptable levels of individual conditions.