Economist calls for healthcare IT as part of reform

By Bernie Monegain
10:44 AM

Nobel Prize-winning economist Paul Krugman's advice for President-elect Barack Obama is to spend "on things of lasting value," including healthcare information technology.

Healthcare IT, like similar infrastructure investments, would help create jobs, which in turn would help mitigate the existing economic crisis, he said.

Obama has pledged $50 billion over five years to support adoption and use of healthcare IT.

Krugman, a professor of economics and international affairs at Princeton University, is a columnist for The New York Times. He offered his recommendations in an open letter to the new president published in the February issue of Rolling Stone magazine.

"As much as possible, you should spend on things of lasting value, things that, like roads and bridges, will make us a richer nation," Krugman wrote. "Upgrade the infrastructure behind the Internet; upgrade the electrical grid; improve information technology in the healthcare sector, a crucial part of any healthcare reform."

Krugman went on to suggest that Obama provide aid to state and local governments to prevent them from cutting investment spending at precisely the wrong moment.

"And remember, as you do this, that all this spending does double duty: It serves the future, but it also helps in the present, by providing jobs and income to offset the slump," Krugman said.

Krugman noted that many people who lost their jobs or faced losing their jobs would also face losing their health insurance - a situation that would worsen "the already grim state of U.S. healthcare and crowding emergency rooms with those who have nowhere else to go."