I really enjoyed today's essay. The only part I disagree with him on is the prescription drugs. It's more of an addendum, really.
Right now, America pays for the research and development of the drugs everyone uses. Everyone talks about buying drugs from Canada because they're cheaper. They're cheaper because Canada has a law that doesn't let the drug companies charge for the R&D.
Why should they be allowed to get away with that? They use the drugs too. They benefit from the R&D without paying for it. However, since drugs are fairly easy to take apart and pirate after they're on the market, the drug companies have little to no recourse. The US would have to step in and impose embargos on developed countries not paying their fair share.
I'm not even sure how effective that would be. We might have to go so far as to treat the plants as pirates and send in the military to shut them down. That would be an enormous cost in time and resources, possibly making action cost prohibitive.
Yes, the US should pay more for drugs. We make more, we have more to spend. But I don't think we should be the only ones paying for R&D when so many people can afford to pay some of the cost.
Posts: 2283 | Registered: Dec 2003
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One erroneous point brought up by the essay is that big lawsuit returns are causing increases in the cost of health care. I heard on NPR yesterday that lawsuits account for only 2% of health insurance costs. I'll try to find the reference.
On the other hand, I find it personally offensive to award money for non-economic damages. In many ways, people need to accept that by placing trust in a doctor, they are accepting a level of risk. In other words, they're trading *certain* pain and suffering for possible ill-effects from treatment. Capping the "pain and suffering" segment of medical malpractice lawsuits is a good solution, but I'd rather see other forms of restitution besides money.
Posts: 903 | Registered: May 2003
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quote:Capping the "pain and suffering" segment of medical malpractice lawsuits is a good solution, but I'd rather see other forms of restitution besides money.
Like making the doctor have to be your butler for a year. Posts: 26071 | Registered: Oct 2003
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Yeah, but a butler? C'mon, nobody is going to buy it. Unless we get a good standup comedian to play the lead role.
Posts: 903 | Registered: May 2003
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One of his better columns, though he'd still be advised to fact check it. Health insurance companies do invest money and use those investments to add to profit, and he uses the (incorrect) negation of that to shore up a number of paragraphs of his argument, making it flawed.
In fact, his reasoning for why health insurance companies can't invest is pretty much bunkum.
All in all, I am in favor of a universalized health care system. This does not mean the free market must be eliminated from it, but that the free market's strengths and weaknesses must be understood. For instance, offloading much of the bureaucracy to private companies would help keep costs down -- allow bidders to undertake coverage of various groups of people under health-agnostic criteria (geographic locality, place of employment, lots of possibilities, and because the actual health care plan, at least in the basics, is the same between them, they can be overlapping).
In other words, make health care a pseudo-utility (sort of like cell phone or long distance service, where there are many competitive providers; notice how low rates keep getting pushed there).
Posts: 15770 | Registered: Dec 2001
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Fugu, that's similar to my own thoughts on the subject. Linking insurable groups only to employment causes several severe inefficiencies in the system.
One possibility to get such a move underway quickly is requiring health plans in the federal employee benefits system to offer geography-based group coverage as well. Access to the federal market is lucrative enough to provide good incentive to the insurers, and the plans already receive oversight.
Actually, I'm going to have to think about that some more. While my game theory is rusty, I may be able to prove some interesting possibilities for such a system . . .
Yes, in fact, we're pretty much in an anti-free market system right now, with health care being linked to employers, creating a series of effective mini-monopolies.
Posts: 15770 | Registered: Dec 2001
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It gets the worst of both worlds: consumers get no choice, AND they do not bear most of the cost for their healthcare purchasing decisions.
It's very non-free market from the perspective of the consumer and the doctor. Instead, employers and insurance companies participate in a free market as proxies for consumers and doctors, and their interests do not align with either.
quote:In other words, make health care a pseudo-utility (sort of like cell phone or long distance service, where there are many competitive providers; notice how low rates keep getting pushed there).
Yep. This is, e.g., how healthcare works in Canada. Physicians set up shop on their own or as members of a group, and the better they are at providing care, the more patients will select them as primary provider.
Good service usually means the clinic is not overbooked, care is accessible when you need it, advice is accurate and medically sound, and the patient is treated respectfully and as a partner in the provision of healthcare.
The only thing "universal" about it is the susbsidization of compensation -- not the delivery, except insofar as medical care is regulated to meet certain standards anyway.
[ January 06, 2005, 12:26 PM: Message edited by: Sara Sasse ]
Posts: 2919 | Registered: Aug 2004
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quote:Yes, in fact, we're pretty much in an anti-free market system right now, with health care being linked to employers, creating a series of effective mini-monopolies.
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When the UMC Conference in Iowa switched its clergy and employee health plan, one of my friends proposed that it be opened to anyone living within a United Methodist parish. (Since there’s a UMC about every seven miles in Iowa, that would mean pretty much anyone in the state.) Unfortunately, he thought of it kind of at the last minute, and didn’t have time to work out the details before the vote would have needed to be taken, so it was dismissed as unworkable. (Which it might have been anyway, but I wish we'd have had time to try to make it work.)
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"If you are given the chance to police yourself and you fail to do so, the government will do it for you."
I'm not sure how doctors, pushed by trial lawyers, have failed to police themselves?
Are we really going to pretend that malpractice suits and/or litigation costs are significant enough to be dragging down the industry? That's a popular conservative claim, but it's pretty darn baseless.
Posts: 37449 | Registered: May 1999
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Actually, I'm thinking of taking that an extra step, Sara.
For one thing, people in the US won't be willing to give up health care differentiation based on ability to pay (and not having it does introduce inefficiencies into the system -- everyone's treated around a common denominator, creating a huge "consumer surplus" -- but not just of payments, of level of health care.
Essentially there'd be a certain minimum level of health care (which would be pretty nice, probably comparable to Canada's level) which all health care plan providers would be required to provide (and they'd likely be required to allow patients to go to any doctor licensed by the government or somesuch), but health care plan providers would be free to provide additional coverage, and their areas of coverage would be encouraged to overlap (someone might have the option of taking coverage through their city, or through their employer, or through a non-profit they volunteer for, or whatever).
The basic level of care would be covered by taxes, but for higher levels of service one would pay directly. This means government compensation to providers would remain simple (simply the number of people the provider covered for the year, pro-rating people only covered part of the year).
Posts: 15770 | Registered: Dec 2001
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quote:Most of the money expended by pharmaceutical companies is not toward R&D, but toward advertising. That is the biggest chunk of the budget
Sara, are you including the cost of a sales force as advertising? Because having worked for a pharmaceutical company, the biggest expense was payroll.
And how much of that sales force and advertising cost would be necessary if drug companies didn't have to fight so hard to recoup their R&D cost before the generics come in and take the market share away? If a company spends a billion dollars on research, and only has a limited time to recoup that cost before other companies can reap the benefits without having invested the cost, what do you expect them to do?
Someone, somewhere, has to pay the R&D cost. Right now we want the drug manufacturer to pay it, and then tell them that they shouldn't charge a lot for their drug, and that they only have a short period of time before we're going to let anyone and everyone make the drug anyway. Then, when they release a drug that causes some kind of interaction or problem, we want them to bear all that cost and responsibility too. It's a wonder anybody would even want to research new drugs and bring them to market.
I'm not a pharmaceutical company kool-aid drinker by any means - there are certainly wastes and huge expenditures that aren't necessary (there was no need for us to hold our annual sales meetings in resort locations, for example) But I see the inherent problems in our current system from a different point of view. If you want the top quality R&D you currently get, then you have to understand that it's not free. The drug company has to make that money back.
Posts: 14428 | Registered: Aug 2001
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Why not simplify things further by returning the county health departments to primary care providers? Now instead of paying per person whether they received care or not, you provide a building and staff that will be in constant use.
The real problem is we're looking at the problem from a happy angle: providing care for people who can't afford the current system. The big push for government health care isn't going to be from that quarter. It's going to be from the Fortune 500 companies.
The biggest companies discovered a while back that they paid more in insurance than their employees used in healthcare. So the companies began paying the healthcare themselves and kept the insurance company to file the paperwork and negotiate the claims down in price.
With healthcare getting more expensive with no end in sight, the big companies want to stop paying for healthcare, but they want to keep their employees. So they need the government to take over the majority of their costs so they can get their profit margin back.
When companies don't get their way and feel their profits are at risk, they can get pretty ugly. Whatever is done, it needs to look out for the underdog and appease the corporate honchos who can give themselves multi-million dollar bonuses but need layoffs to keep their profits. But that's a whole other rant.
Posts: 2283 | Registered: Dec 2003
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quote:Are we really going to pretend that malpractice suits and/or litigation costs are significant enough to be dragging down the industry? That's a popular conservative claim, but it's pretty darn baseless.
I am pretty unedicated on this specific issue. I have a vague belief that we should change "the system" to avoid some of the problems OSC noted (though I tend to lean more toward universalized health care than he does, I think). But on this specific subissue I don't know a whole lot.
I have some acquaintances, though, who are doctors, and this is precisely what they claim is happening--except that they focus on malpractice insurance, which the quotation above does not directly mention. Can you elaborate on why you say this is baseless?
Posts: 13680 | Registered: Mar 2002
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"Then, when they release a drug that causes some kind of interaction or problem, we want them to bear all that cost and responsibility too."
I would have no problem with making drug advertising and promotion of any kind absolutely illegal, in exchange for requiring the federal government to bear full economic liability for any drug that obtains FDA approval.
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ADDENDUM: One of the guys I know is always suggesting he will be forced to close up shop any year now, and gives me the impression that doctors are leaving the field, or at least private practice, in droves. Is this claim not accurate?
Posts: 13680 | Registered: Mar 2002
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quote:I would have no problem with making drug advertising and promotion of any kind absolutely illegal, in exchange for requiring the federal government to bear full economic liability for any drug that obtains FDA approval.
The problem is that drug advertising has, on two ocaisions, figured prominently into an ultimate solution for different medical problems I've had. I want to be able to choose between Allegra, Zyrtec, and Flonase. And I wouldn't know they exist without the ads. In one case I didn't know I had a condition until I saw the ad, and the improvements have been dramatic.
Your FDA approval = liability indemnification is very interesting. With appropriate safeguards (such as every single study about a drug being released to the FDA), it might be a good idea.
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