Innovation in Healthcare Arguments
| Tue Jul. 14, 2009 12:59 PM PDT
Conor Friedersdorf has three reasons he doesn't think he'll be able to support any of the progressive healthcare reforms currently on tap. Here's #2:
It shouldn't be too difficult to imagine another Dick Cheney or Richard Nixon in the White House. Are we really comfortable assuming that the state will never use its role in health care to pressure political opponents, or collect frightening kinds of data, or politicize medical decisions more than is now the case? Isn't there any size and scope of government that progressives deem to be too big on prudential grounds? Why doesn't this put us there?
Points for originality here: I don't think I've ever heard this objection before. And around here we like new and different. Still, while I bow to no man in my contempt for either the Trickster or the Dickster, even I can't really see either one of them scheming to deny Ralph Nader a liver transplant or something. But then again, maybe my imagination isn't active enough.
On the more conventional front, here's reason #3:
I keep seeing the argument that America is the leading health care innovator, and that if our system looks more like what Europe has, there won't be anyone left making strides in research and development. I haven't seen a convincing rebuttal, though there may well be one. Links?
This is actually the only objection to national healthcare that I find sort of interesting. But here's the problem: the reason it's hard to find a convincing rebuttal is because the argument itself is purely speculative in the first place. Sure, it's possible that the only thing keeping medical innovation alive is the (approximately) one-fourth of global healthcare spending accounted for by the quasi-private portion of the American market. But that's all it is: possible. There's no real empirical argument at work here, and given the current state of the global healthcare market, there probably can't be. That makes it pretty hard to construct an empirical rebuttal.
So I guess I'd reframe this. Instead of simply suggesting that innovation will die if America adopts national healthcare, how about breaking that down into three or four very specific arguments about what kind of innovations we're talking about and why they'd be destroyed if the feds funded 80% of American healthcare instead of the current 45%? Let's hear some details and some proposed mechanisms. Then maybe we can take a crack at having a discussion about it.
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Comments
confidentiality in government health care
Submitted by wahoofive (not verified) on Tue Jul. 14, 2009 1:47 PM PDT.
The concern about confidentiality in the system isn't about manipulating your health care, but leaking details about your health to manipulate elections. Remember the flap about Obama's passport file being snooped in during the election?
Not just a risk for publicly-funded care
Submitted by idlemind on Tue Jul. 14, 2009 3:01 PM PDT.
Remember that Daniel Ellsberg's psychiatrist wasn't part of any government health system. That didn't stop Nixon from stealing and attempting to use those medical records to discredit Ellsberg.
That said, although the government's record on maintaining records privacy is pretty bad, are non-government entities any better? Furthermore, if someone high in government is willing to sidestep the law, I don't think it makes much difference if the records are in government hands or not.
medical innovation doesn't just happen in the US
Submitted by Anonymous (not verified) on Tue Jul. 14, 2009 1:52 PM PDT.
Kevin's post touches on several common misconceptions about medical innovation and single payer health care systems that should be clarified.
First, while it is true that the US spends more than any other country on medical research, it still only accounts for about 50% of world wide expenditures, and many clinical trials of new drugs and treatments take place outside of the US.
Second, there is no reason to assume that a single payer health care system in the US will necessarily decrease the pace of clinical research. On the contrary, many drug companies prefer to conduct their clinical trials in countries with single payer and national health care systems. The reason is quite practical - to set up a clinical trial in these countries you only have to deal with one set of insurance bureaucrats, as opposed to the States, where conducting large scale trials is made all the more difficult by the fragmentation of health insurance and the multiplicity of insurers, all with different rules and priorities.
Third, as a clinical geneticist who has practiced on both sides of the US/Canadian border, my personal experience has been that it is much more difficult to get insurer approval for bleeding edge genetic tests in the States than in Canada. Only about 1/3 of the genetic tests I ordered when I was at a major medical school in the States got approved for funding by the patients' insurers. The rest had to be paid for out of pocket by patients, with most tests costing $1000-1500. In contrast, Ontario has yet to deny my requests for approval for the hundreds of genetic tests that I've ordered over the past few years - whether the test is done here in Canada or only available in the States or in Europe.
The most innovative! The greatest! yes!
Submitted by Carol (not verified) on Tue Jul. 14, 2009 1:56 PM PDT.
We keep HEARING that the US system is the most innovative in the world. No one has proved this, but we keep hearing this. Many new procedures, treatments and so forth are generated overseas, but we never hear about them. Why? Because before they come here, they have to be "created" by our private companies and get the supreme FDA stamp of approval.
On the other hand, most "innovative research" in the USA does not happen in private companies at all. It mostly happens in graduate student labs funded by government grants, and then is cleverly appropriated by professors in those "research parks" who go off and create a start-up which is then acquired by a private company, much to the benefit of everyone except the grad students.
who go off and create a
Submitted by Chemjobber (not verified) on Tue Jul. 14, 2009 7:07 PM PDT.
who go off and create a start-up which is then acquired by a private company, much to the benefit of everyone except the grad students.
Who do you think works at those start-ups? Experienced scientists, expecting high pay and good benefits? Or former graduate students, a.k.a. newly minted Ph.D.s, who are inured to working long hours for (relatively) low pay?
Medical research & "socialized" medicine
Submitted by Joey (not verified) on Tue Jul. 14, 2009 2:01 PM PDT.
Let's test the argument. Controlled experiment: let's cover one part of the population (those over 65) with universal insurance -- heck, make most of it single-payer, with the exception of prescription drugs. Leave the other part of the population (those under 65) to be part of America's wonderful competitive capitalist medical innovation cornucopia.
So does anybody still do medical research for conditions that affect the over-65 set? Yes? Hmm, I wonder why that could be. If socialized medicine kills all innovation, then how is it possible that massive research dollars continue to flow to improve medical technology for a population right here in this country that has coverage more "socialized" than any plan to the left of Kucinich's now proposes?
My assumption regarding #2
Submitted by dr2chase (not verified) on Tue Jul. 14, 2009 2:22 PM PDT.
was simply that we would stop electing Republicans. We tried that experiment, it sucked. Our worst problems now (e.g. California) were caused by Republicans and their crazy-ass low-tax initiatives.
medical innovation
Submitted by J. Frank Parnell on Tue Jul. 14, 2009 2:26 PM PDT.
Most large medical device companies are introducing new technologies overseas first. Receiving approval for a new device in the U.S. is considered to take longer and cost more money, plus the perceived litigious nature (real or otherwise) of the U.S. market gives pause to those looking to introduce a new technology. On the Sixty Minutes episode last year that featured off shore medical procedures, people were going to India to receive artificial hips not only to save money, but also because the less invasive resheathing of the hip joint the Indians were using was not yet available in the U.S.
Innovation
Submitted by SecularAnimist (not verified) on Tue Jul. 14, 2009 2:48 PM PDT.
The American system is certainly innovative. The insurance companies are constantly finding innovative ways of denying coverage for the medical treatment that their customers have paid them for.
market vs. centralized command
Submitted by EB (not verified) on Tue Jul. 14, 2009 2:56 PM PDT.
Innovation in today's healthcare in US works along roughly these lines: a professor (or a grad student, or a postdoctoral fellow) in an NIH-funded lab at a public or private university, or a teaching hospital, has an idea, and generates some data to support it. She then patents it through her institution, and then tries to get a start-up going, with venture capitalist funds or maybe even NIH small business initiative. She gets the start-up to the point where it's noticed by a big pharma company or a big medical equipment maker, who then buy her start-up and intellectual property and bring drug, device, procedure, or whatever to market. This works a little different for innovations in treatment (like a new surgical procedure or a modification of drug administration) which are typically invented by MDs and brought to market directly.
All of these are supported by the fact that money can be made in the market by innovating. If feds take over health care, there won't be much of a market in which to make money. Rather, we'll have a command-based, centralized healthcare, where there will be very little reason to make independent investments. This doesn't mean healthcare technology won't advance, it just means it won't advance through private, independent efforts. I am not necessarily sure this is a bad thing. On the other hand, after observing the Defense Department and its interactions with the industry, it is difficult to be hopeful about nationalized healthcare.
That's a nice story
Submitted by idlemind on Tue Jul. 14, 2009 3:11 PM PDT.
But I'm not sure how having government make payment for a new treatment instead of a private insurer does much to stifle innovation. No one proposes to nationalize pharmaceutical or medical equipment makers.
market vs. "centralized command"
Submitted by HR (not verified) on Tue Jul. 14, 2009 5:28 PM PDT.
EB makes a big leap from the Obama plan to "feds take over health care." The public option is not a takeover of health care--it's much more like an extension of Medicare, in which healthcare services will be furnished by the same private-sector providers that furnish them now.
The Obama plan would in fact spur innovation in two areas where the private sector has failed: widespread adoption of electronic medical records and research on comparative effectiveness.
I want to know why a national system of healthcare would make fiddling with someone's ID easier... Hospitals and medicare already use social security and drivers' ID systems which are quite available to scheming masterminds. And the severe lack of security in the private sector on these documents - they have to be transferred many times through many hands without any way to verify this.
How would a national system that had law behind it to keep it out of administration hands be less safe?
It's like the 'do you want a bureaucrat' argument. We already do have faceless bureaucrats messing with our healthcare. Corporate ones, at that, that get bonuses for denying us coverage!
medical records
Submitted by seattlebird (not verified) on Tue Jul. 14, 2009 3:01 PM PDT.
I've been thinking about this a lot lately, and I'd like to see something addressing how much medical knowledge a government entity would need to track and store. Insurance companies track massive amounts of care data because they use it to determine your benefits--annual benefit caps, number of mental health visits, only one transplant per lifetime, and of course the dreaded preexisting condition.
Would public healthcare need to keep track of these points? Sure we'd want to collect aggregate data on care, including procedures and diagnoses for reporting and metrics, but where is the need to connect this back to a patient ID? (Beyond verification that the patient has benefits, of course.)
Ideally, medical records would be maintained locally by the individual's clinic (and by the individual--Google Health, or what about those implanted RFID disc people used to talk about???). Although I am a strong proponent of single payer, I do fervently hope that we take a cautious approach with regard to centralized information collection.
Innovative?
Submitted by Joe S. (not verified) on Tue Jul. 14, 2009 3:09 PM PDT.
Conor's innovation argument, if it applies at all, would apply to pharmaceutical R&D. The argument would go that, but for the enormous profits made in the US market, Big Pharma would not be able to innovate. There is are at least two data supporting this:
--The big profits are indeed made in the US market;
--Pharma development is very very expensive. (Research--the starving grad students to whom some commentators have alluded--is cheap.) Safety and efficacy are hard to prove, even to a slightly complaisant FDA.
I'm not sure I buy this argument, however. Big Pharma marketing budgets are greater than Big Pharma development budgets. Big Pharma hasn't been too innovative lately.
All in all, I think I prefer the Dick Cheney argument, based on style alone.
Public funded health care systems do partner with industry
Submitted by Anonymous (not verified) on Tue Jul. 14, 2009 3:50 PM PDT.
Anonymous 2:52 pm here again. In response to EB, I should point out that EB's scheme of government-funded basic research being turned into marketable treatments by private industry is not unique to the United States.
It should be a surprise to no one involved in the US health care debate that publicly funded health care systems have a major interest in improving the quality and decreasing the cost of health care. Consequently, they regularly partner with private industry in order to accomplish this goal.
For example, here in Ontario, the Ministry of Health (and Long Term Care) regularly meets with clinicians and researchers to keep ahead of new developments in diagnosis and treatment, so as to improve health care delivery. Not infrequently, this means funding a new diagnostic test or treatment brought to the market by major pharma or by a small startup company. The province and the federal government also have a vested interest in developing homegrown biotech companies and regularly give out health research grants that require academic partnerships with local startup companies.
Regarding concern #2, as
Submitted by Royko on Tue Jul. 14, 2009 4:09 PM PDT.
Regarding concern #2, as posters have said, it's less about using health care to eliminate Ralph Nader than using medical data and information on embarrassing conditions to hurt opponents. This is a concern, but not a huge one for me: if they want dirt now, they can usually find a way to dig it up and someone to bribe to leak it. And as the last eight years have shown, the private sector is a pretty sad actor when it comes to protecting citizen's information from the big bad government, even when it's clearly illegal.
I do have a different, but related concern, to #2: I'm concerned about future efforts from Republicans to re-privatize health care, in ways similar to their efforts to privatize Social Security, and I'm afraid they'd muck up the health care system even worse than it is now. On the other hand, once we get people to buy into health care, it should be easier to show them the risks of ill-conceived meddling with the system. So I guess I'll live with it. But I wish the electorate wasn't so easily swayed by sham arguments.
The innovation argument seems to be this: that we are de facto subsidizing medical R&D for the rest of the world. If we remove that subsidy and start negotiating with Big Pharma with the same leverage that other nations' health care systems use, the result won't be an end to R&D, it will be that the rest of the world will have to start paying a little more of their share. And they'd have incentive to -- they want those innovations as well. And Big Pharma does the R&D in the first place not because they have cash piled around (well, maybe they do) but because they think it will lead to future profit. Obviously, there's a trade-off between cost control and R&D, but it seems like the best way to balance that trade-off is through true negotiation, not by artificially keeping the consumer in the weakest negotiating position possible. I mean, if we're going to subsidize the world's R&D, shouldn't that be a conscious decision by us as citizens -- in the way that we determine foreign aid -- rather than forced on us by quirks in our quasi-private, quasi-public employer-based system?
(And, of course, all of that assumes that American overspending is funding the world's medical innovations, which as you said is largely speculation at this point.)
Those arguments fail to persuade me....
Submitted by Capturedshadow (not verified) on Tue Jul. 14, 2009 4:19 PM PDT.
For argument 2. I am sure a national plan will be seen (potentially) as a new way to restrict access to abortion and birth control. I am not sure that having the Federal government involved is any different than having the state governments involved. I don't see it as worse than say my employer having insurance sponsored by an affiliate of the Catholic Church (Providence, aka Sisters of Providence), since I don't get to vote for Pope.
Joey makes a strong argument about innovation. I would also argue that in the other areas where there are government funded vs private funded organizations doing similar tasks, government funding does not stifle innovation. Universities for example. VA hospitals don't seem to be less innovative than the for profit ones. Toll roads don't seem to me to be much different than government roads. Maybe in the area of communication satellites the private companies are pushing the envelope while the NSA is not?
Innovation might be slowed if we had a government monopoly akin to the original bell phone system with all aspects of the industry controlled by one organization with no pressure to innovate. But I have no real evidence of that, after all, touch tone phones were developed and implemented under that scheme. Further, that monopoly in delivery is not being considered.
Implementing the innovation might be slower with a single payer system. It would have to prove an advantage in terms of improving health, or saving money, not just as a competitive marketing advantage.
...how about breaking that
Submitted by Luther on Tue Jul. 14, 2009 5:56 PM PDT.
...how about breaking that down into three or four very specific arguments about what kind of innovations we're talking about and why they'd be destroyed if the feds funded 80% of American healthcare instead of the current 45%?
Drug innovations, medical innovations, and future innovations.
The basic concept of this
Submitted by Anonymous (not verified) on Tue Jul. 14, 2009 6:09 PM PDT.
The basic concept of this entry is flawed:
Basic health care != R&D.
(Kevin hints at same, but doesn't come out and say this as I have.)
Two different animals, with much in common, agreed.
But if we (the US) adopt a European-style health care system, will this mean all the pharmas et al will crash and burn.
Nah.
With national health care
Submitted by B on Tue Jul. 14, 2009 9:07 PM PDT.
With national health care the focus of the R&D might be shifted a bit toward the diseases of the poor (vaccines for infectious diseases, TB, etc.), but don't worry too much. The wealthy will still be willing to put out extra money for viagra, colon cancer drugs, and anti-wrinkle creams. R&D will continue. Perhaps it will shift toward the diseases of wealthy chinese a bit.
Farrah Fawcett
Submitted by flounder2 (not verified) on Tue Jul. 14, 2009 9:13 PM PDT.
He should watch the Prime Time TV special that Farrah Fawcett was on a while back. The U.S. doctors weren't willing to try new therapies for her cancer so she went to the socialist hellhole Germany. Some would ask why someone would go to Germany for healthcare if their government run craps suck so hard and ours rules the universe.
Nancy Irving
Submitted by Nancy Irving on Tue Jul. 14, 2009 11:06 PM PDT.
Most American medical research is funded by the U. S. government, via the NIH and other government bodies, and done by non-profit universities, medical schools and institutes. Thus any causal relationship between research and private health insurance would appear to be tenuous at best.
There is a lot of pharmaceutical research, but pharma is quite international, with many of the major players headquartered in Europe.
The United States has the largest economy, which allows our government to spend more than anyone else on medical research, and explains why we do more research than any other single country.
Some people though seem to have the idea that almost all medical research is done here. This is not the case, as I can attest. I was diagnosed with cancer in 2008, and I had to look at a lot of research results to make decisions on treatment. Important studies I looked at were done in Europe and Asia as well as the United States.
In any case, I cannot see why the research situation here would change were we to add a public option (or even single-payer) to our health insurance pool.
I think he's talking about
Submitted by KathyF (not verified) on Wed Jul. 15, 2009 12:46 AM PDT.
I think he's talking about the innovations in antacids. You have to admit, they're pretty innovative. Especially when it comes to marketing. The Europeans just can't keep up, especially since they aren't even allowed to advertise.
NIH is a 3 letter response to argument number 3. The USA does not just spend huge amounts on health care, it also spends huge amounts on investigator initiated peer reviewed grants.
The budget of the National Institutes of Health is similar to the combined R&D budgets of all pharmaceutical companies in the USA. The US public sector spends huge amounts of money funding medical research.
The NIH budget is just gigantic compared to all other sources of funding for independent scientific research (except maybe the DARPA budget which is spent on top secret research & development so I don't have much to transmit about its contribution to total research along the internet AKA grandson of ARPAnet). It dwarfs the NSF budget (much of which goes to biology too) and makes researchers around the world drool with envy.
Claiming that US leadership medical innovation proves the superiority of the private sector to the public sector is like claiming that US leadership in flights to the moon shows the superiority of the private sector to the public sector.
What does innovation in
Submitted by willybobo (not verified) on Wed Jul. 15, 2009 7:24 AM PDT.
What does innovation in health care mean? What is innovation's purpose? I submit that the purpose is to lead to better health outcomes, and to produce those outcomes less expensively. By those measures, the US is far from the leading innovator in health care.
par4 Designate the
Submitted by par4 on Wed Jul. 15, 2009 7:40 AM PDT.
par4 Designate the Republican party a terrorist organization then deal with them accordingly. That's innovation you can believe in.
public vs. private healthcare research
Submitted by EB (not verified) on Wed Jul. 15, 2009 8:44 AM PDT.
There is no question that in US, publicly funded research plays a huge role in healthcare innovation already. It is supplemented (and in many cases, complemented) by privately-funded R&D that companies can bring to market directly, or through private insurance providers. In nationalized healthcare, government-funded research will be the only game in town. Sure, it will probably work along the lines of Dept. of Defense R&D and procurement, where government pays companies to develop new weapons systems. In healthcare, gvt will pay pharma companies to develop drugs, and so on. The key difference is that all R&D will be under government command in nationalized healthcare system.
We are essentially talking about a difference between a socialist and a capitalist system. And, as I think is always the case when comparing socialism and capitalism, the outcome depends on who is in command of the command sector of the economy. If that individual/group is good at what they do, we might have more innovation. If not, well, they'll be the only game in town, so we'll have to live with the consequences. On the other hand, our current system is far from ideal, so maybe capitalism in healthcare is not as great of a thing as, say, capitalism in consumer electronics. Time will tell.
Here's the Rebuttal to Friedersdorf
Submitted by Richard H. Serlin (not verified) on Thu Sep. 17, 2009 2:11 PM PDT.
From Ezra Klein (at: http://voices.washingtonpost.com/ezra-klein/2009/08/in_defense_of_expert... ):
I had asked about the best way to maximize innovation. "If we want innovation and scientific discovery," he said, "we should fund innovation and scientific discovery." McArdle didn't respond to that point, and instead made it seem as if Avorn didn't understand that pharmaceutical companies spent money on research, or that profits funded that spending.
I posed a similar question to [MIT health economist] Finkelstein. If she had billions of dollars and wanted to supercharge innovation, how would she do it? Would she simply increase reimbursement rates for drugs? Would she give it to pharmaceutical companies? What's the most efficient engine for medical innovation?
In reply, she pointed me to the work of Harvard's Michael Kremer (another expert, sadly). "The two main things that people talk about," she said, "are funding a lot of basic research -- push strategies -- and then pull strategies, where governments get together and define a prize for innovation on a particular disease." In other words, funding innovation and scientific discovery in a direct and targeted fashion.
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