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November 12, 2007

Universal Health Care and Innovation

Without doubt, the strongest argument against universal health care is the claim that it will staunch medical innovation, that our high spending acts as a research and development subsidy for the rest of the world. I've tried to address this in a bit of haphazard fashion, but never really knew how to take it on in a sustained way. Luckily, Jon Cohn is better at this sort of thing than I am, and his article examining the tanged pathways of medical innovation and how they intersect with universal coverage is very good. Go read.

November 12, 2007 in Health of Nations | Permalink

Comments

"our high spending acts as a research and development subsidy for the rest of the world"

Needless to say, subsidies are against everything the idea of free trade is about. But I'm still waiting for any right winger to come out and protest against this government intrusion of business.
:-/

Posted by: Gray | Nov 12, 2007 10:44:33 AM

First point on nomenclature-- this doesn't have to do with universal health care per se, it does have to do with centralized, government-driven health care.

Massachusetts' system is an attempt at decentralized UHC, universal vouchers would be another.

UHC does not equal single-payer health care.

Posted by: wisewon | Nov 12, 2007 10:45:03 AM

"Luckily, Jon Cohn is better at this sort of thing than I am"

I'm telling you, Ezra, if you don't go negative on Cohn right now, he's going to destroy you in the Iowa healthcare pundit caucuses.

(Cohn's piece is very, very good.)

Posted by: Petey | Nov 12, 2007 10:48:07 AM

The ideal would be to come up with some way of achieving the best of both worlds--paying for innovation when it yields actual benefits, but without neglecting less glitzy, potentially more beneficial forms of health care. And that is precisely what the leading proposals for universal health care seek to do. All of them would establish independent advisory boards, staffed by leading medical experts, to help decide whether proposed new treatments actually provide clinical value.

This it the meat of the article. As I noted in response to the TigerHawk post last week, those that look at the issue are more focused on the degree of innovation, not just simply the quantity of it.

That said, the system proposed as above, which is precisely what single-payer policy folks do propose, seems horribly, horribly unrealistic. The key to success here, would be an independent panel free from government oversight, similar to the Federal Reserve. Proposals included separate funding from Congress to ensure complete independence. The fallacy is believing that in the long-run political influence would not override the system. Spend any time really looking at the politics of health care in this country-- physician/professional groups, disease/patient advocacy groups, medical technology industry, etc.-- politics overly dominates the system. To think this group would be able to work effectively given these political realities in health care, is pure naivete.

A second issue is the all-knowing "expert panel" that would be required to make these decision correctly. Whether its 20 people or a few hundred, you're basically putting the future of health care innovation of health care in their hands. The fallacy here, would be thinking that there is a group of experts that could be brought together to do this correctly. This is precisely why we have market economies.

(PS The Cohn rebuttal to this last point had little to do with innovation, and instead fell back on other criticisms of market-driven health care. All in all, the piece furthers the debate, but didn't offer much real meat that wasn't known widely by those in the trenches.)

Posted by: wisewon | Nov 12, 2007 10:58:59 AM


The ideal would be to come up with some way of achieving the best of both worlds--paying for innovation when it yields actual benefits, but without neglecting less glitzy, potentially more beneficial forms of health care. And that is precisely what the leading proposals for universal health care seek to do. All of them would establish independent advisory boards, staffed by leading medical experts, to help decide whether proposed new treatments actually provide clinical value.

This it the meat of the article. As I noted in response to the TigerHawk post last week, those that look at the issue are more focused on the degree of innovation, not just simply the quantity of it.

That said, the system proposed as above, which is precisely what single-payer policy folks do propose, seems horribly, horribly unrealistic. The key to success here, would be an independent panel free from government oversight, similar to the Federal Reserve. Proposals included separate funding from Congress to ensure complete independence. The fallacy is believing that in the long-run political influence would not override the system. Spend any time really looking at the politics of health care in this country-- physician/professional groups, disease/patient advocacy groups, medical technology industry, etc.-- politics overly dominates the system. To think this group would be able to work effectively given these political realities in health care, is pure naivete.

A second issue is the all-knowing "expert panel" that would be required to make these decision correctly. Whether its 20 people or a few hundred, you're basically putting the future of health care innovation of health care in their hands. The fallacy here, would be thinking that there is a group of experts that could be brought together to do this correctly. This is precisely why we have market economies.

(PS The Cohn rebuttal to this last point had little to do with innovation, and instead fell back on other criticisms of market-driven health care. All in all, the piece furthers the debate, but didn't offer much real meat that wasn't known widely by those in the trenches.)

Posted by: wisewon | Nov 12, 2007 10:59:46 AM

I'll take the last sentence back-- it was a little harsh. Relative to what else is written on health care, the piece was good. At the same time, there isn't anything new there for those have follow this issue closely. I guess that is what good journalism is, though.

Posted by: wisewon | Nov 12, 2007 11:03:05 AM

"The key to success here, would be an independent panel free from government oversight, similar to the Federal Reserve."

A panel sounds more like the Supremes to me. And, as we all know, they aren't free of ideologically thinking, and the long terms are more of a problem than an asset.
:-/

Posted by: Gray | Nov 12, 2007 11:09:37 AM

What is it with the spate of tag-breakage?

Posted by: pseudonymous in nc | Nov 12, 2007 11:16:44 AM

This is disingenuous. The argument against government-controlled healthcare is that it prevents innovation in the method of providing healthcare, including making newly-developed treatments available.

If you don't think distribution matters, ask someone who has to struggle with a GP with poor english, or is of the wrong gender, because of the way the catchment area system works in England, or the person who had to wait a year for treatment, then misses it because a letter wasn't sent or (less likely) was lost in the post.

Posted by: Marcin Tustin | Nov 12, 2007 11:18:34 AM

The argument against government-controlled healthcare is that it prevents innovation in the method of providing healthcare, including making newly-developed treatments available.

How, then, do you explain this from the Cohn article: France and Switzerland--traditionally the two highest spenders--get the newest cancer drugs to their patients with virtually the same speed as the United States does. Also, how do you account for the fact, mentioned in Cohn's article, that Japan's universal coverage system has the most CT scanners per capita in the world? The fact that you haven't read the article in question makes me think that your arguments are disingenuous.

Posted by: DMonteith | Nov 12, 2007 11:42:48 AM

It's worth pointing up two separate parts to "medical innovation" - physical and chemical.

Medical innovation in physical (as opposed to chemical) treatments is largely pursued by physicians in research hospitals, mostly working off government research money. There are companies that work in the field and make some big money out of producing items once the techniques are delivered, but contra their corporate propaganda, they actually do very little real development. Yes, Stryker, I'm looking at you over in the Pinocchio corner. That's not going to change under UHC.

Chemical? That's the province of drug companies and the FDA. Here you have to ask, is the current subsidy system actually achieving what we want? If not, why keep it?

Posted by: Meh | Nov 12, 2007 12:13:01 PM

The reason to socialize medical care is to end the arms race so that we can reduce spending.

Posted by: Floccina | Nov 12, 2007 12:49:21 PM

DMonteith, how do you explain that dairy companies don't distribute ANY cancer drugs? That's just as relevant as your comment.

Posted by: Marcin Tustin | Nov 12, 2007 1:10:42 PM

Tustin,

You said that universal coverage systems reduce access to "newly-developed treatments." Then DMonteith pointed out that the universal coverage systems in France and Switzerland get brand-new cancer drugs to their citizens as quickly as those American citizens who are either independently wealthy or happen to have insurance actually willing to cover brand-new medicine at all. And Japan has more CT machines, a fairly recent development that is still considered quite advanced, per capita than the USA.

IOW, it was a direct response - nay, a complete refutation - of your claim. Suck it up, dude, don't dig a deeper hole for yourself.

Posted by: Stephen | Nov 12, 2007 2:41:07 PM

"You said that universal coverage systems [...]"

No, incorrect.

Posted by: Marcin Tustin | Nov 12, 2007 3:57:45 PM

Very good article there, Ezra. Thank you.

My friend Danny also has Parkinson's. Unfortunately, he will never get the treatment described because he has no coverage & can't get it. While he is able to obtain medications, it is a hit or miss deal also because of lack of finances. His doctors tell him that he will probably be confined to a nursing home within a year. He just turned 50.

We will then be paying for his care for the rest of his life. How many times will that bill cover this treatment he was not eligible for? Think about it.

Posted by: bob in fla | Nov 12, 2007 5:20:09 PM

Tustin,

Are you aware that your comments are kept in the thread for anyone to read them? Perhaps you could look at your comment again.

Your anecdotal evidence aside, universal coverage systems are actually quite good at getting treatments to patients. Just because England's system sucks doesn't mean they all do.

In fact, despite the existence of cutting-edge technology and medicines, the US healthcare system is horrible at getting treatments to patients. My insurance doesn't cover DBS - I just checked because I was curious. So this whiz-bang treatment might as well not exist for me since I don't have $50,000 to drop on it. Good thing I don't have Parkinsons, I guess.

Insurance policies in the USA are justifiably notorious for the number of treatments and medicines they don't cover. If it's not been on the market for years - long enough for the price to come down - they don't cover it. So yeah, distribution does matter. It's just that universal coverage systems tend to provide much better distribution than a system in which 45 million people have no insurance at all and in which those of us who do have insurance may or may not be able to access any given course of treatment.

Posted by: Stephen | Nov 12, 2007 7:06:41 PM

DMonteith, how do you explain that dairy companies don't distribute ANY cancer drugs? That's just as relevant as your comment.

-------------------------------

"You said that universal coverage systems [...]"

No, incorrect.


Ah, Mr. Tustin, it's so nice to meet a deconstructionist these days. They're so rare! But you're right, the mutability of the meaning of the texts one encounters everywhere is a veritable fount of critical opportunity! I look forward to our upcoming debate over what the meaning of "is" is.

Posted by: DMonteith | Nov 12, 2007 8:40:38 PM

Stephen,

Tustin is technically correct. You see, what he said was:

The argument against government-controlled healthcare is that it...

So he's just repeating what others say, not arguing that position himself. You fell for the classic passive voice trap and smashed headlong into his plausible deniability. His rhetoric floats like a butterfly and...well...just keeps on floating like a butterfly.

Otherwise, good work!

Posted by: DMonteith | Nov 12, 2007 8:53:29 PM

Stephen wrote:
"So this whiz-bang treatment might as well not exist for me since I don't have $50,000 to drop on it. Good thing I don't have Parkinsons, I guess."

How much money have you made? How old are you? Just wondering why you cannot afford $50,000. Most providers will give you terms. Many people have homes that cost more than that. Life is more valuable than a house.

Posted by: Floccina | Nov 12, 2007 9:08:32 PM

I have heard many complaints about the British system. Admittedly, I don't know a great deal about it, but I suspect that many of the problems are rooted in the fact that it truly is a two-tier system. There is basic health care for all (fortunately), but there can be a huge discrepancy between the health care provided in NHS hospitals and private hospitals where patients pay through the nose (Perhaps a Brit could help me out here: is there health insurance for these private services that is similar to the US system?).

The Brits have managed to create the worst universal health care system by trying to make it more "American".

Posted by: A Canadian Reader | Nov 12, 2007 9:12:22 PM

One of the best things that Ezra has tried to do is to show the diversity of health systems around the world that provide universal coverage. One of the important lessons is that universal coverage does not equal single payer or socialized medicine e.g, the NHS. Cohn conflates universal coverage with government takeover of medicine. There is nothing inherent with guaranteeing coverage to every American with stifling innovation - but that isn't the case with a single payer or socialized system. That may be what he says about "doing it right" but it certainly is not clear from his article.
To wit regarding the DBS treatment that Kinsley got in the article:
"We are one of a handful of Canadian centres able to offer this therapy to Parkinson's patients, and the only site in Quebec," says Sadikot. "We estimate that 80 patients in Quebec need this surgery each year, but right now we can only offer it to about 20 people due mainly to budgetary limits." The current waiting list spans six months to a year.
http://www.muhc.ca/media/ensemble/2003sept/story11a/

As DBS is a relatively uncommon treatment carried out in specialist centres, it comes under specialist commissioning arrangements. In Wales, the commissioning body responsible for DBS is Health Commission Wales (HCW). In June 2006, the Commission made a decision to suspend funding of DBS except in exceptional circumstances, citing a lack of available evidence on the cost effectiveness of DBS in improving long-term quality of life. This decision runs counter to National Institute for Health and Clinical Excellence (NICE) guidance which indicates that DBS should be considered as a treatment option for suitable patients on the basis of the evidence currently available.

In England, specialised commissioning is changing to more localised arrangements based on Strategic Health Authority boundaries. There is potential for new Specialist Commissioning Groups to make different local decisions about funding DBS, leading to inequity of access to treatment around the country.
http://www.parkinsons.org.uk/about_us/campaigns/current_campaigns/deep_brain_stimulation.aspx

Posted by: umbrelladoc | Nov 12, 2007 9:19:54 PM

Stephen does France give this:

http://en.wikipedia.org/wiki/Deep_brain_stimulation
The Food and Drug Administration (FDA) approved DBS as a treatment for essential tremor in 1997, for Parkinson's disease in 2002 [3], and dystonia in 2003 [4]. DBS is also routinely used to treat chronic pain and has been used to treat various affective disorders including clinical depression. While DBS has proven helpful for some patients (e.g. see videos [5]), there is potential for serious complications and side effects.

Posted by: Floccina | Nov 12, 2007 9:22:45 PM

How much money have you made? How old are you? Just wondering why you cannot afford $50,000. Most providers will give you terms. Many people have homes that cost more than that. Life is more valuable than a house.

Do you own a home? Do you own more than one? Why not, since borrowing $50,000 or more seems to give you no trouble.

Of course, it's one thing to borrown massive sums as a secured debt, quite another when it's not.

DBS isn't a life-saving treatment. If I develop Parkinson's and get to the point of DBS being the only effective treatment available to me, the choice will not be between saving my life or not, but putting myself deep into a debt that will probably just take away from my children's inheritance or not.

As for your subsequent comment, I have no idea what you're trying to say. Yes, France offers DBS as part of the national system. That was already answered by the article.

You fell for the classic passive voice trap and smashed headlong into his plausible deniability.

Yeah, I keep assuming that people either aren't so stupid as to assume that's a valid way to debate or that they're actually trying to debate in good faith. When will I ever learn?

Posted by: Stephen | Nov 12, 2007 10:11:14 PM

Chemical? That's the province of drug companies and the FDA. Here you have to ask, is the current subsidy system actually achieving what we want? If not, why keep it?

Actually, most of the basic research and investigations that end up as drugs start with government (NIH) funded studies, much like all the "physical" stuff you mention.

If all goes well, it goes like this (simplified):

1) Basic Science (almost 100% government-funded) research (all in lab, or maybe small animals). Can take years, can lead nowhere (often appears random from the outside).

2) Clinical Trials (co-funded by government and private industry). Still most often conducted by non-profit research institutes.

3) Late stage clinical trials. Almost always private, sometimes with consultation from the scientists who did the foundational work in #1 and #2.

4) Drug making + release

Drug companies do, however, spend an enormous sum of money finding ways to modify what government-funded scientists have already discovered and proven works. But most of the significant advances come out of NIH-funded work years in the undertaking.

There's simply not a sure enough or "soon enough" profit for scientific research for Big Pharma to be funding the kind of basic science that can take 15-20 years to turn into a viable drug (if it ever does).

Even if it were true that UHC and/or single-payer would tamp the Big Pharma's R&D budget, it is not true that drug discoveries that matter would decrease. True advanced ("oh hey, we invented bone marrow transplants", "look here, a vaccine for chicken pox") will still get funded, produced and released for big profit (and a big help to the public).

Posted by: jcricket | Nov 12, 2007 10:50:25 PM

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