Tuesday, December 30, 2008

Here comes bureaucratic health care

Get ready for a few years of breast-pounding about greedy pharmaceutical companies, insurance companies and doctors. The campaign will culminate (we can expect) in some half-assed health care scheme cobbled together by bureaucrats that will hide its costs in taxes, discourage innovation and ultimately run up against the same laws of economics that trip up state-run medicine elsewhere.

The incoming Obama administration is in full yes-we-can mode on health care. Pity-hire ... ummm ... honorable former Senator Thomas A. Daschle wanders the country, asking anybody who will hold still for a moment what the government should do to make people happy with their doctors, prescriptions and aging bodies. Not surprisingly, lots of folks seem to be reaching for the stars, answering that they want expensive stuff for free, and lots of it.

Sob stories always lead, of course. The Washington Post reported the sad case of Dolly Sweet, who says she's not taking her cancer medicine because it costs $35,000 a year.

You know, I'm sorry to hear that Ms. Sweet was priced out of that expensive drug, but I'm at a loss for a viable alternative. Medicines cost money in terms of research, development and the approval process. Seven years ago, the Tufts Center for the Study of Drug Development pegged the cost of developing a new prescription drug at $802 million. Two years ago, the same group put the cost of a new bio-tech product at $1.2 billion. If it's a new painkiller that's going to reach a vast number of users, the cost can be spread out over millions of people. But a new cancer drug -- particularly if it's targeted at specific types of cancer -- is going to cost fewer users a lot of money.

Somebody has to pay those costs, and resources are finite for all possible candidates. Ms. Sweet says she's unable to pay. She apparently doesn't have private coverage that will pick up the tab, and Medicare (she's 77), budget-busting prescription drug coverage be damned, clearly isn't champing at the bit to foot the bill.

Well, honestly, it's a difficult situation for whoever is holding the checkbook.

But somebody always blames the people who accept the check for being greedy bastards. From the same article:
Jill King had her own theory about why her friend's cancer medicine was so expensive: Drug companies spend too much money buying meals for doctors.
And with that sort of brilliance on the loose, this is inevitable:
The group that met in the Las Vegas home of Ruby Waller concluded that a single-payer system similar to the Canadian approach might make better sense. "There's too much profit in health care," said Waller, 53, who has diabetes.
Actually, Ms. Waller might do all right under just about any health care system, assuming she doesn't suffer from complications; diabetes is pretty easy to control with inexpensive treatments which even an inept system could probably manage.

But poor Ms. Sweet's plight would get worse, not better, up north. Two years ago, the Globe and Mail ran an editorial lamenting the Canadian single-payer system's traditional means of allocating expensive cancer treatments: making patients wait, and wait and wait ...
Canada's health system can't seem to cast off the built-in complacency that is the mark of the second-rate. Take waiting times for prostate-cancer patients. Canada's health ministers set a goal of four weeks wait for radiation treatment for cancer. But 70 per cent of hospitals surveyed don't meet that goal for prostate patients. Apparently the hospitals have decided the waits won't kill them. ...

Canadians have told their governments that the number-one problem in health care is the wait for crucial care. The Supreme Court of Canada has put governments across the land on notice that if the waits persist, medicare's constitutional foundation could be brought crashing down.
Canadians of means can't even choose to shoulder the expenses that Ms. Sweet finds excessive, since their government makes it illegal to pay privately for services covered by the public system (except in Quebec, where the Supreme Court ruled the state-run system was so bad private medicine had to be allowed). Canadian politicians are familiar with the complaints and have responded -- by coming to the U.S to pay out of pocket for their own cancer care.

The U.K. goes a step beyond Canada. Forget waiting lists -- you just can't get up-to-date treatments through the National Health Service. It's a way of controlling costs that wouldn't put Ms. Sweet any closer to her expensive cancer drugs (Britain has miserable cancer-survival rates).

At least Canadians have the U.S. Where would Americans turn if we followed Ms. Waller's advice by emulating our northern neighbors in getting the profit out of medicine?

That antipathy to profit is one of the weirder aspects of the discussion of such important services as the provision of health care. Nicholas Kristof penned a navel-gazer for the New York Times last week that actually began with the question: "Here’s a question for the holiday season: If a businessman rakes in a hefty profit while doing good works, is that charity or greed? Do we applaud or hiss?"

Umm ... what? Are we actually at the point that we'd rather that people suffer than that somebody earn a buck by making the world a better place? Who do we think will shoulder the billion or so dollar cost (plus regulatory grief and liability risk) of developing new drugs and bio-tech products if we strip away monetary rewards for making the effort? Where will the brilliant minds go if years of medical education aren't rewarded by lucrative careers?

And is it really morally preferable to keep medical providers that cater to the needy on an umbilical cord that can be severed at any time, rather than to turn them, as The HealthStore Foundation does, into for-profit franchised clinics that earn tidy incomes for their owner-operators in the third World?

To his credit, Kristof finally allowed that "by frowning on aid groups that pay high salaries, advertise extensively and even turn a profit, we end up hurting the world’s neediest."

But what about the rest of us? Aren't we all entitled to medicine and medical providers spurred to excellence by the potential for monetary reward?

Well, Mr. Daschle doesn't seem to think so. As Sally C. Pipes points out in the Wall Street Journal:

In his book, Mr. Daschle proposes a National Health Board to regulate the way health care is provided. This board would have vast powers in regulating the massive federal health-care system -- a system that includes Medicare, Medicaid, and other programs. Under Mr. Obama, it is likely that that system will be expanded and that new government insurance for the nonelderly, nonpoor will be created.

That new government insurance will likely expand and push out much of the private competition -- especially if the government responds to differences in quality of care by imposing greater mandates on private coverage so as to hide the disparity.

In the end, we'll likely get some muddled amalgam that reduces the ability to make a profit and lards the health care system with yet more mandates and regulations -- which will make matters even worse.

But we won't really ever know how much worse, because the next expensive drug that Ms. Sweet would have agonized over won't even be developed, and the top-notch medical talent that might have helped her find alternatives will have gone into another field instead.



Anonymous Anonymous said...

Frighteningly accurate predictions, I believe. In years to come, I expect government to take over more private enterprise than just health care.

When financial institutions were being bailed out, much pressure to accept government help came on a small bank for which a friend works. Her employer chose not to take any bail outs, due to serious concerns about the government setting itself up as a partner for those bailed out. And, one can only wonder if the car industry will become a government-run entity.

What is the term for the opposite of privatization?

Makes for interesting times.

December 30, 2008 1:11 PM  
Anonymous Anonymous said...

There are many less expensive cancer treatments in alternative healthcare, but the government doesn't want us to have them either.

December 30, 2008 10:22 PM  
Anonymous Anonymous said...

I can agree with your basic premise, and I believe in the free market system. But the ding on those who say greed is a problem is a little unfair. True, it does cost a lot and takes a lot of time to develop a drug or any product. However, people profit from such excuses in unholy amounts. If less was demanded in compensation from CEOs, researchers, and others, who I firmly believe are entitled to reasonable compensation for their work, medicines and medical proceedures would cost less. Why do people just demand so much more than they need to live, have some set aside for retirement, and leave some to their posterity? Salaries are grossly disproportinate to the needs of those being paid, causing a need for a higher profit margin in order to pay the salaries. I am not advocating communism, but a little more reasonableness is called for.

December 31, 2008 5:23 AM  
Anonymous Anonymous said...

whenever i hear discussion of national health care i'm reminded of these 2 wisdoms...
"A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury"-Alexander Tytler

"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery"-Winston Churchill

what have we become?

December 31, 2008 7:29 AM  
Blogger Sean said...

The money is never, ever, ever, in the cure. What you are paying for when you go to the doctor, is in fact, your disease.
Being a doctor must be a lot of fun, you tell people to eat better and exercise, then if anything is ACTUALLY wrong with them you scratch something down on a piece of paper and pass the buck.
How are you able to make over six figures a year doing that?????
If I am paying for a healthcare system that actually works, where curing the disease is what the ultimate goal is, then by all means take every red cent of my tax dollars for a free universal healthcare system. But thats a pipe dream.
It's a buisness now.

December 31, 2008 12:53 PM  
Anonymous Anonymous said...

As the eldest son of Dolly Sweet (12/30/08), I hope that if and when your time comes to face the same dilema I pray that you can find the same compassion for the drug and insurance companies (assuming both are not nationalized by then)that you seem to profer now. Suffice it to say, she and my father lost everything a few years back and with a choice between three meals a day or medication that may or may not prolong her life, her choice was an easy one. She has beaten cancer before, due to the fact that she was accepted for clinical trials, but mostly because she is a very strong and positive person. You left that out of your article.

March 11, 2009 6:16 PM  
Blogger J.D. Tuccille said...

Anonymous (of 3/11/2009),

I wish your mother good health and a long life. I'm sure that strong will plays a major role in beating illness, and I'm glad to hear that she's a positive person. Undoubtedly, that will help.

I'm sure that we all hope that the government doesn't just refrain from further interference in medicine and medical research, but that it drastically reduces the role it already plays. That's the best chance we have for not just continued innovation, but also reduction in costs.

Obviously, "compassion" is no substitute for a system free of authoritarian interference, in which people have incentive to do research, reap the rewards for their discoveries, and improve life for all of us.

March 11, 2009 7:21 PM  

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