So I’m Blue in the Face

Andy doesn’t get it:

Moreover, a wholesale shifting of healthcare from the private to the public sector simply means replacing rationing by wealth with rationing by number, and a drastic decrease in individual freedom on both sides of the medical equation. You’d replace insurance company bureaucrats who deny care with government bureaucrats who deny care. Removing the financial incentive from doctors simply means they will provide sloppier treatment. They’re not saints. They’re human beings. And slashing the profit motive from the drug companies will simply mean fewer new drugs for fewer illnesses. This is the trade-off the left will deny till they’re blue in the face. But it’s a real trade-off.

But for the most part these trade-offs are not happening elsewhere. So why would they happen here if they are not happening in, say, France?

In one part of Sicko a doctor — I can’t remember if he’s British or French — explained that his income goes up if his patients get healthier. Meaning, if his records show he is providing patients with good preventive care, as opposed to just writing prescriptions, he gets bonuses. Here, doctors get paid for not treating people.

Patients in those nasty foreign countries like Canada actually have shorter waiting lines in emergency rooms than they do here. They get better general care, which is why they live longer and have lower infant mortality rates. Patients are not being denied care because of some technicality in their private insurance contracts. People are not being driven into bankruptcy by medical bills. Other nations’ plans are not perfect, but nearly all of ’em are a whopping huge improvement on what we’ve got.

As far as the “fewer drugs for fewer illnesses” line — what’s actually happening is that highly subsidized American Big Pharma cranks out tons of boutique drugs for boutique illness (toe rot; restless leg syndrome) or “new” drugs advertised as breakthrough but which usually are just minor tweaks to the old drugs, or perhaps not as good as the old drugs. “Life-saving” often means “terminal patients get one more month.” That sort of thing. I’ve written about his before; see “Demand Supply” and “Unhealthy Care.”

Andy continues,

The European health systems have, of course, been free-riding on private U.S. drug research for decades. Name a great new drug developed in Europe these past ten years. Their own pharmaceutical industries have been decimated by the socialism Moore loves (and many of Europe’s drug companies have relocated to the US as a result). But I fear the left is winning this battle; and the massive advantages of private healthcare are only appreciated when you lose them.

European drug companies move here because they make money like bandits here. But let’s play Andy’s game. Name a great new drug developed in Europe these past ten years. Then name a great new drug — and I mean really great, and really new, not just advertised as great and new — developed in the United States these past ten years. Most of the “new” drugs I know of coming out of America are either variations on old stuff, drugs that had to be withdrawn from the market after patients developed nasty side effects, or drugs that really don’t deliver all that much — one fabulous “new” drug I discussed here increased overall survival rate in cancer patients by 4.7 months, for example. That’s nice, but that’s the “trade off” Andy doesn’t want to give up for single payer health care. I’m not convinced.

Kevin Drum writes,

This business about America providing all the world’s pharmaceuticals is a common trope on the right, but it’s absurd. There are more biotech startups in Europe than in the U.S. Pfizer is targeting Japan as one of its biggest near term growth opportunities (and Japan is also a major source of new biotech development). And plenty of pharmaceutical research is done outside the U.S.: The #3 pharmaceutical company in the world, GlaxoSmithKline, is British. The #4 company, Sanofi-Aventis, is French. The #5 company, Novartis, is Swiss. #6, Hoffman-La Roche, is also Swiss. #8, Astra-Zeneca, is Anglo-Swedish. Their combined R&D spending is slightly higher than the American companies that make up the balance of the top ten.

Now, what is true is that American capital markets are both bigger and generally friendlier to startups than European capital markets, which means that small biotech companies often migrate to the United States in order to get funding. My sense is that Europe is improving on this score, but in any case this has nothing to do with the state of European healthcare. What’s more, an enormous amount of basic research is done in American universities and the NIH, most of it publicly funded. This speaks well for our system of higher education, but doesn’t really say anything about our healthcare industry, which is famously hesitant to invest in genuinely innovative (but chancy) new ventures. Ironically for big pharma’s cheeleaders, it turns out that America’s titans of capitalism mostly prefer to leave the risky stuff to the feds.

8 thoughts on “So I’m Blue in the Face

  1. I am not convinced either. The way I see it the U.S. pays twice as much per capita for health care that is only fair to middling compared to all those government run programs. Cutting out the insurance companies would free up another 10% of the bill. We would have more money to spend on doctors and drugs, we would cover everybody and both business and people would save a ton of time fighting with insurance companies. Throw in some minor gatekeeping functions on end of life care and we would have enough money to even treat our poor elderly and the disabled with some dignity. Who knows maybe with a rational, single payor system GM and Ford could get out of the health care business and get back to building cars. Seldom have such a greedy few been able to block change which would benefit so many so greatly.

  2. If funding drug research is the only obstacle to universal health care, I’m sure we have very smart people who could figure out how to fund research by expanding the government grants and university research system. That already provides the basis for much of that research.

    I hardly think we should let people die untreated in emergency rooms, or getting sicker because they couldn’t afford a doctor visit, just because we have a haphazardly evolved, historically accidental approach to funding drug research.

    And I don’t know about Andy and his doctors, but I prefer to be treated by someone who is doing it because she wants me to get better, not because she can make a buck off me, particularly if the system is rigged to generate more profit if she diagnoses and prescribes within 3 minutes of entering the room.

    Profit motive is a silly motivator to use for patient care.

    Oh, and Altace was developed by Hoechst in Germany.

  3. The idea that pharmaceutical companies would reduce spending on research & development if their profits were marginally reduced is total nonsense. The U.S. accounts for only 1/3 of total drug sales and that number will likely go down as the market in developing countries expands. Regardless of how the U.S. reforms its health care system, there will still be a massive, expanding global market for pharmaceutical products, and companies will be competing to develop the next big drug. The nature of patent laws ensures this. A pharmaceutical company is only as good as its next big drug. Its business model is built around innovation. If the U.S. pays marginally less every year for drugs, it will not do anything to alter the underlying dynamic that drives innovation in the drug industry.

  4. Sullivan pretends to be a Catholic and a Christian. I don`t know how he squares what one supposes to be his agreement with Christ`s moral teachings with the infantile, cynical and mistaken dogma that people will only act or work responsibly if given financial incentives to do so. But as he has shown in the past, he is no stranger to hypocrisy and self-deception.
    I am English and have lived in Japan for 33 years. Britain`s National Health Service certainly had and has its problems, and Japan`s very good National Health Service has its problems, too, but, where my family has been concerned, the services provided by Britain`s NHS have not been bad (though Thatcherite policies – originally intended of course, despite all the high moral talk about `choice`, `efficiency` and `incentives`, to break the power of nation-wide labour unions – have created something of a confusing hybrid, neither public nor private), and in my experience and the experience of my Japanese in-laws and friends the services provided by Japan’s system are generally very good indeed. But it is by their fruits ye shall know them, and even a cursory look at the figures shows that America’s system is not providing Americans (unless they are rich) with anything like an adequate service. Sullivan, I suspect, will not want to address this: the reason for his latest rumblings about health and health services has, I suspect, little to do with any genuine concern with truth as with the appearance of ‘Sicko’, directed by Michael Moore whom he loathes with such a vengeance that he will never seriously address Moore’s central points and will pick up any old stick that might serve to beat him.

  5. This idea that private pharma funding is responsible for all the great drug breakthroughs is just silly. A great deal of the real work takes place in universities, largely with public funding. Typically, the pharmas come in after the hard work is done and buy the exclusive rights to market any drugs that emerge from the research. It costs them maybe a new building and a couple of endowed chairs, but by then they mostly know what they’re dealing with. We provide the risk capital by means of the NEH, which we empower to act on our behalf through our representative government. Then we allow others to profit from our investment at our expense. We pay the universities to do the research and then we pay pharma to market the drugs to us so we can pay doctors to prescribe the drugs to us so we can pay insurance companies to help us pay for the drugs we developed.

    Obviously, this is an intentional oversimplification. But the real process is even sillier.

  6. I meant to say NIH not NEH. Maybe that’s a Freudian slip: typical Liberal, thinks the Humanities are responsible for funding drug research.

    There are a number of avenues public funding that support research that leads to health care improvements that become “productized” in the private sector, including just plain old university budgets. I’m using “NIH” to represent those avenues because it’s by far the largest, and applying for and managing NIH grants dominates the administrative side of US medical school research, the work that leads to actual health care breakthroughs rather than just new designs of old drugs.

  7. “Removing the financial incentive from doctors simply means they will provide sloppier treatment. They’re not saints. They’re human beings.”

    Apparently this person doesn’t think that doctors actually believe the Hippocratic Oath (you know, the part about “first, do no harm”). If the level of income (or, as he so delicately describes it, “financial incentives”) is all that determines whether a person with a medical degree delivers appropriate treatment vs “sloppy treatment”, then why doesn’t the death rate from medical malpractice vary according to doctor’s income levels around the world? Answer: because most doctors become doctors in order to do good for other people; money isn’t the prime motivation for most of them(at least on a world-wide basis, regardless of whether this is the case in America).

    And if financial incentives are required to avoid “sloppy treatment” in everyday non-warzone areas of the world, what about doctors in the world’s warzones? Does this person think that doctors, sent by Doctors Without Borders into places where they could be injured/killed while attempting to help people, command $ Billion incomes to compensate for the extra hardships/dangers they wouldn’t face in America?

    What nonsense. This guy has a extremely faulty understanding of human nature, at least that of people who choose to become MD’s.

  8. What Sullivan has done is that he has participated in the transatlantic soccer match that is as boring as it is human.

    American rightwingers use Europe as a deterring example – basically you toss in an anecdote set in Paris in order to scare away others from left-wing poltics. Vice versa for European lefties. In the middle are American left-wingers who gladly overstate European success and downplay its failures but does this backwards for the US in order to laud everything left-wing and European rightwingers conveniently forget about America’s slights and flaws yet wax lyrical about its strengths, supported by facts or not.

    It would be nice if one took each continent as a unique case and progressed, compared and evaluated from there in order to find what works and what does not.

    Then my alarm clock rings and it’s time for some Müsli.

Comments are closed.