The Health Care Conversation
I appreciate Kevin Drum addressing my tentative thoughts on health care reform, and suggesting how the conversation might profitably progress. I’d like to solicit feedback from other bloggers and The American Scene readers to help things along.
Two of my arguments are at issue.
Numero uno esta aqui:
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?
Kevin’s reply:
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.
Any thoughts? Is my worry outlandish? Can anyone suggest plausible scenarios of this kind that we ought to weigh?
My second point:
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?
And Kevin’s response:
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.
¡Ayudame!
First, it seems that your worry about abuse of government power has two components. One of them is a more generic privacy complaint. This is a serious issue, one that’s not often discussed. But I’m not sure how substantial it is, and I don’t think you’ve written enough to show how substantial it is (that’s a genuine “I’m not sure”, I’m not being dismissive). The Dick Cheney/Richard Nixon worry seems much less interesting. Almost all aspects of the government are open to politicization and abuse by unscrupulous politicians (Dick Cheney can do a lot with someone’s tax forms). But you’d need to do serious work to establish a credible worry here.
Second, I find Kevin Drum’s claim about a lack of real evidence on the innovation front shocking. I don’t mean to imply that he’s lying or poorly informed. However, I really hope someone can prove him wrong, so that we can see if we, collectively, as people debating this subject, know what the heck we’re talking about.
— Justin · Jul 14, 10:59 PM · #
Regarding the Nixon-Cheney point, you wrote: “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?”
A Nixon-Cheney type of President probably wouldn’t be brazen enough to deny Ralph Nader a lung transplant, so we’re safe if that’s all you mean by pressure political opponents. Collect frightening kinds of data is still in. “Politicize medical decisions more than is now the case” is certain to be right, but the question is what concrete form this takes. Does that mean if AARP supports a particular social security reform they get more money for end-of-life treatments, or some religious right movement tries to cut off funding for AIDS treatment? Or when the Congressional Black Caucus complains about inadequate care for African-Americans, what do they have to agree to in return for rectifying the problem? Political pressure can be a bit more subtle than what Kevin Drum is suggesting- you’ve just got to spell out your scenarios a little bit.
— Aaron · Jul 14, 11:08 PM · #
On the government power issue, recall all the people the Soviets put in mental institutions because, really, you had to be crazy not to like the workers’ paradise. So it’s not a crazy concern. My take is that given that the government already has the army, the IRS, the police and the courts, the additional risk from writing a lot of health insurance policies is outweighed by the potential benefits.
On innovation, it is possible at least in principle to cut costs way down without touching incentives for innovation. Read Atul Gawande’s great article. We could continue to pay outlandish prices for pharmaceuticals and only provide home nursing care when it is actually needed and come out way ahead.
But, I’d agree this is an unlikely outcome, at least in its pure form. My basic response is that we have to balance objectives, and with the enormous costs we’re bearing for very mediocre outcomes it’s time to change the balance a bit. Innovation won’t vanish, and we can support more through the NIH, but we need to focus a bit more on making sure people have access to the medicine we already know how to do.
— peterg · Jul 14, 11:14 PM · #
I think the above commenters are generally right about how this shouldn’t be a special worry about health care. If the government is able to mess with our health care stuff, it can mess with the IRS and lots of other things too and we’re already doomed.
If you’re interested, I put up a post on our humble donkey blog about some of the reasons why this doom hasn’t mostly yet befallen us. (You should go there if you click my name link.)
— Neil the Ethical Werewolf · Jul 15, 12:12 AM · #
Most important medical research and innovation happens under either the auspices of the Federal government, by non-profits, or in public universities. Andrew Sullivan is fond of pretending that private industry is entirely responsible for the AIDS retrovirals that keep his disease at bay; as a matter of historical fact, though, they would never have been developed nor brought to market if not for Congress’s Orphan Drugs Act. There simply just weren’t enough people with AIDS.
Private industry in the US has fairly little to do with medical or scientific advance. Private industry is very much in the business of monetizing innovations from the sort of pure research that happens in the public sector. That’s where the science is being advanced.
— Chet · Jul 15, 12:44 AM · #
As to 1. — That’s why the “public plan” should be created as a separate legal entity, overseen by a Board of Governors. Note, also, that the IRS is not known for leaking. Ordinary bureaucrats face ferocious prison penalties.
As to 2. The public plan is going to be an enormous purchaser of medical goods. Even if the profit margin isn’t what it used to be, if you can build a better device you can still make a very nice living. I’ll bet that, much like for pharmaceuticals, most of the cost of medical devices is in manufacturing the first one.
— Francis · Jul 15, 01:23 AM · #
I’m pretty sure there’s something disastrously wrong or misleading about this statement, but I’m not enough of a scholar to disprove it. I will simply say that no public sector is going anywhere or doing anything without private sector money. But then, I guess if you believe that Cuba has a wonderful health care system, you might also believe it’s possible without the private sector.
So, Conor, since you are a conservative scholar, surely you can push back on Chet’s statement.
— jd · Jul 15, 01:35 AM · #
JD,
It is an unusual pathology indeed to turn every comment into an examination of my conservatism!
Chet,
Link?
— Conor Friedersdorf · Jul 15, 01:52 AM · #
I think it would be helpful to narrow down just what sort of ‘national health insurance’ we’re talking about. There’s a whole range of options, each with its own different potential ramifications — it’s hard to make any reasonable predictions without nailing down a lot more details about the proposal to be considered.
But fwiw, his responses to you already don’t suggest to me that there’s a great deal of open-mindedness on his part.
— kenb · Jul 15, 02:29 AM · #
If the government was so inclined to abuse its powers re: health care, it could already do so with the Medicare population. Are you aware of any incidents of a Nixon type character using Medicare for his advantage?
Steve
— steve · Jul 15, 02:29 AM · #
With regard to innovation, specifically on prescription drugs, I’ve often wondered just how many new drugs are entirely developed by the private sector. It seems many major universities, both public and private, are also involved in drug development.
Also – I often wonder if drug researchers wouldn’t do the work for less with the chance to save thousands of lives as sufficient incentive.
I googled where do pharmaceuticals come from and got this (it’s from ’93, but specifically addresses drugs, government spending, and innovation):
“Generic manufacturers are found in every industrialized country and have a useful function. However, only in Canada did they receive particular favor when, after 1969, this country broke ranks with all other industrialized nations by introducing compulsory licensing. This enabled any company to copy a drug after only four years patent protection, on payment of a 4% royalty to the inventing company. Considering the immense costs of research and development, a 4% royalty is derisory. In the words of one Montreal newspaper at the time, “…the existing law amounts to legalized theft.”
If all the other industrialized countries had followed Canada’s example, they too would have had cheaper drugs, but the innovative multi-nationals would have had to stop research or go bankrupt. But the other countries didn’t, and the multi-nationals survived and flourished, because Canada accounts for only 2% of the world market for drugs.”
link: http://www.allbusiness.com/north-america/canada/388501-1.html
— Jeremy R. Shown · Jul 15, 02:46 AM · #
This is interesting because it brings up one key reason why we’ve had difficulty achieving a national health system: suspicion of the central government. Its also points to a key reason why comparing health systems runs into problem. Each countrie’s system reflects key values of that populace. For example the Swiss have a mandate but they don’t struggle with enforcement. Their compliance is very high and would suggest it reflects their comfort level with their central government. We would need significant penalties. Not right or wrong, just different.
As for innovation its a fair question though we’ve gotten a fair amount of our innovation from overseas. Some of the landmark heart attack studies come out of Italy, for example. It is worth considering that a good amount of our innovation is developing “me too” drugs. These lead to added costs but little “benefit”
— C3 · Jul 15, 03:39 AM · #
That’s a tenet of conservative faith, not an argument. Research is a highly speculative endeavor; little of it leads to marketable products. That’s why it is now, and will always be, largely a function of the public sector (funding through federal agencies, non-profits, and public universities.)
— Chet · Jul 15, 03:39 AM · #
On the first point, it seems to me that the more pressing concern than e.g. having Cheney deny Nader a liver transplant is straightforward regulatory capture: when we increase the power of centralized government, we make it easier for corporations and other interest groups to wield power by way of them, e.g. by getting their favored treatments covered by a public plan or included in a mandate. It might be argued in response that a state-centered reform policy wouldn’t make the situation significantly worse on that front, but I’d need that to be shown and not just said; when Drum asks for reasons why we’d be worse off with the federal government funding 80% of health care rather than 45%, that’s probably the first concern that jumps to my mind.
— John Schwenkler · Jul 15, 06:00 AM · #
Drum makes an excellent point about your second point. I agree with you (unfortunately as a European) that US medical research, and private medical research, drives innovation for the rest of the world, but it’s something that needs to be asserted less and backed up with data more.
However, the rub is that “innovation,” itself, is very hard to measure. For instance, in the endless discussions about “Asia” “catching up” to the US on innovation, many point to the increasing number of patents filed by Asian scientists and companies, and their increasing share of R&D spending. However, most of those patents are patents replicating and modestly improving on US-originated, more original patens, so number of patents alone are a bad metric. But the “incrementalness” of a patent is not something you can measure. That’s an example on why innovation (like many things about health) is so hard to measure.
— PEG · Jul 15, 07:29 AM · #
First, my quote is simply based on what seems to me to be self-evident.
Second, I don’t know how you can be so intentionally ignorant. Ever heard of pharmaceutical companies? Maybe you should explain to all the researchers at Merck how it’s all done by those really smart folks in the public sector.
Third, like Conor asked, maybe you could provide a link that shows most research is done by the public sector. Otherwise, I’ll have to conclude it’s a “tenet of conservative faith.”
(Interesting how many people on this blog insist they’re conservative.)
— jd · Jul 15, 12:40 PM · #
Conor – 1 scenario to address both points…
Biotech USA has invested hundreds of millions of dollars to get a new, expensive drug to market, and is approaching the Feds to negotiate for reimbursement under Medicare/Medicaid/Whatever-the-new-public-plan-is.
The Feds are trying to cut costs because their healthcare behemoth is running over budget for the nth straight year. They realize a bunch of new drugs, including Biotech USAs super-expensive miracle drug, are on the cusp of being sold in the market. They put out a fatwa against reimbursement of medical treatments that don’t have “X” evidence that show they produce “Y” cost-effectiveness. Biotech USA did not collect this data prospectively, which prevents reimbursement of the new drug, which causes Biotech USA to lose millions of dollars in potential sales, forces job cuts, etc…
CEO of Biotech USA is a big time political donor to the political party currently not in control of a) The White House, b) The Congress, or c) Both. CEO of Biotech USA feels that this was not only a policy decision but a political one, since he is a well-know political donor for the opposition. Evidence is subsequently produced to show that the government was aware of Biotech USAs pending reimbursement ruling, and that the gov’t rushed the policy through to prevent this from happening.
I don’t think that’s an outlandish scenario…do you?
— Matt C · Jul 15, 01:22 PM · #
A brief nitpick with Chet’s formulation: non-profit does not equal public-sector.
— Blar · Jul 15, 01:58 PM · #
Yes. They’re largely in the business of manufacture and marketing, not research. When they do research, it’s largely on the pharmacokinetics of substances identified by pure research efforts, which mainly happen in the public sector.
— Chet · Jul 15, 03:46 PM · #
Given my income trajectory, will universal health care facilitate my goal to live well forever, or will it impede it?
Note: I pledge my undying support to whatever is best for me.
— Kristoffer V. Sargent · Jul 15, 05:29 PM · #