Medical Innovation in the US
KevinMD loves loves loves to talk about how universal health care will stifle innovation, and while theoretically I see where he’s coming from, I just don’t see the overwhelming data to support the hypothesis. His most recent link is to a Happy Hospitalist post about purchasing pens and limits to innovation, but I don’t really see the connection. I’ve seen plenty of surgeons get to choose which devices they’d like to use being paid by Medicare, the VA, or private insurance.
And because timing is everything, The New Republic’s Jonathan Cohn has a really fantastic piece on innovation in universal health care: Creative Destruction: The best case against universal health care. Just like he says in the article, I’ve yet to see an innovator in the academic sector (where much of innovation begins) be driven by profit. It’s driven by wanting to alleviate suffering, to find answers to questions, to let curiosity and discovery flourish. If you didn’t know, the invention of the CT scanner is shared between the US and UK. France was the first to discover the HIV virus.
The article’s a good 5-10 minute read, but well worth it. Key bits:
But it’s one thing to say that universal coverage could lead to less innovation or reduce the availability of high-tech care. It is quite another to say that it will do those things, which is the claim that opponents frequently make. That argument requires several leaps of logic, many of them highly suspect. The forces that produce innovation in medicine turn out to be a great deal more complicated than critics of universal coverage seem to grasp. Ultimately, whether innovation would continue to thrive under universal health care depends entirely on what kind of system we create and how well we run it. In fact, it’s quite possible that universal coverage could lead to better innovation.
Of course, the idea of involving the government in these decisions is anathema to many conservatives–since, they argue, the private sector is bound to make better decisions than a bunch of bureaucrats in Washington. But, while that’s frequently true in economics, health care may be an exception. One feature of the U.S. insurance system is its relentless focus on short-term good. Private insurers have little incentive to pay for interventions that don’t yield immediate benefits, because they are gaining and losing members all the time. As a result, money invested on patient health may very well help a competitor’s bottom line. What’s more, the for-profit insurance industry–like the pharmaceutical and device industries–responds to Wall Street, which cares more about quarterly filings than long-term financial health. So there’s relatively little incentive to spend money on the kinds of innovations that yield long-term, diffuse benefits–such as the creation of a better information infrastructure that would help both doctors and consumers judge what treatments are necessary when.
The government, by contrast, has plenty of incentive to prioritize these sorts of investments. And, in more centralized systems, it can do just that. Several European countries are way ahead of us when it comes to establishing electronic medical records. When fully implemented, these systems will allow any doctor, nurse, or hospital seeing a patient for the first time to discover instantly what drugs that person has taken. It’s the single easiest way to prevent medication errors–a true innovation. Thousands of Americans die because of such errors every year, yet the private sector has neither the will nor, really, the way to fix this problem.
Graham, It’s not just the innovation, it’s the risk involved developing products (drugs), testing them, and then taking them to market. Without profit, we might still know that DNA exists. But would we have statins? Ace Inhibitors? Any of the biologics? Maybe in fairy land we would, but *someone* has to pay for my kids to go to college.
Tons of drugs are developed in Europe just as well as the US. I’m not going to deny that there’s risk and that risk needs to be rewarded, but I don’t think that providing everyone with health insurance will destroy innovation and device/drug/technology development.
We have plenty of profit in the country, and how many new drugs were produced last year that weren’t me-too drugs? Not many.
Just wondering, How such innovation can occur in my country Indonesia…
Nice to know this medical blog…
Ha! Great minds think alike… and fools seldom differ…
how would you know if innovation in the academic sector was profit driven?
certainly there are hundreds of academic physicians on the boards of start up companies and applying for patents and receiving licensing fees. how do you determine their motivation?
With socialized medicine comes price fixing, and then comes the erosion of profits. This would reduce the incentive of the pharma companies to take risk. And fair or not fair, I am speculating that European drug makers make more profit from the sales of their drugs in the US than in Europe. If that market were gone, innovation over there would suffer too.
Without a potential profit, who’d be willing to risk the potential lawsuits? Its not enough to conduct the research, someone has to bring the product to market.
Heey Graham, I tried to contact you through the “contact” link on your website about the
“Spanish medical opportunities abroad post” but haven’t gotten through. Is the form in working order? Is there a better (electronic) way to send you an email? Thanks
[...] indeed. And the idea that medical innovation doesn’t happen in socialized medicine is a myth that has been debunked for a while now. As I stated in the comments section: Look at uterine artery [...]