Clear Thinkers favorite Arnold Kling, who appears to be everywhere these days in regard to discussions over reform of America’s health care finance system, reminds us in this Washington Times op-ed of an important distinction in the health care finance debate — despite the problems in health care finance, American medical care and research remains the hope of the world:
On one side of me at the graduation [of my daughter] sat [my wife], a breast cancer survivor. On the other side was my father, whose heart condition and blood pressure threatened to take his life before my daughter was ready to graduate kindergarten, much less college. Finally, there was my daughter herself, who since high school has had a chronic intestinal illness sufficiently contained that she could graduate on schedule.
None of these three stars would have been there without medical treatments that only became available since my daughter was born. New drugs played a significant role in each case. In fact, some pharmaceuticals critical for my daughter only were approved for her condition a few years before she was given them. Drugs in the pipeline are likely to play an important role in her future.
In other countries, would the same state-of-the-art medicines and equipment have been available to my father, my wife and my daughter? Perhaps. But it is a safe bet these technologies were not invented elsewhere.
Much of the medical innovation that the world enjoys comes from America. While as an economist I find much to criticize about our health-care system, America’s role in medical innovation is crucial not just for Americans, but for the entire world.
Read the entire op-ed.
Tom,
Innovation is extremely important; I’ve written about it. And there’s a reasonable argument to be made that the way the U.S. regulates — or doesn’t regulate, if you prefer — industry has fostered an environment more conducive to innovation.
All of this seems undeniable, as far as it goes, but the question I have is how far does it go? That is to say, in context of health care reform, one must certainly be aware of the effect increasing central involvement in health care allocation and clinical research might have on innovation. But it certainly doesn’t follow from that legitimate concern that any movement to centralize health care is per se inadvisable simply because it may affect innovation.
Policy involves trade-offs. As you well know, there is no free lunch. If we are unsatisfied with the current system (and whoever is satisfied is either unserious or uneducated, IMO), then we have to begin talking about what kinds of trade-offs we are willing to make. The mere fact that a trade-off in context of innovation would be necessary to implement some kinds of reforms does not ipso facto indicate those reforms are undesirable. Further premises would need to be deployed to draw this inference.
For example, there seems little doubt that prohibiting collusion between brand drug and generic manufacturers could stymie innovation inasmuch as it would negatively effect returns on capital investments, but it certainly doesn’t follow that we ought to condone such agreements if they are indeed anti-competitive.
We also need to consider who is setting the research agenda here (75% of clinical trials are privately funded), and whether that agenda corresponds to the disease burden borne by the given target communities (“No”).