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 Category: AllThe LinchpinOctober 6, 2006
Cost is always the linchpin in any conversation over health policy. Several studies out this week show that cost increases are slowing, and that's a big reason why the political debate over health reform has cooled - for now. Three examples:
Finally, I made a field trip to our local MinuteClinic in Bethesda, MD, this week. The nurse in charge was exactly the kind of person you would like to take your child to see about his sore throat or earache. She has been a critical care nurse, has worked in West Africa for the State Department taking care of ?every imaginable health issue,? and now she is back in Maryland with a job that lets her be near her grandchildren. And to top it off, most of the services there were $40 to $50. The nurse didn't want me to use her name, but if I get sick, that's where I'm going. The U.S. health care system is moving into the 21st century. And savvy consumers are leading the way. Grace-Marie Turner RECENT NEWS ARTICLES AND STUDIES:
MARKETS AND MEDICARE ?The Medicare prescription drug benefit is so far costing less than anticipated, while seniors are getting more insurance options at lower prices,? according to a Wall Street Journal editorial. The editorial stresses that market competition is important to the future of Medicare but says, ?For the moment, the bulk of such Medicare services as doctor and hospital visits are covered by a price-fixing bureaucracy no more efficient than any other system of socialized medicine.? It says the drug benefit plants the seed for a truly competitive Medicare program. ?Ideally, a future Medicare program would offer premium support so retirees can take the private insurance they have during their working years into retirement and through old age.?
David Gratzer offers the perspective of a physician licensed both in the U.S. and Canada to analyze problems in the U.S. health sector. He argues that ?the crisis in American health care stems largely from its addiction to outmoded and discredited economic ideas,? and he prescribes a strong dose of capitalism to reduce health care expenses, expand health insurance to millions, and improve the quality of care. The cure involves less, not more, government intervention, he argues. Nobel Laureate Milton Friedman writes the forward saying, David ?combines firsthand knowledge of medical practice?with a rare capacity for lucid exposition of complex technical material.?
Professors Robert Ohsfeldt and John Schneider, both health policy researchers, challenge well-publicized international studies that claim the U.S. healthcare system is the one of the worst in the developed world - on par with Cuba in the latest World Health Organization survey. In their new book, The Business of Health: The Role of Competition, Markets, and Regulation, they argue that the "U.S. health system performance is at least as good as those of other developed countries, including those with national single-payer systems." They argue that the U.S. could do even better with a big dose of competition "that takes full advantage of market forces" and that purging the profit motive with a government-run system is not the answer. On the same topic, George Mason Professor Tyler Cowen says in a New York Times commentary that U.S. researchers have developed many of the most important medical innovations of the last 25 years, and the U.S. ?is driving innovation for the entire world.? The U.S. "could use its size, or use the law, to bargain down health care prices, as many European governments have done?In the short run, this would save money but in the longer run it would cost lives."
A new book by Richard Epstein, professor of law and senior fellow at the Hoover Institution, is the ?first to offer a comprehensive examination of the pharmaceutical industry by following the tortuous course of a new drug as it progresses from early development to final delivery.? Epstein looks at the many challenges the industry faces, including intellectual property rights, FDA regulation, and pricing disputes. He concludes that the continued success of the pharmaceutical industry relies on ?strong property rights and clearly enforceable contracts, with minimal regulatory and judicial interference.?
CBO also has done a comprehensive analysis of drug development in the U.S., looking at the current state of pharmaceutical R&D and assessing the relative value of government vs. private research. ?Total spending on health-related research and development by the drug industry and the federal government has tripled since 1990 in real terms,? the study says. ?However, the number of innovative new drugs approved by the Food and Drug Administration each year has not shown a comparable upward trend.? CBO speculates on several reasons, including, ?Companies may not yet have fully mastered the complex new research technologies in which they work; the pool of relatively inexpensive research discoveries may be temporarily depleted?[and] the frequency with which leading drug companies have merged with one another over the past decade?has sparked concerns about the industry's R&D productivity.?
?The miracles of modern medicines do us no good if we're getting the wrong drugs, the wrong dosages, or inactive sugar pills,? writes Henry I. Miller, a physician and fellow at the Hoover Institution. Dr. Miller cites a recent report on counterfeit drugs published by the American Council on Science and Health as evidence of the growing problem. He says about ?ten percent of the world's drug supply is counterfeit, encompassing not only products that are completely fake, but also those that have been tampered with, contaminated, diluted, repackaged, or mislabeled.? He recommends several ways that Congress, companies, and consumers can combat fraud, including increased penalties for counterfeiters, applying new track-and-trace technologies, developing new authentication technologies, and only purchasing drugs online from pharmacies on the National Board of Pharmacy's approved list. UPCOMING EVENTS: State Health Care Policy Reform Summit Ceasefire on Health Care Measuring up: A Comprehensive Scorecard for America's Health System Industry Panel Discussion about Medicare Part D The Cure: How Capitalism Can Save American Health Care The Business of Health: How Does the U.S. Health-Care System Compare to Systems in Other Countries? Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at http://www.galen.org/. If you wish to subscribe to this free weekly newsletter, update your address, or be removed from our list, please send an e-mail message to galen@galen.org. The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors. CommentsNo comments Add Comment |
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