‘One Problem, One Bill’: Real Health Care Reform
Pelosi tried and failed. Harry Reid couldn’t do it either. So President Obama has put his plan for health care reform on the table and now he wants to ram it through both the House and Senate.
The president is acting as if he came up with some new and improved concept for health care reform, when all he’s done is repackage an old, out of touch with reality proposal that nobody wants, except maybe Harry Reid and Nancy Pelosi.
Not only is there no price tag on the bill, but the chattering class puts the over-under at $1 trillion. And I’ll go with the over.
His “proposal” is full of disingenuous plans at best and outright malpractice at worst. If he were a doctor, I’m sure the trial lawyers would be lining up to sue him for gross negligence. His proposal will cost more than the Senate version. It includes more taxes and more subsidies, and insinuates the government into even more aspects of health care. I could keep piling it up, but I’d be writing what every intelligent person already knows. Instead, let me remind people of what his proposal will not do.
It will not reduce the deficit, unless, of course, you use some kind of special math. Also, the majority of those uninsured will be placed on Medicaid, as if this is some great accomplishment. The Senate version and now the president’s version use Ponzi scheme math by collecting 10 years of revenue for six years of service. Isn’t Bernie Madoff in jail for something like that?
Most of you are familiar with another thing the president does not tell you. That is, of the 37 million who currently do not have health insurance, some 40% chose not to pay for it. They’re young and don’t need a comprehensive plan, but they could easily get a catastrophic plan if it were available. These are the 18- to 34-year-olds who will soon be forced to buy comprehensive insurance to help pay for those of us who are older.
We have a real problem with the 12 to 15 million Americans who are denied insurance because of pre-existing conditions, and I’ll answer that in a moment. Before I do, I will give the president credit in two areas he reintroduced. First, there is Medicare and Medicaid fraud and abuse. We all know its rampant. Presidents before him tried but failed to fix it. Maybe this time we’ll be more successful.
One reason for this fraud is that only 3% of Medicare expenditures go towards administrative costs. The government does not have the resources to investigate all the fraud and abuse. The same can be said about the state’s Medicaid programs.
The second area where Obama is actually right is Medicare Advantage. This is an expensive program that I’m not sure we can afford in its current format. It is running on average 13% over the cost had the services been run through regular Medicare.
Is it possible that there is actually someone out there; some poor, unfortunate, brain dead soul that honest to God believes that there is even one politician that gives a tinkers damn about your personal health, welfare or anything else going on in your life?
Your approach would also allow for easier and simpler policies adjustments and corrections should the need arise.
The ingrates on the hill are in constant CYA mode looking for the next vote. They are not concerned with doing the “peoples work” at all. There are several simple things that can be done to open up the healthcare industry like being able to purchase across state lines, preexisting conditions and removing all other government intrusion.
I have thought the very same thing. I work in a hospital billing office and I can tell you that the problems with health care are just too big to tackle all together. One issue at a time is the way to go.
I agree absolutly about the Medicare Advantage plans. From what I can see patients pay far more out of pocket for these plans than they do with traditional Medicare. They cost hospitals, in my experience, more as well. One company in particular (that has been advetising hot and heavy for the past year) regularly underpays and the amount of time spent rebilling and appealing these claims is costly especially when you consider that they only have to pay what Medicare would pay which most of the time is peanuts. Not only do they underpay, they then inform us that they overpaid and want a refund. Another issue is that the while Medicare covers patients accross state lines, many advantage plans do not.
One issue no one seems to notice about insurance is that they seem to have a policy of not paying timely. They always have an excuse: the claim is not on file (doesn’t matter that you sent the claim certified mail) the claim is illegible (it was sent electronically so how can it be illegible?) the claim is missing codes but when you call and ask them to pull the claim up in their system and make them actually look at it, nothing is missing. Then there are the ones that tell you the claim is being paid but won’t send the check for 6 months. The excuses go on and on and the penalties for not paying timely is a joke. It is unbelievable the amount of time and paper it takes to get claims paid. All of this hurts cash flow and contributes to increased costs.
A sensible proposal. Eat the elephant one bite at a time. I suggest reforms that lead to more consumerism in health care should be very high on the list. Competition is really the only way to fix the cost problems. I would never give my mechanic a blank check. Doctors should receive the same treatment.
Here’s a cause that the Republicans should take up:
THE WAY to Really Call The Democrats’ Bluff and Save Us in the Process
Barak Obama just wants to give granny a pain killer, not treat her condition. And the state of Oregon would rather assist suicide than give one of its residents cancer treatments/medications.
In response, here’s what we do:
Introduce and pass legislation that would prevent the Federal government, or any of its agencies, from harming us, killing us, or otherwise prevent us from receiving life-preserving treatment, as a matter of its operating any sort of health care system (to include the murdering of infants in the womb).
Push for a constitutional amendment. Really raise as much stink as possible.
Credit Rose Pappas, senior citizen, Chicago, Illinois.
Let’s get behind this. I have a premium membership with Rush and have already emailed him. If you have access to Glenn Beck and/or Sean Hannity and/or Mark Levin through premium membership, please email them.
Dr. Weiss, your suggestions are well thought out and make sense, which is why they’ll never be considered by anyone in Washington.
Dr. Weiss, I applaud you for your bravery in suggesting the One Problem – One Bill approach. The problem is that government has never operated that way, and it never will. Government seeks and secures power by doing just the opposite and, in the process, obfuscating the dynamics of governance to the extent that even legislators are completely clueless about what they’re passing. See also: TARP.
- We can all agree that one problem is the cost of insurance.
Uhm… you skipped a step.
I’ll get to that later, but first let me note that just like the clueless legislators in D.C., your attention is ALSO drawn, first, foremost and – as it turns out – almost exclusively to changes in health care insurance. But here’s the thing…
Insurance IS NOT HEALTH CARE.
Insurance is a tool for mitigating financial risk. It should NOT be used to pay for every dollar of routine health care we consume.
Paying for health care with comprehensive, group health insurance has destroyed the economic relationship between health care provider and consumer and, in so doing, destroyed ALL downward pressure on health care costs – the pressure that keeps all other commodities relatively affordable.
The result of this phenomenon has been – and will continue to be – skyrocketing health care costs; it began when government first started meddling with the way we pay for health care and was then kicked into high gear by subsequent government meddling (HMOs, subsidized employer plans, etc.).
So please explain to me: why does your plan for “health care reform” start and end by taking either small or large steps to meddle even further in the health care insurance industry and create a mandate that micromanages drug companies? Where’s the actual reform in health care, per se??
I have a question: do they teach basic economics at any point in Medical School? I’m not being sarcastic, I’m genuinely curious. Because the elephant in the room you seem to be willfully (and predictably) ignoring here is the effect of doctors’ fees on the skyrocketing cost of health care.
You rightly identify the exorbitant cost of drugs, which profits enable big pharma to blanket the TV airwaves and page after page of every magazine I pick up with BILLION$ of dollars in annoying DTC ads for new, nominally tested drugs. That’s a huge problem. But please ALSO explain to me how a cardiologist can justify billing $800 for a 15 minute follow-up consult? Or how a surgeon can justify charging $3,000 for a 20 minute procedure that actually requires only 9 minutes of his time? The long and short of it is that none of these fees would be possible if physicians had to maintain a direct economic relationship with their patients, who are the consumers of the service they provide.
This economics question speaks to how commodity prices are controlled. And like it or not, the service you provide is a commodity. In all areas where consumers DO NOT abuse insurance to pay for routine commodity expenses, the price has remained relatively affordable. The reason for that is that the consumer has a clear perception of the value of the commodity and a direct economic relationship with the provider.
Only in the commodity market of health care – where the consumer is completely dissociated from the value and cost of actual services – has the cost skyrocketed. Please don’t defer to the standard nonsense about expansion of services or health care innovation. ALL OTHER commodity sectors have experienced explosions in innovation and the “cost-per-improvement” has typically gone down not up. And in fact, a substantive portion of health care innovation has piggy-backed off of computer and electronics innovation anyway.
So please ask yourself: what’s wrong with the economics of health care? The answer is simple: comprehensive, group health insurance has destroyed the economic relationship between the health care provider (that would be you) and the health care consumer (that would be someone like me). As such, ALL downward pressure on prices has been neutralized, and the result has been THIS.
The problem is not “uninsured” or just the price of drugs. The problem is the way we pay for health care, and the fact that it has allowed the price of health care to increase completely out of proportion with all other commodities. The ONLY way the health care “crisis” is ever going to be resolved is by restoring the free market for health care, restoring the economic relationship between health care provider and consumer, and allowing the market to bring the cost of health care back into equilibrium with other generally affordable commodities. I’m sorry if that puts a crimp in your lifestyle, but physicians’ penchant for skyrocketing fees is now going to put a serious crimp in mine if ObamaCare is passed. Meanwhile, pretending that solutions to this problem are to spread the costs around “better” and allow government to meddle in the manufacture of drugs is disingenuous at best.
You rightly mention high-deductible / low-premium insurance policies above (“catastrophic” policies), and they figure into the picture here: they are a proper use of insurance, which is to mitigate ruinous financial risk. That’s the direction this discussion needs to go – AWAY from the comprehensive, first-dollar type of insurance that has utterly corrupted the free market for health care.
Please stop pretending that the medical profession isn’t an enormous part of the problem here and recognize that the issue is not insurance, but the skyrocketing costs engineered by socialists in government and now being exploited by them… to give us more socialism.
Goy
Amen!
What Goy does NOT understand is that we physicians are NOT able to charge more or collect more for any of theprocedures that are done.It is the rare doctor that can. Insurance companies and Medicare pay doctors about the same amount they did back in 1994. A doctor will make about$500 for a laparoscopic appendectomy and is NOT paid for any post operative visit. Goy, get your facts straight before making aacusations. Overhead costs run about 60% of what a doctor collects, so that $500 is actually about $200. Also, you are not paying for 9 minutes of his or her time, but 12 years of his or her experience.
Goy, you are absolutely right about health insurance not being health care. You make a good point.
@10. doctor in the trenches: … we physicians are NOT able to charge more or collect more for any of the procedures that are done.
Hmmm… I guess it’s just a mystery, then, how the fees for these procedures went from what they were in 1960 to what they are today, 50 years later – completely out of all proportion with inflation.
Seriously doc, don’t get me wrong. I’m not blaming the medical profession, per se, for this problem. What I won’t stand for, however, is watching medical professionals point fingers at the drug cartel and insurance cartel, while pretending that the AMA has not worked tirelessly – even lobbying for BCBS at its inception – to ensure that doctors are among the most highly paid of all professions, by far (see p.3). I find it doubtful that such a high income level would never be supportable in a world where physicians had to justify their fees directly to their patients and actively compete with others in their field for business. Whether I’m right or not can only be known if we re-establish a truly free market for health care. Presently, that is far from the reality and, worse, not even on the radar of the legislators poised to ignore the Constitution and act on this issue.
- Overhead costs run about 60% of what a doctor collects, …
Much of which would be reduced if we eliminated government meddling in the health care market, wouldn’t you agree? I mean the (virtually useless) HIPAA legislations, government regulation and extra infrastructure required to deal with Medicare alone would make anyone think twice about starting a practice, I should think.
But here’s the thing: that’s the situation YOU buy into when YOU decide to pursue that practice. So I hope you’ll excuse me if I’m not sympathetic to your CHOICE to incur that overhead any more than I’m unsympathetic to my auto mechanic for the expense of paying for electricity to run an air compressor 10 hours a day. That’s her cost of doing business. I’ll decide if what he charges, as a result, is more than I want to spend. Right now, with health care, I don’t have that option. No one has. We haven’t had that option since comprehensive, group insurance became the norm. And the results have been skyrocketing health care costs, well exceeding inflation, for decades.
- … you are not paying for 9 minutes of his or her time, but 12 years of his or her experience.
Sorry, doc. That’s your perspective, and it goes hand-in-glove with the entitlement mindset that says if one spends 10 years in school and another 3 in residence, that this should automatically lead to a wage of $X when, in fact, that wage can only ever be reasonably determined by the value that individual offers to the market. From my perspective, I don’t owe the doctor one thin dime for the 12 years of experience s/he amassed, while charging similar fees to others throughout that time.
As a physician, you make a CHOICE to go into medicine. Health care consumers are no more responsible to help finance that CHOICE than Taxpayers should be responsible for funding the lifestyle of someone who chooses to live on welfare. It’s a bad analogy, but the mechanics are the same. The only thing I’m bargaining for when I hire a doctor is the service they’re going to provide to me, the consumer. The problem now, however is that as things stand, any value I place on that service is completely ignored in the mechanism that determines what is ultimately paid for that service on my behalf. That determination is made by an insurance company, WHICH IS NOT THE CONSUMER. And nowhere is this more true, nor is the pricing model more distorted, than with routine health care – the vast majority of health care consumed.
- … you are absolutely right about health insurance not being health care. You make a good point.
This, ultimately, is the only point for me. I take exception with Dr. Weiss’ apparent position – based on what he’s written here – that the medical profession is utterly blameless in this issue, but that’s as far as it goes. That problem can ultimately be solved by realizing that insurance is not health care and that, therefore, making insurance “more competitive”, as he suggests, will NEVER bring down the skyrocketing cost of health care. They are two different things.
Fix the way we pay for health care – that is, provide incentives for people to use HSA’s, high-deductible / low-premium (appropriate) insurance, and pay out-of-pocket instead of purchasing first-dollar, comprehensive, group policies – and the market will once again determine whether medical professionals’ fees are what they should be. Who knows – if we eliminate the gargantuan money pit that is the comprehensive, group insurance industry, scale back the billion$ in profit and DTC advertising by the pharmas, and eliminate the enormous waste incurred by government meddling in health care, it may turn out that what doctors are earning is perfectly reasonable. But as a consumer and a taxpayer, I want to see the MARKET make that determination, not some bureaucrat at Wellpoint, Aetna or in D.C.
Goy,
Let me rephrase what I said earlier. you are right, in a perfect world where there is no government meddling the market forces would work themselves out. Physicians would charge what the market place would allow and patients would have control of our own expenses.
However, I deal in a real world, patients show up with an illnnes and I want to treat them as best as I can. They, the patient want it to be covered by insurance, they do NOT want to even pay a co-pay. I did not buy into this system, is was forced upon me by Hillary Care in 1994.
The average cost for a medical education is over $200,000 to the student. The overhead costs have escalated due to government interference and regulation, insurance company controls and a host of medico-legal forces as well. I don’t think Dr Weiss was saying anything about the medical profession not having any responsiblities, he was just addressing the current situation we’re in and how to fix it with real expectations.
You also are making a false assumption that the AMA represents physicians. It only represents 20% of physicians,all academics, but has been given an extraordinary amount of political influence…not by the doctors.
Funny thing is I think we actually agree..the best situation is to do away with all government control, but what I think Dr Weiss is proposing is the next best thing. Goy, great disscusion.
@12. in the trenches: … in a perfect world where there is no government meddling the market forces would work themselves out. Physicians would charge what the market place would allow and patients would have control of our own expenses.
Well, tongue firmly in cheek, I’d will disagree there. In the perfect world of the health care consumer, all doctors would act with absolute altruism and work for free. So you you see this is still just a matter of one’s perspective.
- … I deal in a real world, patients show up with an illnnes and I want to treat them as best as I can. They, the patient want it to be covered by insurance, they do NOT want to even pay a co-pay. I did not buy into this system, is was forced upon me by Hillary Care in 1994.
I’m pretty sure HillaryCare failed, IIRC. But I understand your point completely (first hand – I deal with this myself), and it illuminates the aspect of this problem that makes it so monumentally difficult to solve: EVERYONE shares some of the blame, not the least of which is the health care consumer who blindly conflates health care and health care insurance and over-consumes because “insurance will cover it”.
- Health Care Consumers want to keep the ostensibly “free” health care they’ve become addicted to, made possible by manipulation of the health care market by government. They expect their employer to pay for it or, if unemployed, they expect they’re entitled to get it from the State (read: productive Taxpayers). They want to use it whenever they get a sniffle and have no questions asked because “insurance will cover it”.
- Medical Professionals want to keep their much-higher-than-median salaries because the world owes them for the years they spent in school, the massive debt they incurred there, and all the bologna and ramen noodles they were forced to eat in the process. They want the option to perform whatever procedures and treatments are legally advisable, even if they aren’t striictly medically necessary, because the government refuses to address tort reform and, besides, “insurance will cover it”.
- Medical durable goods manufacturers want to continue to make ungodly expensive, disposable medical supplies, at enormous profit because… “insurance will cover it”.
- Medical Schools want to charge ever-higher tuitions because they like not being held accountable for the ridiculous amount of money they spend per graduate, and they feel justified in charging what they do because of the salaries doctors can demand, since “insurance will cover it”.
- Socialists in government want to create a massive, middle-class entitlement that will marry their very future to the ongoing political dominance of leftist political agenda, so they have lots of incentive to see health care costs rise to the point where no single individual can afford to pay for health care without help from the collective, i.e., “insurance will cover it”.
- Insurance company management, rank and file are all extremely well-paid, and their companies make an enormous profit (through massive volume, 3% at a time, just like the credit card companies) by selling a product that has the unhappy side-effect of driving health care costs higher at rates far exceeding inflation each year. Meanwhile, they enjoy almost zero accountability, since any waste in their bloated, opulent, unbelievably inefficient operations can be compensated for by raising rates at will. Despite the fact that this is literally killing small business, health care consuming employees don’t really care about rate hikes because they like the fact that whenever they need a doctor, “insurance will cover it.”
- Pharmaceutical companies make an enormous profit (same dynamic – see above) while at the same time enjoying the ability to spend billion$ in DTC advertising to ensure that the demand for their products is artificially inflated to a level MUCH higher than the actual, medical necessity. In the end, “insurance will cover it”.
The list goes on and on and ALL of it works, open-loop, to drive increases in the cost of health care at the rates we’ve seen for the past 50 years. Anyone who can spot the common denominator in that list will understand what’s at the heart of this cost-driving engine: insurance abuse.
But the problem, frankly, is that no one wants to admit their part in the game. Thus, each player points fingers at everyone else while health care costs continue to skyrocket at what are now beginning to look like exponential rates – all because we suffer from mass hysteria when it comes to the way we pay for health care.
- You also are making a false assumption that the AMA represents physicians.
Well ultimately it doesn’t matter who they represent, unfortunately. The AMA has been instrumental since the inception of comprehensive insurance in constructing the system we have now, which is bankrupting us and providing an exploit for the socialists to turn this Republic into something it was never intended to be. Ironically, the AMA’s initial support of BCBS, which later turned into the mechanism that has driven health care costs through the roof, was intended to stave off… socialized medicine. Today, that support is precisely what has made socialized medicine a reality. And one certainly can’t make the argument that the AMA has worked to depress medical professionals’ wages.
- Funny thing is I think we actually agree…
Not funny at all, or surprising. And I appreciate the discussion as well. I’ve been writing this same line for years and had plenty of discussions with medical professionals, both online and off-, as you can imagine. Funny thing – we almost always end up agreeing. My wife is a mental health professional with her own practice. I’m quite intimately familiar with the challenges. Neither of us wants to see the day when her options for treatment are determined by Obama’s Health Care Czar at the Ministry of Medicine. No one should want that. But if we don’t STOP arguing about “the uninsured”, STOP pretending that competitive insurance will automatically translate to lower health care costs, and FIX the health care market, that’s exactly what we’re headed for.
Actually, goy, the doctor’s medical school bills are as much an input to medical treatment as any of the equipment the doctor uses. If a business can’t cover its costs, it will go bankrupt. It doesn’t matter what those costs are, and half a million dollars in intellectual capital is a rather large input cost, don’t you think?
@14. myth buster:… the doctor’s medical school bills are as much an input to medical treatment as any of the equipment the doctor uses. If a business can’t cover its costs, it will go bankrupt.
mb, I think you’re making the same mistake everyone else makes on this: you assume that there’s no way to CONTROL med. school costs – that they’re somehow fixed in the firmament and can’t be brought back into equilibrium with other types of education. I disagree.
Medical school bills are as high as they are not because they’re imparting $X in intellectual “capital” – they aren’t. They’re high in large part because in the current broken market, doctors’ skills ultimately demand very high salaries – far above the median. Like all other commodities, the price of med. school tuition naturally rises to the level the market will bear. Right now that market is prospective med. students who look at placement information such as I’ve linked to above and who see a $500k starting salary for a Gastro’, for instance. As such, to put it in entrepreneurial terms, they don’t see $250k in “start-up” (tuition) costs as a barrier to entering that business and, with that, they either happily or grudgingly borrow the money. Either way, they pay the tuition.
The problem is that those salaries – at least right now – are not constrained by free market forces determined by the consumer’s assessment of value. Rather, they’re determined by insurance reimbursement, which has an entirely different set of criteria – including (but not limited to) the insurance company’s business model – NONE of which involves the ultimate consumer’s assessed value of the service. So the prospective student’s willingness to borrow and pay the tuition is based on a distorted market in the first place. Put simply: high med. school costs don’t “justify” high med. professionals’ salaries. Rather, high med. professionals’ salaries make high tuition costs palatable because the underlying market is broken.
Ultimately, what you’re stating here is no different from the argument the socialists make, although they do so deceitfully. That is, they make the assertion that “we must find a way to cover the rising cost of health care” while they (a) ignore the cause of skyrocketing health care costs (i.e., government meddling in the market by leftists intent on collectivizing/nationalizing that part of the economy) and (b) tacitly assert that there’s nothing that can be done about those rising costs. Both are dishonest or, at the very least, misguided.
The problem is that simple bills would make it harder to hide the pork-barrel. However, it would be cool to have a bill that you could actually read in one sitting.
Great idea, “one problem, one solution”. But the importation or re-importation of drugs from countries which do not respect patent rights would cripple new drug innovation. How many new drugs are developed in Canada or Argentina, for example?
Consumers around the world are subsidized by the American public when it comes to paying for drug development, due to price controls in most countries. This is an invisible form of foreign aid which is forced upon the American public. If pharmaceutical companies cannot recoup their investment from the U.S., they will not develop new drugs. European companies typically register their drugs right away in the U.S. in order to subsidize sales in Europe.
And some European countries will not register a new drug if they think they have cheaper, almost-as-good alternatives available. There isn’t a lot of respect for incremental improvements or for differences in individual responses to particular drugs in the same class.
After the current U.S. generic drug laws were enacted, it became crucial for drug companies to recoup their massive development, liability and regulatory costs for a new drug (and for the inevitable failures which accompany the successes) over a short period of time. They could no longer charge a little more for older drugs to help finance the new ones. This contributed to the pressure for heavy marketing and produced sky-high prices for new drugs. Generic companies cannot compete on the basis of quality – only on the basis of cost. And innovator companies can be held liable in court for adverse events which result from a patient taking a generic version of their drug.
Drug development is a riskier business now than it used to be. It’s chicken or feathers. One reason there are fewer, bigger drug companies now.
Once you get into the ultra-expensive, very effective, genetically-engineered biological products, you encounter a whole new set of problems which push prices up. And it’s harder for countries which don’t honor patents to replicate these products with the same quality as the innovator.
I don’t think there is one simple solution to high pharmaceutical prices which will maintain new product development at a level which many people would hope for.
KarenT, take a look at Pfizer’s 2008 financials (the latest available). You’ll find that almost $3B was spent on direct-to-consumer advertising for drugs that consumers can’t purchase WITHOUT a prescription. This advertising budget approaches the equivalent of half of Pfizer’s entire R&D budget (as well as almost half their net income), which puts the lie to the notion that exorbitant prices for drugs ($300 for a month’s worth of sleeping pills… are you kidding me??) are somehow justified by high R&D costs.
Clearly, the 17% net margin Pfizer saw in 2008, as the economy was declining rapidly, demonstrates that they’re doing just fine and that there’s no danger of losing innovation if they’re forced – by, say, a free market in health care – to lower their prices to the level the average consumer would be willing to pay (as opposed to the claim an insurance company pays, which is based on actuarial math that has absolutely nothing to do with protecting the consumer from skyrocketing health care costs, obviously).
What’s more, that 17% required some $48B in revenue to produce – and that was just one company. Remember that even low-margin enterprises make huge absolute sums of money when they operate in volume (think: credit card companies). Also remember that just because it isn’t all “profit” doesn’t mean an enormous portion of it hasn’t either been wasted – due to bureaucratic inefficiency or wasted resources. I’ve worked for Pfizer AND a few insurance firms, and can tell you that efficient operation is not one of their top ten priorities, partly because they’re used to getting whatever they demand for their products (drug companies name their price, insurance companies simply raise rates). In any case, the vast majority of that total revenue sum came from insurance policy claims, NOT directly out of the pockets of those who were prescribed the drugs. Irrespective of the actual profit margin, we are talking about hundreds of billions of dollars here – ANY reduction is going to have a significant impact on the cost of health care.
Consider that advertising for a company like Pfizer is a very different animal from that of a company whose products (a) can be freely purchased without the intervention of a doctor and (b) are paid for directly, out-of-pocket, rather than being paid for out of a resource pool comprised of hundreds or thousands of members in a comprehensive, group insurance policy.
Big pharmas’ enormous advertising budgets do one thing: they artificially explode the demand for their products far beyond the actual, medical need, which can only be determined by a doctor. Combined with the “insurance will cover it” mentality we’ve all been trained to have, the results have been economically devastating. Tied together with the open-loop economics that already have a hyper-inflationary effect on health care costs, this approaches being an unacceptable business practice. I’m not absolutely convinced it should be legislated, although legislation of DTC ads for cigarettes points to the notion that we can take this sort of action if it really does improve the General Welfare (i.e, preventing widespread personal and government bankruptcy). But ultimately, the point is that no one should be shedding a tear for the poor pharmas, or assuming that a significant reduction in the price of their products will automatically translate to Mom and Dad not getting that life-saving new drug. And that’s BEFORE we even get to talking about the enormous damage some of their products cause.
Either way, the pharmas have gotten a free pass on their part in jacking up the cost of health care by mindlessly repeating the mantra about the high cost of R&D, which is nonsense. EVERY other commodity sector has seen innovation, sometimes explosive, and the cost-per-innovation has typically gone down, not up. The only reason the cost of drugs continues to increase well out of pace with inflation is because of the insane way we pay for them: abusing the collectivizing mechanism of comprehensive, group health care insurance to create an open-loop system where the consumer is completely dissociated from the economics and there is, as a result, no significant downward pressure on price.
SCARY……
Is this REALLY our AMERICA??????
Know the TRUTH about the Government Health Care Bill H.R.3200 – Key Points
http://www.youtube.com/watch?v=HcBaSP31Be8