Any solution to healthcare will need to emphasize continuous innovation. Read Andy Kessler’s “The End of Medicine” where he looked for opportunities to profit from scale and found that “doctors don’t scale,” that is, healthcare that depends on personal interventions will inevitably cost more as it gets bigger. Technology is not the end-all but it has to be used a lot more than it is (and it will be, from electronic health records management through smart diagnostics and biomarkers to pharmacogenomics and data-mining).
Which leads me to my one main beef with the good doctor’s suggested changes in healthcare: to ban or discourage “me too” drugs. Nobody sets out to build a me-too product. What happens is, everybody in pharma R&D learns about/participates in the same biological and chemical breakthroughs at the same time. Statin drugs are a great example. Lowering LDL was seen to have big positive effects, everybody raced to build a statin. They all arrived on the market at roughly the same time. So for each of the innovators it was a “pioneer” product in development; but for the market where they all showed up, it looked like a bunch of “me too” products. Except they’re not “me too.” Even tiny changes in chemical structure or formulation can have huge effects. One statin is not like another, and don’t ever let the pharmacist or doctor try to tell you otherwise. If you can get exactly the same substance cheaper (e.g. when the patent expires and the true generic arrives), go for it. But if somebody wants to switch you from say Zocor to Lipitor (or, more likely, the reverse), be careful. They are not the same stuff, anymore than a Yugo is a Dodge pickup. One last angle on “me too” is that people launch a drug for the indication about which they have the most knowledge and confidence that it will add value (safe and efficacious). As they learn more from its use in the population, they may add new indications. Sometimes these are surprisingly different and quite unexpected. Cancer meds are a case in point. And thalidomide is an example of the “Whodathunkit” effect. A drug approved for morning sickness in the 1950′s and withdrawn after it was found to cause birth defects, turns out to be a powerful anti-cancer medicine. People are now pursuing ‘me too” versions of thalidomide, in the sense that they are exploring chemical analogues with more punch and fewer side effects. That is what innovation looks like. You can’t legislate it with a rule against “me too.” If something is truly “me too,” then nobody will pay for it. It can have its fine little patent, but it will be a market dud and the patent will be irrelevant.

Sorry for the length, I am in the pharma R&D innovation business.