Thursday, January 4, 2007

Health Care, Part Deux

Here is a good article on health care here, compared to other countries: Think Progress.

One must ask the inevitable question: why is health care so expensive here? Why do we pay so much and get less than many other countries? The Republicans tried to blame it on lawyers. If you look at the facts, only two percent of health care costs are created by litigation and malpractice insurance. Don’t get me wrong, 2% of our health care budget is a very large number. It is not the problem though. I am sure we could all add to this list but here are some other problems I can think of.

1. Administration: If some things are covered and some things are not then someone has to decide who pays and then collect. That is expensive.
2. Marketing: It costs a lot to advertise in our country. It costs a lot for drug companies to have drug reps run around buying lunch for everyone at a clinic in the hope that they will be allowed to see the doctor and give their spiel.
3. Royalties: The Government gives our tax dollars to universities to do research. The drug companies get the rights to the research from the universities by paying them royalties. We pay the drug companies for the drugs that our tax dollars helped fund the research to develop. Sounds like a good system to me.
4. Actual drug company research: The drug companies do have their own research departments. They do come up with useful innovations, and that is very expensive. Unfortunately, they come up with drugs that may not be useful, but are quite marketable. For example, drugs that help hair to grow back for bald men. Or drugs that replace a healthy lifestyle, like weight loss medication, or some cholesterol and sleep medications. Go ahead eat what you want, don’t exercise, no problem, we can give you drugs to help reduce the consequences of an unhealthy life. All this research needs to be paid for by someone.
5. A “for profit” medical system: Forget structural inefficiencies, a “for profit” system has two problems. First, profit is simply extra cost paid to shareholders and executives. Second, there is a conflict of interest between medicine and profit. That is, it is often cheaper to let someone die than treat them. Unless you can resolve this conflict, we will have an unhealthy tension in our medical system.

I am sure there are others. These are just the ones that popped into my head in the first ten minutes.


Leo said...

Good points. It is too bad that some balance between capitalism and benevolence did not exist. Yet if profit did not exist then many people and organizations would not invest in the research. A sad but true commentary on our society.

Andrew said...

You are right. We do live in a wonderful capitalist society and there needs to be incentive to do research. I live very near a major university and I am constantly amazed at how much reasearch we pay for as tax payers. I actually think that is good. It would be interesting to see what the comparison is between the research done by for profit entities and that done with funding by the government or non- profits. I wonder what percent is done by whom.

By the way, it was nice to see your name today.


Leo said...


I was doing a search for information on tax funded research and found that there is quite a battle going on to release results of testing etc to the public free of charge, institutions seem to be putting up barriers. Most of these seem to be, of course, self-serving. The November issue of the American Society for Cell Biology Journal has an interesting column on this issue. but there should be some way for taxpayers to see where there money goes, how it is being spent and what the results are.