The Problem with Tying Health Care to Trade
fivethirtyeight.com
fivethirtyeight.com
- Option 1: you sell the drug at whatever market price you want but no patent will be granted and anyone is free to copy the drug.
- Option 2: you receive a patent protection for you drug but you must defend the price at which you want to sell in a bargaining round with the government. In essence, it's a compromise where you as a drug manufacturer can recoup your costs, and where the people don't overly get taken advantage of in life-or-death situations.
Disclaimer: my Dad worked in a major French pharma company.
As for the second option, France, Germany and the UK all have a system where an independent body evaluates a drug in order to determine it's value. They do this by comparing the new drug against what's currently available and provide a rating. In France it's an ASMR rating, but I think that's changing.
Once the drug receives a rating (Important, moderate, mild and insufficient improvement over current agents, ASMR I-IV), the company and gov't enter negotiations over the price.[1]
[1] http://www.has-sante.fr/portail/upload/docs/application/pdf/...
While we'd love to be able to say "pill X costs $Y to make, therefore you should charge $Y+10%" there are many more variables in play that aren't directly connected to the manufacture of the pill.. or even the R&D that went into it.
(Spoken as one who is watching the quality health insurance plans disappear from the Affordable Care Act (Obamacare) for the coming year.)
What I have seen is Insurance companies just finding loopholes, and doing what "for profit" insurance companies do; make money.
I don't know how the Affordable Care Act is making things worse.
The insurance companies were greedy, selfish bastards before the act? I don't think health care would have magically gotten better with time?
As to Obamacare. No it's not what he originally wanted. Politically, he needed to amend his original bill. At the time the Rebublicans pressure was palatable. He knew it was this, or nothing. An election was comming up, and he knew he wouldn't be able to get anything through next congress.
I'm not a fan of Obamacare, but we were cornered. It was this, or nothing.
I do believe we need to document our complaints about individual Insurance companies, but that will probally never happen. Why--because it's one of those subjects we don't like to think about.
I don't have an answer to the problem of horrid insurance companies, and medical institutions/individuals that overcharge us. I would be the first one pulling the cord on Obamacare if someone could get a better alternative through congress. I don't see that day comming soon.
(To the Doctors/Institutions that don't abuse their power; you have my highest regard. To the ones that accept a medi-cal patient every blue moon; you have my highest regard. To the ones who are just in it for the money, or blame everything on the Insurance companies; some of us see right through the lie.)
This suggests that the providers of medical care are actually the biggest culprits for our out of control healthcare spending and lack of access to affordable care, not the insurance companies, yet your post only passingly blames the former.
Private insurers need to make a profit for distributing risk, and due to there being a lot of them, those risk distributions are much smaller than they could be. Adding a public, non profit "cost + x percent" type plan, say Medicare part E for everyone, would very significantly improve this, particularly if it were allowed to bargain for bulk pricing.
(that we don't allow Medicare to do this is just nuts!)
Private entities also need to make a profit, and there is no meaningful check on this at present. A similar, public non-profit type delivery entity would reduce prices on most common treatments and maintenance activities.
Those wanting to profit on primary care could add value, such as home service, etc... and do it that way, rather than mark up common, mass delivered treatments. Secondly, niche specialization could remain high profit, high value add and more people would be able to afford those services.
Doing something like this would carve a big hole into much of the profit inherent in the US system, which would bring our national costs closer to those found in the rest of the world, while leaving high profit, high value on the table.
Some of us would not be able to afford those high value offerings, but would definitely benefit from much improved access to preventative and or more common, well proven health care.
This is all a compromise. The US could make much better choices and improve both access and outcomes.
More expensive recurring costs per plan, then larger out of pocket cost for the consumer after they visit the doctor, which they are economically discouraged to do. Then, when they absolutely have to go to the doctor, they are bankrupted.
I thought the ACA was supposed to help us away from this shitty system? Seems to have made it much worse... we should have pushed harder for universal healthcare.
The NHS isn't perfect, but the US system is a nightmare that must be defended against.
The assault on NHS funding at all levels is clearly an attempt to gradually have it sold off.
I'm always deeply depressed and even angry at how many people genuinely believe the free market will solve all of our problems.
http://www.iea.org.uk/blog/how-to-abolish-the-nhs
Edit: I should point out that I don't agree with them - just pointing out that there are established well funded entities who oppose the NHS - presumably on purely ideological reasons.
But radical regulatory reform is necessary if a dynamic private health sector offering low-cost, high quality and innovative treatment is to emerge.
A private healthcare sector offering low-cost treatment. That never happens in reality.
Did you actually bother to read their recommendations? I can't speak to the NHS, but the second one alone would save a fortune if implemented in the US when you consider how many doctor appointments are scheduled just to obtain prescriptions or to renew them:
> Perhaps most importantly, the compulsory licensing of medical professionals should be abolished. Anyone should be at liberty to practice as a doctor or nurse, with patients relying on brand names or competing voluntary associations to ensure quality. Ending current restrictive practices is essential to enable private firms to increase productivity in the sector.
> Restrictions on the types of treatment available ‘over the counter’ should be lifted to enable patients to obtain medication without recourse to registered doctors and regulated pharmacies.
> Burdensome drug licensing regulations should be rescinded. Instead, the testing of new drugs should be left to private firms and free markets. Reputable companies would have strong economic incentives to ensure the safety of their products, while there would also be far more freedom for experimentation and innovation by new market entrants, with huge potential benefits for patients.
> Prohibited recreational drugs, such as cannabis and opiates, should be legalised to allow the sick to benefit from their numerous medical applications.
> Some form of tax rebate could be introduced for patients choosing to opt out of NHS treatment (see, for example, this study from the Adam Smith Institute).
> Private firms should be free to bring in low-cost medical professionals from abroad and at liberty to determine rates of pay and working conditions through private contract.
> Legal reforms could enable patients to waive their right to clinical negligence claims.
> Planning controls and building regulations should be liberalised to enable the rapid development of new private healthcare facilities.
Most of those recommendations operate under the assumption that private firms can be trusted when unregulated and left to their own devices.
Believing this is to repeat past mistakes.
Private = for profit. Quality of service and public safety are never high on the list of priorities for such firms.
> Legal reforms could enable patients to waive their right to clinical negligence claims
So you can have cheap healthcare, but the quality hasn't been vetted and you can't sue for negligence? That's more or less directly taking us back to the "barbers with dirty hands" era of medicine.
Laser eye surgery is reasonably priced. People usually pay for it directly so there's a functioning market, unlike most of the rest of the health care industry.
A friend had it done, but I've no idea how much he paid.
A free, universal healthcare system should be a primary goal of any civilised society.
The fact that we had one and it has been eroded by decades of corporate self-interest and Tory backhanding is abhorrent.
Just that our system is being eroded and is clearly intended to be consigned to the dustbin of history if the Tories have their way.
What premises lead you to conclude that our highest duty is to guarantee our fellow citizens the unlimited attentions of doctors, surgeons, nurses, chemists, biotechnologists, etc? Keeping in mind, of course, that fellow citizens = collection of complete strangers circumscribed by some invisible line in the dirt.
> The fact that we had one and it has been eroded by decades of corporate self-interest and Tory backhanding is abhorrent.
Surely that's not the only thing standing between society and your goals for it. I might start with the fact that voters have resisted paying for the things you'd like them to pay for.
Our status as a social species that works better when it works together and looks out for other members of the group.
Refusing to contribute to a country's social programs and welfare is basically giving the middle finger to everybody who is less fortunate than yourself. Fuck you, got mine.
How charitable and humanitarian.
We have a much healthier and more productive society when we aren't entirely focused on material self-interest and and irrational fear of strangers or 'welfare scroungers'.
Fair. But why define the relevant group as your countrymen? If you do not believe in positive obligations towards strangers, that definition is overly expansive. If you do believe in such obligations, it's overly restrictive-- third world residents are much poorer and are surely more deserving of your help than anyone inside the UK.
> We have a much healthier and more productive society when we aren't entirely focused on material self-interest and and irrational fear of strangers or 'welfare scroungers'.
There's a large space of actions between fearing strangers and showering them with handouts.
This is the important part of your sentence.
The NHS is government assistance, paid for by everybody's taxes, for the benefit of everybody.
I am absolutely in favour of this, as well as government-provided food and housing.
Without free, universal healthcare those poor people than cannot afford outrageous prices under a US-style insurance system for example are, to put it midly, fucked.
And so every society find themselves in one of the most complex paradoxes of modern times.
If you tax your way to healthcare and provide everyone with free healthcare like in ex. Denmark, then access to treatment is equal but it's always a cost center and your will always mostly lag behind access to the latest treatments.
The only way to be able to pay for new equipment or new medicine is either through higher taxes or by budget cuts somewhere else.
If you go the insurance way of the US and try to let market forces rule then you end up with highly inflated prices and a younger generation that don't insure themselves and therefore don't pay for the healthcare system until they need it which drives up the prices of the insurance (hence Affordable Care Act).
Here the access isn't equal but you have some of the best specialists in the world and always the latest treatments.
Then there are countries in the middle trying to find a balance like Switzerland, Germany, the UK and France but even here I fear that no one have found a perfect system either.
So no matter how you try and pay for it whether trough trade agreements or NGO etcs that problem still applies. Someone always have to pick up the bill and the bill is potentially infinitely big.
Edit: For clarification
>He sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived. -DL
Health and well-being is too weak a way to look at things and so people will put into it what they want. Not everyone will agree that regular exercise and eating salad is well being.
And actually getting people to do the "right thing" even if you could define what that is would be much more costly. Also many sicknesses are age related and so even if you could get people to live more healthy lives they would just accumulate even more so the older they get.
Not really: http://www.reuters.com/article/2013/01/29/us-preventive-econ...
It's not just a rational choice, people aren't rational. It's kind of like saying that the solution to overpopulation is to get less children.
Thats not how things work.
The solution to overpopulation, as evidenced by the Demographic-Economic Paradox, is clearly to raise the standard of living by successfully distributing the renewable surplus of food, water, and shelter that is available but wasted every year. This is also an example of turning a negative feedback loop into a positive feedback loop which in turn pays for itself.
https://en.wikipedia.org/wiki/Demographic-economic_paradox
The issues of poverty, disease, and overpopulation are closely interrelated indeed.
Innovation is always expensive but it always has been. There's a rolling wave of upgrade costs and older treatments becoming commoditized or dropped.
The fundamental of a fair system is that people are treated according to their clinical need.
You don't want to get cancer in Denmark because they don't have the best medicine and treatments and you don't want to get cancer in the US without an insurance to pay for those best treatments and even then it's hard.
Or put another way. You can claim that Denmark is one of the most fair systems IF you ignore the fact that they aren't providing it's citizens with the best and most effective treatments available. Thats not more fair. Thats just another system.
> If you go the insurance way of the US and try to let market forces rule
Market forces do not rule in the US. If you want an example of healthcare in which market forces rule, look at India. In India, there is massive disparity in terms of equality of access to care. But on the other hand, costs are entirely transparent (unlike the US), and the quality of care that one has access to given sufficient money is comparable to the quality of care in the US.
The US is actually much more like socialized medicine than people realize, due to the fact that we have two monopsonic systems[0] that we force private insurers to subsidize. It's the worst of both worlds.
That said, I agree that it's not clear that a single monopsonic system would be any better, for all the reasons you mention. I don't think there is a solution. Our actual demand and expectations for quality healthcare has risen dramatically over the last century, and our technology has not kept up (to the extent that, we are able to afford the top care for some people, but it is just not physically or economically possible to extend that to everyone right now, no matter how we structure the market).
[0] If the phrase 'two monopsonic systems' sounds like an oxymoron to you, just think about how we refer to Comcast and Time Warner Cable as monopolies - they are, because their markets are completely segmented and do not overlap.
Yup. It's worth all of your money for me to live an extra day—to me. That's the fundamental problem with insurance and end-of-life care.
> If you go the insurance way of the US and try to let market forces rule then you end up with highly inflated prices
It should be noted that while the U.S. employer-purchased insurance model is extremely broken, it's not really a free-market model. We've not had a free market in healthcare for a very long time (and of course, if we did have one, there would be issues about fraudulent marketing and credentials).
And let's not even get into issues of personal responsibility and choice. Should others underwrite lung care for smokers? AIDS medicines for the promiscuous? Mental treatment for drug users?Are some personal choices acceptable, and others not? Who decides? If a majority, who protects the minority?
Instead, it apparently means stuff like this:
>He detailed the many ways in which U.S. law prohibits competition for pharmaceuticals that Peruvian law doesn’t, including granting new patents to old drugs for relatively small changes
If drug companies are trying to charge ridiculous high prices for drugs with "little therapeutic benefit", wouldn't it be easier just to not buy those drugs than to re-work the patent system?
But that would involve physicians making recommendations in the best interests of their patients, and patients making decisions for themselves, and we certainly can't have that!
I recall a surgeon friend of mine complaining about the decisions made by the physician overseeing his child's care, and how hard it was to stand by and see the wrong thing done. He's internalised the model of 'doctor knows best' so much that even where his child was concerned he couldn't overcome that conditioning!
This has analogies, I think, to the ideas of software users who don't develop or people who rely on the police to protect them.