So we agree medicine cannot be managed as a business, right?
It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and not being profitable.
It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and not being profitable.
The trick is to still find ways to apply pressure so that a service gets better and more efficient in time, instead of attracting parasites that'll use it as money drain. Like a lot of healthcare-related businesses seem to do (heard plenty of horror stories from someone I know who's studying medicine and interned at hospitals, and we're talking about a country with public healthcare).
In public services, where making a loss is o.k. this is just included in the loss, and there is essentially nothing that encourages the 'parasite' to not drain the system.
Not if they sell before the shit hits the fan.
In fact I think this is the sad truth behind a lot of privatisation stories in the West... various government running out of cash but rather than admit poverty put on the rich mouth and claim its “better”
A huge part of the problem is the public reaction to how for-profit research is supposed to work.
In theory a cure is highly valuable. People should be willing to pay as much for it as the alternative, meaning as much as it would cost for multiple years of ongoing treatment, plus the value of the inconvenience the cure avoids in participating in the ongoing treatment for all those years. A cure should be more profitable than a treatment because patients prefer it to continuous treatment and are therefore willing to pay more for it.
But a treatment that costs $500/week and continues for 40 years is business as usual. Someone offering a cure with a one-time price in excess of a million dollars is derided as a soulless profiteer taking advantage of the sick, insurers refuse to cover it and everyone starts calling for Congress to pass a law against it.
So the market develops treatments instead of cures.
Just because there exists a multi-million dollar over a lifetime treatment regime doesn't mean that it is okay to suddenly "own" an equivalent chunk of cash from everyone cured.
We invent treatments because we CAN'T find a cure. The treatment represents society's best effort to alleviate suffering.
We solve problems so that we don't have to suffer them as a society/species anymore.
Businesses exist until we figure out a way to live without them. Profit should never be the end all justification for doing something.
The chunk of cash is the only reason the company is doing the research to begin with.
If finding a cure was easy then it would have been found a thousand years ago -- as some of them were. The ones remaining are hard and require a lot of resources to solve. If you want someone to put that kind of money in against a high probability of failure, they have to be able to expect an even larger amount of money to come back to them if they succeed or they won't do it.
The alternative is government funding, but then you're spending pretty much the same money. The taxpayer now has to pay the tab for all the high risk/reward research that didn't pan out. And then you're subject to all the usual government issues with bureaucracy and cronyism and principal-agent problems because you've put a thick layer of abstraction between the researchers and the patient outcomes.
As far as I know the most productive research places like xerox-parc was pretty open ended. There was not clear profit driven goals.
We also see massive success with open source projects which suggests to me that there are other ways of organizing this research which we have done very little to explore.
Not strange since there is a mssive profit incentive by industry to lobby us against ever trying alternatives.
That's a nice little scam they put together a while back. If the government funds the research then it shouldn't be patented -- the taxpayer already paid for it, they shouldn't have to pay for it a second time.
But the industry has better lobbyists than the public, so they get the taxpayer to fund the research, then wait to see if it pans out, then buy it for pennies on the dollar after they already have some evidence that it works. If it doesn't work, the taxpayer foots the bill and gets nothing. If it does work, the taxpayers have to pay even more money to use the fruits of the research they already paid for.
It's corruption plain and simple.
> We also see massive success with open source projects which suggests to me that there are other ways of organizing this research which we have done very little to explore.
Open source works, but it's mostly non-governmental.
The thing that worked really well historically was small research trials conducted by individual doctors as part of their practice and then replicated at larger scale if they panned out. That's all but impossible with the current FDA rules, somewhat for good reason (some of those experiments had a tangential relationship with ethics). But the current rules are just crushingly bureaucratic.
Maybe. But maybe there's also something wrong with expecting that much. Somehow Sidney Farber didn't decide that he was going to charge the families of kids with ALL the actuarial value of the remainder of their lives.
It can be frustrating to see the public, out of ignorance, grossly misjudge the relative contributions to health of, say, a vaccine developer relative to a self-promoting surgeon. But there is something new and rather strange with this way of seeing medicine as a "capture the value"-type enterprise.
The problem is this. Suppose the total value of a cure is two billion dollars but it takes a billion to do the research. You can say they should get, say, 1.2 billion instead of the entire two, but that isn't actually that much different, and if you make it 0.8 billion then the research doesn't happen. And it's really hard to calibrate that sort of thing -- you can't just look at the amount the research actually cost because that doesn't take into account the risk of failure, which you have to compensate for or you won't get the investment.
Which is also where the apparent inequity comes from, when a million dollars in research produces a billion dollars in profit. But that's usually because it was a thousand to one shot to begin with. If it wasn't, why has it taken this long for someone to take ownership of that huge pile of risk-free money, instead of the cure being discovered 30 years ago and already being out of patent?
Maybe because no one thought of it before?
The picture you're painting is fine if you're evaluating a handful of candidate molecules each with, you'd guess, a 5% chance of having the right PK profile or something.
But for major breakthroughs, there are "unknown unknowns" that make it impossible to estimate that likelihood. It's nice to think that, if you let the full value be captured, it would incentivize more people to pursue one-in-a-million "lottery ticket" cures, but it just doesn't work that way. They're not lottery tickets if they have incalculable odds.
For the most part, the difference between management and cures is in this latter category. I.e. we don't have a cure because we just don't know how to do it, not because we were too cheap to invest in the biochemical trench warfare to find the right molecule.
The odds aren't incalculable. They might have wide error margins, but that's hardly the same thing.
> we don't have a cure because we just don't know how to do it, not because we were too cheap to invest in the biochemical trench warfare to find the right molecule.
You're thinking about this at the wrong level of abstraction. It isn't a matter of having some candidate molecules and we just need some monkeys on typewriters or a huge bank of supercomputers to test them all.
It's that if you want a cure for cancer, you have to pay scientists to look for it. Not knowing where to look is not the same as not knowing how to look. The fact that it's hard is the reason it's expensive.
We do that. It's a two-tier system where the public pays for the science and the companies fish ideas from the science to make into medicines.
>The fact that it's hard is the reason it's expensive.
No, the reason it is expensive is because we've signalled that we are willing to pay large amounts of money, essentially regardless of the actual benefit extended by the state of the art treatment. Even if the state of the science doesn't have much to offer in the way of a cure, you can count on the private sector to make drugs that push the envelope of what we are willing to pay.
But because the job that the private sector does is not the "rate limiting step" as it were, dumping more cash on them is just wasted money.
Not the cost of medicine, the cost of medical research. If finding a cure for cancer wasn't expensive then either we've been doing something very wrong or we should have found it already.
And if it's expensive then the reward has to meet the expense in order to get someone to do it.
It gets worse if you look to the UK where a of lot public services are handed to companies, for example the merger of all social benefits Universal Credit is run by companies and in a manner that can only be called unprofessional and anti-social.
The idea sounds great on paper - there are a lot of different benefits, why not reduce duplication by merging them into one scheme then only asking for personal information once - but it ignores cashflow. People can be left without money to live on for weeks. It's also a classic "big bang" project which just piles the requirements of existing systems together, and hands them to one of the traditional government crony contractors: Accenture, HP and IBM. At least it didn't involve Serco.
(those are all real cases you can find in UK newspapers, mostly the Guardian)
You can certainly keep a 'competitive' environment which is regulated with incentives. And I do agree healthcare needs this, and shouldn't live purely by the free market.
This is the model many rich country healthcare runs on, and provides measurably better outcomes for less expenditure than the US.
However, in a single payer or similar systems, if a drug company decides to hike the price, the state (or institution) can swallow the cost and continue medical services to citizens until the situation is resolved (either by legislation or court cases). Since the state (or institution) is not a for-profit it doesn't matter as much if they sink a lot of cost as long as everyone can get their medical treatment.
IIRC, the research typically comes from state-funded academics, and the development comes from the manufacturers.
I am completely on the side of having government agencies developing cures and licensing out to companies then. This would avoid the perverse incentive of the OP. It also would stop the pervasive argument that patents are necessary to get new pharmaceuticals developed (I don't believe in patents benefit to society).
https://en.wikipedia.org/wiki/Medical_research#Privately_(in...
Private R&D is around 60% - however a large part of that is making minor changes to existing molecules in order to obtain fresh patents.The bigger, riskier research is done by the NIH and other publicly funded bodies. See
https://marianamazzucato.com/entrepreneurial-state/
Also - the quality of privately funded research is much worse, with non-reporting of negative results, data dredging and other dodgy activities being routine - see
Goldacre's book (he also has a blog) is well worth reading - describing _many_ ways in which drug companies can cheat.
And big pharma companies don't do early stage research. Small companies do. Most of those are in US
I would say in some cases that is a good thing. https://en.wikipedia.org/wiki/Thalidomide
Novartis? AstraZenica? Gsk? Bayer? Siemens? Hitachi? Philips? Olympus?
this works quite very much the other way as well..
The US has the best outcomes in the world if you have money. Which is why rich people from all over the world come here for treatment. We just have lower average outcomes because of access disparities.
The US has average healthcare when money is no object. The weathty often seak treatment outside the US and occasionally wealthy people come to the US on a case by case basis.
The core problem is treatments entail risk, so doing more eventually results in worse outcomes. Further the incentives are around doing more, putting the healthcare system in opposition to heathy patients.
That's why universal healthcare is the better solution for everyone.
That being said, the only source I can find for your claim is a throwaway sentence in an op-ed on Forbes (https://www.forbes.com/sites/paulroderickgregory/2012/07/01/...).
I found some more realistic (and sourced) statistics here: http://blogs.sciencemag.org/pipeline/archives/2010/11/09/whe...
That has the U.S. at 47% of drugs developed. Keep in mind those are based on drugs approved by the FDA, so it skews towards the U.S., and especially away from countries like Japan. Adjusted for population (I'm not entirely sure this is fair), that puts us neck-and-neck with the U.K., behind Israel, and far behind Switzerland.
I think that worrying about removing the profit motive entirely misses that fact that not only is the profit motive not the only motive for doing things, but oftentimes not even the determinate factor.
The more likely explanation for Castro seeking treatment in Spain is that Cuba is a relatively small country of only 11 million, and it should be expected that they're not at the very forefront of the world on every area of medical expertise.
well I'm living in Germany and I agree with that it is cheaper, but "better outcomes"? I do not think so.
I mean in Germany treating Diabetes means taking Insulin for a life long. However newer studies, actually found out that a treatment where the patient should be dieting and starts to do more sport can actually reduce the needed insulin dose or patients can even completely dismiss insulin or are cured from it completely in rare cases. (not a lot of doctors would actually help the patient or even tell them that this would be beneficial to them, hell not even the public health care sector cares)
However the thing is if you can sell Insulin for a life long to somebody who will probably die earlier you make a profit. On multiple fronts. Treating it means that once the person is cured, he will probably live longer, will have less problems and will probably cost the overall system less (but that's not something that should happen).
So basically in "richer" countries the system is equal to the US, it's just more hidden. care system and government are systems that benefit from each other if patients take treatments over a long time and probably have a reduced life-time. i.e. treatment > healing, at least from a business perspective.
We talk about AI optimized to create paper clips accidentally running amok and turning the world into paper clips. Why isn't profit a similar problem? Government agencies are just AI running on meat. Give them success parameters different than raw profits.
Honestly, why can't we see this as just a variant of the instrumental convergence problem?
To expect results or effects is not the same as making profits.
Why?
Schools are not for-profit institutions (well, not everywhere). Police don't make a profit. Nor does the fire brigade. Or the military, for that matter.
Are all of these disasters waiting to happen?
Let's make it a bit more ridiculous and extreme. Would it be a good idea to privatize US nukes? What would profit incentive provide there?
Remember, we are discussing the claim "creating public institutions without a profit incentive is a disaster waiting to happen".
[citation needed] My understanding is that they are more expensive than uniformed soldiers.
As further examples of state level institutions we could also look at coast guard and customs service. And, of course, the tax officials (what ever their local name happens to be in various countries).
A modern nation state is full of public institutions with dedicated personnel to carry the institutions mission.
Public institutions work just fine around the world in various countries, performing a multitude of missions. That's not to say they are immune to various pathologies, but that applies to all organizations, public, private, for-profit or non-profit. Public institutions work fine when they are fulfilling a legally defined obligation under a democratically chosen government.
The thing everyone wants to avoid is pathological cronyism. The key to this is to make sure the political power pool has churn - so there is no predictable kingpin with executive power around whom the power and corruption accumulates. Which, democratically chosen governments provide (with varying capacity, but even two parties is probably enough).
I agree, no one wants to funnel tax payer money just to amass state power. But some things that improve life really cannot in any obvious way be guided by profit mechanism, and some things are just too capital intensive to be able to do on a small scale. The obvious place to look for capital for large scale projects that add value to the general public is the state.
Note: although monarchs do exist as mostly figure heads, modern monarch seldom have executive power. Compare this to some countries with dictators or monarch with actual executive power.
> You can certainly keep a 'competitive' environment which is regulated with incentives.
This is my preferred approach as well. It's worst weakness is the potential for regulatory capture. I tend to believe that should be addressed by not giving corporations as much power as they currently enjoy in the US: enforcing constraints on participation in politics and requiring transparency, disconnecting health insurance from employment status, enabling clawback of executive bonuses, etc.
This in my opinion is a false dichotomy. The government can be owned/operated by coorporations or by the people or can be an entity in itself.
What I feel is missed by people leaning towards the idea of competition is that it is not a sustainable model under the current framework of ideas. If you optimise a society purely based on profitability, competition is the enemy, since it hinders individual businesses from maximising their profits. Hence the massive business consolidation we have seen in the last decade across the globe.
If you want competition because you want different ideas to be tested, then we need to explain what we want entities to compete for. Focusing on optimising one variable only, i.e. profit, will not work. We need new ideas.
We seem to have no problem with throwing $700 billion per year on the military and nobody is pressuring them to make a profit. Is that a disaster? No? "But that's different!" It's only "different" because that's what we've been led to believe.
A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.
https://en.wikipedia.org/wiki/Monopoly_on_violence#Max_Weber...
All the critiques on this thread about competing authorities such as local law enforcement, the second amendment, and so on, none of them invalidate the idea of legitimate use of force defining the state. Weber accounts for all those points.
The closest thing we have to an actual marketplace among authorities wielding violence is the competition between jurisdictions (one municipal police department against the one the next town over, the state police in one US state vs another US state) -- but that's not the same as a commercial marketplace.
The only critique I think is relevant is the idea of mercenaries, a.k.a. private military contractors. But there again, those mercenaries are part of the military-industrial complex, which is an extremely stunted marketplace as it's largely a government monopsony.
We don't use economic competition to determine who holds authority on the legitimate use of violence. As a consequence, we don't get the full benefit of marketplace competition in maximizing the efficiency of our armed forces -- but we also don't have perpetual civil war.
I don't think you know what the "[state] monopoly on violence" means. It does not mean all people authorized to use force are directly on the government payroll.
That is not the case in the USA, where the absence of such a monopoly is written into the federal constitution.
I think that the whole point of 2nd Amendment to US Constitution was to prevent government monopoly on violence. The possibility of citizens making successful military rebellion against the state was supposed to keep the government in check.
We give the government the leeway we do, because it is the best way to provide for the common defense of the nation. NOT because ONLY the State should have violence open to it as an option.
Anyway... Back to healthcare... The type of structure that made the military industrial complex problematic was specifically that the industrial part was doing everything they could via lobbying/bribery to maximize profit. A shift to a model where we attempt to minimize waste, and maximize effective treatment/cures turns the quality equation on it's head. You still run into the issue where riskier grants that 'may work' are going to have a harder case to make in order to be issued, but I think that once one gets away from trying to build industrial supply chains predominantly for treatments that don't result in cure, you would start to see materials and expertise to get industrial supply chains built period may become more easily accessible if not perhaps become much cheaper.
The 2nd Amendment is completely compatible with the philosophical concept of monopoly on legitimate violence as articulated by Weber.
Political hobbling and fuckery related to post office operations done to marginalize otherwise exemplary performance aside, the model has merit.
Aren't most public institutions non-profits? Don't many of these work well? What makes you think that a (truly) democratically run enterprise wouldn't satisfy the needs of its constituents?
I think patents make any kind of free market approach difficult if not impossible, but it's not as if there's no monetary incentive to invent the 'best' cure.
The big companies will always be the most greedy one's but most companies may still have slightly different priorities. Companies that survive must be long term economically sustainable. Consequentially most companies that exist will likely prioritize economic sustainability because those are the one's that survive.
However, it might still be that it makes sense to start and work with temporary companies that are not long term sustainable if they do fix a problem?
We all benefit from the higher availability of liquid dollars present in the majority of spenders. Demand backed by liquid dollars is a resource. Demand not backed is a cost.
It's cheaper to live overall. People can take risks, etc...
It's worth noting the Post Office does not operate on tax dollars. It's self funded, and could serve as a model for non profit public services. There are political reasons why the Post presents financial difficulty right now. They aren't rooted in any realities, just agendas seeking to marginalize it to favor for profit works.
Normally, the Post does turn some profit, which can go into the general budget. That didn't really effect the overall benefit and value to people.
This suggests we could do public works, non profit in the sense of some one or entity accumulating money somewhere, to pay down other debt, and do so in an equitable, low impact way.
Public works can be broken down into two types:
Infrastructure. These works provide new opportunity for everyone to benefit economically. The Interstate Highway Project, for example, returned many times it's initial investment. As a nation, those greater efficiencies allow us to compete better. All good, except when tolling them is discussed. That idea turns a clear benefit into a cost, and it hurts our ability to compete.
The other type is services. This is the Post Office model.
I often wonder how health care, basic banking, might be improved and actually pay us all nationally using the Post Office model.
But yes, I still think healthcare needs to be out of the market, ultimately.
The pharma industry should be working hard on planning its own obsolescence.
The same dynamic is at work in the food industry, which is responsible for the obesity epidemics.
Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.
In an ideal word. But as you show in your mismatch "serving shareholder value" is prohibitive to this. So having then as (blue chip) for profit bizes is making sure they will NOT ever be planning they own obsolescence.
> The same dynamic is at work in the food industry, which is responsible for the obesity epidemics.
...and high amount of pesticide residues, and destruction of the ecosystems, and heavy pollution on surface waters, and extreme disdain for animal wellbeing, and... (cries)
> Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.
To my understanding it should never be the economic model "to govern all markets", but AN economic model allowed in some markets while carefully bounded by rules and ensuring (1) best outcomes for we the people and (2) a leveled playing field.
The earth is like an apple pie
Let's eat it and let's die
Do you want some more? It's delicious...
Grow theee...
Grow theee...
Grow the economy!
It may be nice in theory to have government manage drug R&D, but it is not practical. It's simply too expensive
"It's not practical of the US to maintain the most expensive military in the world, it's simply too expensive" said nobody in Congress ever.
Ike then counseled American citizens to be vigilant in monitoring the military-industrial complex.
https://www.history.com/this-day-in-history/eisenhower-warns...
Ability to pay and willingness to pay are very different concepts
All your argument was that it's too expensive. Clearly it's not. If the manner in which the money is spent (or the feelings we'll have while sending it) is actually the limiting factor, you'll need to actually make that argument.
And less than the projected increase in the deficit this year due to tax cuts and spending increases
I dont know enough to have an educated opinion on healthcare regulation or on social services...but its disengenuous to claim that medicine cant be managed as a business when its already so heavily regulated that it barely looks like a normal business.
I would agree that the current model is super messed up...but maybe managing it like a business without all the government intervention and IP laws is the better solution here... maybe not...i dont know...but you definitely cant support your conclusion from the current environment.
No, we don't all agree with this. In a well-regulated and competitive market, businesses can opine about their fantasy product and scheme about how to extract maximum revenue from their customers all day, but if they push the envelope too far, a competitor will emerge and undercut them or offer a better product.
The issue is that the pharmaceutical industry isn't regulated in a manner that promotes competition. It's a heavily concentrated industry dominated by just a few multinational companies, most of which originated in the United States.
Like a growing number of industries in the US and elsewhere it is regulated in a manner which preserves the dominance of a few powerful firms and creates barriers to entry for competitors.
The behavior of these firms naturally shifts toward milking their customers as hard as they can because governments have granted them big moats. They pay the politicians, the politicians protect them, and we get another example of late stage capitalism, which isn't really capitalism at all.
Many Americans seem to harbor a curious cognitive dissonance: they don't trust their government, but they believe that more regulation of these already heavily regulated industries, devised by the government they mistrust, will fix the problem.
Yes, managing healthcare 'like a business' with an emphasis of profit over results produces bad outcomes for patients.
But managing healthcare 'unlike a business' with no emphasis on results also produces bad outcomes for patients.
Managing healthcare for the benefit of healthcare workers also produces bad outcomes for patients.
Healthcare should be managed in terms of producing results. Metrics would be a good discussion, eg "good quality of life hours added to life" "hours in acute pain reduced" or similar.
Point is, we need something to measure, the primary measurement shouldn't be profit.
Canadian here :). By that list, our per-capita healthcare costs are about half of what our neighbours to the south pay. I don't have it handy, but I've worked out the currency conversions and things before with various tax estimators, and in my province (Saskatchewan), we pay approximately the same overall income tax (Provincial + Federal) as someone making an equivalent salary in California (State + Federal). But included in that is all of our health care and some pharmaceutical coverage.
My own person experience was that taxes were much lower in the US than Canada.
I also didn't include the monthly health insurance premiums, nor did I include the mandatory 3-week vacation pay, nor the 35-week maternity/paternity leave, etc etc. Nor tuition costs. I'd really love to see the numbers all across the board as a general "cost of living comparison" for sure.
https://www.linkedin.com/pulse/20141010125950-31061941-what-... We do have a 401k-like system that has some neat perks:
- your contribution limit carries over, so if you have a tight year, you can contribute a bunch over the following couple of years
- you can temporarily withdraw from it tax-free to buy a house (it has to be replaced within 10 years or you'll owe income tax on it)