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> The US is the back-bone of the medical system for the rest of the world and also has the best medical schools and best quality hospitals (the majority of people with money come to the US for life-saving surgeries..this has to tell you something).

This just means American consumers end up subsidizing health care R&D costs for the rest of the globe — purely because our government prevents us from collectively bargaining the way pretty much every other country does.

The people coming to the US for the “best quality” are generally going to doctors / surgeons in private practice, most of whom do not take insurance and can see you immediately. There is an almost entirely separate (and much higher quality) medical system available to those who can afford it. The system the rest of us belong to ranks right behind Morocco and Costa Rica in terms of outcomes (not joking — this is according to the WHO). We come in dead last among “first world” countries.

If American consumers stop subsidizing health care R&D costs, what will happen to the R&D? Will it decrease? Will health care costs in other countries increase as they start to bear some of it?

I assume it will continue because the drug companies need products to sell. It's not like they're just going to close up shop, but it may be the end of windfall profits.

The other problem right now is that it's not profitable to create drugs that actually cure anything. It's far more profitable to research drugs that help control chronic conditions (like diabetes, hypertension or Alzheimers) rather than drugs that can cure a condition outright. This is one part of why nobody researches things like antibiotics anymore.

As stated in a thread above, while it is not directly profitable for drug companies to cure diseases, it is profitable for their insurance agency cohorts. The current system does not totally dis-incentivize cures.

The problem is that those drugs never even make it into the pipeline because they don't get investment in the first place. The big drug companies aren't the ones actually developing new drugs; that's done by biotech startups. If a drug shows promise, big pharma buys the company and pays for stage 2+ clinical trials.

A friend of mine works in pharmaceutical marketing, and the big revelation I got from him was that the marketing departments run the drug companies from the top to the bottom. If marketing doesn't see a billion dollar market for a new drug, it won't even be considered for clinical trials. The VC in biotech knows this, so they won't fund startups that don't have this potential.

There was a HN thread on this recently in relation to antibiotics. [1] Antibiotics are a special case for their own reasons, but ultimately if the potential for insane windfalls isn't there, big pharma is not interested.

[1] https://news.ycombinator.com/item?id=21782994

Don't have to put money into R&D.

Between the MRC and NIHR, the UK's NHS puts at least a couple of billions (Sterling) into clinical research each year, making them the largest clinical research funder in Europe. They're not researching generics. Oh and they were one of the original funders of PubMed Europe.

I can think of lots of things the government does better than the private sector, although admittedly outside the US.

> Most new drugs come out of the US

How true is this though?

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2866602/

> Objectives. We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.

[...]

> Conclusions. Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.

And

> In the United Kingdom, the pharmaceutical industry invests more of its revenues from domestic sales in research and development than do companies in the United States.

The US pays a lot for medication, but a lot of that money is used for things that are not innovation (eg advertising). Countries that have better free markets for medications don't see less spending on innovation, they see more spending on innovation.

Take all my karma...

Implementing something like what you describe, IMHO, would have the greatest positive impact on the health and welfare of Americans, of anything this century.

I have a friend who is very high up in one of the largest health insurance providers in the US, and I have often debated over the years with this person that same point, that the insurance layer is what creates the model for inefficiency, and abuse at the provider level ($5 Tylenol pill, $10 Band-Aid, minor treatments and return visits of dubious value, etc.), and that if we treated medical care as an ordinary consumer good, outside of the extreme emergencies that are bankruptigly expensive, things would be a lot better. The person I know at the insurance company doesn’t necessarily disagree either.

Take a look at some of the "universal catastrophic coverage" proposals. The ideas is to BOTH socialize and increase market competition for healthcare at the same time. Universal care if you get cancer or for other chronic/terminal conditions. Then have a real market and competition for everything else. Regulate safety but not pricing or delivery. (Many of these plans also call for universal preventative services that drive down costs for the whole system). The Dutch have something closer to this in practice with "universal long-term care insurance" separated from the basic/primary insurance, but I've heard mixed reviews of how this works in practice.

It’s an interesting concept. The primary concern is that most of the costs for catastrophic medical problems will be incurred due to things like obesity, smoking, heavy drinking, dangerous lifestyles, etc. This creates one of two problems (or both?): either I’m left with the bill for others’ bad choices, or individual agency is under state / democratic control (e.g., salty foods banned, dessert banned, drinking banned, etc.).

Neither of those scenarios are ideal.

If the only question was genetic differences, that’s a risk I think a lot of people would be willing to take (e.g., that I might be healthy until 100 and then die in your sleep, theretofore paying constantly for others who have had medical problems for 70 years straight). I myself would be willing to take that risk / pay for that style of universal coverage, if not for the aforementioned choice part (smoking, etc.) playing so heavily into the cost, in practice.

The costs vs. outcomes analysis across health care systems suggest that your personal lifetime expected return on investment (likelihood * (value/cost)) of a universal health care system with a single large national risk pool will be higher than your lifetime ROI in the current US system.

You are probably underestimating your own unknown non-lifestyle associated risk, along with the risks your offspring represent.

It also costs a lot to detect and judge risk factors, manage individual risk pools, assure compliance, etc. You save a lot of money by simply not bothering to risk-qualify eligibility and this offsets the costs associated with carrying lifestyle risks in a single large pool.

This is a shockingly uncompassionate perspective - is it satire?

Assuming it's genuine, it's also misguided. Almost no-one wants to be obese, alcoholic, etc - accessible healthcare will reduce the incidence of all of these, which in turn will reduce the externalities associated with them.

You also don't need further state control to discourage smoking, drinking, junk food, etc - taxation is the mechanism used globally to discourage undesirable behaviour.

Anarcho-capitalism -- er, "libertarianism" -- at its finest. It's a deeply nihilistic worldview.

Almost all these things are biologically addictive, and furthermore the companies selling them have long known about their addictive qualities and then built marketing campaigns to ensure the public was not aware of the risks.

Taxation is how you recognize the externalities of this behavior while maintaining a free-market system.

We’ve been taxing cigarettes at like 100% or something ridiculous for many years, yet just as many people die from tobacco-related cancers now (if not more) as did when cigarettes were much worse for you (no filters, more chemicals, etc.). Those taxes also did not help to alleviate any of the problems in the medical industry; or if they did, they were obviously offset by something else massive, since cancer healthcare expenditures have risen drastically since their inception.

Also, it’s easy to look at something like cigarettes which pretty much everybody would agree are a terrible idea, and say, “fine, tax em”, but what about when it’s sugar, then butter, then red meat, etc. Let people make their own choices instead, and just don’t put the onus on the rest of us to fix the problems of those choices. Banning smoking in public is acceptable because it’s no longer a choice that only affects yourself; it affects anyone near you in a really terrible way. But taxing cigarettes (or anything else) is no solution.

“Consumer driven healthcare” as the academic researchers call it. It is bewildering why we don’t have diagnostic labs doing email marketing campaigns, for instance. This is driven, I think, by an outmoded concept of the security of doctor’s knowledge. Now, doctors are so behind the ball and play defensive to protect themselves from malpractice. The idea that an individual cannot make educated decisions which are market driven (ie price driven) for most mild conditions is incomprehensible.

With respect to health care, you may be able to make such educated decisions, almost no one else can. There isn't enough signal, and almost no one has the ability to distinguish signal from noise, and correctly interpret it.

What happens is that when given the opportunity, business will pollute the market with proxy signals (like brand trust, or fear based selling) that people instinctively respond to.

These proxy signals will be subject to manipulation by well-capitalized actors and will not in general reflect outcomes or value. They will interfere with the fundamental signal, making it even harder to detect and interpret.

Therefore the market will not work, in the sense of delivering the best outcomes for costs.

(Note that I am strictly speaking of healthcare, where even experts are often unsure of causal relationships and the relative value of various therapies. In general I think markets are a wonderful thing. Here is an experiment to try... take a mild condition treatable by OTC medication, such as the symptoms of colds, allergies, etc, and see how long it takes you to identify, characterize and factor the available therapies, and then map this to available products. Evaluate interactions, cautions, effectiveness, risk, convenience, costs, etc. Now ask yourself, where did you get your information? Who did you have to trust? Why did you trust them? Is the basis for your trust and understanding available to the average person?

I've done the experiment. My conclusion is that healthcare large and small is not like other goods.)

You assume medical bureaucracies are needed to protect from self-harm; ironically the current healthcare state is harmful!

I have firm belief in the fact that the market can more efficiently aggregate medical information but above all else create more rapid responsiveness to care. Bad products and actors are always seeded out over time in a society.

I really wish that all markets worked like that. When they work, markets are an amazing mechanism for pricing, driving value creation, allocating capital, and searching the economic and technological solution space.

But they don't work like this all the time, for all goods.

Tetraethyl lead, which quite probably caused material long-term harm to entire generations, is gone because the bureaucrats banned it. The free market would never have phased it out organically in a reasonable time-frame, we know this because it didn't. The market participants fought for its continued use and obfuscated the issues to their advantage.

GlacierMD was explicitly an attempt to filter, aggregate and make available high-quality health-care information (i.e. improve the quality of the signal, which is necessary for efficient market functioning), and it did not find a value proposition in the market.

> GlacierMD was explicitly an attempt to filter, aggregate and make available high-quality health-care information (i.e. improve the quality of the signal, which is necessary for efficient market functioning), and it did not find a value proposition in the market.

Except it doesn't -- what GlacierMD was trying to do is something that's currently done by humans at scale. Which he would have known if he understood the market better. This is a centralized function that is performed much higher up the chain and ends up in clinician / patient hands in the form of clinical guidelines.

This is maybe a useful tool for researchers to be used as one input in the development of clinical guidelines. But the functionality it delivers can be done manually (and will continue to be for liability reasons). In this case, the market worked. The author should be thankful he was able to get out of it only $40k in the hole.

I’m not trying to be divisive, but allow me to counter that all markets need consumer advocacy. High fructose corn syrup has been substituted in certain soft drinks now because of the diligence of consumer activism. I take it as a mathematical certainty that bureaucrats take longer to respond than the fluidity of market economics. I just find it appalling I can’t order my methotrexate medication without having to physically see a rheumatologist, with the man-hours to get that script embarrassing for a digital society.

The government runs a lot of things better than the private sector. Even in the US, the government loosely or strongly manages Police, National Defense, Garbage Disposal, Water managenemt, Power Management, Internet infrastructure, Education, Telephone, Mail and many more. Any service that every citizen needs to live a healthy life is better and more cost effectively run by the government.

Some of those are run by monopolies such as power, telephone and internet providers.

Telephone and internet are usually run by private companies no? I think the post meant that the few government run alternatives that exist tend to be better (cheaper, faster, better service etc).

>Government-run healthcare isn't a panacea

I didn't claim it was. Only that our present standards incentivize fee-for-service and not outcomes-driven, as exemplified by the author's inability to sell his outcome optimizing software. ACA tried to remedy that with preventative care standards, but the current administration is actively dismantling it.

Your model works for cosmetic surgeries because they are cosmetic - optional and not life threatening.

When calculating price, the cost to produce a drug is the last thing on pharmaceutical companies' minds. The question they ask is how much are you willing to pay for something that allows you to continue living. The factors they actually consider: the patient's perceived cost-benefit of continued suffering, the credit/insurance-worthiness of the treatment cohort, and whether the company faces competitive pressures from others selling the drug on the market.

Nothing better depicts the situation than what goes on when pharmaceutical companies merge or acquire the rights to rarely used drugs[1].

The only way to structurally combat this is with the monopsony power of a single payer system.

>I can't think of anything that the government runs better than the private sector. Healthcare is no different.

Government run care has the highest satisfaction rate of any healthcare coverage[2].

1. https://www.nytimes.com/2015/09/21/business/a-huge-overnight...

2. https://news.gallup.com/poll/186527/americans-government-hea...

> I can't think of anything that the government runs better than the private sector.

Then you are not very good at thinking. There is no theoretical, practical or empirical evidence that this should be true. If you _feel_ this should be true, you should really investigate where that feeling comes from.

Basically your post is just ideology without argument or evidence. All evidence shows that free markets in health care are terribly inefficient. If that doesn't align with your ideological priors, well, adjust your reality.

I am on the fence between Single Payer and your proposed solution of "push the cost to patient to force the price down". I do think the same but the appeal of universal healthcare is similar to the appeal of things like fire department. We don't really always need it but when we do, we don't want to worry about it.

Honestly, as long we get rid of the mafia middleman a.k.a insurance company except for real catastrophic situations, I do agree that costs will plummet. Price transparency is another key aspect.

The problem with the fire department is the freerider problem - if I pay for the fire department’s “protection” but my neighbor doesn’t, and his/her house is on fire, the fire department has to save my neighbor’s house in order to save mine, so the neighbor is not incentivised to pay.

Healthcare doesn’t have this issue (except in emergency services), so public healthcare also doesn’t solve that. It solves problems such as the principal-agent problem, asymmetric information, improves collective bargaining, ...

The drug things is partially BS. The top 10 big Pharma (in random order)

GlaxoSmithKline British

Eli Lilly US

Sanofi French

AbbVie US

Roche Swiss

Pfizer US

Novartis Swiss

Merck & Co US

AstraZeneca British/Swedish

Johnson & Johnson US

(edit spacing)

Hard to say. These are all internationalized firms with a variety of global operations centers. I know GSK does a lot of their research in North Carolina. But that is beside the key argument, which is that the US pays more (in aggregated cost and volume) to these firms, such that the total revenue for a product line during the patent lifetime justifies the cost to both bring the drug to market and pay for a variety of failures that didn't make it to market. I'm not sure if this is true, but it does seem plausible. And even if it is true, it still might be better to, say, fund more university based research instead, or have lower per-unit costs and pay innovation bounties or any number of other schemes.

Is it more than aggregate of all other markets?

> with an even more inefficient layer called the government.

Maybe in the US, other countries (e.g Australia) are not so inefficient.

I have worked in government (twice) and large and small companies, now working in the private sector for the last 20 years. There are structural inefficiencies and perverse incentives in both domains, though they are very different in style and visibility.

In magnitude, not so much.

In a true Democracy nothing would be valued more by government run health care than human lives and/or human suffering.

>Most new drugs come out of the US and socialized governments create generics at a fraction of the cost, because they don't have to put any money into R&D.

This is a completely false right-wing talking point. It takes 10 minutes to uncover how just totally bullshit this is.

Don't ever repeat again or anything remotely like it (aka the rest of your post).

https://www.ncbi.nlm.nih.gov/books/NBK50972/

https://other98.com/taxpayers-fund-pharma-research-developme...

The government never sees a return in any form on the money taxpayers put forth. But private companies do. Just waiting like vultures to snag whatever makes it through the proof of concept phase and claim credit.

>I can't think of anything that the government runs better than the private sector.

ISP's? Roads? Social services? Schools? Emergency Services?

Your second link has a pie chart that claims that pharma companies spend around 200x as much on advertising as clinical trials. Do you believe that is true?

This has been known for a very long time in pharma circles. Marketing budgets are several orders of magnitude higher than R&D budgets. An extra dollar spent on marketing has much higher returns than an extra dollar spent on R&D. Most of the real "hard science" R&D is paid for with NIH grants.

> Marketing budgets are several orders of magnitude higher than R&D budgets.

This is a lie. Marketing budgets are approximately equal to R&D (https://www.bbc.co.uk/news/business-28212223) so you're off by several orders of magnitude.

> Most of the real "hard science" R&D is paid for with NIH grants.

Also not true. NIH grants are ~$40 billion/year whereas industry R&D are around $80 billion (https://www.statista.com/statistics/265085/research-and-deve...).

There are definitely lots of problems with the pharmaceutical industry, several of which are mentioned in that BBC article. But making hyperbolic claims that they essentially don't do any R&D isn't helpful.

>This is a lie. Marketing budgets are approximately equal to R&D

Your own source doesn't even say that. In the exact BBC article you linked:

>But as the table below shows, drug companies spend far more on marketing drugs - in some cases twice as much - than on developing them

Here's some very very basic reading on the subject that you can find in 10 seconds of googling: https://en.wikipedia.org/wiki/Pharmaceutical_marketing

In the literally first sentence on this topic:

>pharmaceutical company spending on marketing far exceeds that of its research budget

Imagine living in a society where supposedly rational, intelligent people hold opinions that don't withstand the test of a few keystrokes; opinions that quite literally aid in the needless death and suffering of others while also just generally being a complete waste of time.

In the context of a claimed difference of "several orders of magnitude" (i.e. >1000x), a difference of 1-2x rounds down to 1.

If you follow the citations for that Wikipedia claim (a very very basic step) you will see that they don't provide any evidence for an order of magnitudes difference.

I'm not usually in the habit of shilling for Big Pharma, but since you've taken such a condescending tone I'll make an exception and point out that according to that exact Wikipedia article you linked, literally the same paragraph on the topic mentions that the majority of marketing spending is on free samples. Unless you think that drug companies should raise their prices in order to fund more R&D (which would have the same effect as reducing free samples) this doesn't seem very objectionable.