Antrax wrote:
Because these systems are not isolated from each other and the U.S. currently with its medical over-spending subsidizes the rest of the world. Our reward is to have a greater share of medical technology development.
Of the top 15 biomedical companies:
9 are located in the U.S.
2 are located in Switzerland
2 are located the UK
1 is located in Germany
1 is located in France
It seems obvious to me why more biomedical companies are located in the U.S. There is more money to be made there, and research costs are incredibly expensive. I'm reminded of an exchange on the West Wing which debated this point:
The West Wing wrote:
Toby: Each pill costs them $5 to manufacture
Josh: You know that's not true. The second pill cost them $5 to manufacture, the first one cost $400 million.
Because Americans pay so much for their healthcare, medical devices and treatments are developed here at a greater rate. Because we pay more for these goods and services, the same companies can sell the same products elsewhere for cheaper. The result is an American subsidized world medical development industry. If we were somehow able to legislate our way to less total costs: either the rate of medical development would slow, the cost in other countries would go up, or both.
Not sure that this is a strong argument. For one thing it seems somewhat circular - healthcare spending is high because the US funds a lot of research, and the US funds a lot of research because healthcare spending is high. It also doesn't really add up - healthcare products are sold globally, so they needn't be developed in their primary market. For example, China is the world's largest economy, but a small economy like Switzerland attracts more top biomedical R&D by your measure.
I would suggest the picture is more rounded than that. The US is an attractive place to do business, and to do research. You have plenty of access to highly-educated professionals to carry out your research, you have a thriving economy with plenty of opportunity for clustering (and keeping those professionals in relevant work), you have a low-tax and low-regulation environment, you have the best research infrastructure in the world (particularly on the East Coast and California, but also in the South), you have one of the strongest intellectual property systems in the world, and you have a generous R&D tax credit.
Amongst countries that spend at least $50m dollars a year on R&D, the US spends the third most per capita - behind only Switzerland and Singapore. Even extremely research-intensive countries like Israel and South Korea (who spend larger proportions of their GDP on R&D) can't match America's sheer size and wealth. And incidentally, healthcare in Israel and South Korea costs about a quarter of what it does in America. Yes, medical research is only a subset of total research, but this gap can't be explained through reference to research costs.
I think your are right that the model currently advocated by the left of the Democratic Party is not sensible. However, I think there is are credible middle ways between "Medicare for all" and the present American model, which is grossly inefficient, leading to huge waste and preventing many people from getting the treatment they need (or the money going to other priorities).
The issues I see with "Medicare for all":
- Medicare is unusually generous - it funds a lot of things that other systems don't and provides them much faster.
- Some advocates, such as Bernie Sanders, want to make private health insurance illegal. This is clearly a very bad idea. While it may mean that standards in the public option rise, it would put a squeeze on resources and ultimately seems motivated more by politics of envy than by practical, evidenced considerations.
The issues I see with the current American system:
- Huge levels of spending for poor results, most notably only partial coverage.
- Many people left with little or no healthcare, or forced to spend large portions of their income on healthcare.
- People are discouraged from getting cheap preventative healthcare, instead holding off until emergency hits (admittedly this is the case in most systems but is likely to be worse in systems with more barriers to access)
- In most countries, nationalised systems can benefit from economies of scale. The US's insurance-based system doesn't allow for this to nearly the same extent.
- Geography - there are more remote areas in America. This is insurmountable unless you just ban Alaska and the Midwest.
Now I don't know what the effect of geography would be, but Canada has very hostile geography, and Americans spend more than double what Canadians spend on healthcare. Perhaps efficiency on the level of Israel or New Zealand is unobtainable, and I think Singaporean levels almost certainly are, but the US is currently using a deeply inefficient model with huge related opportunity costs. It's difficult to see things getting worse as you already have the worst system (some metrics may put you narrowly ahead of Switzerland).
Of course, this is going to require more government spending. But you presently operate in an extremely low-tax environment. While it might be difficult politically to raise taxes, ultimately it would simultaneously increase people's standard of living while also increasing disposable incomes.
Americans deserve the best, but currently they don't get it.
23 Jul 2019, 4:21 am
