Cleaning Up From The Old Blog

One of my last serious entries over at the old blog had to do with the recent news of Canadian Premier Danny Williams coming to the U.S. to have heart surgery.  It went a little something like this:

Over at Glenn Reynolds' place, he's talking about the news that Premier Danny Williams of Canada is visiting the U.S. for the purpose of having heart surgery. One of Glenn's Canadian readers writes:

I’m a Canadian in Australia, and a great fan of your blog.

The premier heading south is not new. The Canadian political elite has long headed to the US for medical services while - with straight faces - extolling the virtues of socialized medicine for everyone else. And US hospitals are always used to back up a system in Canada that can’t meet demand.

It prompts the question: If the US adopts Obamacare, how will the Canadian health care system survive?

Given that the U.S. currently produces a disproportionate number of medical innovations and given that the proposed health care "reforms" currently in Congress will kill those innovations, it isn't just our friends to the north that will suffer if those reforms get passed. It will be the whole world.

One of the more frustrating aspects of watching the health care reform debates is seeing that none of the Democrats and damned few Republicans seem to recognize that a very large part of the health care cost problem is that the rest of the world isn't paying its fair share of the research and development costs of new medical technologies, pharmaceuticals, etc. Profit is a good thing. Sadly, education regarding economics has fallen into disrepute.

Shortly thereafter, the impending Haloscan implosion was announced.  So the doors closed there and opened here.  Unfortunately, the timing was bad as my frequent interlocutor, Ruth, stopped by to leave the following bon mot.

This post looks to me like two different -- and barely connected -- posts. The issue of whether the rest of the world is paying its fair share for our innovations doesn't have a lot to do with a Big Shot in any other country choosing a surgeon in the US. Patients, especially those in the Upper Crust, do sometimes go international to see someone particularly renowned in a delicate procedure.

If that US surgeon to whom the Premier is going is here because he moved his practice to the US from Canada it might say something about the merits of the two systems. Maybe. Did he? I didn't research it that far. But it doesn't say anything about delivery of your basic care in which knowledge and competence, but not rare SuperDoctor skills are needed. Which is most of it.

I'd be a lot more interested in the issue of "fair share" payment for US innovations. When i've said "fair prices!" elsewhere various people have asked who determines what's fair. And how.

I really dislike letting something like that go without a fair response.  And here we go.....

First off, I understand about the "barely connected" thing.  Part of that perception is the result of my taking a few shortcuts.  I assumed things about my readers that I probably shouldn't assume.

Here in Michigan, we are used to news stories about Canadians visiting our fair state to take advantage of the speedy and generally high quality level of care provided south of the border.  Hospitals located within an hour or two the border are known to have included serving Canadians as part of their business plan.  Such is the number of our northerly neighbors making their way south to resolve heath issues.

As Ruth suggested, there are many other reasons why a Canadian might come to the U.S. for medical services.  But the smart money is that they can't get what they want in the time frame they desire.

I assumed that my readers were familiar with those issues.

Good, Fast, Cheap; pick any two.

That is the rule for any good or service.  You can have a crappy product right away for little expense.  You can have an excellent product for little expense, but you will have to wait.   Of course, you can also have an excellent product right away, but it is going to cost an arm and a leg to get it.

Health care is not immune to this dynamic.  After watching and reading stories about Canadian health care, it is my opinion that they have decided to sacrifice speed....and some quality....in order to lower expenses enough that they can offer "universal" coverage to every Canadian.

Canada isn't alone.  Most of Europe has made the same choice with varying results.

Speed is not a simple measurement of service.  It is also the measure of the progress towards new treatments and technologies.

New technology is always expensive.  Consider the PC, flat screen TVs, cell phones, washing machines, refrigerators, or any other modern convenience.  When they were first introduced, it was always the affluent that could afford the latest and greatest products.  Eventually, mass manufacturing, further technological developments, and the experiences of early customers caused the price to drop until almost anyone with a job could afford to acquire some level of technological advancement.

The same holds true for medical technology.  The United States currently leads the world in the area of medical technology.  That isn't because we are such brilliant people.  It isn't because we have any unique natural resources that give us a medical advantage.

We lead the world in the area of medical technology because innovators are largely free to innovate, and health care customers are largely free to purchase those innovations, and those activities are largely governed by the actual costs involved rather than based on an arbitrary value imposed by a government body.

As is the case with any other product or service, early adopters pay more than those that buy in later on.  Some new technologies work better than expected.  Others don't really pan out or are replaced by later developing technology.  That process of figuring out what works and what doesn't is expensive.  And we are paying those development expenses on behalf of the rest of the world.

When countries limit reimbursements based on production costs, they automagically exclude themselves from paying for the cost of developing new medical technologies.  Those countries with a free market for health care are left with the responsibility of paying those R&D costs.

Back to our friend, Canadian Premier Danny Williams, and others like him.  What happens to those people if we enact a health care reform that dramatically slows medical innovation?  What happens to those people in Europe waiting for the next generation drug from some serious condition when research slows to a crawl?  Do they have to suddenly make do with what they have right now?  Do they have to live with months long delays where they formerly had the ability to be treated in a few weeks by traveling to the U.S.?  What happens if that next step in life saving medical technology doesn't take place within their lifetime?

How will the changes that we make today affect future generations?  Is it possible that the march of progress could be slowed to the point where a real cure for cancer might never be found?  How many people will continue to suffer and die as the result of slowing...or halting...the march of progress?

As we continue to consider the options with respect to health care reform, I believe that we have to keep in mind that some reforms will lead to less health care for everyone; now and in the future.  Sensible reforms that expand health insurance coverage are certainly worth pursuing.  Those reforms that hobble the technological engines of medical progress, and thereby cause everyone to have a lower standard of care, are not.

I don't have a quick definition for fair.  And having rambled on for so long, I'm not sure I can come up with a good one.  Here is one attempt at it.

Take the private cost of development, plus a small percent for profit.  Divide that by the number of people that will need the medical widget, pill, treatment, etc. over patent period.  The result is the fair distribution of cost across the people that will make the most of new product, service, etc.

Excluding large number of patients from the above is exceedingly unfair to those that are left footing the bill for the cost of development.  Excluding all patients will result in a dramatic reduction in the amount of money that is spent researching new solutions to old problems.

I'll close by admitting that I was having a bit of fun at Mr. Williams' expense.  More seriously, shouldn't politicians have an obligation to live under the rules as their fellow citizens?

One of the more frustrating aspects of the proposals for a "public option" to provide health care is that only the poor would be subject to it.  Our Congress critters get insurance by purchasing it in the same manner as all other federal employees.  Wouldn't we be better served by enabling individuals and businesses to buy into that federal insurance pool and get coverage that is identical to our Congress critters?  Isn't that a better option than creating an insurance ghetto for ordinary citizens while leaving our public servants with much better coverage?

Were I Canadian, I would be absolutely furious that Mr. Williams exempted himself from the problems that plague their health care system.  As a leader, he had an obligation to accept whatever his country had to offer.

[OK...this really is the end.  I'm terribly disappointed.  I ran the above through MSWord to use the grammar checker.  It said the above was written at the 10th grade level.  I usually do better.  Sigh]