5 ms·

Public health systems, well-funded or not, are not a cure-all. I'd be curious to hear if you have any examples - if anything, they are reliant on research funde

by ppf 7y ago

Public health systems, well-funded or not, are not a cure-all. I'd be curious to hear if you have any examples - if anything, they are reliant on research funded by the huge amount of money sloshing around the US healthcare system. Given a fixed annual budget, a public health system essentially has to decide what "healthy" or "cured" means, and set some quality of life to cost of treatment ratio. Some examples: my dad, an incredibly fit ultra-runner, suddenly found himself unable to run more than a few miles, and was gasping for air. He was initially told he was fine for his age, and had to fight for further diagnosis. A close friend of my wife's died of bowel cancer - this is a known "loophole" in the diagnosis pathways of our public health care system. Essentially, it was decided that the cost of early diagnosis is too high for the relatively tiny amount of people who have it, which is why most cases are found when they are terminal.

nolongerlowres 7y ago
I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. To give a personal anecdote as well: A close friend of my wife’s had to fight and fight to get insurance to cover appointments in order to get her breast cancer diagnosed. I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it.
- ppf 7y ago
  Agreed, the US system is flawed. I suppose with public-funded healthcare, everyone is on the same level - the survival rates of breast cancer and bowel cancer is the same for all (unless you can afford to fly to the US and pay for care there).
  - rockinghigh 7y ago
    There can still be large variations across hospitals and doctors in a public system in terms of outcome.
- AnthonyMouse 7y ago
  > I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. Insurance company profits are only a single digit percentage of US healthcare costs; eliminating them wouldn't make a real dent anyway. (In many cases the "profits" are also unavoidable. For example, if the insurance carrier owns its building then the internal rents are "profit" but if you want to replace them you would still need a building and then have to pay for it from somewhere else. Every dollar you spend on anything is profit to somebody.) And a profit motive will in general tend to lower costs, because a company that can eliminate waste and then charge lower premiums for the same coverage will get more business and make more money. There are a lot of reasons it doesn't work out that way for US health insurance, e.g. when it's provided with employer subsidies under tax incentives it reduces competitive pressure (employees can't choose another insurer) and the tax incentives reduce price sensitivity. But a big one is this: > I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it. The basis premise behind the patent system is like this. It takes a lot of money to do R&D and it may not even turn into anything, but once it's public knowledge, everybody starts making the thing and not just the party who paid for the R&D. Which makes it a lot more profitable to wait for somebody else to do R&D and then go into competition with them than to do the R&D yourself, so then nobody has the incentive to do it. Patents say if you do the work you get a temporary monopoly on selling the thing to give you some time to recover your R&D before competition drives down the price. In principle this allows the market to set the price. If you invent a more efficient light bulb, you can ask $1000 for one but no one will pay that much even if you have a monopoly, they'll just buy the old light bulbs. But you might be able to charge as much of a premium as your light bulb will save in electricity over the existing ones and still find buyers. With drugs the incremental value is often very high -- it could save your life when the alternative is that you die. Which is what you want to happen, because you want a large financial incentive to do R&D that can save lives. But then the cost can be really high which makes people want some kind of insurance. When you have private insurers in competition with one another, you still basically have a market. If the drug maker demands a trillion dollars to treat one patient, any insurance company willing to pay that would have to charge premiums nobody can afford, and then nobody would buy that insurance and the drug maker would get no sales. So there is a limit on what they can charge, but it's still pretty high, because people really want their insurance to cover those drugs and will strongly prefer insurance carriers that do over those that don't. And then you get the large financial incentive to do life-saving R&D as desired. With a single payer system, that competition between insurers doesn't exist. If the system refuses to pay the maker's price for a drug, the system can't lose customers to a competing insurer that will. Which means you have a monopsony buyer that can dictate prices. Naturally they have the incentive to dictate prices that are lower. But higher prices during the exclusivity period is how the patent system directs money to R&D. By dictating lower prices they're not paying their share of the cost of developing the drugs that only exist because the US is paying more, and causing some life-saving drugs to not exist because the US market on its own isn't enough to justify the R&D.
- grkvlt 7y ago
  In the UK there is the Wellcome Trust [0] which is a non profit healthcare research body, and I believe other organisations like this exist. They would seem to be the ideal place for this type of work? 0. https://en.m.wikipedia.org/wiki/Wellcome_Trust https://en.m.wikipedia.org/wiki/Wellcome_Trust

by ppf 7y ago

nolongerlowres 7y ago

I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. To give a personal anecdote as well: A close friend of my wife’s had to fight and fight to get insurance to cover appointments in order to get her breast cancer diagnosed. I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it.

ppf 7y ago
Agreed, the US system is flawed. I suppose with public-funded healthcare, everyone is on the same level - the survival rates of breast cancer and bowel cancer is the same for all (unless you can afford to fly to the US and pay for care there).
- rockinghigh 7y ago
  There can still be large variations across hospitals and doctors in a public system in terms of outcome.
AnthonyMouse 7y ago
> I’m sorry to hear about your wife’s friend. But both examples you gave (people having to fight for further diagnoses of outside-case health problems) are really common with private healthcare in the United States too - we’ve just shifted the burden of cost of treatment/quality of life decisions to private entities who typically are only interested in furthering shareholder value. Having a profit motive is only a serious problem when there is insufficient competition. Otherwise companies that try to make outlandish profits would lose business to companies that offer better coverage for lower premiums by taking smaller profits. Insurance company profits are only a single digit percentage of US healthcare costs; eliminating them wouldn't make a real dent anyway. (In many cases the "profits" are also unavoidable. For example, if the insurance carrier owns its building then the internal rents are "profit" but if you want to replace them you would still need a building and then have to pay for it from somewhere else. Every dollar you spend on anything is profit to somebody.) And a profit motive will in general tend to lower costs, because a company that can eliminate waste and then charge lower premiums for the same coverage will get more business and make more money. There are a lot of reasons it doesn't work out that way for US health insurance, e.g. when it's provided with employer subsidies under tax incentives it reduces competitive pressure (employees can't choose another insurer) and the tax incentives reduce price sensitivity. But a big one is this: > I would like to understand if the world really does rely on US private-healthcare funded research - I’ve heard this argument mentioned before and have always been curious about it. The basis premise behind the patent system is like this. It takes a lot of money to do R&D and it may not even turn into anything, but once it's public knowledge, everybody starts making the thing and not just the party who paid for the R&D. Which makes it a lot more profitable to wait for somebody else to do R&D and then go into competition with them than to do the R&D yourself, so then nobody has the incentive to do it. Patents say if you do the work you get a temporary monopoly on selling the thing to give you some time to recover your R&D before competition drives down the price. In principle this allows the market to set the price. If you invent a more efficient light bulb, you can ask $1000 for one but no one will pay that much even if you have a monopoly, they'll just buy the old light bulbs. But you might be able to charge as much of a premium as your light bulb will save in electricity over the existing ones and still find buyers. With drugs the incremental value is often very high -- it could save your life when the alternative is that you die. Which is what you want to happen, because you want a large financial incentive to do R&D that can save lives. But then the cost can be really high which makes people want some kind of insurance. When you have private insurers in competition with one another, you still basically have a market. If the drug maker demands a trillion dollars to treat one patient, any insurance company willing to pay that would have to charge premiums nobody can afford, and then nobody would buy that insurance and the drug maker would get no sales. So there is a limit on what they can charge, but it's still pretty high, because people really want their insurance to cover those drugs and will strongly prefer insurance carriers that do over those that don't. And then you get the large financial incentive to do life-saving R&D as desired. With a single payer system, that competition between insurers doesn't exist. If the system refuses to pay the maker's price for a drug, the system can't lose customers to a competing insurer that will. Which means you have a monopsony buyer that can dictate prices. Naturally they have the incentive to dictate prices that are lower. But higher prices during the exclusivity period is how the patent system directs money to R&D. By dictating lower prices they're not paying their share of the cost of developing the drugs that only exist because the US is paying more, and causing some life-saving drugs to not exist because the US market on its own isn't enough to justify the R&D.
grkvlt 7y ago
In the UK there is the Wellcome Trust [0] which is a non profit healthcare research body, and I believe other organisations like this exist. They would seem to be the ideal place for this type of work? 0. https://en.m.wikipedia.org/wiki/Wellcome_Trust https://en.m.wikipedia.org/wiki/Wellcome_Trust