Kamen: Well, I mean the whole supposition that "We have a crisis in healthcare." Our healthcare system has seen some of the greatest achievements of the human intellect since we started recording history: We're developing incredible devices and implantables to improve the quantity and quality of people's lives. We're developing pharmaceuticals that alleviate the need for surgery and eliminate the volatile effects of diseases. We're making the surgeries that are necessary ever less invasive. You can get a stent through your femoral artery all the way up into your heart and fix a blockage without surgery. I'd say, if we have a crisis, it's the embarrassment of riches. Nobody wants to deal with the fact that we're no longer in a world where you can simply give everybody all the healthcare that is available.
Each side of this debate has created the boogieman and monsters, like "We don't want let this program to come into existence because that will mean rationing." Well, I hate to tell you the news but as soon as medicine started being able to do incredible things that are very expensive, we started rationing. The reason 100 years ago everyone could afford their healthcare is because healthcare was a doctor giving you some elixir and telling you you'll be fine. And if it was a cold you would be fine. And if it turns out it was consumption; it was tuberculosis; it was lung cancer—you could still sit there. He'd give you some sympathy, and you'd die. Either way, it's pretty cheap.
We now live in a world where technology has triumphed, in many ways, over death. The problem with that is that it's enormously expensive. And big pharmaceutical giants and big medical products companies have stopped working on stuff that could be extraordinary because they know they won't be reimbursed, according to the common standards. We're not only rationing today; we're rationing our future.
We didn't use to have the options that we have today in healthcare. We have incredible technology. It doesn't come free.
The whole debate is twisted. These guys want you to be afraid this is going up. We should celebrate that. These guys say, "We don't want to ration." You're rationing now. The way to ration less is to make more good technical solutions.
Popular Mechanics: So you're saying that rather than trying so much to control costs, we should be encouraging new cures?
Kamen: Every drug that's made is a gift from one generation to the next because, while it may be expensive now, it goes off patent and your kids will have it essentially for free.
Whatever the marketplace, if talented people are given resources they're going to keep driving us to having better, simpler, cheaper solutions to problems. And, by the way, if they come up with a better solution but it can't be cheaper—which, in the beginning, most things aren't—nobody says you have to buy it. If you think this new drug is too expensive, it's not a good deal, we have a crisis, buy the old one. It's a generic now. It's cheap.
That is a great way of looking at it. Every expensive patent now is a "gift from one generation to the next". The expensive drugs today are the generics of the future. Brilliant simple truth that is easy for even me to understand.
I can't quote the entire article, but he also adds some forward thinking analysis of why health care costs can come down if we continue to invest in the future. I thought the interview was an excelllent take and I appreciate reading his viewpoint.
I also found this on Marginal Revolution
The cost of the Medicare prescription drug benefit
I would remind everyone of this recent research result:In spite of its relatively low benefit levels, the Medicare Part D benefit generate $3.5 billion of annual static deadweight loss reduction, and at least $2.8 billion of annual value from extra innovation. These two components alone cover 87% of the social cost of publicly financing the benefit.
And here's another research result:Overall, a $1 increase in prescription drug spending is associated with a $2.06 reduction in Medicare spending.
Both papers are from very reputable sources. Left-wingers focus on the "giveaways" in this plan and conservatives focus on the cost or maybe they don't walk to talk about it at all. It's a little late to go through all the usual pro and con arguments on the policy as a whole. I'd just like to note that -- relative to its reputation -- the Medicare prescription drug benefit is one of the most underrated government programs of our time. If the goal is to cut or check Medicare spending, and I think it should be, we should do it elsewhere in the program.
It's also possible that the prescription drug benefit will do more for peoples' health (as opposed to their financial security) than will the Obama plan.
I was not a fan of Medicare expansion under Bush. It was the largest expansion of government healthcare since the sixties. If Tyler Cowen likes it though, I could be wrong. And I bet if it is using free market forces to be effective, expect the current administration to shut it down like the DC Voucher program. Sphere: Related Content