About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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July 30, 2009

Health Care Reform - Really?

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Posted by Derek

I haven't written about the various health care reform packages that are being hammered out and hammered through the various parts of Congress. That's partly because I began to think fairly early on in the process that we weren't actually going to see something happen as quickly as the administration wanted, which meant that there were still plenty of twists and turns left. I still think that's true - in fact, I have no idea when a final bill will ever get Frankensteined together for a vote, and no one else seems to have a good idea, either.

And since the main focus of this blog is pharmaceutical research, the first question I have to deal with is what effect such a bill will have on what I (and many of the readers here) do for a living. Absent a good idea of what the legislation will really look like, that's impossible to do in detail. But I can paint some broad strokes at this point, and they're probably not going to come as much of a surprise: I don't like what I see.

On the macro level, I don't like the administration's rhetoric on this issue. I do not believe that health care costs are crippling our economy, and the implication that they're tied to our current economic downturn seems specious. (And yes, that argument has been made, and more than once). Such an any-weapon-to-hand approach seems a bit different from what many people may have thought that they were voting for in the last election.

But I didn't vote for Obama, although I certainly wasn't crazy about the McCain-Palin ticket, either. My fears (expressed here) that he might turn out to be a zealous world-changing reformer have been amply confirmed. What do I have against zealous world-changing reformers, you ask? Why, I fear that the world is trickier than they are, for one thing. And too many of these people seem to come across as "If you people would just have enough sense to see that I'm doing this for your own good" types. At the rate we're going, that'll be the key phrase in a presidential speech right after Labor Day. (Mickey Kaus has been pointing out for some time now that this eat-your-peas-for-the-common-good approach is not doing the administration any favors).

The only big changes I'm in the mood for, generally speaking, are ones that give people more control over their own destiny, and if that's what we're seeing here, I've missed it. (I'm not alone). I guess that I just don't believe that systems this large and this complex are subject to wholesale intervention by the Wise and the Good. I worry that the Wise and Good will, in fact, decide that if they're truly going to control costs that they're going to ration health care in ways that people aren't necessarily expecting. Part of that rationing may well have to be either de facto (or flat-out de jure) price controls on pharmaceuticals and other parts of the system - and if applied thoroughly enough, these will be an excellent way of creating shortages of just the things that are being controlled, in the same way that price controls have always functioned. Some of those shortages will be silent ones: the things we don't discover.

Alternatively, we could end up with a Great Big Plan that doesn't really attempt to cut costs, or defers those cost savings into the glorious future. It's worth considering that, as far as I can see, every single attempt to run a large state-sponsored heath plan has ended up costing far, far more than even the most pessimistic initial estimates. And this time will be different. . . how, exactly?

And that leads us to the sort of bill that I think we're most likely to get: one that doesn't satisfy the biggest advocates of sweeping health care reform, since it's had to abandon the big proposals for the sake of political reality, but one that at the same time spends lots and lots more money, with no clear plan of how to raise these funds, all of that again for the sake of political reality. One, in short, that gives all the politicians involved a chance to pin "I Passed Health Care Reform!" buttons on their jackets while pissing off everyone who bothers to look at the thing closely, and one that commits us to spending oceans of money to accomplish not very much.

Perhaps I'm just in a bad mood. But that looks like what we're heading for.

Comments (72) + TrackBacks (0) | Category: Current Events | Drug Prices | Regulatory Affairs


1. Old Timer on July 30, 2009 9:29 AM writes...

I normally find myself thinking that your posts are right on the mark and incredibly insightful. This post, however, has me scratching my head. Although I am rather worried about a "sweeping reform" that simply bloats another government program, I wonder about the data you examine to conclude health care costs aren't out of control (although to be fair, you said "crippling our economy"). I am also in favor of giving people more control over their own destiny, but the current healthcare system is so far from that it's mind boggling. I don't understand why people don't discuss the conflict of interest inherent in having a for-profit insurance company dictate the healthcare for which you qualify. I had the misfortune of needing a minor surgery while in graduate school, and even with my wonderful University insurance program, I was wiped out for 1.5 years just for my 10% (or was it 20%?) copay. If my copay was any higher, I would have had to drop out of grad school to pay my medical bills - at 23 years old. Most people aren't so lucky.
I don't expect things to change overnight, but I see a system so overly bloated right now, it needs to be tied down and given gastric bypass surgery.

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2. RB Woodweird on July 30, 2009 9:43 AM writes...

This just in: Us upper-middle-class white people with company-paid health care whose salaries depend more-or-less on the current system are happy with the current system, see no need for change.

Turn a hose on the servers now, fellas - health care reform comments are incoming!

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3. metaphysician on July 30, 2009 10:20 AM writes...

Problem is, it ain't price controls the system needs. The worst offenders as far as high medical costs are: drug R&D; and malpractice lawsuits.

What the system really needs to save money, is extended patent life and tort reform. Which we aren't going to see anytime soon, certainly not under this administration.

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4. exAZ on July 30, 2009 10:22 AM writes...

For anything this big and complex the Law of Unintended Consequences always applies, but I don't share your concerns about rationing. The fact is, in the US, health care is already rationed, first by income and employment status, and second by the insurance companies that are required by their stockholders to maximize their profits.

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5. Palin by Comparison on July 30, 2009 10:29 AM writes...

I think you should stick to science- your biases are showing, and they aren't pretty.

Everyone that I know who is a health care provider feels that our current system is irretrievably wrecked- doing nothing is what got us to this point. Rather than simply say "I don't like the current plan" how about proposing an alternative? It's so easy to criticize, yet in the absence of a better idea (or ANY idea) it sounds to me that you're defending the status quo.

There are many better blogs engaged in this debate, and I think you've made a mistake in posting this entry.

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6. Sili on July 30, 2009 10:33 AM writes...

Well, I agree that what you'll get will be a dog's dinner of a solution.

As a furriner I'm overjoyed not to see McPalin anywhere near influence, but I'm not at all pleased with your Democrats for that reason. The least of two evils.

I'm just glad I don't have to suffer your system. Sweeping reform seems in order. I cannot for the life of me understand why anyone would accept a system where insurers can profit off sick people.

Of course there'll be a need for rationing, but as in any other situation these days, noöne will accept the blame. Risk-averse cowards, the lot of them - I have the exact same loathing response to the current manned spaceflight programme. (It's so easy to complain when one is not directly affected, of course.)

Good luck. You're screwed.

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7. Biobug on July 30, 2009 10:43 AM writes...

I agree completely with your sense that the administration is fabricating this healthcare crises. data shows that while the number of uninsured (45.7M) keeps going up over time, the proportion of the population remains fairly stable around 14-15%. If you exclude non-citizens (10M uninsured, or a 50% proportion) the rate drops to about 10-11%. This is about the poverty level as well.

So in other words, citizens in poverty don't have health insurance. Why isn't there a poverty crises instead of a healthcare one? Or a provide treatment for non-citzens, mostly hispanic people crises? Perhaps those two are less politically viable...

Furthermore, there are 9M uninsured who are 18 to 24. Many of these people chose to not have insurance because they don't go to the doctor, as I did for most of this period of my life. All the current bills being considered mandate these people purchase insurance or pay a penalty. Talk about decreasing liberty while giving more money to insurance companies, and (thankfully) our industry.

Obama's team should expand the phrase to "Never waste a good crises, and don't be afraid to create one."

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8. darwin` on July 30, 2009 10:43 AM writes...

C'mon everyone. Don't sweat the small stuff.

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9. goatleggedfellow on July 30, 2009 11:10 AM writes...

@ RB Woodweird- Our exorbitant health plans that we don't see and can't change and tie us to our employers are part of the problem. One of the aspects of the Wyden plan (the only part I know of, admittedly) gets rid of the employer plans and forces the companies to return the expenditure directly back to us so we can choose our own plans. I don't know about your experience in the industry, but I'm tired of losing my health care every time a company collapses.

@ Biobug- Please leave the illegal immigrant debate out of this. We pay for their health care and we always will. We can at least divert it to cheap, preventive care instead of the emergency room.

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10. eugene on July 30, 2009 11:12 AM writes...

Well, Switzerland had a similar system to the US, and changed to a public healthcare system a little while ago. It was a very narrow decision but almost everyone is happy with the outcome now. It doesn't seem to have affected the Swiss pharma giants, but you can always argue that they can make up most of the lost revenue in the US I suppose.

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11. Joel Blow on July 30, 2009 11:23 AM writes...

"every single attempt to run a large state-sponsored heath plan has ended up costing far, far more than even the most pessimistic initial estimates."

I agree, except for the "state-sponsored" part. The current approach must also be included as failed.

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12. eugene on July 30, 2009 11:25 AM writes...

A really big problem with the US healthcare is that a lot of people are afraid to lose their crappy job simply because they will lose the healthcare. But even with their company healthcare, many are screwed by the copay so badly, that it doesn't really matter anymore.

Get rid of that, and you could stimulate the economy in untold ways as more will be able to start their own business or demand a bigger wage since they are no longer afraid to change health plans where a pre-existing condition will not be covered. There is a lot of underestimation of this phenomenon. Many, many Americans that I've met are scared to death of losing their health coverage and it creates a serious depression to the economy and the entire society when that number gets into the higher 'tens of millions'.

Being afraid to take risks due to fear of going bankrupt from a simple broken leg is a terrible way to live. Strangely, when I didn't have any medical insurance, because I couldn't afford it anyways and I was in between jobs for a while, I wasn't really afraid anymore. The choice was out of my hands. Still, I never did break my leg (but I didn't ride my bike as often).

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13. Hap on July 30, 2009 11:25 AM writes...

1) The costs of every other state-sponsored health plan are substantially lower than ours (even Canada's, who was running second by a decent margin), and in most cases, they get better outcomes (longer average lifespan, lower infant mortality, etc.). Oh, and other places are likely a more comprehensive public health network as a side benefit - part of what made TB and AIDS problems in the first place was the lack of such.

2) Individual/family health care outside of work is effectively unaffordable - this would seem to imply that either they won't get care (until too late, at which point we lose either their economic production or the costs of fixing them, or both) or we'll pay for it anyway, and more (ER care isn't exactly the cheapest of all care after all). Employers who do have to pay the costs are trying to cut them, and are taking burdens from those unwilling to pay for health care - thus making them less competitive. That guarantees a race to the bottom, with employers dumping health care, and the federal and state governments bearing the costs, in the most expensive way possible, and with bad outcomes to boot (because care at that point is probably less likely to work than earlier care would have). This seems like a problem to me.

3) Health is something people can't live or produce much without, its outcomes are subject to chance, and (intentionally or not) providers' effectiveness is hard to measure - these all seem to unhinge the market mechanisms that would moderate prices, or even make the current system sustainable. In addition, the AMA effectively rations doctors (limitations on med school admissions), so the supply of care is guaranteed to be far less than the demand (which, as noted above, is unlikely to be self-limiting). If you can't comparatively price care (or evaluate its quality), can't live without what's being sold, and always have too little, how is the market going to solve any of those issues? (well, other than "You're poor. Sorry. You're going to die, soon.")

I don't like rationing (and more likely, the impositions on activities that seem to be in the offering), but as someone else put it, they already are (by income and job status) - the question would be can the government do it better and more fairly than the insurance companies? My lack of faith in insurance companies is still significantly greater than my lack of faith in government at this point. YMMV.

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14. John D. Froelich on July 30, 2009 11:36 AM writes...

All thru this, Obama has been like the high-pressure salesman of a shoddy product. He wanted more and more speed, DON'T BOTHER TO READ THE FINE PRINT1 Everything will be alright BECAUSE I SAY SO.!

This does not look like a good deal.

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15. John D. Froelich on July 30, 2009 11:36 AM writes...

All thru this, Obama has been like the high-pressure salesman of a shoddy product. He wanted more and more speed, DON'T BOTHER TO READ THE FINE PRINT1 Everything will be alright BECAUSE I SAY SO.!

This does not look like a good deal.

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16. Hap on July 30, 2009 11:51 AM writes...

That may be the best argument against Obama's plans - I mean that sales style worked out so well from 2001-2009...

I don't think that's what you meant, though.

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17. barry on July 30, 2009 11:53 AM writes...

Americans currently pay more for "healthcare" than anyone ever has, and the fraction of our GNP keeps growing. For this, we don't get the world's best longevity, or infant mortality, or standard of health. According to the AMA, we now spend 2/3 of our "healthcare" dollars on prolonging the last six weeks of dying, rather than on the health of the living. We need to put our money where our values are. It is unlikely that a system run for the profit of the Insurance companies and their shareholders will do this.

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18. pEvans on July 30, 2009 12:11 PM writes... and then skewering those fools who want to change things--thought I had the wrong blog. What's next? (Suggestion: I can haz adamantane)

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19. Belen on July 30, 2009 12:26 PM writes...

I really like the chemistry related posts on this blog, but this one is way off the mark. I don't understand how a system that denies people the care they need just to pay more money to executives and stockholders can ever work.

@ Biobug- My medical insurance lapsed while I was in college. Like you said I was 18-24. I ended up slipping on some ice and breaking my arm. Needless to say the bills for the emergency room visit alone were astronomical. I was in college! how was I supposed to pay them off? TA an extra class? Please don't talk about how young people never get sick and don't need coverage. You never think it will happen to you until it does.

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20. Biobug on July 30, 2009 12:33 PM writes...

@ Goatlegged... interesting jump assuming that non-citizens refers to illegal immigrants, when an estimated 60% of non-citzens living in the US are here legally on work / education visas. My point was how the administration is skewing the numbers, always talking about the number of uninsured growing, but never saying the percent has been stable for over 20 years. Talking about 45 million uninsured, which includes many people who don't want to be insured. Other things like that.

Also, look into the outcome measures that 'prove' we have worse care. The most commonly used are infant mortality and life span. You'll see this data is a very poor reflection of reality as well.

I agree entirely lets move people to preventative care. How about with a concentrated program for a group of people where HALF don't have any insurance? Crafting a program for 10 million people who need help is probably easier than one for 300 million many of whom don't want it.

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21. FormerMolecModeler on July 30, 2009 12:47 PM writes...

The most common reason for filing bankruptcy is medical bills. I can't think of any other country where that is even a vague possibility. Maybe you can enlighten us why that is a reasonable outcome Derek.

Your philosophy appears to be, and it is shared by many others, I got mine to hell with you.

Let's say you get fired in the next year, and are unable to find a position (they'll just replace you with a freshly minted PhD). Will you be able to pay your COBRA premiums? Suppose then you or someone in your family suffers a catastrophic illness. How will you pay your medical bills? Really, I am curious what you would do in such a situation.

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22. molecular architect on July 30, 2009 12:48 PM writes...

I share your concerns that the proposed reforms are too expensive but the current system truly is broken. If you have the unfortunate opportunity, as I did, to join the ranks of the uninsured you will learn just how bad the current system is.

I lost my job when my mid-sized pharma company folded. For 19 months, I applied for literally hundreds of chemistry and non-chemistry jobs. I learned just how unmarketable a science PhD is in the current economy. No matter that I had a good publication/patent record, had contributed to drugs in clinical testing, and had worked my way up to director.

I took advantage of my COBRA benefits to maintain my heath insurance. This was almost prohibitively expensive, consuming over one-third of my unemployment benefits. I looked for alternatives and was prepared to dig into my retirement savings to pay for it. To my dismay, I could not buy insurance. I was 47, in excellent health, with no preexisting conditions. I exercised regularly, walked over 50 miles each week, backpacked, kayaked, and other exercise on a regular basis. All of the insurance companies I checked with had the almost identical six questions on their application form. The "sin" that disqualified me from coverage - I had taken prescription medicine at least once during the previous 6 months. They didn't even ask what the prescription was, how long I took it, or anything else. The simple fact is insurance companies do not want to insure ANYONE over 45.

Incidently, the group "health insurance" plan offered by the American Chemical Society is a joke. You can't get it unless you're young and healthy.

I finally landed my current position and only had to go without any coverage for 6 weeks. Fortunately, I had no accident or other health problem which could have easily pushed me into bankruptcy.

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23. molecular architect on July 30, 2009 1:03 PM writes...

As to the claims that "government bureaucrats" will RATION health care - "corporate bureaucrats" ALREADY DO! Insurance companies employ medical and dental "experts" to review claims, not with the goal of providing the best care but with the goal of maximizing profits.

I received a personal introduction to this recently. I have crowns on my two front teeth due to an accident in my youth. Recently, one of these crowns developed a crack. In fact, a piece of the crown broke free and had to be glued back into place as a temporary repair. My dentist submitted the claim to the insurance company for pre-approval.

Should have been a slam-dunk, yes? The crown was severely and obviously damaged. Well, the experts at the insurance company refused saying that the tooth structure was not at risk. Two appeals from my dentist, with photos to document the poor shape of the crown resulted in REFUSED.

Finally, after I wrote a nasty letter questioning the dental knowledge of their "experts", it was approved. More than 7 months since the original application. Of course, there has been no letter with an explanation of why the claim was denied originally.

Ever wonder who employs the MDs and DDSs that graduate in the bottom 2% of their class?

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24. molecular architect on July 30, 2009 1:09 PM writes...

#6: That's a great link you posted. A well presented case for why we need reform and rationing of health care based on a cost/benefit analysis. Presented by a surgeon who stands to lose money if we maintain the status quo.

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25. Hap on July 30, 2009 1:16 PM writes...

1) I had the same experience - I would have figured that dental insurance company wouldn't have a preferred provider list with people who don't provide the care you are willing to pay for (metal fillings vs. plastic), right? I guess that was optimistic. Of course, the capper was that the filling broke a year later, requiring a root canal.

2) I think the problem with a limited plan covering only those who need it is not only doesn't it get politicians votes ("more money for welfare"), but there is the temptation for employers and insurance companies to push their undesirable and expensive employees/customers onto such a network. Limited systems will get only the most expensive patients, and the costs will probably be more unpredictable - even though a comprehensive system would be massively expensive, the costs would be spread out more evenly and could be estimated with greater confidence.

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26. Aspirin on July 30, 2009 1:30 PM writes...

If only you brought the same keen insight to politics that you bring to science (to be fair you do admit you don't like political blogging). Health care in the system is clearly messed up and while a completely federal healthcare program is not going to help, people must be able to get free or cheap healthcare for minor ailments without being insured. Companies cannot declare virtually non-existing trivial problems as pre-existing conditions; even die-hard conservatives agree with this. And insurance plans must be applicable to a broader range of doctors and clinics; one must not need to travel 40 miles to look for a doctor included in his or her plan.

Such goals are no socialist utopian dreams; they simply reflect what any modern civilized country should be able to do for its citizens.

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27. Anonymous on July 30, 2009 1:31 PM writes...

What's up Derek, I didnt see any such rants when Bush decided to start a war which will probably end up costing $3 trillion (after factoring in life time medical costs for returning veterans). Health care reform appears cheaper in comparisona nd doesnt involve killing tens of thousands of people.

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28. goatleggedfellow on July 30, 2009 1:32 PM writes...

@Biobug- Fair point on the non-citizens. I shouldn't have lumped you in with some of the other arguments I've been hearing.

My understanding of the uninsured-by-choice, though, is that we still help them when accidents happen. As we can't exactly let them die, I'd rather see a car insurance-style mandate. If we could easily shop around for our coverage, we'd see a lot of improvements and competition.

In the end, though, I think we're going to see a fundamentally flawed plan that won't get fixed for 8-12 years.

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29. molecular architect on July 30, 2009 1:40 PM writes...

I worked in the pharmceutical/biotech industry for 20+ years. . I've run drug discovery/development projects and seen first-hand the costs and unpredictable difficulties involved. I know that industry is better suited for drug development than either academia or government and I firmly believe that these companies have the right to a reasonable return on this investment.

All that being said, these efforts stand on the basic scientific discoveries made in academic labs and funded, for the most part, by the government with our tax dollars. All taxpayers help support this research enterprise and should therefore benefit from it, not just those who have good insurance or fat bank accounts.

This doesn't mean we should provide unlimited health care to everyone. It does mean that, as a society, we need to reach agreement on what constitutes reasonable access to basic care and make it happen.

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30. drcharles on July 30, 2009 1:41 PM writes...

This problem of health care delivery and reform is so massive and complex that it makes the financial system problems look easy in comparison. I've been fairly passive in following the proposals, and I share your overall sense of unease.
If i were in charge I would raze the whole thing and build another based on core principles such as evidence-based medicine, health care courts to reduce defensive medicine and reinforce universal standards of care, emphasis on covering everyone, emphasis on medical home models and preventative care, reestablishing incentives to practice primary care, reigning in consumerized medicine and the practitioners who profit from their own excessive procedures, rewarding patient compliance, and destroying systems that result in the CEO of United Health Care making in excess of $100,000,000 per year.

That would be a good start.

I would be impeached, though.

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31. molecular architect on July 30, 2009 2:34 PM writes...


Well said. I for one would vote against your impeachment!

There are too many players more interested in preserving their profits than in providing good healthcare and too many politicians (on both sides of the aisle) playing to their respective bases.

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32. Karen on July 30, 2009 2:36 PM writes...

Last year, I was laid off from my pharma job. Unfortunately, the timing was really bad - six weeks later I was diagnosed with cancer. I had never been sick before, so it came as a huge shock. But the bigger issue was how to pay for treatment. Thankfully I managed to keep my COBRA coverage, by running up my credit cards, but it was a constant struggle. Just in time, I managed to get another job, and I'm now covered by employer insurance.

I ended up leaving pharma and getting a government job, mostly because of the insurance issue. I'm too afraid to work for a biotech or take any kind of career risk, because I could lose my insurance, and with my health history, I'll never be able to qualify for it again. I know a lot of other people who feel "locked" into their jobs and aren't willing to take risks in starting a new company or working for a startup, just because they need employer health insurance. That has to be stifling innovation too.

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33. Bored on July 30, 2009 2:39 PM writes...

Our nation is under some kind of bizarre trance. It in no way resembles the country I knew even 5 years ago. We are all being told that green is blue, and believing it! Come on people, we are scientists! Any objective person can see that Obama is a perfect example of how "A little knowledge can be a dangerous thing." The guy spent 150 days in the Senate, and now he has the knowledge to fix every problem under the sun? Like Derek, I'm a libertarian. We are all giving up freedom for the sake of security, and we are on an extraordinarily dangerous path. This healthcare nonsense is just one more example. The lack of objectivity in our culture today is breathtaking.

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34. hsr0601 on July 30, 2009 3:06 PM writes...

According to the CBS/New York Times poll, survey respondents get nervous about the low quality after the reform.

In case you are a doctor, and your pay is dependent upon your patient's outcome, you will more likely strive to prescribe the best medicine for your patient, let alone avoiding unnecessary cares, and hope your patient will feel better as quickly as possible.

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35. hsr0601 on July 30, 2009 3:14 PM writes...

I share the opinion that only a strong public option will be capable of getting the premium inflation under control.

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36. Hap on July 30, 2009 3:27 PM writes...

#33: I don't know - I guess we'll find whether a little knowledge is better than none. We spent eight years seeing how the "no knowledge" part of that worked, and think the evidence points to "not well" being the answer.

I assume "objectivity" refers to the conformity of reality to an Ayn Rand novel, because your use of the word doesn't appear to fit any other definition.

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37. anon on July 30, 2009 3:46 PM writes...

At this point I feel like health reform is putting a bright blue superman band-aid on a hatchet wound. It may look pretty but doesn't stop the bleeding. There are underlying problems of malpractice insurance/litigation - difficulty for new insurance providers to get into the market creating more effective competition - regulations of the TYPES of plans offered - lifestyle of the average American also plays a large part.
Government paying for insurance in the current system/mentality will not solve the cost problem, it simply nationalizes it. You still have a population that eats terribly, and doctors that are so scared of being sued that they want to run MRIs on broken middle toes. And even if you don't like your insurance sorry you can't switch because its nearly impossible to find a provider even offering individul coverge (you would think a free market would be rather good at offering lots of choice). Solving these problems will take a much more sustained effort.
On another political note (if your not interested in FDA as regards to farming/food safety stop here) it seems the administration is trying to slip HR 2749 under the table while all the hulabloo about health care happens. This bill creates another beurocratic position in the FDA mandate how crops (inc. animals) are raised and harvested. Criminaling people who stray outside this paradigm. I usually don't like to tangent but after reading it I honestly fear for the future of small farming. Apparently Monsanto had a hand in his one - that always makes me jittery.

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38. Hap on July 30, 2009 4:03 PM writes...

But we aren't in fact unhealthier in our habits than lots of countries - the New Yorker reviewed obesity books about a month ago, and at least one of the books discussed the rising occurrence of obesity in other countries (particularly E. Europe). We don't drink as much, either, and though we drive more, our driving isn't as unsafe as many countries. If those are accurate statements, then individual unhealthiness doesn't entirely explain why our health care costs more than pretty much everywhere else on earth (and does not give better outcomes and in some cases gives worse ones than elsewhere).

Malpractice reform would be more reasonable if it were paired with the ability to get rid of the most incompetent doctors (if 5% generate 50% of malpractice cases, then those 5%), but paired with the "white wall of silence" it is likely to get lots of people killed and maimed without reducing overall health care costs.

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39. kieth on July 30, 2009 6:31 PM writes...

I am responding to the comments regarding insurance companies. First response: if you like their profit potential, if you think they can virtually print their own money you have the option to buy their stock. Oh, they haven't done well lately? well how has the government been doing? the insurance companies bought securities, some of them very bad risks. The government, on the other hand sold (and bought) treasury bills, and quietly printed money.

The insurance companies, callous as they are, accept your money and pay for a major part of your medical bills. When their investments make money they can do this well and profit from the business. Recently, insurance companies investment returns have been lousy they, and their stockholders lose money. You can buy Chub pretty cheap now.

By contrast, you can give your premiums to the government with the (unspoken but very reliable assumption) that the government will be more compassionate in its assumption of you medical bills. If you assume that the premiums are the same for the government and for the insurance company then I submit that you are buying snake oil. You are assuming that some other taxpayer is subsidizing your medical care, someone that makes a lot more money and pays a lot more taxes. That is a winning political idea but it hardly merits respect as a financial model.

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40. SRC on July 30, 2009 8:31 PM writes...

The most common reason for filing bankruptcy is medical bills.

Not true. Ah, but I love the smell of agitprop in the morning...

As Megan McArdle (IIRC) pointed out on her blog, the fact is that most of the people filing for bankruptcy include one or more medical bills in their filing. An outstanding co-payment of $10 would include one in that category.

Going from that observation to saying that those people filed for bankruptcy because of medical bills is a huge jump, but then exercise is good for you. By the same argument, an even bigger cause of bankruptcy filings is auto loans.

Now, back to the food fight...

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41. L. French on July 30, 2009 8:38 PM writes...

Relax, I'm sure Derek's employer will come up with a blockbuster that enables me to take a piss 6 times a day instead of 7 and all will be good in the world. I used to enjoy reading this blog but if I wanted the right wing spin I'd go to Hannity's page

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42. anonymous on July 30, 2009 8:57 PM writes...

Just read that the govt is suspending the "cash for clunker" program because they underestimated the potential volume of sales. Hmmmm... do you think they may have underestimated the cost of their socialist healthcare plan? Let's see here, pre-war Iraq intelligence, hurricane Katrina, Fannie and Freddie...Do you really want these people reforming healthcare?

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43. BACE on July 30, 2009 10:00 PM writes...

Socrates to student: What should a young man do? Science
Socrates to student: What should an old man do? Politics

Stay young Derek

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44. brian on July 31, 2009 3:08 AM writes...

Yes, rationing will be necessary. It doesn't take a genius to figure it out.

Unless we somehow manage to overcome the following facts:

1) Everyone is either dying or getting older.

2) Avoiding death is a basic goal of medical care: the better health-care gets, the older the average citizen will be.

3) The older you get, the more health problems you are likely to have experienced in your life.

4) The more health problems you have experienced, the more likely you are to have contracted a chronic or very serious (expensive) ailment.

5) Inventing new treatments for chronic or serious ailments is a basic goal of health-care.

6) The more treatments there are, the more there will be available to use, and (as per points 1-4) the more demand there will be for them.

7) Given points 1-6, it would seem that the total amount of health-care consumed over the average lifetime must inevitably increase.

8) However, the average working lifespan (until retirement) is not increasing. Nor is the average lifetime earning capacity increasing very fast.

9) Given all of the above, unless things drastically change, health-care will take up an every increasing proportion of the average individual's income.

10) Since this is ultimately unsustainable, rationing is inevitable.

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45. Sili on July 31, 2009 7:03 AM writes...

I wish people would stop whining about what bloggers should blog about on their own semprini blog.

I respect your talent and knowledge, dr Lowe, but I disagree with you in your politics obviously.

BUT noöne is forcing me or anyone else to read, and if they're unhappy about what they see here they can Belgium go away - and write their own blogs.

A correction re Sid Schwab: He's retired. And as I understand it, had he still been in business, he'd likely have lost money on reform. He seems to be all blogged out about his career and experience, but his archives are still there to be enjoyed.

But he is correct that you're already burdened with an immense bureaucracy. And it is one that has only its own economy in mind - not your health. And there is - everywhere- the problem of people being afraid of death. Leading to a waste of money in the last few months of life. A situation that could be much better dealt with through therapy rather than untested, expensive pseudotreatments. This is another subject touched on by Ben Goldacre, incidentally.

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46. Hanger on July 31, 2009 7:19 AM writes...

I am sorry Derek your are wrong. Healthcare expenses take a big bite out of every one's budget (family, industry) here in the USA. It is not the medication itself, but hospitalizations, insurance company etc.that is crippling this great nation and really brought us to this state. Look even major companies like GM and Chrysler went off track for several reasons. One of them was high health costs associated with pensioners (I can hear you mumble- union guys, which is also true). Frankly, doing nothing is not an option at the present time. I always felt that if you can afford the medical care in the US is the best.

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47. Bored on July 31, 2009 7:31 AM writes...

#36 Hap,

My point about knowledge is this: Would you allow a first-year Chem major to run roughshod over your lab? It's as if Obama is mixing together every chemical on Derek's list of "Things I Won't Work With" and then telling us (on prime time t.v.) that we will all benefit from the resulting explosion.

As for my definition of "objectivity" coming from an Ayn Rand novel, I suppose there are worse places to be: like the Dante novel we currently live in. As I recall, by the time the inhabitants of Hell had reached Circle 9, they all had Universal Health Care.

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48. CB on July 31, 2009 8:43 AM writes...

I am interested in hearing if the libertarians out really believe that government should get out of health care entirely.
Should we completely eliminate:
Veterans benefits
and the myriad of smaller targeted health programs?

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49. Ed on July 31, 2009 9:25 AM writes...

@48 Yes!! While not a Libertarian I lean strongly in that direction. NO health care program is in the Constitution and every program bloats the Federal Government.

Read Freehold!

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50. Tok on July 31, 2009 9:44 AM writes...

Okay #49 Ed. We'll send all the old people who have nobody to take care of them over to your neck of the woods and let them rummage through your dumpsters and sleep on your stoop.

It's worth paying for SS and medicare just so we don't have to see that again. The elderly have paid their dues to society and deserve our respect and support.

Though, Ed, you could always run for office on the platform that we take all our elderly up to the mountain and leave them there once they hit 70.

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51. Hap on July 31, 2009 10:11 AM writes...

Bored - I'm sorry for being so vituperative. The problem is, though, that the financial underpinnings of medical care aren't sustainable (you run out of money, eventually - you can't increase spending as a fraction of overall income and expect not to run out of money eventually). Since (as noted above), you can't get coverage as an individual (in rare cases, you can get it but probably can't afford it), and employers can't afford it, where is it going to come from? The lack of quantitative data and the requirement for health care to actually survive and be useful in society seem to short-circuit the methods the market would need to allow individuals to restrain spending. So, I don't see exactly where there isn't a problem. Pretending there's not will probably get us closer to the end of Atlas Shrugged, but revolutions don't usually work out very well, except in books.

My biggest dislike of W was his unwillingness to consider contrary data. Obama probably knows more, but I don't know - the key is probably more whether the Obama and D's can incorporate (and account for) contrary data into their plans. If they can't (or we can't deal with the contrary data either and would prefer to pretend it doesn't exist), then we're screwed. Whether or not health care reform comes to pass.

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52. CB on July 31, 2009 10:22 AM writes...

@49 Not sure I could go that far.

The only countries that I have seen with little or no government involvement in health care are in the second/third world. Trust me, you do not want to be treated for a major illness in these places.

Does anyone know of any examples of first world countries with a good private insurance system? Any good models?

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53. Dster35 on July 31, 2009 1:33 PM writes...

What is it with Americans & fear of a public health care system?

I'm in Canada & our system isn't perfect but it works for a great majority of people a great majority of the time. Whatever system is used it will have flaws, I'm sure we could all point out specific examples of each system's failings all day.

However I'd argue that our system goes a step further to providing equality to people such that everybody has an equal opportunity to raise a healthy family, and removes a major stress from our lives as we never have to consider concepts such as pre-existing conditions, loss of insurance after a job loss, having to choose whether to have a life-changing or life-saving operation for ourselves or our kids because of cost.

It is annoying at times to not have the same choice and power given to the consumer in the American capitalist health system (eg: getting an MRI whenever you want it) but this is rarely an option for those without the means anyways.

I think many of our system's shortcomings is a cultural phenomenon wherein we Canadians don't like to get aggressive and push for what we need and instead politely put up with some mediochre service instead.

I see a trillion dollars of your money going to the wars in Iraq & Afghanistan (much of which ends up in the hand of weapons makers, oil companies, & Haliburton), and then another trillion being handed to the bankers & automotive companies. Yet you guys all start gettin queezy when the thought of a healthcare system that that treats everyone equally comes around.

Killing people with public funds is O.K., but helping sick people with public funds is a bad idea?

I don't get it. Maybe you should switch those around. Let Exxon fight it's own war and let your government take care of Americans & their health.

Good luck.

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54. Dan on July 31, 2009 2:31 PM writes...

Netherlands has a private health care insurance system that has been proposed as a model for US.
Here is a link:

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55. C on July 31, 2009 2:37 PM writes...

Stick to posts about science, politics is not your forte.

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56. Anonymous on July 31, 2009 3:05 PM writes...

Welcome to the middle class of AMERICA.....

Lose your job, purchase COBRA insurance, don't find job, Cobra runs out and can't get insured, (have pre-existing "condition" like taking lipid lowering meds, high blood pressure meds, etc), get something a bit more serious like cancer, lose house. rinse repeat....

Why does someone who is working have insurance and is protected from losing the shirt off their back but someone laid off from a job and struggling to find work can lose it all? Why don't those out of work middle class have an option to purchase insurance at the same rates as someone with a job? That is all...........

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57. Anonymous on July 31, 2009 3:38 PM writes...


How can I become a citizen of Canada? I'm ready to go!

Your analysis is spot on. The middle class in this country have to constantly worry about insurance since it is tied to our employment. Lose your job and not only do you not have income but you can now lose all your wealth due to unforeseen health issues. There needs to be comparable insurance made available to any and all that can pay and it shouldn't be 10-20X more costly compared to those who work.

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58. Bored on July 31, 2009 3:48 PM writes...


I agree on W (I voted for him twice.) Two things that turned out to be maddening about him: his out-of-control spending, and his unwillingness to alter course in the face of new data.

By the way, no vituperativeness taken. I look at it as peer review...(which, of course, CAN be quite vituperative.)

For some of the others, Pharma and Science are inescapably linked to politics today (can you say Climate Change boys and girls?) Besides, Derek can blog about anything he wants to. For NOW at lease, the Internet is free...

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59. Bored on July 31, 2009 3:52 PM writes...

Correction, "least". No grammar check here.

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60. Hap on July 31, 2009 4:27 PM writes...

Peer review is supposed to constructive, though - it the truth is brutal, so be it, but you should then bring enough evidence to support that level of brutality in argument. If the subject is clearly immune to knowledge, then ridicule may be the appropriate response. Review with no knowledge and vituperation is unhelpful. (Review with no knowledge and no attention is also unhelpful - as recent and probably insufficiently reviewed articles have indicated).

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61. befuddled on August 1, 2009 9:14 AM writes...

It never ceases to amaze me how alarmist many people are getting about healthcare reform. It's absolutely clear that many of the European countries have far superior systems, most of which involve private insurance of some sort. Plus, between Medicare, Medicaid, and the VA, our government is already deeply involved in the provision of healthcare.

It's not clear to me that the impact on pharmaceutical companies will be that great. Yes, there will likely be lower drug prices. But with greater coverage I suspect there will also be greater volumes sold.

Even if the administration gets everything they want (and sadly, due to the hysteria, ideology, and misinformation of some in Congress, they probably won't) I see nothing to justify all the doomsaying.

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62. doomed2repeat on August 4, 2009 1:34 AM writes...

Check out this history of the start of the NHS in Britain - . Same exact arguments trotted out 60 years ago against the demon of socialized medicine.

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63. Mr. Beginning on August 4, 2009 6:38 AM writes...

So how is there in your home state, Derek, has Palin already started drilling oil from the polar bears?

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64. Bored on August 5, 2009 8:02 PM writes...

#63 Mr. Beginning

You need to check up on your oil sources. Everyone knows that baby Harp Seals have a much higher oil content than polar bears.

Personally, I would drill into California Condors or Mountain Gorillas... they are a bigger challenge.

Gotta go now, I'm cooking up some Spotted Owl...

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65. Jonadab the Unsightly One on August 10, 2009 10:58 PM writes...

In many ways, our health care system is one of the best ones in the world. (Not that it doesn't have some problems...)

As for life expectancy, we engage more in high-risk behaviors (notably: driving cars, eating badly and too much, and ignoring medical advice) than just about any other first-world country. Not all of that is our health care system's fault.

Neither, I would say, is our health care system entirely at fault for our infant mortality rate, which furthermore is not really all that high, particularly considering that the definition of "infant mortality rate" is apparently rigged to favor Europe by excluding from the count any child that's never born live; this is not entirely fair: the US has significantly more live births per thousand pregnancies than Europe.

Be that as it may, the reform we most need is to decouple health coverage from employment. They only got linked in the first place because of stupid governmental meddling in the economy in the form of wage and price controls. (The government literally attempted to stop inflation by making it illegal. It didn't work, but the coupling between health coverage and employment came about as a result: it was a loophole that companies could use to provide better employee compensation and thus successfully hire more labor, without violating the wage controls.) If employers want to provide medical coverage as a benefit, they should have to let the employees choose the provider. Frankly, I'd prefer they just give the employees the money and let them make their own choices about how much health coverage to buy. This would force insurance companies to compete on stuff the people being covered care about (such as, premiums, or what's covered, or deductibles, or whatever), rather than focusing on winning accounts by wining and dining the HR people.

Another important step would be to prohibit the insurance companies from telling people where they can get their health care, or providing better coverage for "in-network" care, or cetera. The insurance company should only be able to dictate what is covered and for how much, not where you can get the care. And the what is covered and how much stuff should be required to be readily available in writing, up front.

Finally, people are going to have to realize that a medical plan that covers all of everybody's medical needs is fundamentally different from insurance. Insurance, traditionally, covers only rare and unlikely events, so that most people who have the coverage don't submit any claims in any given year. Consequently, because most people who pay the premiums don't have claims, those who *do* have claims can be covered for significantly more than they paid. This is how home owner's insurance works, fire insurance, car insurance (theft, collision, liability, ...), and every other kind of insurance. Everything except health "insurance".

People hear the word "insurance" and expect that if they need coverage they'll be able to get it for much more than they paid in. After all, if your house burns down, your fire insurance covers very nearly the value of the home, even though it's much more than you paid in fire insurance premiums. Problem is, that doesn't work for medical insurance, because nearly everyone who has coverage submits claims. The money has to come from somewhere. The word "insurance" doesn't magically multiply the money. The traditional multiplication mechanism is the fact that most policy holders don't end up needing the coverage, so the few who do are covered out of everyone else's premiums. When almost everyone starts filing a whole bunch of claims, that mechanism is broken, and the money isn't multiplied. At that point you can't get out much more than you put in. You want fifty thousand dollars a year of coverage? It's going to cost fifty thousand dollars a year, or more. (A lot more, if it's run by the federal government.)

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66. Dave L on August 13, 2009 2:28 PM writes...

It boils down to this: Healthcare is a product. Like any product you can only have two of the following three: Good, Fast, Cheap. Which two do you want? It seems right now we have Good and Fast. This means its not cheap. But the Obamanation wants it cheap. So which one are we giving up? The Good or the Fast? By the way, government run organizations let you pick only up one of the three if you're lucky. Only the private sector gives you two of the three. The phycical laws of universe prevent you from having all three.

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67. Hap on August 13, 2009 2:54 PM writes...

Some people (a very few) get all three. (There isn't anything that keeps you from getting all three - you just have to pay with lots of cash or energy to do it. You can keep your room clean, and get it there fast, but it'll cost you.) Most people - those covered by insurance - get two (most likely, fast and good, or fast and cheap). Some people - those without insurance or independent means - get one (most likely fast) - but they pay more (or rather we pay more for their care) than either of the other two groups. If people can't get insurance through work (the fraction of people with insurance there is likely to drop, and continue to do so), and can't get it independently (see above comments), then 1) there is no market for health insurance and thus care and 2) the last slice of people (and the costs associated with their care, and the secondary costs - loss of work, welfare for their families, etc.) will grow far faster than the means to pay for them. Considering most of the world (or rather, most of the world with comparable economic status to us) has more general healthcare and better overall outcomes than we do for cheaper, I don't know how well the "market" (or, at least, our "market") is working.

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68. Dave L on August 14, 2009 12:03 PM writes...

Because "time is money" you can't have all three....ever. Even Hap proves it with this line: "there isn't anything that keeps you from getting all three - you just have to pay with lots of cash or energy to do it." If you're paying with lots of cash or energy this means it aint cheap!

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69. Hap on August 14, 2009 2:36 PM writes...

I r not smrt. Or maybe just not literate. Sorry.

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70. Bored on August 14, 2009 2:57 PM writes...

This administration's answer to Dave L's "good, fast, cheap" conundrum is:

"Good, fast, and we'll print what we don't have."

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71. Hap on August 14, 2009 3:29 PM writes...

I don't think that that's been original to this administration, though - I can think of about 10 trillion reasons in the last thirty years why not.

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72. Bored on August 14, 2009 7:02 PM writes...

Exactly, Hap. We started going to Hell in a handbasket when we got off the Gold Standard. Our monetary system today is based entirely on Trust. As you can see from any news source today, Trust is rapidly bleeding away.

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