Tag: capitalism

Government-Run Healthcare is Sub-Standard

So it turns out that Government-run healthcare (most European countries have this model) comes in far ahead of the US method of healthcare delivery in one category: patients are much more likely to die in the hospital.
“A recent report from Channel 4 News in the U.K. revealed figures showing that National Health Service (NHS) hospitals (the government run health program) have death rates “among the worst” compared to other countries. In fact, Channel 4 found that NHS patients are 45% more likely to die in a hospital than the United States. Due to privacy, the article was not able to reveal the other five countries.”
Is it the profit motive that is embedded in US healthcare delivery that provides us better healthcare or is it the American culture of competitiveness (also driven by/supported from a capitalist system)? For example: Mayo Clinic wants to be better than Banner Health so as to make claims that their patients do better.  Maybe it is America’s history of entrepreneurism and attention to continuous improvement (also a straight line tied capitalism). If Mayo puts in place higher staff to patient ratios and spends more on training, it increases the price of healthcare but to the gain of better quality of life and longer life. And as Professor Richard Zimmerman, a neurosurgeon at the Mayo Clinic Hospital, points out that while this can be labor intensive with a dozen or more people involved in each round for each patient, but he said it is cost efficient in the end. He noted that “It is less expensive than having a lot of deaths and having admissions that last longer because you don’t do it right the first time.”
Although other health economists have pointed out that more and quicker deaths in the hospital actually use less resources and saves money.
So what is the goal of socialized healthcare –
  • reduce the amount spent on healthcare
  • give access of affordable healthcare to more people
  • improve population health
The conundrum is you can’t achieve the first and second without a decrease in the quality of healthcare that is provided.

Benefits of Capitalism in Drug Discovery

Nathan Yates has spinal muscular atrophy and is a professor or economics and finance. Here’s an excerpt of his article on the price of a new drug to treat his condition. The bold in the text below is mine. The

The full article is here:
https://www.statnews.com/2019/05/31/spinal-muscular-atrophy-zolgensma-price-critics/

As someone who has lived with spinal muscular atrophy for all 30 years of my life, I was perplexed and disappointed that the recent approval of Novartis’ gene therapy Zolgensma was immediately overshadowed by outrage over the drug’s price: $2.125 million.

The Food and Drug Administration’s decision was a pivotal day for those of us in the SMA community. Zolgensma, approved for children under 2, is the only one-dose treatment option for any category of SMA patients and has been highly effective in clinical testing so far.

Sure, it’s the world’s priciest drug. But instead of debating the level of financial profit that is appropriate for Novartis, let’s focus on the needs of patients. How are we going to get treatments for rare diseases if there’s not a financial incentive for doing it? Therapies are being developed because people think they can sell them for a profit. We don’t like to talk about it, but pharmaceutical companies exist to make money. Don’t we realize, though, that all of society profits from each disease we cure and each baby that is saved from SMA and other deadly diseases?

As a professor of economics and finance, I believe that the cost-related complaints being thrown around social media are short-sighted. Shortly after Zolgensma’s price was announced, I even told a friend, “This is a good problem to have.” Why? It’s a twofold answer:

  1. Competition – drives cost down
  2. Long term value – each successive drug that’s approved will be an improvement – whether that’s injected by IV once instead of into the spinal column every 4 months or made into a pill for once a day dosing. drug