Reason.tv: Don't Break What's Working in Health Care—Economist Glen Whitman on medical innovation

When it comes to health insurance reform, California State University, Northridge economist Glen Whitman emphasizes, "We have to make sure we don't just fix the parts that are broken. We also have to make sure we don't actually break the parts that are working very well. And it turns out that one of the areas that America is really great at is innovation."

Reason.tv's Ted Balaker sat down with Whitman to discuss his new Cato Institute policy analysis, coauthored with Raymond Raad, "Bending the Productivity Curve: Why America Leads the World in Medical Innovation."

Whether it's Nobel laureates in medical fields or the most important recent medical innovations, Whitman and Raad find that the U.S. has contributed more than any other nation, and in some cases, more than all nations combined. Whitman cites some key factors that account for America's innovative ways, and warns that if America adopts a more centrally planned health system we may not only innovate less but we might not know what innovations we're missing.

Interview shot by Alex Manning and Hawk Jensen; it was edited by Manning. Approximately 10 minutes.

For downloadable versions of this and other videos, go to Reason.tv

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Related video: "Would ObamaCare Kill Medical Innovation?"

Comments

[ChrisH]

...California State University, Northridge economist Glen Whitman...

Go, Matadors!!

[John Tagliaferro]

Huh, I never took you to be an American Motors Corporation fan.

[Flush Obama]

What's a Matador?

[z]

One of the reasons there is so much innovation is that the innovators don't have to worry too much about whether they will be able to find customers who can afford their products. As a country, we have decided that everyone deserves the latest and greatest health care, regardless of ability to pay.

[Death Panelist]

Sheer government will is going to keep innovation going. Duh.

[MikeP]

The regional governors now have direct control over their territories. Fear will keep innovation in line. Fear of this legislation.

[Chad]

Odd that Cato blatently ignores Japan, which spends a higher fraction of its GDP on private-sector medical research than the US.

Whoops, there goes the theory that universal coverage must impede R&D.
Oh well, there's nothing like ignoring the data that refutes your hypothesis.

I also didn't note any admission that much of the "American" R&D is now being done with cheap Chinese labor. Big Pharma is outsourcing like mad. Which country is doing the research? The one where the customers are? Is this weighted by how much they pay? Or is it where the corporation is headquartered? Or where the researchers are actually located? These are trivial questions.

[J sub D]

Linky links, idiot?

To the board, I apologize for engaging the twat.

[Xiver]

Yeah... I live in Houston and the cancer and orthopedic doctors outsource almost all of their research work to China.

/sarcasm

Just for fun I checked the nobel laureate list for medicine for Japanese winners.

http://nobelprize.org/nobel_prizes/medicine/laureates/

[Mary Stack]

Interesting he used the example of ace inhibitors as American innovation and then goes on to knock the NIH as being good for "studying" the amount of Nobel prize winners because:

" Leonard T. Skeggs, Jr., who discovered the conversion of angiotensin I to the active form, angiotensin II, by ACE in horse plasma, was an employee of the Veterans Administration Hospital in Cleveland during all of his professional career..Dr. H.Y.T. Yang and I discovered an enzyme in kidney and human plasma and named it kininase II independently. Subsequently, we characterized kininase II as being identical with ACE. I was supported then and have been ever since, almost entirely by the National Heart, Lung, and Blood Institute of NIH. The clinical studies on the application of ACE inhibitors in the U.S. of John Laragh, Haralambos Gavras and others also depended on NIH support. All of the above contradicts the statement that no government money went into the development or any part of the discovery. "

[Chad]

Hmmm...now who is paying for the research by those doctors? More likely NIH than Big Pharma.

And if you haven't noticed that R&D has been slaughtered in this recession, you haven't been paying attention.

[nmg]

As an aside, this comment reveals the typical understanding of what outsourcing is. Outsourcing is NOT about finding expertise a firm lacks. It's about offloading mundane repeatable tasks that don't require any expertise at all! The most successful outsourcing projects require quite a bit of process overhead precisely because the foreign labor pool lacks expertise. The outsourced labor needs ot have everything spelled out and rigidly controlled for there to be any chance of a successful outcome for the firm using them.

American drug companies may very well be outsourcing some aspects of their business but I assure it's not for the core of their business.

[IAA committee]

Mng, "foreign labor pool lacks expertise" Congratulations you are the recipient of the IGNORANT AMERICAN AWARD.

[Eric]

I implored by son not to support Big Candy last night, but sadly, he bought a Snickers bar and a spotted owl died.

Government is a false god.

E.R. Evans

Libertas!

[Eric]

In my further attempt to feed the trolls, I'm wondering if Chad can name three companies that make up "Big Pharma." I can name three companies that make up Big Candy:

1. Hershey's (offender #1)

2. M&M/Mars (the M&Ms; are plotting a conspiracy to kill us with candy-coated chocolate).

3. Nestle (foreign chocolate causes global warming).

Down with Big Candy!

Government is a false god.

E.R. Evans

Libertas!

[Eric]

P.S. Chad,

I am indeed ridiculing you because you're stupid, and I am severely intolerant when it comes to stupidity and irrationality of any kind. I ignore evidence all the time, especially when it's stupid, irrational, inane or simultaneously all three.

Government is a false god.

E.R. Evans

Libertas!

[Chad]

The data is a bit old, but I doubt it has changed substantially. We sure don't look very good...

http://books.google.com/books?.....mp;f=false

Page 29.

There is nothing funnier than watching libertarians hoot "USA USA USA We are #1!!!" when it is patently obvious the reason we are #1 is the very generous funding of NIH and our universities.

lol

[Sean W. Malone]

What's even more funny is how the video actually addresses this point, and you fail to recognize that the private funding is also far more massive than in any other country and that the context in which NIH & Private funding are employed in the US is still rather different than in Europe (*SLD*).

Chad, go move to Venezuela. Please.

[Chad]

It is only "far more massive" because of our population, Sean.

I listed some per capita statistics above. We don't win. Get over it, and find a new argument.

[Keith]

Your source says the US accounts for over three quarters of OECD health-related R&D. Are we three quarters of the population?

And the private sector funds about twice as much R&D as the NIH in healthcare.

Look into the biotech industry next, where the US does like 90% of the research, almost all of which is privately funded. Maybe you can find some tiny country the size of my suburb with a higher gdp percentage to claim you've proved something, but I doubt it.

[Keith]

Here is a better source for you. It is more recent and also includes private funding.

http://www.globalforumhealth.o.....lth-equity

The US matches the rest of the entire world in terms of funding. Pg 40 has Japan's private funding at just over 1/4 the US. How is their percentage of GDP supposed to come out higher? Sweden at 1/10 our size funds under 1/20th as much privately. And as the video pointed out, most new drugs are launched in the US first. They do R&D elsewhere to make money here.

[Chad]

It is interesting that our sources disagree. Either way, your data still shows that it is possible to have universal coverage and robust medical R&D.

Woot! We are #5! Clearly there is nothing we can learn from anyone!

[tkwelge]

Well, yes, anybody can raise taxes and pay for R and D. Nobody's denying that.

[tkwelge]

Well, yes, anybody can raise taxes and pay for R and D. Nobody's denying that.

[Old Mexican]

You cannot have a right to something that is ultimately somebody else's labor. Otherwise, you are talking about enslaving the owner of that labor.

So, no, MNG or Chad or Neu: People do NOT have a right to health care NOR do they have a right to education or anything else that entails the labor of others. People do have a right to seek a service, to trade for it with others, but not to have it.

[Chad]

You can, however, have a right to some of the fruits of other peoples' labor, when they were utilizing tools that you happen to be co-owner of.

If you don't like the rules under which we distribute these tools, you are certainly welcome to start a colony on the high seas or the moon or whatever floats your fancy. We will even be so kind as to let you keep some of the non-rival tools for free. See ya!

[Fiscal Meth]

For those of you who may be arriving late...earlier today Chad and a mouse he keeps in his pocket went around distributing gardening tools to people and then, tonight, he and that little mouse explained that "WE now own 3 hundred million people and WE can make them do whatever WE want."

[tkwelge]

Once again, it doesn't matter where the private R and D takes place. It is the fact that the US provides a market where drug maker can charge whatever price maximizes their revenue that causes private medical R and D to increase. Drug scientists in Japan do research to hopefully invent pills to sell to Americans, because selling to their own people isn't as lucrative. The japanese in turn experience the benefits of these innovations while contributing less to the market that encourages their development.

[abercrombie milano]

My only point is that if you take the Bible straight, as I'm sure many of Reasons readers do, you will see a lot of the Old Testament stuff as absolutely insane. Even some cursory knowledge of Hebrew and doing some mathematics and logic will tell you that you really won't get the full deal by just doing regular skill english reading for those books. In other words, there's more to the books of the Bible than most will ever grasp. I'm not concerned that Mr. Crumb will go to hell or anything crazy like that! It's just that he, like many types of religionists, seems to take it literally, take it straight...the Bible's books were not written by straight laced divinity students in 3 piece suits who white wash religious beliefs as if God made them with clothes on...the Bible's books were written by people with very different mindsets...in order to really get the Books of the Bible, you have to cultivate such a mindset, it's literally a labyrinth, that's no joke

[abercrombie milano]

Once again, it doesn't matter where the private R and D takes place. It is the fact that the US provides a market where drug maker can charge whatever price maximizes their revenue that causes private medical R and D to increase. Drug scientists in Japan do research to hopefully invent pills to sell to Americans, because selling to their own people isn't as lucrative. The japanese in turn experience the benefits of these innovations while contributing less to the market that encourages their development.

[nike shox]

is good