health care

Innovation vs. Intervention in Health Care

How can we produce better health for more people at a lower cost, year after year?

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How can we produce better health for more people at a lower cost, year after year? By lifting all the rules and barriers that prevent health care innovators from bringing new lifesaving products to consumers and force doctors to beg bureaucrats and insurance administrators for permission to save lives.

For years, free market types focused most of their attention on how to provide better health insurance coverage than their liberal counterparts. But is this the right approach? Health care coverage is different from health care. Though introducing more consumer choices and competition among health care suppliers certainly affects health care prices, nothing would have as radical an impact on prices and quality in the health care industry as revolutionary innovation—which we've seen in other fields, e.g., information technology.

For that, we must first free the health care supply from the many constraints imposed by federal and state governments and the special interests they serve.

At the federal level, that means, among other things, radically reforming the Food and Drug Administration. The FDA is the perfect example of an agency that works by the "precautionary principle" norm. In the name of protecting people from everything at any cost—even against their will, if need be—it imposes an incredible regulatory burden on health care innovators, which then translates into higher costs and fewer new products available to consumers.

In some cases, the FDA's intervention in the health care market slows down access to certain drugs, or it makes some drugs and technologies unaffordable to low-income individuals. In other cases, it actually drives innovators out of the market. In extreme cases, it kills people who could have been saved if they had had access to a drug or a technology.

As laudable as the efforts by Congress to reform the FDA have been, they haven't worked. One reason is the tendency of the agency to be captured by special interest groups. For instance, large, established pharmaceutical companies might complain about the cost of new regulations, but they are well aware that their competitors will bear these same burdens. Smaller upstarts, however, are thwarted by the heavy cost of regulation before they even get a chance to enter the market.

So what can be done? Some argue that the only way to productively reform the FDA would be to allow for a private alternative. In The Wall Street Journal last year, neurosurgeon-scientist and entrepreneur Kevin Tracey described such an alternative. He wrote: "Institutional review boards and human-subject research protocols provide extremely high levels of protection overseeing clinical trials in the U.S. and Europe. These bodies have weeded out the charlatans in the industry, and the ultimate determinant of success will be patient satisfaction."

Others suggest getting rid of federal and state regulations that prevent people from having access to more and better information about drugs, medical devices and procedures; forbid them to try new, unapproved drugs when they or their loved ones are terminally ill; and preclude doctors from offering new treatments to their patients. As my colleague Adam Thierer at the Mercatus Center told me, "we should focus on ensuring patients a 'right to know' and 'right to try,' and doctors should have a 'right to heal.' It's time to put patients first and trust them."

Indeed, people often are better-suited to know what is best for them than bureaucrats in Washington. Moreover, these reforms would be important first steps to allow tech innovators to work their magic in health care. This would result in spectacular reductions of health care costs—making the need for health insurance much less important than it is now.

© Copyright 2015 by Creators Syndicate Inc.

NEXT: University of Wisconsin concludes there was no misconduct on Prof. Alice Goffman's part [UPDATE: this turns out not to be a response to Prof. Steven Lubet's criticisms]

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  1. Why would Veronique pretend she’s not further out than “the free market types” she glancingly disparages here?

    Yeah, let’s just let physician quacks wing it when it comes to medicines and devices. Let’s trust them not to perpetrate worse-than-Christian-Scientists outcomes on children, then rush to ‘rescue’ victims of their greed/idiocy after the fact. That sure sounds like a plan.

    Here’s what let’s do, though; let’s try it out on Veronique’s kids first. You’re fine with that, right, Veronique?

    1. Yes, clearly if the government doesn’t license physicians, then nobody will.

      1. Look at Uber, John. We have unlicensed taxi drivers out there, and you just *know* what’s going to happen…serial rapists and murders preying on passengers, bad drivers getting into horrible accidents and taking out gobs of pedestrians, drivers forcing out passengers in bad neighborhoods and robbing them.

        I mean, yeah, these things haven’t happened *yet*. But they will. I just *know* they will. And it will be an *epidemic*!!! Just you wait. Only regulations can save us!

    2. Why would you take your kids to a quack, worse-than-Christian-Scientist physician? What the heck is wrong with you????

    3. Get a second opinion, then. If you have a disease without an effective, “approved” treatment, wouldn’t you be willing to try something that was in a later stage of clinical trials? And if the results looked good, both doctors would go for it.

      Do you, in general, trust FDA bureaucrats more than the average doctor?

      Veronique’s proposal also rests the treatment of the individual in the hands of the individual, with a doctor’s guidance. Using doctors’ medical knowledge in a consultatory role is a great idea. Most doctors keep up with (or in this scenario would be forced to keep up with) drug trials and studies. The individual makes the risk/reward calculations here, not actuaries at the medical malpractice insurance company.

    4. The alternative is panel style medicine, where doctors prescribe what is on a list as opposed to the drug they think is most effective for the case (if they want to be paid, that is.) Insurance has incentivized this to an extent, but the ACA has made it much, much worse. It renders the full skill set of a doctor moot and relies almost exclusively on his/her ability to diagnose. Treatment is a matter of autopilot and if a patient is a “zebra” (doesn’t fit the mold) they’re basically screwed.
      As Lynch already pointed out, people get to choose their docs and do additional research to educate themselves. As a husband and skilled caregiver for a zebra patient with 2 rare terminal diseases, who takes over 60 medications and sees a GP and 8 specialists, and has been royally fucked by FDA policies- I speak from experience.

      1. Thought I should add an example of FDA foolishness. I had a chance encounter with a doc who, as a paid consultant for the FDA, voted to ban a gastric motility drug called domperidone. This is used to treat patients diagnosed with gastroparesis, a condition of gastrointestinal paralysis which renders someone incapable of holding down food and even fluids in extreme cases. He smugly defended his position stating that the drug can lengthen the QT interval (the period of time between depolarization and repolarization of the heartbeat,) which is easily controlled and monitored by an inexpensive, painless and quick annual ECG. There are 2 FDA approved treatments:
        1. gastric pacer- a costly surgery that has had worse than lackluster results
        2. reglan- a p.o. medication that causes severe anxiety in many patients, and irreversible facial and body twitches )Tardive Dyskinesia) , eventually in more than half.

        The net result of this regulation is tens of thousands of patients (us included) buying domperidone out of pocket from often- dubious, overseas pharmacies– that is, for those of us lucky enough to have a doctor willing to forgo pay and have the balls to face scrutiny.

  2. How can we produce better health for more people at a lower cost, year after year?

    Socialize it and make the 1-percenters pay their fair share to cover the cost. Duh.

  3. There are a lot of weasel words in this article.

    “Precautionary principle”

    Your kids first, Veronique.

    I once worked for a free-market company that spent billions of dollars on a cancer drug that got FDA approval by extending a patient’s life by 4 weeks– and that was if you read the data from the study just right. Veronique, do you think this is the type of free-market innovation we need in the marketplace that is going to reduce costs?

    1. You work AMSOC ???

      1. ONCE worked. Once.

        1. Worked or was employed by?

      2. Yes. Monday through Friday and sometimes on Saturday and Sunday. A lot of people here seem to have a lot of time on their hands. Maybe they are getting social security checks.

        1. Well you re right here with us. The same could be said about you.

          1. The difference being of course that I don’t get a check from the government every month and then bitch about my taxes.

            1. * Citation needed.

            2. You just bitch about taxes being too low without cutting a check to the U.S. Treasury yourself.

    2. If you think the pharmaceutical industry is “free market,” you need psychiatric treatment. Ironically, probably in the form of antipsychotic pharmaceuticals.

    3. Yes. Because

      1) Cutting edge products are always expensive. Then they become less expensive as productions processes improve, economies of scale take over, etc.

      2) Regulations impose costs at all stages of care, not just the cutting edge, extend your life by a few weeks cancer drug market.

      3) Innovation can occur across all stages of care.

      Your kids first, Veronique.

      I hope you never have to face a situation where a potentially life saving medication isn’t available to your children because it doesn’t have the right FDA stamp of approval. But there are people who do face that situation, so maybe you should explain to them why they shouldn’t be allowed to try to save their kids lives.

      1. It’s interesting that amsoc and civis isus both came up with this “your kids first” notion… Independently? Or is it an amsockpupet?

        1. It’s a pretty common retort.

        2. No, it’s the go-to for muddle-headed irrationalists on the left (though I repeat myself). BUT THE KIDS is as reflexive a notion as OLD PEOPLE DYING IN THE STREETS and ROAAAAAAAAAADDDDDDDDSSSSSSSSSS.

      2. Cutting edge drugs, hmm. They aren’t all that. And sure if you want to give experimental treatment to the dying feel free, but it’s no real free market. The companies will charge the same outlandish price whether the drug helps a little a lot or not at all. The fda is a joke. Corrupt playing favorites. But big pharma is still a snake oil salesman selling a mixed bag.

    4. …and then you follow up with an example of the inefficiencies of the FDA.

      1. It’s more like the inefficiencies of the drug that I was working on. You think pharmaceutical companies should be allowed to market a drug that has not been tested in double-blinded and well-controlled Phase 3 studies? More snake oil for you if so.

        1. Are European pharmaceutical safety standards unsafe? Because they are far less onerous than the FDA’s standards.

        2. “Snake oil” of course being a drug that has passed examination twice already, I take it?

          Are you really suggesting pharmaceuticals not be subjecting to rounds 4 and 5? Why is Stage 3 the culminating, decisive step in determining efficacy or safety? Why is it, amsoc, that you hate the children?

    5. Considering the billions of dollars to get the FDA approval would have been saved, the free market would have still been a better alternative.

    6. OK, so the drug you worked on was pretty mediocre. You suggest that because of that, we should throw out Veronique’s free market ideas regarding health care.

      I have a different take. I believe I will avoid any drugs that you worked on.

    7. So your objection to reducing the government control of treatments is that the control doesn’t work? You say they spent billions on the drug, did they get the money back? Because if they didn’t then that sort of problem kinda sorts itself out. People stop doing things that cost them over a billion dollars.

    8. So your objection to reducing the government control of treatments is that the control doesn’t work? You say they spent billions on the drug, did they get the money back? Because if they didn’t then that sort of problem kinda sorts itself out. People stop doing things that cost them over a billion dollars.

  4. In extreme cases, it kills people who could have been saved if they had had access to a drug or a technology.

    Is every bystander at the scene of an accident that does not render first aid a murderer if a victim dies?

    Not saving someone is not equal to killing them. Accusing the FDA of killing people who are already dying of some terminal condition [other than Life] by interfering with the development and/or distribution of something that might save them from their condition is simply fallacious hyperbole.

    1. OK, but there is a difference between standing idly by and actively withholding a treatment that both patient and doctor want to try and are willing to pay for.

    2. Under the Hippocratic Oath, not saving someone is basically equal to killing them. Someone’s bleeding out on the street and I’m trying to push the paramedics out of the way. How does that not make me party to their death?

    3. Is every bystander at the scene of an accident that does not render first aid a murderer if a victim dies?

      For a bystander to be equivalent to the FDA, they would have to pull a gun out and threaten to blow the head off of anyone who tries to render first aid.

      1. Amen, Jordan, way to go!

      2. For a bystander to be equivalent to the FDA, they would have to pull a gun out and threaten to blow the head off of anyone who tries to render first aid.

        Interesting analogy. Thanks for that food for thought!!

    4. Yay. Someone here finally makes a sensible comment. Hooray. [blows on noisemaker]

      Seymour, don’t tell the rest of the peanuts around here about the FDA and compassionate use exceptions. No need to interfere with their bright white righteous indignation.

      1. peanuts

        That explains a lot.

        1. I just co-opted the term. Or did I? Mwahahaha.

          1. Now that’s how you troll.

  5. One of my pet peeves about the FDA is how these petty tyrants require you to get a prescription for ANY new medical device, no matter HOW utterly trivial. If they invented a toothbrush tomorrow, the FDA would require a prescription for it. If you do not believe me, go see http://www.churchofsqrls.com and search for “lung flute” and for “earpopper”? We are the ONLY nation in the world, where these kinds of things require prescriptions! We have less medical freedom than North Korea does!

    1. Add to that the nasal cannula, which is just a soft plastic tube to carry oxygen. Had an occurrence where my wife, a severely immuno-compromised patient on 24/7 o2 therapy, accidentally dropped her cannula into the gutter when exiting the car. She can’t sterilize it without being in violation of the law, and the oxygen store a block away couldn’t sell us a new one because she wasn’t carrying a prescription in her purse.

      1. Seems to me the FDA is more-so the “preventer of health care” than they are the “helper…”

        Sterilize away! If you can accidentally drop it in the gutter w/o being jailed, you can “accidentally” drop it in a kettle of boiling water for a few minutes! If you won’t tell, I won’t tell, either! It’s only a crime if they catch you!

  6. “How can we produce better health for more people at a lower cost, year after year?”

    Get rid of health insurance companies.

    1. Get rid of the FDA and let people have the freedom to chose who to believe on medical matters.

      Stupidity or ignorance are common and should be easily forgiven. If I am un-informed as to a certain medical matter… Which meds work, which do not… I can ask friends or neighbors, or “Google” it. If I am stupid / un-informed, ***AND*** arrogant… Will not bother to consult ANYONE, in a medically free world… And take any med or snake oil that I choose… Then I deserve whatever comes my way! … Of course, in the here and now, in this case, socialized medicine will SAVE me from my stupid choices, via socialism or mandated insurance, and I will burden everyone else with the cost of trying to repair the results of my stupid choices. Why not solve the WHOLE mess of inter-related troubles, and just SHRINK government violence-and-coercion-driven meddling, across the board?

      1. I have all of my preventative care done in Mexico, where all medications other than narcotics and antibiotics are available over the counter without prescription. The pharmacists are extremely knowledgeable and helpful, and there is a doctor’s office next to my pharmacy where I can pay $10 for a consult if I wish. Amazingly enough, people aren’t dying left and right from inappropriate usage of medications. Its as if… they have a vested interest in their life and actually make informed decisions about their own healthcare!

    2. Aren’t insurance companies, where coverage, for the few, is paid for through spreading out the cost, to the many, little socialist enclaves?
      I would think you would rather that than the evil every-man/woman/child-for-themselves – AKA individual responsibility – system.

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  8. She is not a moderate. She is an amoral crap weasel that will say and do anything to continue to suckle on the body public. then check all report news this way…. http://moourl.com/gjftp

  9. One thing that would increase supply of medical services would be to remove “Certificate of Need” regulations. There have been 2 cases I recall reading about here in Tennessee regarding that. There was a recent one where one medical company wanted to open up an urgent care type operation in Brentwood, TN. There is a government agency that must approve a “certificate of need”. Of course they get heavy input from the medical company’s competitors saying this would harm their businesses (of course they phrase it in medical terms.) The agency denies the permit. This is a clear violation of the liberty for that medical company.

    There were similar type “Certificate of Need” regulations in Kentucky for moving companies. A man opened a moving company without getting his “Certificate of Need” permit. Of course, when the agency in charge did their investigation of him for not having the certificate, the existing moving companies had input saying there was no need for a new moving company. He fought in court & won, I believe, on restraint of trade arguments.

    I would bet that many states have these type of “Certificate of Need” regulations. It is time to get rid of them.

    1. We need a “certificate of need” before we make new laws and/or make the Government Almighty more Almighty, THAT’S where we need these certificates!

  10. It has come to my attention that the FDA wants to force you and your smart-phone apps developers to spent “about $31 million”, see http://www.post-gazette.com/pg…..d=news.xml , for each “medical” smart-phone application that is developed. At http://www.lexology.com/librar…..ab4965868e we can see that anything that? “Allows the user to input patient-specific information and, with the assistance of formulae or processing algorithms, produces a patient-specific result, diagnosis, or treatment recommendation.” ? WILL be regulated!!!

    1. “DOES THIS DRESS MAKE ME LOOK FAT!?!?”

      So, knowing the history of the FDA, I can confidently predict, that, say, you or one of your apps developers that helps you sell smart phones, will, say, want to develop an app for those women who can’t or won’t trust their husbands and/or boyfriends, or even ANY of their multitudes of husbands and boyfriends, to honestly answer that perennially recurring, ancient old question, “DOES THIS DRESS MAKE ME LOOK FAT!?!?” So y’all devise a clever rational, mathematical, scientific analysis algorithm? Take that smart phone picture, run the program, and, wallah, like magic, THE Ancient Old Question is honestly answered! Woo-Hoo! ? But, the FDA (Praises Be!) will delay the sale or distribution of that app, by a decade or two, and inflate the price a hundred-fold? Because it is a MEDICAL APPLICATION that diagnoses obesity! Not that I am complaining; we Scienfoologists know VERY well, that Government Almighty LOVES the children, and we are ALL children, in the eyes of Government Almighty! Praises Be!

  11. Ain’t gonna happen! The system is controlled by the politicians, now. They know better than any of the doctors, don’t you know!?!

  12. Sometimes you have to just do your own research to find lower cost healthcare. https://voyagermed.com

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