Innovation and Freedom

T he free-market system of the United States has been the engine of medical innovation, responsible for more life-saving drugs, ground-breaking research, and innovative medical procedures than anywhere else in the world. If the free-market were not the mother of innovation for the healthcare industry, it would still be the most desirable socio-economic approach. That’s because freedom is the highest goal of civilization. Those who are free may never be totally secure, but those without freedom are always insecure. With freedom, everything is possible; without it, nothing is . . . except a tsunami of insecurity and unthinkable consequences.

No Way to Stimulate Life-Saving Technology

Under national healthcare, what will be the mechanism to insure continued medical innovation? The plan laid out by Sen. Max Baucus (D., Mont.) would impose new taxes on medical device manufacturers of $40 billion over 10 years. That’s greater than the entire industry venture capital investment. If science and innovation are important, this is not the way to stimulate new life-saving devices.

In the House plan put forth (H.R. 3200), medical and pharmaceutical research would be stifled because of the inherency of price controls and payment policies that would shift the practice of medicine into more politically convenient channels. This will certainly harm innovation, and end up restricting useful treatments to manage the inevitable cost overruns. The central tenet of H.R. 3200 is the creation of a new government-run insurance plan that would reimburse physicians similar to Medicare, thus exacerbating many of the problems Medicare has had in stifling medical innovation. Indeed, Medicare is a system wrought with waste and corruption. Moreover, its change-resistant payment system punishes doctors, hospitals, and private insurers who try to improve quality. That discourages innovation and costs lives.

The truth is that none of the plans have any means of encouraging medical progress and innovation. Just the opposite, to save money, these are disincentivized.

Physicians Claim They Will Shrug

In addition to the likely consequences of national healthcare on innovation, the number of practicing physicians is likely to decline. In a poll taken by Investor’s Business Daily, it was found that up to 45% of US doctors would stop carrying the world on their shoulders and quit medicine under universal healthcare.1 With more than 800,000 doctors practicing in 2006, extrapolating the poll’s findings results in 360,000 doctors who would consider leaving their professions. One would suppose that freedom plays a role in these attitudes.

Even without far fewer doctors, 72% of the physicians did not believe that the government can cover a substantial increase in the number of people getting medical care without a concomitant increase in the number of physicians, nurses, and other heath care providers.

Self-Determination Loss

If Congress ends up creating a new government healthcare program, it only will succeed in twisting the market further into one of perverse incentives and innovation blocks, the results of which will make medicine worse, more expensive, and far less safe. We who believe in the right to self-determination for personal healthcare will suffer great losses. The only logical reform is for the government to bow out of healthcare and to revert to the free-market system that made America great.

  1. http://www.investors.com/NewsAndAnalysis/Article.aspx?id=506199

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