Ron Amundson’s Political Blog

One of the problems with health care costs, is regulation which protects monopolies , ie the good old boys must not be subject to competition. An $8000 medical device maker cannot compete with a $150 Iphone and custom software. I sort of like this quote “We look at determining the effectiveness of the technology — and not the cost — first,” um no… you are looking at protecting vested interests.

Granted, cheaper is not always better, and no doubt for some people, the $8000 device is a better solution than the $150 Iphone. Also, there is a concern, that if even 50% of the folks, if they were allowed, might switch to a $150 device, there no longer would be enough business to justify keeping the $8000 device on the market. Another scenario is the $8000 device might actually have to double or even triple in cost. The thing is… if the market is un-encumbered, someone might just end up coming out with a new device for $2000 that blows the $8000 unit out of the water.

There are two other issues at place in this, first is folks crying foul because they didn’t get a deal, and second is the issue of snake oil and woo.

Folks like to cry foul a lot, I bet many would rather $8,000 of their taxes go to an in-effective device than $150 towards a Iphone, being one can also run games or watch videos on the Iphone. This puritanical fairness stuff is costing our nation a fortune, and impeding quality of life for many… but horrors that little Johnny has an Iphone for his med needs, and their own healthier Bobbie is jealous because you can’t afford to get him one… but alas, you will gladly advocate spend $8000 of your tax money for Johnnys proprietary device, because he cant play games on it.

The next issue is woo and snake oil, and its a huge business. All one has to do is consider the billions spent in supplements and other alternative medicine, some of which likely works wonders, and others are just a waste of already scarce resources. Govt in its wisdom in 1976 stopped a lot of device woo with the medical device act, but alas they also stopped a lot of progress too. Govt in its wisdom came out with HSA‘s to give people more freedom, but then restricted HSA’s so much, that many even proven treatments, devices, and other health care services are prohibited from being paid for under a HSA.

Woo and snake oil are obvious concerns, less so is the puritanical notion of fairness, especially when more and more of our GDP is being sucked up by healthcare expenses. When the costs are hitting astronomical numbers, perhaps we need to take a serious look at the costs of regulations, vs the aspect of fairness, as well as the need to take personal responsibility for purchasing healthcare. Granted, no consumers could know the intricacies involved in bad engineering in a Therac 25, so some regulation is needed.

By the same token, the creation of artificial monopolies and restriction of competition has to end… or it needs to shift to something like a public utilities panel such as used for the land phone system, electricity and natural gas, if indeed it is so critical to prop up said medical device maker monopolies.

An interesting approach might tie monopolistic regulations to tort reform and tight government regulations. Ie, if you grant monopoly status, also grant some type of no fault tort insurance from the government and combine this with an insane level of government oversight to protect the public. If a medical equipment maker does not want massive government oversight and control, it doesnt need govt sponsored no fault coverage, nor goes it need govt granted monopoly or protection status. Such a policy would likely put a serious dent in the world of lobbying for protections… if you need that protection its available, but in effect, you sell your soul to the government to get it.

There has to be a level of give and take. The era of free lunches has to end, or we need to accept that the percentage of GNP going to healthcare will continue to skyrocket until its no longer sustainable. Sooner of later, if left unchecked, the house of cards is going to come crashing down.