Healthcare Coalition

The big news is surfacing angst with the backroom deals made between the Obama administration and “big healthcare”.

Let’s start with Robert Reich’s complaint:

I’m a strong supporter of universal health insurance, and a fan of the Obama administration. But I’m appalled by the deal the White House has made with the pharmaceutical industry’s lobbying arm to buy their support.

The Daily Capitalist also complains, but for different reasons:

Well, Robert, who is extorting whom? Let me understand this: if industry tries to protect itself by negotiating a better deal under threat of worse things to come, they are doing the extortion? If there is any extortion, then, and since government is the only one holding a gun, it would be the Obama Administration who is extorting these industries. The explicit and implicit threats from the Administration and a Democratic controlled Congress amount to extortion in the classic sense. That is, the threat of violence obtain money, property or services. Don’t let me hear you say that the government’s authority is not based on the actual use of violence. Try not paying taxes. In this case, industry can’t use violence and is on the giving end of these concessions. If Robert is talking metaphorically, then my argument still stands. To Mr. Reich, democracy is the right of the many to strip the few of their rights.

He goes on, making a few key points. In summary:

  • First, these “stakeholders” are fighting for survival.
  • Second, the process we are witnessing is a coalition of government, business, and labor working together to achieve control of the health care industry, and, in essence, remove it from free market competition.
  • Third, these industries will end up being regulated medical utilities.

This does not bode well for us citizens. Capitalist goes on to get near the heart of the problem:

There is not one health care system in the world of the type proposed by the Obama Administration that has been able to keep costs down. As costs rise, the government will try to cut back medical services as well as reduce what it pays its vendors. It will result in more regulation and more price controls for industry. Who is going to come up with the $1 billion it takes to bring a new drug onto the market?

It’s not just drug development, but medical innovation in general. As Megan notes, innovation is funded by profits. When you cut profits, you cut innovation. I rather like where innovation has gotten us so far and I’d like to see more. Megan gets to the real nub of the problem:

If they have to risk some innovation in order to wring … profit out of the system, and distribute the goods … already produced for us more widely, they’re fine with that tradeoff.

I’m not.  And I don’t think this is a gap we can bridge by discussing the thing.  We’re doomed to keep getting angry at each other.

The “reformers” would rather see you suffer for lack of some new medical miracle than see the producers of the miracle richly rewarded.

Oh dear.


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