I still think the drug companies could make a profit if we put in price controls. And if they don’t, so what? Our government can bail them out if they are in a jam.
Your friend is simply wrong. I know what the drug companies SAY they do - we’ve all heard it - and I’m telling you they’re lying. Of course they’ll say that, they want more money from countries outside the USA.
Look, consider the logical implication of what your friend is saying; they are saying, in effect, that if Canada, Belgium et al. were to suddenly agree to pay more, his company would turn around and charge American customers LESS than they could. That they would, in other words, deliberately make LESS money than they could - actually, voluntarily turn down profit, out of the sheer goodness of their hearts.
Ha ha ha. Come on, you don’t believe that, do you?
Drug companies are always going to charge what they think the equilibrium price is, and nothing else. If they can make more money by raising prices they will raise prices to what they think the equilibrium price should be. Makes no difference what they pay for the drug in Italy.
However the US government funds alot of research that goes into pharmaceuticals. Its not all pharmaceutical funds that pay for R&D. So US citizens end up doubly subsidizing pharmaceutical research because we pay taxes for gov. research and we pay higher prices for drugs.
According to a May, 2000 congressional Joint Economic Committee report, The Federal government fundsabout 36% of all U.S. medical research
-Major drugs have been developed with taxpayer-funded research: Of the 21 most important drugs introducedbetween 1965 and 1992, 15 were developed using knowledge and techniques from federally funded research.Of these, NIH research led to the development of 7 drugs to treat patients with cancer, AIDS, hypertension,depression, herpes and anemia
-A study of 32 drugs introduced before 1990 found that without the contributions of government laboratoriesand non-commercial institutions, approximately 60% of the drugs would not have been discovered or wouldhave been delayed. “This suggests public sector research is becoming more important over time” (Maxwell and Eckhart – 1990
http://cthealth.server101.com/myths_and_facts_about_prescription_drug_pricing.htm
That site is biased, but the info is still good. A good book on the subject of universal healthcare is healthcare meltdown
As far as Europe lagging behind the US in R&D spending, its partially true
For most of the past decade, Europe has led in pharmaceutical innovation. In 1997, however, the US overtook Europe for the first time, both in terms of research and development (R&D) investment and output (new drug candidates). In 1990, EU pharmaceutical industry spent 73% of its R&D budget in Europe, but this figure dropped to only 59% in 1999 and the US is now spending €24 billion compared to €17 billion in the EU. Spurred by more open market regulations, the world market share of US pharmaceutical products jumped in the same period from 31% to 43%, while in price-controlled EU the figure dropped from 32% to 22%.
The EU is falling behind but they are talking about doubling R&D spending. So even with price caps they are still doing alot for R&D.
“Of course we cannot expect the pharmaceutical industry to invest as much in research as in the US, if the value of the EU market remains at only about half of that of the US, particularly if it does not seem to encourage the introduction of innovative drugs” adds Commissioner Busquin. “Despite this, the EU is only slightly behind the US in terms of biotech patenting activity and in terms of scientific publications we are as good as the US. Indeed, our goal is to attract more investment into EU biotech and pharmaceutical research, whether from EU or US industry, and to make the EU research and innovation system more effective in terms of innovative output”.
Pharmaceuticals are one of the (if not the) most profitable field there is with an 18-30% profit margin.
http://www.cpa.org.au/garchve5/1090pharm.html
These companies had the greatest return on revenues, reporting a profit of
18.5 cents for every $1 of sales, which was eight times higher than the
average for all other listed industries. Commercial banking, for example,
only returned 13.5 percent on revenue.
Actually, what sounds logical to me is that they’d leave American prices high, since a large segment of the population has bought into the idea that they’re fairly priced (because all that money goes to R&D, you know. Not advertising.). They would continue to charge the highest price the market would bear in America, like good capitalists.
Which is exactly what RickJay said.
But he says that this disproves what elfkin said. It doesn’t.
It is entirely possible that the drug companies chose to increase prices in America because they were making lesser profits abroad. That is, that they chose to price drugs at prices higher than the equilibrium point. Companies do sometimes do so, when they have a good enough motivation (losing profits abroad sure sounds like one). (This is something that is taught in Macroeconomics 101, BTW. Equilibrium point is the usual place for selecting price, but not always.)
Selecting a different pricing point is easier if drug companies are colluding in some form to do so (directly or indirectly). This scheme is made easier because there aren’t that many drug companies, and certain big brand-name drugs are only available from one company.
You’re right though–my earlier post was kind of brain dead. This is what I should have written.
In france : no, but I guess the damages granted are much lower, especially since some courts. Besides, France generally speaking hasn’t an “I’ll sue your ass” culture. So, I’m convinced that many frenh people won’t sue a doctor when american people would have. However, in recent years, the courts have changed their jurisprudence to grant damages in cases when the mistake made was minor (and even in some cases, when there was no mistake at all) and granted more important damages. So, there are now some worry since the malpractice insurance premium of some doctors (especially obstetricians) has skyrocketed.
Like all other public universities, medical schools are free in France.
You’re forgetting another cost : administrative costs in the doctor’s office, which, as established in previous threads, is much higher in the USA (due to the paperwork charge resulting from multiple insurances schemes with different forms, regulations, arguing about what is reimbursed or not, chasing down clients who didn’t pay, etc…). For instance, here, the only insurance-related paperwork a doctor has to do is to enter the code of whatever he did, the cost he charged and his signature on a standard form that he then hand over to his patient. Total time required : roughly 3-5 seconds, and no administrative staff involved. The standart staff in doctor offices, from what I can see, is roughly one secretary for 2-4 doctors.
Also, still as established in previous threads, US doctors make significantly more money than french doctors.
“Socialized” isn’t a nasty word in Europe. They call it whatever it happens to be called (“social security” in France) and I don’t think anybody cares.
In fact, the administrative cost often constitutes the bulk of the fee. There are doctors in the United States who have decided it was ridiculous to have to charge $60-100 for a doctor’s visit when it would only cost $15-30 without insurance administrative costs. Some of these doctors have set up their own little HMOs, where people get regular catastrophic insurance coverage, but the doctors just charge $15 for routine-type visits and don’t take insurance for those visits at all. A big part of the savings comes from not having to hire so many administrators to handle the paperwork.
I can’t find a decent link right now. It’s been in Newsweek and on one of the television news magazines within the last year.
Actually, it was a serious question : if US doctors don’t visit patients at home, what people who need to see a doctor but can’t go to his office (bed-ridden, elderly, etc…) do, in practice?
Are there private organizations of doctors only making visits at home, especially at night, as the ones existing in France? That’s the first alternative I can think of apart from being hospitalized when you don’t need to.
Three major options that I know of:
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Go into a nursing home.
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Have a family member provide full-time care at home, and transport elderly person to doctor. A private nurse, full or part time, can be hired to help out.
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Hire a full-time, in-home nurse. My grandmother and grandfather have/had this. They take you to doctor’s appointments.
Basically, it boils down to this: either you have someone to get you to the doctor and are well enough to be moved, or you go into a nursing home. Or, in some sad cases, simply wither and die at home all alone.
Are nursing homes included in the cost of healthcare? If so, then you’ve here something else driving up the costs in the US. This person might just need a regular check-up by a doctor, and nothing else. Which is certainly way way less expensive than spending years in a nursing home. Not even even mentionning probably way more pleasant too.
Besides, there aren’t only elderly people in bad health who are concerned. Say you have a bad case of flu, high fever, etc… You need to see a doctor, say a couple times during the week. When I think about it, my mother was in this situation last winter (and she probably wasn’t the only one). Instead of that, if I’m not mistaken, you’re going to call an ambulance and stay the week in an hospital. How much that would cost?
Or you’re an elderly, in good overall health, but living in the countryside and without a car, or not able anymore to drive, but given your age, you’ll need to see a doctor from time to time (that would have been my grandmother before her death). Nursing home or hospital for years, once again? Again, not a pleasant end of life if you’re perfectly able to live in your house.
And again, how much does this cost when compared to the cost of a doctor occasionnally driving to your door? And who pays, eventually? I assume the government, hence taxes, if you can’t afford the nursing home. Or if you can, yourself : but it’s still a waste of money that could have been put to a better use than funding unnecessary (and in all likehood not wished for) care.
It depends what you mean by “nursing home.” If you’re in rehab following injury or surgery, then yes, it’s covered by most insurance. If it’s assisted living or permanent care, it’s covered by some insurance, and generally by medicare, up to a point. If you need permanent housing, as for someone with Alzheimer’s or other long-term disability, it’s another thing entirely. Long term care is another entire discussion.
You’re not getting into any of the above for purposes of a normal checkup anyway.
If you cannot drive and need health care, you simply have to find some way to get there – via a friend, relative, taxi, whatever. Many senior communities, and some municipalities, have shuttles that will take their residents to various places including doctors. Costs of transportation for medical care are also, IIRC, tax deductible.
If you are elderly and cannot drive, you are well advised to have a source of transportation anyway. How are you getting groceries, for example?
In some cities there are medical services that come to a person’s home. There are also visiting nurse services.
[QUOTE=Shodan]
What I am asking for is evidence that their system will work here.
One way of testing this would be to [ul][li]identify what about their system will reduce cost []implement this in one of our existing systems (Medicare and/or Medicaid) []See if it really does work[/ul][/li][/QUOTE]
I dispute your critera for satisfactory evidence even though I will meet it. Right off the evidence is that these are also Western industrialized countries with diverse populations of various social classes. These other Western countries have little essential difference from our own society, ceratinly no more than they have from each other. Yet each one that provides universal healthcare is able to provide healthcare for all comparable to, or by some measures significantly better than, ours, and for significantly less cost. To me that is pretty convincing evidence right there. There is no reason to believe that we are much different than any of that varied and sundried motley crew of societies.
Moreover limiting implentation to just a few governmental programs removes the ability to prove most of the proposals, since most of them are based on the benefits accured from standardization and from providing more cost-effective care to the currently uninsured instead of providing them expensive care that then gets shifted onto other payors.
Still, with those objections stipulated, I will proceed and point out that single payor as a model has been proven in this country by the standards that you put forth. The simple fact is that costs for Medicare and Medicaid (single payor systems) have not increased anywhere nearly as fast as costs for private health insurance (Medicare has increased on average at the rate of inflation; private Health insurance has seen double digit increases that are getting larger every year, much higher than the rate of inflation). Programs that extend Medicaid coverage to children and families that are up to 185% of federal poverty level (such as Illinois’ KidCare and FamilyCare programs) have been successful and cost effective. The paperwork and adminstrative work entailed in health provider participation in these programs has been less than that required for most HMO and PPO plans. Increasing primary care payments has driven up participation rates and allowed these families to recieve care in primary care offices instead of going to the ER with colds, flus, strep throats, and ear infections (where they would never leave without at least some unneeded blood tests and a few hundreds of dollars of charges more than in my office, most of which gets shifted onto your tab, eventually). It works, here, in America.
That said, single payor isn’t worth promoting because it will not happen. But universal coverage can and should be implemented in any one of several doable ways. To put it off any longer is not to “do no harm”; it is sitting idly by with several kinds of proven cures in hand but just watching the patient crump instead.
Healthy elderly persons who can take care of themselves, but just need to find a way to get to the doctor, don’t live in nursing homes. There are a number of different programs out there, and they vary by community.
Some of these folks will live in assisted living communities, where they can get help with parts of daily living that they need, and rides to the doctor. This is pretty much like living in your own apartment, and there’s help on call in the building.
Some communities have a senior shuttle that provides free or low cost transportation; this can be used to get to a doctor.
My grandparents were prime nursing home candidates–couldn’t leave the house, couldn’t take care of themselves inside it–but instead of a nursing home, they devoted the rest of their assets toward full-time, in-home private nursing care from someone with an LPN. (The cost is relatively low, all things considered, because the nurse takes room and board as part of her salary.) Medicare pays for part of it.
I should say, as a rule, they do not live in nursing homes. There are exceptions to all rules.
Some nursing homes also have varying stages of care. Some residents are more able than others. These homes often sell themselves on the idea that “you can move Mom in now so you don’t have to worry about her living alone; then when she gets progressively more ill, we will be here to help.”
What is an LPN?
Licensed Practical Nurse.
Q.N. Jones, if you find anything about the “little HMO” doctors, can you post it here? I wonder if there’s a database of these doctors or something.