Throw grandma under the bus

I often write about breakthroughs in medical research. Innovation is the only way out of our healthcare mess: new discoveries in the lab and new ways of getting them to people.

Unfortunately, the new bureaucracies rising up under Obamacare are going to hurt this.

Benjamin Zycher, a senior fellow at the Pacific Research Institute, writes:

Obamacare established the Patient-Centered Outcomes Research Institute to “conduct research to provide information about the best available evidence to help patients and their health care providers make more informed decisions.” What could be wrong with that? CER is supposed to be “a rigorous evaluation of the impact of different options that are available for treating a given medical condition for a particular set of patients.” 

Alas, there is a problem: The federal government does not have patients. Instead, it has interest groups engaged in a long twilight struggle over shares of the federal budget pie. Less for one group means more for others, and even modest reductions in the huge federal health-care budget are a tempting goal for other constituencies.

In other words, there can be no such thing as unpoliticized science in the Beltway, he writes. 

It is inevitable that political pressures will lead policymakers to use the findings yielded by CER analyses to influence decisions on coverage, reimbursement, or incentives within Medicare, Medicaid, and other federal health programs.

Consider the new environment confronting would-be investors in new and improved medical technologies, examples of which are pharmaceuticals and medical devices and equipment. One cannot know in advance either how CER analyses of interest will turn out or how the findings will be used. Indeed, the uncertainties are enormous.

This is staggering:

Recent research from the Pacific Research Institute examined the likely effects of these CER implications for R&D investment in new and improved pharmaceuticals and devices and equipment. Using data from the National Science Foundation and other sources, R&D investment would be reduced by about $10 billion per year over the period 2014 through 2025, or about 10-12 percent. Based upon the scholarly literature on the benefits of medical innovation, this reduction in the advance of medical technology would impose an expected loss of about 5 million life-years annually, with a conservative economic value of $500 billion, an amount substantially greater than the entire U.S. market for pharmaceuticals and devices and equipment.

This adverse effect would be concentrated upon technological advances likely to serve the needs of smaller subgroups within the overall patient population, upon riskier investments among new treatments, and upon drugs and equipment expected to prove relatively less profitable.

Well, if people die the cost of their healthcare drops to zero. So there's a solution.