What the left misses in the health debate: innovation

Here's the most important question related to health care reform: if you were sick with a serious illness, where would you rather be? England, Canada or the United States?It is no accident that people who are seriously ill come from all over the world to seek treatment in the United States. Centers of excellence like the Mayo Clinic, Sloan-Kettering, Johns Hopkins and others utilize cutting edge technology and treatment protocols that continually advance the treatment of cancer and other serious problems. They do so with the full participation of pharmaceutical and biotechnology companies that are using research and development to drive innovation. It is the reason that American health care is the most advanced in the world and works miracles on a daily basis. This system works centrally on the profit motive -- something that the left seems to think is a dirty concept. Pharma and biotech companies spend billions on R&D to advance the efficacy of drugs and treatment technology with the promise of a return on their investment. It drives innovation -- and is an aspect of our health care system that has been both misunderstood and demogogued by proponents of national health care. The left -- including our president -- has made villains of the pharmaceutical industry for daring to charge prices that allow them to recoup their massive investments and make a profit. It is as if the left thinks that all this innovation and progress should come for free, or at the very least as a public service. It might work in their ideal vision of how the world works, but it doesn't work in reality.

And herein lies the real issue related to health care reform: the real threat to innovation that makes the American health care system the best in the world. As Rupert Darwell writes today in the Wall Street Journal, what characterizes the National Health Service in Britain is a lack of investment in technology -- something that reflects the fact that the system is based on rationing -- not investment:

The case for ObamaCare, as with the NHS, rests on what might be termed the "lump of health care" fallacy. But in a market-based system triggering one person's contractual rights to health care does not invalidate someone else's health policy. Instead, increased demand for health care incentivizes new drugs, new therapies and better ways of delivering health care. Government-administered systems are so slow and clumsy that they turn the lump of health-care fallacy into a reality. According to the 2002 Wanless report, used by Tony Blair's government to justify a large tax hike to fund the higher spending, the NHS is late to adopt and slow to diffuse new technology. Still, NHS spending more than doubled to £103 billion in 2009-10 from £40 billion in 1999-2000, equivalent to an average growth rate of over 7% a year after inflation.

Darwell also writes that the NHS is inherently "ageist" -- making treatment decisions that expressly deny care to the elderly.

It should therefore come as no surprise that the NHS is institutionally ageist. The elderly have fewer years left to them; why then should they get health-care resources that would benefit a younger person more? An analysis by a senior U.K.-based health-care expert earlier this decade found that in the U.S. health-care spending per capita goes up steeply for the elderly, while the U.K. didn't show the same pattern. The U.K.'s pattern of health-care spending by age had more in common with the former Soviet bloc.

I'm quite certain that nobody in the U.S. wants our health care system to be like the former Soviet Union. But I'm equally certain that those who are promoting a "public option" haven't thought through the long-range ramifications of creating a publicly-financed system. The supporters of "universal health care" are invested in the social justice aspect of the issue -- but they ignore vital economic incentives that have made the U.S. system the best in the world.