Thursday, November 26, 2009
The Plasma Disinfectant Device: The Birth of A Win-Win-Win Industry. But For Which Country?
Could a new technology vastly improve our capacity to disinfect objects, as well as living tissue--or even cause injured tissue to heal faster? That's the claim reported by the BBC's Jason Palmer, detailing a new plasma device--the prototype sort of looks like a microwave oven--that can be used to kill microbes, including the deadly and dreadedly drug-resistant MRSA. Which is to say, if this device works, could it not only save lives, but could it also reduce healthcare costs--reducing them the right way, not by rationing, but by eliminating the problem?
And third, could such a device provide wealth and jobs for its inventors and makers? Create a whole new industry, perhaps? Let's hope so! Because we want people to develop the cures and treatments that will help us live better and longer lives. We should reward these medical trailblazers financially, as well as showering them whatever other honors and rewards a grateful nation--and civilization--can bestow.
That's the bright prospect, but unfortunately, current trends in political economy are going the other way. These days, as the U.S. Senate debates a healthcare bill that will almost certainly slow down innovation, we are left to wonder whether or not the benefits of this new technology will come to our shores any time soon. Sure, the rich in America--and a few rich hospitals--might be able to buy such a disinfectant device as an imported good in a few years, but the vast bulk of Americans will probably be left out, because their government is committed to a vision of insurance egalitarianism, a.k.a. low-tech austerity, in which all expenditures for healthcare, no matter how meritorious, are lumped into the category of "rising cost curves to be bent downward."
The BBC's Palmer, reporting on the work of Gregor Morfill, at the Max Planck Institute for Extraterrestrial Phyiscs in Munich writes:
Professor Morfill and his colleagues have worked out the precise details of the plasma production that effectively kills off such bugs without doing harm to skin, and demonstrated a number of prototype devices that do the job efficiently.
"To produce plasmas efficiently at low cost so you can really mass produce these things for hospitals, that's the big breakthrough of the last year," Professor Morfill said.
The team says that an exposure to the plasma of only about 12 seconds reduces the incidence of bacteria, viruses, and fungi on hands by a factor of a million - a number that stands in sharp contrast to the several minutes hospital staff can take to wash using traditional soap and water.
Professor Morfill said that the approach can be used to kill the bacteria that lead to everything from gum disease to body odour.
Now, of course, we'll have to study and see how this technology proves out. But on the operating assumption that Morfil has a workable idea here, it's possible to imagine that a whole new industry is about to be created. And that will be worth a lot to somebody, and to some country.
Indeed, there are actually two related devices in question. The Medical News adds this:
Two prototype devices have been developed: one for efficient disinfection of healthy skin (e.g. hands and feet) in hospitals and public spaces where bacteria can pose a lethal threat; and another to shoot bacteria-killing agents into infested chronic wounds and enable a quicker healing process.
A Serious Medicine Strategist, Aaron Jacobson, did some quick calculations on the value of this plasma technology, according to three variables: first, the number of lives that might be saved (the most important concern); second, the economic value of such life-saving; and third, the economic value of a future plasma disinfectant device industry. Here's what Aaron came up with, focusing on just the United States. These are, of course, extremely rough back-of-the-envelope figurings:
First, the number of lives saved:
In 2000 there were 103,000 deaths from infection in U.S. hospitals. Let's imagine that 80% of those would have been prevented by this device. That's 82,400 lives a year.
That's good news for a lot of people.
Now, second, the economic value of lives saved. Here at SMS, we are always hesitant to express human life in dollar terms, but unfortunately, the data-driven language of today's public policy discourse demands it. Washington DC, after all, is a place where just about everything is reduced down to a Congressional Budget Office number (no matter how notional that number, derived through static analysis, can oftentimes be; in July, we wrote extensively about the limitations of such narrow-gauge static analysis). But, alas, when in Rome, do as the Romans do. So here goes with Aaron's estimate; SMS readers can see how he arrived at his numbers:
Now let's imagine that on average each of those people would have lived 10 more years. (That's the most questionable estimate because it's really hard to say. Some people might have lived 40 or 50 more years, while others might have lived just a few more months. I'm assuming that many people dying of hospital-borne infections were already old and sick and may not have had a long time left to live.) That brings us to a total of 824,000 life-years.
Medicare payments functionally value a life-year at $50,000. Multiply that by 824,000 lives and you get $41.2 billion. And that's per year.
Third, on a cheerier note, Aaron provided some initial thoughts on the possible size of the market for these plasma machines:
There are 7600 hospitals in the United States, employing 5.1 million people. The former device (the one for disinfecting hands) would probably be a standard feature in hospitals, like sinks and hand sanitizer are now. Let's say 1 for every 50 employees (remember that only about a third of employees are on shift at a time). That's 102,000 devices.
The latter device (the one for disinfecting wounds) would probably be rarer. There are about 965,000 hospital beds in the United States, with an average occupancy of about 75%, which means about 723,000 patients at any given time. Let's say 1 of these devices for every 500 patients. That gives us 1446 devices.
Estimates of the prices are even more conjectural. I imagine that a plasma device that would "disrupt" traditional sinks and sanitizer would have to be affordable, let's say $200. (This seems plausible if we remember how cheap the cheapest plasma TVs have become.) The other device, on the other hand, might be significantly more expensive--although still nowhere near the scale of some hospital equipment. Let's say $2400 apiece.
That gives us a total market of $23,870,400. Based on current employment in manufacturing and manufacturing as a percentage of the GDP, we can estimate that manufacturing these devices would provide jobs for about 6500 people.
It's important to realize, of course, that these estimates are completely rough. The new technology could have dozens of unforeseen applications--if it turns out to be truly efficient it could replace traditional sinks and sanitizers in public restrooms and restaurants (the latter market being much larger than the hospital market). On the other hand, it might never be feasible to make the devices that cheap, and then the technology would just flop. There's no way to know.
OK, let's sum up Aaron's estimates: This plasma device could save 82,400 lives a year, saving us $41 billion a year, by staving off the economic losses that come from premature death. And the industry that would be created would generate almost $24 billion in revenue, creating 6500 jobs, before the U.S. market was saturated. Although, of course, there would undoubtedly be a large home- and office-use market as well. And as the market got bigger and bigger, per-unit costs would fall and quality would rise. There would even be mini- and handheld versions of these disinfectant devices.
In other words, plasma disinfectant devices would go through the same virtuous cycle as has happened with every other consumer electronic device. Today, 80 percent of Americans have cell phones--and why shouldn't they? They are cheap, they are useful, and sometimes, as we know, they can be lifesavers. If even a quarter of Americans decided that they wanted an inexpensive device that would disinfect anything, including themselves, it's easy to see this hypothetical industry being a future peer to the home entertainment industry.
But of course, beyond the 300 million people in the US are another 6 billion or so people around the world. And those folks account for economic product approximately triple that of the U.S. Not all of those billions could afford these devices--but many of them could, especially as prices fell. So that's a lot of devices to be made and sold, and then, out of the enormous surpluses generated, it would be right and proper to give some of them away to the truly needy.
But in any case, a new industry could be created, as line-extensions beget spinoffs, begetting uses that we can't even imagine right now. So on top of the value of the initial sales of the device, what would be the market capitalization of such a new industry? How much wealth would that add to the economy? How much momentum for future breakthroughs?
That looks like a win-win-win to us: A win for saving lives, a win for saving money on healthcare, and a win for economic development.
It might seem strange that such a discussion of techno-entrepreneurial possibilities is completely absent from the current healthcare debate in Washington--yes, that it strange, And a huge lost opportunity for our health, and for our wealth.
If DC continues to let itself be dominated by CBO numbers--numbers totted up by well-meaning beancounters, who are deliberately oblivious to the transformational potential of technology--then of course Washington policymakers will be blind to the sort of scientific potential outlined by Morfill, and to the economic potential outlined by Jacobson.
So the question: Which company, and which country, will jump on this technology? For the sake of the hard-hit American economy, let's hope that the U.S. gets ahead of the pack, but for the sake of humanity, let's hope that somebody does it, even if we don't.
Thanks to another Serious Medicine Strategist, Peter McBrien, for first tipping us off to this item.
Posted by James P. Pinkerton at 8:19 PM