Serious Medicine Strategy

Jeremy Shane: The Best of Times, and the Worst of Times, for Health and Healthcare

2011-12-09T21:41:00.001-05:00

Editor's Note: Jeremy Shane is the President and COO of the Health Central Network, based in the Washington DC area. Jeremy is a leader in both the business side of healthcare and also on the activist side. So this guest piece reflects not only Jeremy's deep understanding of the industry, and the challenges and opportunities that it faces, but also his passion for Serious Medicine. As he observes, only a Serious Medicine approach to Alzheimer's, to cite one urgent example, will save the US from economic ruination as future entitlement bills come due.

Yet ultimately Jeremy sees more good news than bad news on the horizon; so count him as a the rarest of contrarians--a well-informed optimist.

The Best of Times, and the Worst of Times, for Health and Healthcare

A single page--page B4 of Thursday’s Wall Street Journal provides a wonderful synopsis of the state of the US health industry. The page includes four articles: “Pfizer Cancer Drug Advances,” “Justices Weigh Patents on Medical Tests,” “Novartis Retools Brain Work,” and “Astra Cuts Sales Force in US 24%.”

Collectively, these articles paint a hopeful picture for health, but a very difficult outlook for health companies. Great science will continue to excite and frustrate, scientific breakthroughs will test long-held regulatory approaches and law, and traditional models of drug development are in big trouble.

First, on the critical issue of curing serious disease, is the Pfizer article. Wednesday an FDA advisory committee gave a unanimous nod to a new Pfizer drug, axitnib, for kidney cancer. The FDA likely will give its final approval for the drug soon. Clinical trials showed the drug prolonged survival for kidney cancer patients whose disease stopped responding to initial treatments. There are two other treatments on the market for advanced kidney cancers. Pfizer’s drug seems to work as well as the others, and better in some cases. That’s the good news. The challenge now is to figure out which types of kidney cancer where each advanced drug is certain to work better. The only thing worse than a drug that doesn’t work, is a drug that that sometimes works and sometimes doesn’t, but in either case for reasons doctors don’t understand. It means some patients will have false hope and lose time that could be spent trying something else that might-–or ideally would-–work. So at the same conference where Pfizer announced results for axitnib, a new study from the PREDICT Consortium, a group of European researchers, was announced to see if different combinations of kidney cancer drugs could be associated definitively with specific tumor types. That’s progress.

Yesterday’s articles also highlight how science and technology are eroding long-held regulatory approaches. The FDA will approve Pfizer’s drug as a “second-line” treatment, meaning most patients will get it only after widely-accepted chemotherapy, surgery, or radiation therapies have been tried and have failed. FDA rules do not prohibit doctors from using second-line drugs as part of an initial treatment plan, but because the drug wasn’t tested with “treatment naïve” patients before FDA approval, the choice to use it earlier is riskier for doctors and patients. Ironically, the same research approaches making highly targeted drugs possible also suggest that tumors evolve once they are bombarded with chemotherapy, making them harder to kill. Drugs used as second-line therapies might work better in combination with other drugs if used at the outset. Or, they might not. But right now, because of FDA rules governing clinical trial, drug manufacturers rarely test drugs on just diagnosed patients if a reasonably effective chemotherapy regime exists (reasonably effective meaning the chemo will shrink the tumor or slow its growth but is unlikely to kill it for good.) Patients lose as a result. Oncologists play the odds, more comfortable with tried-and-true though imperfect approaches, unsure in the absence of trial data whether using a second-line drug at the outset will improve survival. And the specter of a malpractice suit if they try (and fail) cannot be far from the oncologist’s mind. In time, research will win out, and it is possible that for many kinds of fast-growing or complex tumors, going nuclear as early as possible on multiple biochemical fronts is a surer path to total victory.

Yesterday’s story about the Supreme Court deliberations highlights how scientific and technological advances also are undermining long-held legal standards. Patent law is intended to encourage new discovery, protecting breakthrough ideas while allowing others to benefit from publication of new approaches, enabling others to build on new discoveries (for a fee) in their own products. Patent law has become murky in addressing new techniques to improve diagnosis, adjust drug doses, or determine individuals’ risk of disease based on their genetics. Yesterday’s Supreme Court case, Mayo v. Prometheus, concerns a test that helps doctors pick the best dose for a Crohn’s Disease drug. Tests like the one in Prometheus are at the heart of targeted medicine. By definition, for a targeted therapy to be picked, doctors and patients must know what they’re aiming at, requiring sophisticated tests. The question facing the Justices in this case and one expected next year, is: What makes a test patentable? If a test merely detects substances that humans naturally produce, is it really creating something new? What if the substance identified by a test is a rare mutation--it is a natural substance, but absent innovative techniques it might not be identified? The answers to these questions could have a large impact on the pace at which new cures are discovered. If patent law is too loose, and too many patents are issued, patent-holders could extract monopoly prices and stifle innovation. But allowing too few patents eliminates the incentive to risk money and time to discover new things, since there is no certainty that investment can be recouped. Whatever the Supreme Court decides this year and next, it seems likely that health innovators will spend more time in court (like software and wireless phone companies) fighting over patents, diverting precious time and money from breakthrough science into law firms’ coffers.

Patent law may be about to become messier but the skirmish obscures the larger import of cases like Prometheus. Whatever the law, science and technology are changing the way doctors and patients make health decisions. Bit by bit, test by test, products like those offered by Prometheus are demystifying diagnostic and treatment choices. As technology takes the margin of error out of previously subjective medical judgments, it will take the premium out of the cost doctors charge to make the diagnostic or treatment choice. This is not to say all medical science can or should be reduced to a set of algorithms, though companies such as IBM, with its Jeopardy-winning Watson software, may try. Doctors will continue to add a lot of value in their surgical skill and ability to manage difficult cases. The body will remain a complex place to do business for a long time yet. But the way medical professionals work is changing forever and for better. The more that can be determined about a person’s medical condition objectively and precisely, the more consistent will be choices about treatment, and the more equitably can treatments become accessible to patients whether they are in a vaunted Memorial Sloan Kettering or a health clinic in rural Kansas.

So, patent law disputes will over time become beside the point, even as they remain costly distractions. We can hardly expect nine Justices, however learned, to solve a problem that-- regardless of their words--will be overrun by the discovery of scientific fact. The high priests of the legal profession represent an industry marching ever-deeper into nuance and obfuscation as science marches in the opposite direction, towards clarity and consistency in making treatment decisions.

This brings us to the articles about Novartis and AstraZeneca and the breakdown of the Big Pharma business model. Over the last twenty years, big pharma funded R&D on many disease areas with fat profit margins from a few multi-billion dollar blockbusters. Once the FDA approved a drug, pharma companies sent legions of sales reps to knock on doctors’ doors, persuading them to treat patients with the newest compound. This business model worked well for a while. New medications came to market could be used by millions or tens of millions of people. New treatments in many conditions like high cholesterol worked much better than older drugs, or even postponed costly surgeries. Drug companies learned to create demand in conditions like erectile dysfunction where no real treatments existed, appealing to aging Baby Boomers’ anxieties about youthfulness and self-image. Over time “lifestyle” drugs attracted elite scorn, but it is worth remembering that for a company like Pfizer, male angst over performance in bed funded research in niche categories like kidney cancer. (Lilly, maker of the other leading ED drug, Cialis, also plowed profits into drugs for hard-to-treat conditions as well as more broader-scale areas like depression and chronic pain.)

Regardless, the days of blockbuster sugar daddies is over. Big drugs, such as Pfizer’s Lipitor, are going off patent, crushing profit margins. And “push” marketing, driven by salespeople pounding the pavement and knocking on doors makes less sense. Today’s targeted drugs are used by fewer doctors, specializing in less-common conditions. Even in oncology--a fairly broad specialty--there are only about 30,000 medical professionals in the largest cancer society, compared to the total universe of about 600,000 US doctors who prescribe drugs. So companies like Astra Zeneca, who have not found many new targeted drugs, are in a bind. Unable to support speculative research in multiple areas or justify large sales forces, big pharma is laying off marketers and researchers en masse. Before Astra Zeneca, rounds of layoffs have happened at Merck, Novartis, Pfizer, GSK and others.

There is another looming threat to American health and welfare that could produce a few blockbusters, Alzheimer’s Disease. But AD has proven to be a vexing disease to understand. Researchers are facing hurdles to developing “druggable” compounds, medications that work in predictable ways and can be delivered in consistent doses to deep recesses of the brain. AD is likely to follow what we are learning about cancer and autoimmune disease. That is AD will probably come to be described as Alzheimer Diseases, plural, with different varieties triggered by a range of genetic and environmental interactions, requiring a spectrum of combination therapies.

Companies like Novartis which have tried and failed to develop Alzheimer’s killers now see that brain conditions defy resolution until we take a holistic approach to understanding brain disorders--degenerative ones like Alzheimer’s, developmental ones like autism, and behavioral ones like schizophrenia. They are taking a step back to study brain anatomy, chemistry, genetics, and immunology, hoping that collaboration on core brain processes will mean many steps forward on multiple fronts. Novartis, and a other pharma companies who remain interested in brain disorders, realize that even the largest “Alzheimer’s product team” focused solely on Alzheimer’s cannot hope to crack the “case.” Brain research will be bigger than any company, any patent law, any FDA rule, bigger too than Obamacare or Ryancare since no insurance scheme from left or right can hope to cover the daunting cost of caring for people with multi-decade degenerative, developmental, and traumatic brain conditions. Only great science and willing research participants--cures, in other words--can.

That, in a nutshell, is the state of the health industry today. It is tempting to say it’s Dickensian, the best of times and the worst of times, but that gives too much credit to the down side. Vibrant societies rely on creative destruction, objective truths, enabling new ways for innovators to profit, and citizenry to prosper. Great science, or cures as most people think of it, requires perseverance and openness to new ways of thinking. Rent-seekers and beneficiaries of now outdated regulatory schemes will be compelled by public pressure and scientific truth to step aside or join the fight. If they get seriously ill, you can bet they will.

Editor's post-script: A very important point is tucked away at the end of the paragraph about the Prometheus case: Now matter how the Supreme Court rules on that case, to the extent that cutting-edge science can be replicated, in the form of both treatments and tests, the problem of doctor-skill differential--which tends to disadvantage rural locales, and other under-served areas--is diminished. That is, if the necessary intellectual capital is all captured in in the test or the treatment, then the skill of the doctor or healthcare provider is de-emphasized. Doctors and other healthcare providers will always be vital, but if the test or treatment can be standardized and replicated on a mass scale, then everyone, everywhere, can get the benefit of the best that medicine has to offer. And that's a good thing.

All Visions Must Pass: Donald Berwick Departs the Centers for Medicare & Medicaid Services

2011-12-06T17:42:00.002-05:00

Dr. Donald Berwick, now departed from his 17-month recess appointment as Administrator of the Centers for Medicare and Medicaid (CMS)--he was unable to win confirmation by the US Senate--took some parting shots at "waste" in the system in a New York Times interview. Berwick, who oversaw the spending of more than $800 billion in outlays, declared that as much as 30 percent of health spending is wasted. OK, we're all against waste, but who defines it? The federal government? Has Uncle Sam earned the credibility to make judgements about waste?

His valedictory interview notwithstanding, Berwick is probably best known, to admirers and detractors alike, as America's leading fan of Britain's National Health Service (NHS). As he said to an NHS audience in July 2008, "I am romantic about the NHS; I love it." And he went on to flatter the NHS in rapturous terms: "You are unified, movingly and most nobly, by your nation's promise to make good on an idea: the idea that health care is a human right. The NHS is a bridge--a towering bridge--between the rhetoric of justice and the fact of justice."

The NHS does, indeed, represent a kind of pinnacle. It is the culmination of a belief system that originated in 19th century Germany. In the early part of that century, G.W.F. Hegel lyricized about the wondrous justice-giving powers of the "universal" bureaucratic state, not so different from the government of his Prussian homeland. Later in that century, another Prussian, Bismarck, reified and solidified Hegel's idealism into the practical reality of a bureaucratic welfare state; neo-Hegelians finally had achieved their utopian vision. For them, the welfare state became a secularized godhead, boasting the power to transubstantiate mere tax money into glorious and ennobling political structures. In the US, neo-Hegelians called themselves Progressives; the English word "Progressive" was inspired by the German Deutsche Fortschrittpartei, the German Progress Party, founded in 1861.

Of course, American progressives, yearning to enact their vision of modernization and uplift, were not inspired only by Bismarck, they were inspired also by the humming factories that improved productivity and generated prosperity. So Henry Ford, having mastered the assembly line, became a hero, as did Frederick Winslow Taylor, the pioneering "efficiency expert." Across the political spectrum, right to left, from the US to the USSR, "Fordism" and "Taylorism" were admired for their industrializing powers. For their part, American progressives reasoned that if factories were efficient thanks to Ford and Taylor, they could be made even more efficient without the "waste" of capitalist competition. And they further reasoned that people like themselves could make the whole nation more efficient. As John Dewey wrote in his 1935 book, Liberalism and Social Action, "Organized social planning . . . is now the sole method of social action."

So it made sense that healthcare, too, should be planned, modernized, and socialized. The Beveridge Report, produced by the British government in 1942 as the blueprint for the NHS, asserted that national healthcare should be seen as part of a "comprehensive policy of social progress."

Later in the 20th century, Dr. Berwick was swept up by the same progressive idea: planners would improve social welfare and, at the same time, eliminate waste. Berwick founded the Cambridge, Massachusetts-based Institute for Healthcare Improvement (IHI), which self-described itself as follows:

IHI was founded in the late 1980s by Don Berwick and a group of visionary individuals committed to redesigning health care into a system no longer plagued by errors, waste, delay, and unsustainable social and economic costs.

Berwick has been open in his admiration of such contemporary efficiency experts as W. Edwards Deming and of companies that have streamlined "just in time" techniques, such as Toyota. And the progressive healthcare dream has stayed steady now for a century; Berwick's declaration that 30 percent of healthcare spending is "wasted," for example, is perfectly congruent with Barack Obama's 2008 promise to eliminate waste and so cut a family's healthcare spending by $2500, or one-third. The promise still stands, of course, even if we are still waiting for the facts to catch up. Indeed, the lag time might lead some to conclude that perhaps the government is not the efficiency machine that Berwick and Obama might wish it to be. The progressive dream of enlightened management, it seems, will never die.

Some things have changed, to be sure, in the 100 years since Teddy Roosevelt ran for president on the Progressive ticket, promising, among other platform planks, national health insurance. For one thing, progressives have figured out how to profit from their progressivism; Berwick's IHI paid him more than $2.3 million in 2008. Indeed, such a fat paycheck is perfectly in keeping with the spirit of an age in which policy experts become rich as well as powerful. White House healthcare czarina Nancy-Ann DeParle, to name another, received $5.8 million as a consultant to health insurance companies in the three years prior to her entry into the Obama administration.

Yet at the same time, there can be no doubt that Berwick has full faith in the transcendence of what he has been doing. As he told the Times, "We are a nation headed for justice, for fairness and justice in access to care." Indeed, he continued, putting the cause of providing universal health insurance in grandiose terms: "There is a moon shot here." By "moon shot," Berwick meant a project that can grip the popular imagination the way it has gripped the imagination of so many Democratic Party intellectuals. Yet if most Americans don't see health insurance in such lustrous terms, well, that is indeed a problem for the latest generation of Hegelians.

In fact, Berwick lamented that the public hadn't yet grasped the greatness of the vision: "Somehow we have not put together that story in a way that's compelling."

One problem, perhaps, lies in Berwick's zeal for health rationing, seen as a necessary component of health justice. Yet zeal is not shared by most Americans. So when Berwick declared in 2009, "The decision is not whether or not we will ration care--the decision is whether we will ration with our eyes open," those words were widely used against him. But Berwick has, in fact gone even further, past the political point of no return:

Any healthcare funding plan that is just, equitable, civilized and humane must, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent healthcare is by definition redistributional.

Alas, poor Berwick--we knew him too well. Whereas he saw government-run healthcare as taking us toward the light, others saw darkness. The NHS, for example, looks bad to most Americans with access to Google. Even the briefest search yields up headlines such as this, from the December 1 edition of The Telegraph, the UK newspaper: "Loved ones not always told their relative is on controversial 'death pathway'/ NHS doctors are failing to inform up to half of families that their loved ones have been put on a scheme to help end their lives, the Royal College of Physicians has found." It seems that tens of thousands of NHS patients are being put on what the Telegraph called the "death pathway," as a play on what the NHS calls--using a euphemism for euthanasia--the "care pathway." According to NHS rules caregivers [sic] are allowed to withhold care from terminal patients after receiving consent from the family. Yet a government audit found that some 2500 families, in the city of Liverpool alone, were not so consulted.

It's from reports such as this that some in the US get the idea that eliminating "waste" is code-talk for eliminating patients. So maybe "death panels" in the US aren't such a stretch, after all. That's why most American advocates of national health insurance tend to shy away from any comparison to the NHS. But not, as we have seen, Dr. Berwick, who has always been forthright in his NHS-philia. Most likely that's why he wasn't confirmed by the Senate; when his recess appointment to CMS expired, he had to go back to Cambridge.

No doubt Berwick will soon find a way to pass his vision on to a new generation, but after a century of progressive activism on healthcare, perhaps he--and all of us--might think about a new course of action. It seems that US healthcare advocates have hit the point of diminishing returns; after all, we have had mostly universal healthcare coverage for decades now. Medicaid and Medicare were created in the 60s, and EMTALA gave everyone the right to emergency-room treatment, without regard for ability to pay. Yet such piecemeal approaches did not meet Berwickian efficiency standards, it would seem, and so the Obama administration charged ahead with the Affordable Care Act, signed into law in 2010. And later that same year, the Democrats, of course, were clobbered in the midterm, and now "Obamacare" is still deeply under water politically.

So maybe the Hegelian-Bismarckian-Berwickian vision has played itself out. Maybe it's in the nature of the health-and-welfare state these days that it a) can't keep up with fast-fluxing market forces, b) can't keep up with the even faster changes in social networking and computerized transparency and publicity, c) can't withstand the onslaught of special interests, who honeycomb any kind of legislation with baroque and unpopular mandates and set-asides, d) can't come to grips with the reality that lawyers and judges end up running any public system these days, and e) can't comprehend the fact that the real problem with a disease such as Alzheimer's is not the financing of the disease but, rather, the disease itself. And therefore the whole idea of securing additional healthcare finance for the population is less important than the idea of securing the medicine to keep people healthy in the first place. The best way to eliminate "waste" in the healthcare system is to eliminate the need for so many people to be processed through the system.

We shouldn't be surprised if Berwick writes a book about his experiences in Washington. Here's a suggested title, although he probably won't use it: All Things Must Pass.

DARPA to the rescue! If civilians have lost interest in developing cures, let the military do it.

2011-11-28T22:04:00.003-05:00

Wired magazine reports that the Defense Advance Research Projects Agency (DARPA) is working on a new approach to antibiotics--or post-antibiotics. As Wired's Katie Drummond writes, DARPA is seeking proposals that could completely replace traditional antibiotics with a whole new kind of bacteria killer:

Darpa wants researchers to use nanoparticles--tiny, autonomous drug delivery systems that can carry molecules of medication anywhere in the body, and get them right into a targeted cell. Darpa would like to see nanoparticles loaded with "small interfering RNA (siRNA)" -- a class of molecules that can target and shut down specific genes. If siRNA could be reprogrammed "on-the-fly" and applied to different pathogens, then the nanoparticles could be loaded up with the right siRNA molecules and sent directly to cells responsible for the infection.

Drummond allows that it might seem hard to believe that DARPA could pull off something like this, but in fact, the theory has already been proven. Last year, she notes, researchers were able to engineering siRNA and put it into nanoparticles that were injected into four primates infected with the Ebola virus, thereby arresting the killer disease.

But wait--there's more. Not only does DARPA seek to bring about this whole new approach, skipping past familiar modes and mechanisms, it is also seeking ways to time-compress the timeline of new cures, from years down to mere days.

So it's a daunting, if enticing, prospect. DARPA does, indeed, have a big vision. At a time when most healthcare "experts" talk only of finance and bean-counting and rationing--that is, on the demand-side of medicine--the DARPA wants to jump in on the supply-side of medicine; that is, the creation of actual cures; it's the Pentagon, not the Department of Health and Human Services, that wants to decisively intervene in the course of disease and save lives. Audacious? Sure. Impractical? Maybe. Popular? Absolutely, if it works. But as Drummond concludes:

If anybody can design a new paradigm for medicine, and a new way to mass-produce it, our money's on the military. After all, we've got them to thank for figuring out how to manufacture the medication that got us into this mess in the first place: penicillin.

Indeed, the military, British and American, was the impetus for the serious development of antibiotics. The medicinal qualities of the blue-green mould penicillium notatum had been observed as far back as the Middle Ages, but those positive properties were not recorded in a scientific treatise until 1875. Yet serious scientific inquiry did not begin for another five decades after that. Alexander Fleming had been a British military doctor during World War One, working in the mud and filth of the trenches, observing firsthand the lethality of infected wounds. For the next decade, Fleming kept seeking a remedy for infection--until that fortuitous moment in 1928, when he noticed that bread mould was inhibiting bacteria growing in a petri dish. He called it penicillin.

Yet in the following years, progress remained slow, as Fleming and others at St. Mary's Hospital in London struggled for a decade to purify and extract the antibiotic agent and turn it into a usable drug. It was not until World War Two that urgent military necessity led to increased funding for Fleming--and to the rapid acceleration of penicillin research and development, mostly in the US. This heroic story was ably told by Lauren Belfer in her 2010 novel, A Fierce Radiance.

Vannevar Bush, the director of the Office of Scientific Research and Development--DARPA's predecessor agency--ordered that penicillin research be a national priority second only to the atom-bomb project. And it worked. By 1944, penicillin was being produced in the millions of doses by Pfizer, working on a government contract. As a result of this public-private partnership--this medical-industrial complex, if one prefers--more gains were made in the battle against deadly infection than in all the previous years of human history.

Fleming and two fellow researchers were awarded the Nobel Prize for Medicine in 1945. As Bush observed in that same year:

The death rate for all diseases in the Army, including the overseas forces, has been reduced from 14.1 per thousand in the last war to 0.6 per thousand in this war. Such ravaging diseases as yellow fever, dysentery, typhus, tetanus, pneumonia, and meningitis have been all but conquered by penicillin and the sulfa drugs, the insecticide DDT, better vaccines, and improved hygenic measures. Malaria has been controlled. There has been dramatic progress in surgery.

So while we don't yet know if DARPA's new plan for siRNA will truly work, history tells us that if the military really puts its mind to work on a challenge, that challenge can often be overcome. Why? Because the military has a strong claim on national resources--and not just tax revenue. In the past, to achieve an urgent objective, the military has black-boxed its budgets, dragooned brain power, and bulldozed any and all obstacles.

To cite one germane non-medical example, Gen. Leslie Groves, leader of the Manhattan Project, did not pause over Environmental Impact Statements when he occupied Oak Ridge, Tennessee, and set up a nuclear bomb factory that brought in 75,000 people, and he certainly did not hold public hearings in advance of the 1945 atomic tests at the Trinity site in New Mexico. Such military mobilization of resources is a hard and Hobbesian process, but it has one virtue: It works. If the goal is important--and theoretically, at least, the wartime military doesn't have any goals that are not important--then the Manhattan Project sums up the way the process can work to shorten the war, reduce casualties, and guarantee victory.

Similar tales could be told about the wartime (including the Cold War) invention/acceleration of such 20th century inventions as radar, synthetic rubber, aviation, electronics, nuclear power, the internet, and GPS. As an aside, the fact that each these inventions contributed not only to military victory but also to civilian wealth is yet another bonus of constructive public-private partnerships, and a reminder that the US military has been one of the principal drivers of the American economy all through our history. And so, too, in the case of DARPA's siRNA project; if it works, we will all owe those defense nerds yet another huge debt.

By contrast, the results for innovation and the economy in the absence of military mobilization can be painfully slow--even deadly slow. In a free and pluralistic society, every economic activity is eventually surrounded by claimants and rent-seekers of various kinds; these claimants and rent-seekers can be variously described as remoras, barnacles, or lampreys. That is, they can be mildly symbiotic, a slight burden--or they can be lethally parasitic.

The dismal economic consequences of runaway pluralism were ably described by the economist Mancur Olson in his 1982 book, The Rise and Decline of Nations; Olson went so far as to suggest it was more economically beneficial to lose a war than to suffer the endlessly cumulated sedimentations of special-interest encrustation. The non-catastrophic solutions to such "demosclerosis"--to recall Jonathan Rauch's encapsulation of the Olson argument--are relatively straightforward; csh solutions include deregulation and an overall opening up of clotted economic arteries. But as we have seen in our time, it's easier to prescribe those solutions than it is to implement those solutions.

Typically, what's needed is at least some kind of crisis--some wake-up call; a default, if not a defeat. Civilian leaders can sometimes make the most of a sense of urgency and crisis--but military leaders always can.

As we have seen in recent decades, bad news on the medical front has not been in any way galvanic--the situation gets worse and worse. Indeed, the worsening seems to be part of a deliberate policy of looting the medical industry to achieve other governmental goals.

No wonder, then, that we have been losing the war against infection for some time now, and nobody in the US government, other than DARPA, seems to have noticed. Yes, it might seem to be a strange world when all the agencies and committees that have the word "health" in their title have been allowing the problem to worse, to the point where the number of new antibiotics has fallen by more than 80 percent over the last quarter century, even amidst louder warnings about the rise of deadly "superbugs." Yet as the historical record shows, even well-meaning civilians have not been able to overcome the cumulative blockages of the trial lawyers, the FDA, and the overall brain-drain and capital-drain out of the pharma sector.

Enter the Pentagon and DARPA, coming from a different world, pursuing different goals. By no means is the military always a paragon of efficiency, but mission-focused command-and-control does have its bottom-line virtues. For the most part, the military is able to fend off civilian predations and Olsonian sclerosis, because generals and admirals can invoke national security--and, at a more gut level, the well-being of our fighting forces--in order to push its projects through.

"Compared to war," General George S. Patton said during World War Two, "all other forms of human endeavor shrink to insignificance." War is, indeed, catalytic; it does unleash vast amounts of public exertion and public forbearance. But war, of course, is also tragic, even if, as in World War Two, the larger benefits of improved medicine save lives during and after the war.

In a better world, advocates for Serious Medicine, such as a new kind of instantaneous bacteria-killer, would be able to act just as decisively in the fight against microbes as generals can in the fight against men. That is, we would enjoy the benefits of saving lives without predicating the effort on taking lives. Until then, however, we can conclude that those generals and admirals care more about the well-being of their men and women than our elected politicians care about the well-being of us civilians.

So yes, someday, we should have a MARPA, for Medical Advanced Research Projects Agency, as a more mission-focused version of the NIH. We should mimic the military's sense of purpose on the civilian side, without firing a shot.

But until that happens, we should be thankful that we have a DARPA.

The FDA’s Rejection of Avastin: Not Part of the Solution, Part of the Problem

2011-11-19T17:59:00.005-05:00

The Food and Drug Administration’s decision to restrict the use Avastin for breast cancer has attracted some cautious supporters in unexpected places. MPT’s own Paul Howard, for example--not generally regarded as a fan of the contemporary FDA--writes,“This is one case where I think the FDA did the right thing.”

Well, here’s another perspective: This is a case where the FDA did the wrong thing. It’s wrong for patients, wrong for the country, and wrong even for the long-term cause of saving money. We need to do more against cancer, not less. And paradoxical as it may seem, if we do more, we will not only save more lives, but we will ultimately spend less money. Indeed, medical history tells us that only when we do more--that is, increase innovation and productivity--do we end up spending less. That’s the lesson of polio from the 50s, of AIDS in the 80s and 90s, and of heart disease over the last half-century. And it could be the lesson of breast cancer, too--but only if we take the same dynamic pro-science, pro-innovation approach.

Today, the FDA, echoing the thinking of the larger federal government, seems content to fight mere skirmishes in the war on cancer. Yet absent any sort of strategy for victory, the casualty toll will continue to mount. Last summer, at an FDA hearing in Washington, one woman, Priscilla Howard, declared, “Despite the potential side effects from Avastin, metastatic breast cancer has only one--death.” She added that Avastin had controlled her cancer for 32 months: “I want every available weapon in my arsenal as I fight this devastating disease.” But now, thanks to the FDA’s action against Avastin, that arsenal has been depleted. Indeed, it’s a safe bet that the future arsenal will be depleted even more; Uncle Sam has just sent a clear signal to researchers and developers: Don’t assume that the government is interested in financing future progress against cancer. If you develop a new drug, the burden is all on you. In addition, you will confront both implicit and explicit price controls.

In fact, the FDA’s Avastin decision should be seen in the context of overall public policy in the last few decades, which can be summed up in three points:

First, the dominant healthcare policy elites, influenced by the environmental movement, have adopted a generally skeptical view of technological advancement in medicine. Since the 60s, technology has been seen by many as a source of alienation, pollution, and even, in a metaphorical sense, mutilation. In 1984, Dick Lamm--who had led the fight against the proposed Denver Olympics before going on to serve two terms as Colorado’s Democratic governor--struck an elitist chord when he applied the same limits-to-growth ethos to healthcare. Older Americans should pass from the scene sooner, rather than later, he said, for the sake of future generations: “We’ve got a duty to die and get out of the way with all of our machines and artificial hearts and everything else like that and let the other society, our kids, build a reasonable life.” With the conspicuous exception of the fight against AIDS--which was treated as an all-out war, thanks to the intervention of figures from the popular culture, as opposed to the policy culture--this go-slow approach has dominated the chattering classes. Indeed, the Kaiser Family Foundation has noted this gulf between the elites and the masses; the elites want less healthcare as a matter of national policy, and the public, by contrast, wants more.

Second, policy makers see the need to control healthcare costs as a way of making national health insurance more acceptable and affordable. To put it bluntly, if people die, that’s cheaper for the system, at least in the short run. Such sentiments are rarely articulated in public, of course, but the public is nevertheless suspicious of what the elites are up to. And so, for example, when a panel within the Obama Department of Health and Human Services put forth new and more restrictive guidelines calling for fewer mammograms, the public rose up and the new rules were withdrawn, although not before the “death panel” meme was born. Interestingly, the same panel put forth similarly restrictive guidelines on prostate cancer screening, and those new rules have not been withdrawn--perhaps a reminder that prostate-cancer-minded men are not as organized and energized as breast-cancer-minded women. Meanwhile, the cost-controlling effect of the Independent Payment Advisory Board, part of the Affordable Care Act of 2010, remains to be seen. But here’s a prediction: IPAB will be much more effective at controlling abstract costs, defined as future speculative research, than it will be at controlling tangible costs, defined as money flowing directly to patients and caregivers. In other words, IPAB will impose “savings” in exactly the sort of research that could ultimately save lives. In the past, the federal government has been good at making long-term investments, e.g., the railroads, aviation, and the Internet. But in the current political environment, the healthcare imperative is for immediate savings--in time for the next fiscal year, or the next election.

Third, we now see the additional pressure of the “deficit hawks,” culminating in the so-called Super Committee, which has raised the static-analysis view of deficit-reduction to the pinnacle of national thinking. Official Washington will be happy if there’s a deal in the next few days or weeks--any deal. It’s not hard, of course, to find skeptics who believe that the spending restrictions will not be meaningful, but it would appear that the Establishment has settled on the idea that an agreement of some kind is desperately needed--if only, some might say, to save the same Establishment from losing face. Yet if and when those possible spending caps are broken, it’s more likely that immediate costs--say, increasing payments to doctors or hospitals--will be accommodated, as opposed to longer-term research. So once again, cancer researchers and developers are on notice; the real money will be in treating cancer, not in beating cancer. And the same will hold true for other diseases, such as Alzheimer’s. The care may ultimately cost more than the cure, but the feds are interested in paying only for the care. And as always, we get what we pay for.

Back to Avastin: If the drug is used less, that’s a savings to the government, in the short run. Yet as the population ages, diseases such as cancer--as well as other illnesses, such as Alzheimer’s--seem destined to become more prevalent, and the nation will have to bear the expense. So while the price-controlling approach to cancer research is likely to “work” in terms of restricting cancer drugs, it is ultimately doomed to fail as a means of controlling costs. Caring for increasing numbers of sick people for long periods of time is costly--and those people, by the way, are voters.

So how can prices for healthcare be lowered? The answer is the same for medicine as for everything else--improved productivity, getting more for less. That’s been the secret of the Scientific Revolution over the last four centuries, and also for the Industrial Revolution over the last three centuries. As Adam Smith explained in The Wealth of Nations, developing a more efficient way to make something as simple as a pin could increase overall output by a factor of 240--that’s 24000 percent. Such gains have been routine over these hundreds of years, accounting for the material abundance that we enjoy today. So it’s perverse that all the aforementioned policy elites are following a different policy path when it comes to medicine. Instead of saying, “Push ahead, so that we can have more for less,” the elites have taken an anti-Smithian stand; they have taken a neo-Malthusian stand, arguing for rationing and scarcity. And such neo-Malthusianism is the ultimate animating philosophy behind the FDA’s decision against Avastin. If everybody “knows” that we need to cut back and make do with less, here is the FDA’s opportunity to be on “the right side of history.”

So the challenge for the rest of us is to rediscover Smith, and to reject Malthus yet again. We must apply Smithian wisdom to the systematized research, and mass production, of medicine. That is, apply the time-tested scientific and industrial principles of growth, and insist that they be applied to medicine. And if we do that, Avastin would be seen in a new light. The drug may or may not prove to be a great cancer treatment, but surely, at minimum, the use of the drug will save some lives, as well as help teach us about what works against cancer. Edison didn’t get the the lightbulb right the first time he tried, nor did Einstein develop the theory of relativity in the first draft. The process of discovery can be lengthy--and expensive. But as we have seen, the cost of non-discovery is even greater, and ultimately more expensive.

This further point--that we learn by doing, as millions of actors set in motion a Hayekian process of discovery that no bureaucrat could plan for, or account for--is worth pausing over, because it speaks to what saves lives in medicine.

A powerful illustration of discovery in action comes from Harvard economist David Cutler, who describes the process by which heart disease has become vastly more survivable and vastly less expensive on a per-patient basis. Cutler recalls that in 1955, President Dwight D. Eisenhower suffered a heart attack. His doctors prescribed . . . bed rest. That was the best they could do, even for the commander-in-chief, the leader of the free world. The remedy was certainly low-cost, although for the leader of the free world, no expense would have been spared. In fact, Cutler comments, the treatment Ike received was counter-productive: “We know today that bed rest is ineffective. It does not prevent further heart damage, and it can lead to other complications, such as blood clots in the veins and lungs.” In other words, the treatment for the heart attack was making the president’s condition worse. Early failure is a familiar enough phenomenon in any scientific inquiry, and medicine is no exception. So the challenge, therefore, is to keep pushing forward, figuring it out as one goes along. Such problem-solving is the basic method of all science and all engineering.

By the 1970s, Cutler continues, open heart surgery had become common. Such procedures were an improvement, albeit with huge drawbacks; any patient who spends time in a hospital runs the risk, for example, of nosocomial infections--that is, infections acquired in the hospital. Such infections are estimated to occur in five percent of all acute-care hospital stays, causing perhaps 70,000 deaths a year. But even as progress was being made for such surgeries, the development of alternatives continued. In the 1960s, stents emerged, and in the following decade, the first angioplasties were attempted. Drugs emerged, too, such as statins. Meanwhile, science became more aware of dietary and lifestyle issues as they affect heart disease, giving people new tools to help their own health and longevity. In addition, that old medicine-chest standby, aspirin, was now seen in a new light. So we can see that for many, the advance of science has led to some surprisingly simple and elegant solutions, based not on faith or superstition, but on a century of accumulated scientific wisdom. When a basic problem is solved, it stays solved, at minimal cost; for example, for as long as people want to use the wheel, the wheel will work, and for as long as people wish to avoid rickets, Vitamin D will work. And at the same time, we have developed the sort of heavy scientific machinery, including the pacemaker, that is keeping, for example, Dick Cheney alive. The cumulative wisdom of simple solutions, together with complex solutions, has worked: As Cutler observes, heart disease is three-fourths more survivable than it was in Eisenhower’s time. And that’s been a huge boost to our society and economy; unfortunately, the federal bean-counters have chosen not to notice, and so the positive-feedback impact of cures has never been factored into national budgeting.

So that means, unfortunately, that progressive scientific health solutions--as opposed to redistributive bureaucratic health semi-solutions--have never been taken seriously by the budget “experts.” And so, absent that policy support, we haven’t made as much progress on some other diseases. If the healthcare policy elites could forget their training and bring themselves to see medical progress as a fiscal winner, of course they would demand the sorts of changes in the legal and regulatory environment that would foster more and better medicine. But at the rate we are going, they won’t change, and so the inhibitory environment won’t change.

So the Avastin decision is a sign of the times, a part of the problem--and certainly not part of the solution.

This piece was cross-posted at the Manhattan Institute's Medical Progress Today.

Helping the paralyzed to walk--can Uncle Sam compute the value of that?

2011-10-24T11:47:00.000-04:00

A company called Ekso Bionics has developed a wearable, battery-powered exoskeleton that enables the paralyzed to walk; that's one Amanda Boxtel, above, walking for the first time in a long time. A very heartening story--and it's not just a story, it's real.

No doubt such exoskeletons are expensive, although, of course, the price will fall if and when they are mass-produced and new competitors enter the market.

Of course, if the US government were to buy such bionic devices for, say, America's wounded warriors coming back with crippling injuries from Iraq and Afghanistan, that expenditure would simply be measured as a cost by the Congressional Budget Office. Given the tenor of the times, it's a safe bet that the bean-counters who rule Washington these days will say that we can't afford it. Would the CBO even attempt to score the possibility that more wounded warriors would be able to go back to work, and be more productive? And of course, the way things work in DC these days, if CBO doesn't score it, then it has not happened.

Moreover, if we had built this exoskeleton industry here at home, then the cost of buying the equipment would be balanced by the jobs and profits that we would be generating here on the home front.

More on the Serious Medicine Crash

2011-10-09T14:39:00.000-04:00

Data from the California Healthcare Institute and the Boston Consulting Group providing yet another metric of the decay of healthcare investment in the US. Note steep falloff in last three years. These numbers not adjusted for inflation.

H/T: Manhattan Institute's Medical Progress Today.

Serious Medicine Crash update

2011-10-09T14:28:00.003-04:00

According to the Medical Innovation & Competitiveness Coalition, a unit of the National Venture Capital Association, medical investment is dramatically falling off:

The survey found that U.S. venture capital firms have been decreasing their investment in biopharmaceutical and medical device companies over the past three years and expect to further curtail such investment in the future. Overall 39 percent of respondent firms have decreased their investments in life sciences companies over the last three years and the same percentage expect to further decrease these investments over the next three years, some by greater than 30 percent. This is roughly twice the number of firms that have increased and/or expect to increase investment.

While 40 and 42 percent of firms expect to decrease investment in biopharmaceutical and medical device companies respectively, 42 and 54 percent expect to increase their investment in non-FDA regulated healthcare services and healthcare information technology companies respectively.

In another alarming sign, survey respondents expect to see significant investment decreases in companies fighting serious and highly prevalent conditions including cardiovascular disease, diabetes, obesity, cancer, and neurological diseases.

“More than 100 million Americans suffer from diseases for which there are still no cures, or even meaningful therapeutic options. To conquer disease and relieve suffering, we must have a medical innovation pipeline that is as strong and robust as possible,” said Margaret Anderson, executive director, FasterCures. “Bringing critical therapies to market requires venture capital investment to spur a thriving life sciences industry as well as having a regulatory system that’s appropriately resourced and equipped to ensure innovation is translated to better health.”

H/T: Manhattan Institute's Medical Progress Today

Steve Jobs, 1955-2011

2011-10-05T19:53:00.000-04:00

"The Super Committee Faces the Challenge of Knowing the Unknowable"

2011-09-25T08:34:00.002-04:00

From the Manhattan Institute's Medical Progress Today blog.

Serious Medicine Strategy is now part of the the Manhattan Institute's Medical Progress Today Blog

2011-09-25T08:31:00.000-04:00

Here's one of several pieces I have written for the new Manhattan Institute Medical Progress Today blog.

The return of fatalism: One time-tested way to save money on healthcare--embrace illness and death

2011-09-11T11:00:00.004-04:00

Is disease a blessed event hastening our path to heaven?   Should we look beyond the pain and suffering and focus only on the end goal? It's easy to mock this don't-worry-be-happy-just-die admonition from a 1799 religious pamphlet:

Let us learn a lesson from the seafaring man, then, and regard the bright side of even our afflictions. Instead of considering sicknesses and diseases to be only so many painful visitations, let us try to regard them, also, as so many different roads to the golden gates of heaven.

Few admit to thinking that way today, but it does seem as if, in our dismissal of science, we are strangely returning to that sort of fatalism.   Every civilization puts certain things in the ascendancy as opposed to other things: One civilization builds pyramids, another buils cathedrals, another builds grands boulevards, another builds mcmansions. In other words, each civilization makes a series of choices: What's important? monumentalism? clericalism? royalism? militarism? economic dynamism?   Another choice is science and scientific advance--either a culture celebrates, and fosters, scientific advance, or it doesn't. And if a culture doesn't celebrate technological progress, then, in a dynamic world, it is likely to not only fail its own people, but it is also likely to be overcome by rivals. That was the story of China relative to the West from 1500 to 1945 or so, and it could be the story, in reverse, of the 21st century and beyond.    On this 9-11 anniversary, we rightly pay tribute to those who were lost ten years ago today, but surely just as important is making sure that it doesn't happen again. And such prevention requires active measures. Passivity and fatalism are no answer--at least not a good answer.

And yet it sure seems that for the most part, we are on an anti-science course in America today. Yes, we have plenty of schools and institutes with "science" on their nameplate, but oftentimes, they seem at least as interested in politics, and politically correctness, as science.   And of course, while the larger culture is happy enough to get a next-generation smartphone, the larger culture also seems happy enough to assume that these wondrous mini-machines will be developed and produced by foreigners. And of course, the climate of regulation and litigation sends an unmistakable message: anything made in the USA can be targeted by bureaucrats and trial lawyers, as politicians either cheer them on or watch passively.

Nowhere is this adversarial culture more evident than in the area of medical R&D. As noted here at SMS, there's been a crash in Serious Medicine, which will obvious and deleterious effects on all of us, and yet the political system has been clueless.

So today we spend money financing disease and its ravages, and yet we seem uninterested in intervening to stop the disease. Out of the $2.6 trillion that the US spends on healthcare, only around $113 billion goes for medical R&D, and that category of R&D covers everything from cancer to botox. In other words, as a percentage of our total spend, very little is directed toward urgent national problems, such as Alzheimer's. It wasn't always thus--for a while, we focused on polio, and we beat it. For a while, we focused on AIDS, and we beat it back, at least in the US.    But now, we seem content just to deal with the ravages of disease. And yet ironically, this approach isn't cheap at all, because the epidemics we confront are not the quick death of the black plague, but rather the slow disability and death that come from chronic illnesses such as Alzheimer's Disease. So we get the worst of both worlds: no cures and we spend a fortune.

Except maybe for a lingering few Christian Scientists and maybe some Greens, we don't do this out of a religious or quasi-religious feeling, but merely out of inertia and sloppy thinking, backed up, of course, by some quiet players who gain money and power out of the status quo. After all, plenty of current constituencies benefit from a definition of healthcare that focuses on retroactive finance, as opposed to proactive science--think nursing homes, financiers, and non-science-minded "experts" in "public policy."

The French critic George Bernanos argued, “The worst, the most corrupting of lies are problems poorly stated.” And so we see today, the problem of healthcare has been defined away from cures and defined instead as long term care. And so the issue becomes insurance of various kinds, and not science of any kind.   So we might as well embrace the fatalism of that 18th century pamphlet.

Hat tip: Marc Abrahams at Improbable.com

Frederic Bastiat, Call Your Office: What the Committee for a Responsible Federal Budget Would Like to See --and What Can Be Seen: Two Different Things

2011-09-08T14:14:00.000-04:00

Under the headline, “What We Hope to See From the Super Committee,” the Committee For a Responsible Federal Budget (CRFB) weighed in yesterday with its recommendations to the Joint Select Committee on Deficit Reduction (Super Committee), which holds its first meeting on Capitol Hill on today.   The CRFB, of course, is perhaps the pre-eminent “deficit hawk” organization in Washington DC, and so its recommendations carry great weight among wonks, pundits, and, inevitably, politicians.

 But what, exactly, is it recommending? What would CRFB have the Super Committee do? The September 7 document outlines five sets of recommendations, mostly aimed at reinforcing the determination and credibility of the Super Committee and, by extension, Congress.   But here we will examine just one recommendation: the admonition to “Go Long,” as in, long term. As the CRFB document puts it, the Super Committee must take entitlement spending head-on, addressing “the long-term drivers”:

Any serious fiscal plan must address the long-term drivers of our growing debt. The Super Committee must enact serious reforms to Social Security, Medicare, Medicaid, and other federal health spending.

In other words, it’s all the major entitlements that must go under the budget knife.   Okay, fair enough: Entitlements account for almost three-fifths of federal spending, and so it makes sense to look into those budget categories for savings.   The CRFB document pushes hard in this direction, advocating an overhaul of spending--including federal health spending--well beyond the familiar ten-year time horizon for federal budgeting. Indeed, the CRFB looks ahead a full four decades, all the way to 2050:

Based on our projections, federal health and retirement spending is slated to grow substantially, from below 10 percent of GDP today to 12 percent by 2021, 15 percent by 2035, and 17 percent by 2050. This is due both to population aging (largely because of the retirement of the baby boom population) and to rapid health care cost growth.

Okay, so major increase in costs is foreseen. But let’s ask ourselves: How do we really know what healthcare and retirement spending is going to be in 2050? What do we really know about the middle of the 21st century--that is, what things will be available, and how much they will cost?   To be sure, part of the cost-increase is relatively foreseeable, because of the aging of America; the over-65 population is projected to grow almost three times faster than the overall population, and the percentage of the elderly will increase from about 12 percent of the population today to about 20 percent in 2050.   And old people, to be sure, generally cost more to treat than young people.   Moreover, for the most part, population increases and demographic shifts are relatively easy to project--although some forecasters, such as the notorious Malthusian Paul Ehrlich, author of The Population Bomb, have still managed to be grossly wrong.

But how much do we know about the future costs of healthcare? Answer: not much more than we know about what life will be like.   A moment’s reflection tells us that the year 2050 falls into the category of what the great free-market economist Frederic Bastiat called the “unseen,” as opposed to the “seen.”   That is, some things just aren’t knowable in advance. And to draw upon the wisdom of another free-market economist, Friedrich Hayek, it’s a “fatal conceit” to think that anyone can plan that far ahead. Quick questions: What will a computer look like in 40 years? What will the Internet look like in 40 years? If we don’t know the answer to those questions, we don’t know what healthcare is going to cost. To gain perspective, we might think 40 years back to telephones and early computers: How have they changed since the early 70s? Answer: Thanks to the cost-crashing/ productivity exponentializing power of Moore’s Law, they have changed in every imaginable way, and in ways that nobody back then could have imagined.   So to the extent that computers and the Internet are now thoroughly woven into the fabric of everything we do, it’s a safe bet that computers and the Net--or whatever they will have evolved into four decades hence--will have similarly transformed and retransformed medicine in the decades to come. And perhaps changes in healthcare will change the length of our productive worklife in some dramatic way as well.   So in other words, we have no idea what federal healthcare and retirement spending is going to be in 40 years.

Thus a lesson straight from Bastiat and Hayek: Don’t try to predict things that can’t be predicted. The future--to borrow the distinction made by RAND national security expert Gregory Treverton--is not a puzzle, it is a mystery. Puzzles, of course, can ultimately be solved by piecing information together--and yet mysteries are, well, mysterious. In this world, anyone who says he can solve a mystery by examining the pieces of a puzzle is, at best, wrong, and, at worst, dangerous.

If we continue with our current healthcare strategy--which can be defined as decreasing amounts of new technology, plus increasing amounts of labor and financial inputs--then we will, indeed, get a costly future such as CRFB projects.    Today, for example, nearly six million Americans suffer from Alzheimer’s Disease (AD), and that number is expected to quadruple in the next four decades. Once again, projections about the future might be suspect, but those concerning the health consequences of an aging population are easy enough to foresee, especially in the absence of any dramatic scientific intervention. And as of today, we have no proven effective treatment for AD. Zero.   As a result, AD care is not only labor-intensive--nursing home care for increasing armies of incapacitated dementia victims--but it also meets the definition of “futile care.”   And yet the idea of attacking the true cause of rising AD costs--as opposed to lamentations about those costs in the future--is unmentioned by CRFB. Indeed, the idea of seeking a cure for AD is essentially ignored by the entire category of Beltway “budget experts.” The economists and lawyers and talking-point-writers who dominate the DC debate seem oblivious to scientific transformation as an alternative budget strategy. Three critical words vital to the self-esteem of any bureaucracy are “not invented here.”   That is, if we didn’t think of it, it can’t be worth considering.

So we might ask: How, under the current medical-technological regime, are we going to save money on AD?   Will we simply reduce the nursing care for dementia victims?   As always, the affluent will be able to buy their way out of personal neglect--even if they have failed to buy their way out of the disease, thus demonstrating an ultimate grim equality of result.   But what about those who depend on Medicare and Medicaid? What will happen to them? What are the horror stories to come?   Moreover, how will those people vote? The brave talk of inside-the-Beltway lobbying groups and legislative bodies doesn’t hold up well against popular passion expressed in the streets and at the ballot box.   That was the story of the federal government’s short-lived catastrophic health insurance program in the 80s, of Clintoncare in the 90s, and of Obamacare in the last three years.   In other words, Members of Congress who vote for the sort of cuts that CRFB is advocating are likely to be rewarded by opinion-leaders inside the Beltway--and punished by voters outside the Beltway.   That is, elected officials can become un-elected officials and then, as a consolation prize, get a good seat at the Gridiron Dinner.

Yet there is another path, completely ignored by CRFB, and that is the path of medical progress. The words “medicine,” “research” and “cures” do not appear at all the in the CRFB document.   And yet it is only through medical progress that genuine medical transformation can occur.   Profound transformation is achieved by visionaries and scientists, not by financiers and bean-counters.

It’s worked that way in the past. Let’s take polio as an example. Back in the early 1950s, economists calculated that the polio epidemic, then raging, would cost the US economy $100 billion a year by the year 2000 (more like $1 trillion in today’s dollars). Yet instead of accepting the basic premise of that projection--that the polio epidemic would continue forever--we changed the basic premise. That is, we developed the polio vaccine.   And so, instead, our expenses for polio are essentially zero. And what’s the smart way to think about that kind of budgeting?   Going back to that projection from the 1950s, deficit hawks might have said that $100 billion a year is too much money. So should they have said $90 billion? Or, even hawkier, $50 billion? The fact is, if polio were still engulfing us today, such reductions would be politically disastrous; voters would show their fury at the ballot box.

Meanwhile, Alzheimer’s today is costing the US economy $172 billion a year, according to the Alzheimer’s Association.    And the cumulative cost is headed up to $20 trillion by 2050.   Deficit hawks might say those dollar figures should be reduced by 10, 20, maybe even 50 percent or more; that’s what deficit hawks do.      But there’s still that nagging issue of “how?” As we have seen, AD care is expensive; indeed, labor-intensive healthcare runs into the iron logic of Baumol’s Law--if it’s labor-intensive, it will be expensive.   In other words, it’s one thing to declare that eldercare should be X-percent cheaper in the future, it’s another thing to achieve those savings.    As the news from the UK reminds us, the obvious solution is rationing--rationing that costs lives.   And from rationing, it’s not hard to get to even more draconian cost-saving solutions.   As always, it’s easier to envision these solutions inside a marble palace of planning, as opposed to at an actual patient’s bedside.

Interestingly, CRFB seems to have grappled with this issue--the issue that its proffered solution is unpopular with the American people; the polls, after all, show that by 3:1 or 4:1 margins, people don’t want to see cuts in Medicare.   So perhaps in anticipation of a likely political backlash, CRFB is telling the Super Committee that it’s okay to “backload” the cuts--that is, have them come beyond the ten-year time horizon.   Super Committee members are told, in other words, that it’s okay to make negligible cuts in the near term, as long as big cuts are made in the long term:

To reassure markets and put our budget on a sustainable path over the long-term, the Super Committee must therefore address the growth of the nation's largest entitlement programs, and give priority to those reforms with the potential to slow long-term growth paths (even if they do not have significant scoreable savings this decade). Reforms to Social Security, Medicare, and Medicaid are central to improving the long-term imbalances. [underlining in original]

Okay, so in other words, the CRFB is telling the Super Committee that it’s all right to make small cuts in the near term, over the next decade, as long as the big cuts come later.   But we might ask: Isn’t that the essence of kicking the can down the road--that is, telling Super Committee members, and Congress as a whole, that the big cuts need come only many elections hence, in 2021 or thereafter?   And what economic problem does that solve? Aren’t we in a crisis now?

What could be the reason for this budget-fudging?   One possibility is that CRFB accepts the Keynesian argument that immediate cuts in spending--and thus in consumer demand--might damage the economy. Another possibility is that entitlement cuts in the near term are just too painful politically; that is, if such cuts are on the menu where the voters can see them, the whole project collapses as the politicians flee.

Yet we might ask: If the work of CRFB is not about cuts anytime soon, then what is it about, exactly?   A third possible explanation is that the CRFB simply wants a deal. That is to say, CRFB wants something that it can call a success. Or, to be even more cynical about it, with apologies to the late Sen. George Aiken, it wants something that can be dubbed a “victory,” no matter how transparently risible that “victory” might be.   That is, something that proves that the American Establishment can still do something--anything.   Establishmentarians always like to emphasize their credibility, their seeming competency. And the CRFB is the epitome of an operationally conservative establishment--not ideologically right-wing, just eager to tamp things back down to something that looks like normalcy.

So back to CRFB’s recommendations to the Super Committee.   And if those numbers are built on bad assumptions? Well, that’s a problem to addressed at some later time. The important thing, it seems, is that we have a deal in our time.

The problem for the rest of us, though, is that the problems we face are not normal--and neither are the solutions. Science, and scientific progress, are inherently disruptive, and if the political Establishment can’t handle that truth, well then, we need a better Establishment. Indeed, for reasons that C. P. Snow outlined a half-century ago, contemporary political and cultural can barely handle science and what it brings. And so the establishment just pretends that science doesn’t exist. But as Galileo said under his breath at the Inquisition, eppur si muove. That is, just because the reigning orthodoxy says that something isn’t happening, that doesn’t mean it isn’t happening.   As they say, if we don’t deal in reality, other people will.   Reality is a stubborn thing. Indeed, the only way that the Establishment can possibly makes it straight-line projections work is by squashing science--and we know how that ends.

Then and now, politics, and the desire for orthodoxy, has trumped looming reality.   The obvious reality is that if we don’t do something radical about AD and other costly diseases, none of these budget deals are going to be work out as the American people might hope. Either we will vastly more than the “deficit hawks” wish, or we will move toward rationing--or worse.

Today we see huge edifices of political thought being based on projections about the budget deficit in 2021, 2050, or even later.   There’s nothing wrong with predicting the future--so long as there’s an adequate amount of humility in the predictions. But the bold predictions of CRFB as to what will happen in the middle of this century are based on a kind of know-nothing hubris. The hubris that pretends to knowledge about what is unseen and mysterious.   And that is, indeed, a fatal conceit.

Governor Rick Perry takes on cancer at the Reagan Library presidential debate

2011-09-08T08:23:00.003-04:00

From the Politico/NBC Republican presidential debate last night:

PERRY: But here's the facts of that issue. There was an opt-out in that piece of -- it wasn't legislation. It was an executive order.

I hate cancer. We passed a $3 billion cancer initiative that same legislative session of which we're trying to find over the next 10 years cures to cancers. Cervical cancer is caused by HPV. We wanted to bring that to the attention of these thousands of -- of -- of -- tens of thousands of young people in our state. We allowed for an opt-out.

I don't know what's more strong for parental rights than having that opt-out. There's a long list of diseases that cost our state and cost our country. It was on that list.

Now, did we handle it right? Should we have talked to the legislature first before we did it? Probably so. But at the end of the day, I will always err on the side of saving lives.

Rick Perry was responding to questions about his controversial 2007 executive order to vaccinate girls in Texas with Gardasil, as a way of warding off the human papilloma virus that can cause cervical cancer. Obviously anything to do with sex--especially teen- and pre-teen sex--gets into touchy issues of family and family values and parental rights, but equally obviously, vaccinations as a whole are a good idea. Think polio vaccine, for example, or, in an earlier era, the smallpox vaccine. Perry has since expressed regret for the way that the Gardasil issue was handled, but the larger story of how Texas is fighting cancer is quite interesting--and quite compelling.

And fighting cancer in Texas--or anywhere--isn't just a good thing for compassionate health reasons, it's also a way to job-creator. The Texas Medical Center in Houston, for example, employs 61,000 people. Statewide, and nationwide, medicine is a much bigger industry--one of the most dynamic industries we have.

What Happens When “The doctor will see you now” Is Replaced by “Show me the money”?

2011-09-06T20:13:00.002-04:00

A fascinating article appeared in Monday’s New York Times, headlined, “Adjusting, More M.D.’s Add M.B.A.” That is, medical doctors are now getting master’s degrees in business administration. As the Times explains:

As recently as the late 1990s, there were only five or six joint M.D./M.B.A degree programs at the nation’s universities, said Dr. Maria Y. Chandler, a pediatrician with an M.B.A. who is an associate clinical professor in the medical and business schools at the University of California, Irvine. “Now there are 65,” she said.

Mark V. Pauly, a longtime leader of the health care management program at the Wharton School at the University of Pennsylvania, said, “A light bulb went off and they realize that health care is a business.”

And so doctors are learning business as well.   As Penn’s Mark Pauly says in the Times article, “healthcare is a business.”   That point is worth pausing over: doctors as a business. Some cynics will say that this is nothing new, that doctors have always been in it for themselves, but as the Times story makes clear, this is indeed a new businesslike trend in the offing. So how to regard this trend? What does it mean for doctors--and for the rest of us?

On the one hand, it’s hard to blame doctors for shifting toward a greater focus on businesslike profit-maximization. Why? Because while doctors are admired by the general public, they are not respected by powerful blocs in society.   A 2010 Gallup poll shows that health professionals (nurses, pharmacists, and doctors, but hereafter, for simplicity’s sake, we’ll just “doctors”) finish at or near the top in rankings by the public of most admired professions. Yet at the same time, doctors are very much disrespected by big financial players in society, including lawyers, insurance companies, and governments. And so doctors must compare the specific negative power of those antagonistic blocs against the general esteem of the public--and today, the power blocs have an edge over the public. That is, the real muscle in our society belongs to lawyers bent on suing doctors, also suing medical drug- and device companies.   And other segments of society, including insurance companies and governments at all levels, are seemingly guided by a sole objective: to control and cut costs, no matter what the other consequences might be.   In such an environment, perhaps it makes sense for doctors to muscle-up financially in self-defense. Okay, so that’s why doctors are getting MBAs.

But on the other hand, what about the rest of us and our health?   What about the public interest? Yes, it’s a free country, but are we as patients better off if doctors take time away from medicine to focus on business?   That is, if doctors become so focused on making money that they take two years to get a formal MBA?   And more importantly: If doctors become doctor-businesspersons, is that really good for our national health?   Might we better off, instead, if we could think of ways to incentivize doctors to put more energy into medicine and the healing arts?

One thing is sure: If the doctor-business melding trend continues, big things in our society will change. First of all, it means an inevitable downshift in the public esteem of doctors.   One ultimate source of medical prestige is the feeling that doctors are motivated by at least a modicum of altruism. It’s at least a little bit of altruism, people think, that inspires doctors to put themselves through the rigors of strenuous education in order to help others live better and longer. The public realizes, however vaguely, that the Hippocratic Oath, composed some 2500 years ago, is still the guiding medical-ethical document for the profession. The modern American version, for example, includes these idealistic lines:

I will prevent disease whenever I can, for prevention is preferable to cure.

I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.

If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.

Obviously not all doctors have lived up to these high standards, but just as obviously, most doctors have--that’s why doctors are so respected. Moreover, the reality that the medical profession, plus medicine, has done great good is undeniable; over the last two centuries in the US, for instance, life expectancy has more than doubled, while the infant mortality rate has plummeted by some 98 percent.

Yet what might happen if doctors just became another species of businessmen? What happens if the Hippocratic Oath is supplanted by profit-and-loss statements?

One early clue comes from those same Gallup rankings, which showed that the honesty and ethics of doctors are rated “very high/high” by 66 percent of the population, while business executives are so rated by just 15 percent.   So if doctors turn into just another category of businesspeople, it’s logical to assume that their prestige will drift down toward the general level of businesspeople.

More urgently for most of us, what’s the health impact of purely businesslike doctors?   What happens when you go to such a doctor?   Will he or she want what’s best for you, the patient? Or what’s best for his/her bottom line? There’s a big difference. As noted, the Hippocratic Oath stipulates, “I will prevent disease whenever I can, for prevention is preferable to cure.”   But of course, from a doctor’s point of view, cure, or attempted cure, is a better financial bet than prevention. From a purely financial utilitarian point of view, separated from any ethical framework, it makes perfect sense not to tell a fair-skinned patient about the danger of too much sun--and then treat the patient, a few years or decades later, for skin cancer.

Once again, despite the Hippocratic Oath and all the other medical canons, we have seen plenty of profiteering doctors who eagerly order unnecessary and duplicative tests and even superfluous operations.   Still, so far at least, we can say that these are rotten apples in the professional barrel. Yet what will happen if and when medicine becomes fully “incorporated” and the new goal for doctors becomes hitting revenue targets? If this were to happen, the most obvious consequence is that the prestige of the medical profession would plummet.

Some doctors, to be sure, might say, “Fine. Keep your prestige. We’ll take the money.” Yet meanwhile, for every doctor who reaps the monetary benefit of an MBA, there are another hundred doctors who have been proletarianized--that is, turned into an overworked and underpaid wage-slaves--by Medicare or the insurance companies. That is, proletarianized doctors are put to work on the medical equivalent of an assembly line, told what to do by a bureaucracy, told what to prescribe and how fast to do it. Yet either way--whether doctors learn how to make more money as corporate operators or just accept becoming salaried employees of a public or private bureaucracy--the uniqueness of their profession will be lost. And that will be a huge loss to the commonweal.

Once again, those words: “healthcare is a business.” As a matter of national policy, is this really what we want?   Do we want to eliminate the elevating aura of professionalism and move to total bottom-line-ism?

We might learn the fate that doctors could face from the precedent of lawyers. Once upon a time, lawyers were seen as a self-regulating guild, in which private appetites were subordinated to what we would now would call “the public interest.” In England, mother country of American law, new barristers would be “called to the bar” and then spend their careers as members of an “inn of court,” which were a combination of insider’s club, workplace, and classroom for continuing legal education.   The guiding idea was that senior barristers would oversee the proper development of the legal profession, providing discipline and sanction as needed. And such supervision was indeed needed, because after all, lawyers have extraordinary power--most obviously, the power to make or break individuals and firms with lawsuits. And so the masters of the bar prohibited, for example, champerty--over-zealous or manipulative lawyering. Were these long-ago lawyers motivated by idealism? Not necessarily; they might have made the practical calculation that if they didn’t police their own profession, others would do it for them.

In the US, bar associations attempted to fulfill the same policing and oversight function. And so, for example, the American Bar Association forbade lawyers from advertising, beyond the use of business cards.

Those rules were overturned in the 1970s on free-speech grounds, in keeping with a larger sense that the US economy needed to be deregulated. Critics of the old system were right to criticize it as cliquish and self-protecting, but they were wrong to think that the new wide-open system would be an improvement. Today, the legal profession has been entrepreneurialized; one consequence has been the rise of John Edwards-type legal buccaneers--lawyers becoming millionaires and even billionaires.   Are we really better off being a nation of all lawsuits, all the time?   Americans curious as to the cumulative harmful impact of this litigation might take a look at Walter Olson’s website, Overlawyered.com.

Another ill consequence to our healthcome to our health in the form of those ubiquitous television spots, trolling for clients, featuring phone numbers such as 1-800-BAD DRUG.   In other words, legal predators are now free actively to seek plaintiffs to sue medical providers for any and everything.   So now we see what happens when a profession is fully and totally commercialized, even as it maintains its coercive power; now, more than ever, the power to sue is the power to destroy.   In today’s legal environment, ethical canons and traditions of restraint have melted away in the white heat of publicity- and profit-seeking litigation.   The cost to doctors is bad enough, in terms of malpractice insurance, but the cost to patients has been infinitely greater, in terms of damage done to medical research and development.   As noted at SeriousMedicineStrategy.org in the past, the real story of the past two decades has been the precipitous decline in the number of new drugs and medical devices coming to market, as well as the wipeout of the medical venture-capital sector.

So over the last few decades, lawyers have been de-regulated and de-professionalized, and the result is that the profession has been enriched, even as its ethical prestige has been degraded.   So now we could go further and ask: What would happen if other professions were similarly de-professionalized and profit-maximized? What would happen to the police? Or to the military? Or to the courts?   To be sure, there are libertarian theorists who think such privatization would be a great idea, but mercifully, not too many Americans agree with them.

For most of us, it makes sense to see our society as a series of sectors, each with its own sectoral rules, under the overall umbrella of the Constitution. Public officials are supposed to operate according to one set of rules. So are the clergy. And families, too, have some unique rights. This is the essence of pluralism, and it is also the essence of common sense.   Edmund Burke called these different groups “little platoons,” while Peter Berger and Richard John Neuhaus called them “mediating structures.” It’s impossible to imagine society functioning without these legal and traditional privileges.

Yet at the same time, untrammeled market forces, unmodified by the morality or ethics of non-market entities, are a threat to each of these little platoons and mediating structures.   And that’s why we should worry about what is happening to the medical profession--what doctors are doing to themselves, and what they would, in turn, do to us.

In recent decades, we can note, advocates of pure market forces have gained ascendancy in business thinking. One oft-heard argument is that the greatest goal of a corporation should be to maximize “shareholder value,” and therefore all other corporate goals should be subordinated to that prime objective.   And so, for example, the interests of corporate stakeholders, as opposed to shareholders, are given short shrift as a matter of policy and ideology. Such a view may have its place for a company making widgets, but if the same value-system migrates into a medical office, trouble will ensue.

It’s not hard, for example, to foretell that corporatized doctors, schooled in the new verities of corporate methods, will see the Hippocratic Oath as less and less of a hindrance to their pursuit of profit thorough any possible avenue.    And so just as “innovative” financing schemes became the bane of the financial markets in recent years, so new-style doctors could find “innovative” ways to extract money not only out of patients, but also out of society.   Organ sales from willing donors--or unwilling donors?   Any number of Coma-like scenarios?   So then we will get the worst of both worlds: greedy doctors who do a bad job for patients, while costing the individual and the country even more more money.

Some will say, of course, that there’s no alternative, no turning back. The forces of modernity--from global competition to the Internet to the rising health consciousness of the citizenry--are shaking up the medical profession. And so we must go forward, we are told, into the further transformation of the medical profession.

It is indeed true that we can’t go home again to the idea of a country doctor.    But we don’t have to give up on the traditional mores of medicine. We can keep the best of our sacred medical tradition and yet also reap the best of what science has to offer. How? We will explore that in the next installment.

Ambrose Evans-Pritchard, Serious Medicine Strategist, zeroes in on why, if present trends are allowed to continue, healthcare costs are headed higher, no matter who's in charge

2011-07-26T16:41:00.002-04:00

In critically analyzing the Washington DC debate over the debt ceiling, Ambrose Evans-Pritchard, the well-known British journalist, makes a portion of Serious Medicine argument in a concise nutshell of a parenthetical paragraph. In describing the difficulty of controlling federal spending, he suggests that the forces of the healthcare status quo--that is, the folks who currently gain from rising healthcare costs--are part of the problem.   Indeed, he is saying, they are the driver of the problem:

(The great health care cartel is in my view the villain here. It is the root cause of US ruin, and is itself responsible for the epidemic of diabetes, Alzheimers, and several other mass ailments afflicting America. It has systematically failed to keep up with the scientific literature, and refuses to abandon grievous policies when shown to be wrong. Americans need to confront this huge vested interest (nearly a fifth of GDP) before it destroys the country. But that is a rant for another day.)

Evans-Pritchard makes an interesting point. Surveying the enormous cost of Alzheimer's--nearly $200 billion a year, according to the Alzheimer's Association--one has to realize that somebody is benefiting from the spending of all that money.   Nursing homes are one beneficiary, so are nursing home service workers. So cui bono, Evans-Pritchard is saying.

The answer, of course, is to raise up countervailing interests--starting with the American people as a whole--who understand that cures are a better health strategy than care.   We need both, of course, always, but if we have more of the former, we will need to spend less on the latter.

And that's the path to not only spending less money on healthcare, but to improving the lives of all Americans. And the peoples of the world, too.

Science can transform the budget and the economy, as well as medicine. But of course, Washington DC is unlikely to notice.

2011-07-09T17:49:00.002-04:00

The front page of Friday's Wall Street Journal illustrates the opportunity--and the challenge--facing both the US federal budget and Serious Medicine. One article details fiscal frustration; the other outlines medical hope. It's too bad that those who are suffering the frustration don't look to science to alleviate that frustration. And it's also too bad that those who are offering hope languish outside of the political system.

The top Journal article is headlined, "Sights Set on Grand Debt Deal," and details yet another round of Washington DC budget negotiations. If it seems to you as if these budget negotiations stretch on, year after year, decade after decade, with no real resolution--other than that spending goes up---you are right. In other words, there's a cyclicality to the politics of such fiscalism--and a futility to the actual numbers.

Of course: In our hyper-pluralistic system, everyone gets a say-so, and that means that there are no final victories. Everything is an election away from being done, or undone. The spending cuts, for example, that might be agreed to in this year can simply be repudiated in some future year--see, for example, Sustainable Growth Rate for Medicare. It's easy to talk tough today, if the cuts come in a decade--but recent political history doesn't point to a very encouraging record that cuts are actually followed through on in some distant outyear.

But if politics, like human nature, is cyclical, then technology, like science, is cumulative. That is, for the most part, once something is learned, it is never unlearned. And so that makes sci-tech qualitatively different from politics. If we develop a new and better discovery and a process in its wake, those improvements will always stay with us. With only rare exceptions, nobody, in seek to repeal it. Every country in the world, for example, makes use of modern medicine--at least for some of its people.

The bottom article is headlined, "A Lifesaver, Custom-Built in the Lab," and it details the creation of an artificial esophagus to replace the cancer-ridden esophagus of a 36-year-old man living in Sweden, thereby saving his life. We might note that the new esophagus was frown from adult stem cells--the stem cells, in fact of the man himself. So no ethical concerns here. Meanwhile, Swedish science has not only saved the life of a young man, but it's easy to see a new industry being created in Sweden, making not only esophaguses, but every other kind of replacement organ.

And so now we see something interesting: The budget news goes in one mental "silo," concerning politics and economics, and the medical news goes in another silo, concerning health and science. For the most part, for reasons CP Snow outlined a half-century ago, the two silos don't really acknowledge each other.

And so, for example, it's unlikely that any of the budget negotiators, in either party, are going to come to the next round of negotiations and say, "You know, if we transform medicine, in the way that this news from Sweden suggests we might, the cost of Medicare might fall, and the economic output of the health sector might increase." That just won't happen, because as a casual glance at the DC news demonstrates, the political class is simply not very interested in science and technology--that's why sci-tech policy gets so little attention. Moreover, even if a negotiator were to make that transformative argument, he or she would be dismissed, because, in DC parlance, the positive side science cannot be "scored." That is, the Congressional Budget Office won't score, or calculate, gains from future science.

But CBO will calculate costs. So if a new federally funded esophagus research & development center were to open up in the US, and it were to cost, say $100 million, CBO would score that cost--another $100 million to the deficit. And if the esophagus center were to generate great windfalls of money for the US economy, and for the Treasury, the CBO would be happy to score that, too. But such a positive development, were it to come, would be years away. And in between, as the esophagus center was ramping up, the CBO would just count its ongoing costs as simply more red ink.

It's possible to defend the way that CBO does its job--as a matter of accounting rigor, we should not count chickens before they are hatched--but it's not possible to defend making national policy on such a basis. Why? Because under CBO rules, the most exciting and potentially transformative projects are scored as costs. And so when belts tighten, it's easy to cut such costs. Perversely, CBO would measure such spending reductions as a reduction, and never even think about the foregone gains.

So most likely, in any kind of budget deal to come, medical R&D will take a hit. And CBO will dutifully assess the "savings," paying no heed, of course, to the missed opportunities that medical science could have produced with a little help and inspiration. Meanwhile, the sort of strategic thinking we need, as to what opportunities and needs should be addressed, is pushed out of the way by the bean-counters. That might be a good way to run an accounting system, but it's a lousy way to run a country. Such static analysis, applied to things that aren't static, will be the ruin of us.

And maybe that's why the Swedes are using high-tech science to manufacture organs, generate jobs, and produce hope. And not us.

Peter Orszag rebutted by a Serious Medicine Strategist in Foreign Affairs

2011-07-01T09:59:00.002-04:00

Peter Orszag, who spent nearly two years as the director of the Office of Management and Budget in the Obama administration, has published a piece in Foreign Affairs continuing is efforts to bring European-style rationing to the US. Such policies proved disastrous for the Democratic Party in 2010, and don't even seem to be helping to control spending--but evidently, they still play well in the gilded towers of New York City, where recipients of bank bailouts scan the horizon looking for other people to de-fund.

In "How Health Care Can Save or Sink America: The Case for Reform and Fiscal Sustainability," Orszag asserts that healthcare costs could cause either a "severe fiscal crisis or a crippling inability to invest in other areas." As he puts it:

Rising health-care costs are at the core of the United States' long-term fiscal imbalance. The Congressional Budget Office (CBO) projects that between now and 2050, Medicare, Medicaid, and other federal spending on health care will rise from 5.5 percent of GDP to more than 12 percent. (Social Security costs, by comparison, are projected to increase from five percent of GDP to six percent over the same period.) It is no exaggeration to say that the United States' standing in the world depends on its success in constraining this health-care cost explosion; unless it does, the country will eventually face a severe fiscal crisis or a crippling inability to invest in other areas.

Orszag worries, in particular, that spending more on healthcare will divert money away from education. And that's certainly a concern, but the plain fact is that if people age and grow sick, their care will expensive. Orszag's answer is to crimp down on that spending, which, of course, is politically problematic. The crimp-down was a partial explanation for Obamacare, and the same crimp-down helped explain the Democrats' defeat in 2010.

Completely ignored in Orszag's piece is the idea that better health through medical research and new cures is a more politically and economically acceptable way to achieve Orszag’s own stated end: saving money. It would be nice, for example, if Orszag were to at least consider the option of cures as part of US policy strategy. Happily, that Serious Medicine point was made in the comments section of Foreign Affairs by one James W:

Where was Mr. Orszag and his analysis when America first needed him--in 1950 when the federal government estimated that (translated into today's dollars) by now we would be spending over $1 TRILLION/year just on care for polio victims? Americans would have then been able to choose one of his three "strategies for saving", 1) reducing provider reimbursements, 2) direct rationing, and/or 3) consumer-directed health care. Lacking the benefit of his policy insights, ignorant politicians allowed Dr. Jonas Salk to blunder ahead with that vaccine thing of his. Now we will never know by how much Regina Herzlinger's "focused factories" could have bested the cost of treating polio vs. general hospitals, nor will we ever learn what percentage skilled bureaucrats like the author could have used Medicare's market power to negotiate down the price of iron lungs.

Back when Mr. Orszag was running the Congressional Budget Office (CBO), the term for his kind of thinking was "static scoring". It still is. For an alternative view, in which innovation is an option and outright cures are possible (think "Gardasil" vs. "rationing chemotherapy for cervical cancer"), see: http://seriousmedicinestrategy.org.

Well said, James!

Michele Bachmann brings Serious Medicine to Newsmax--and to America

2011-06-27T15:37:00.003-04:00

Michele Bachmann continues to point America toward more hope in medicine. That's a good policy, and so, of course, it's also good politics. In a new interview with Newsmax's David A. Patten, she is asked about the Paul Ryan Medicare plan, and she both defends the cuts as necessary and then launches into a larger discussion of medical transformation. Here's the passage:

Newsmax: Democrats hope to make a major campaign issue out of Rep. Paul Ryan’s plan to reform Medicare entitlements through a voucher system. You have some concerns yourself about the plan…

Rep. Michele Bachmann: I absolutely agree with the Ryan plan on the trajectory of spending. My asterisk, if you will, on the Ryan plan is on how we message this idea of reducing federal government spending. What I believe is that we want to offer a better quality of life for senior citizens and people need to know that this plan should be called “The 55 and Under Plan.” We don’t want anyone who is 78 years of age, who is depending on Medicare, to think that their Medicare is going to be pulled out from under them. It won’t be. We’re talking about people who are 55 years of age and younger, who will actually have a far better plan to choose from than the one that will be de-facilitated, if we continue down Medicare. Also, I think it’s important that people know that we want to focus not just on numbers, and not just on insurance options, but we want to focus on cures -- cures for Alzheimer’s, cures for diabetes.

Those are the key words, as the bottom: "We want to focus on cures--cures for Alzheimer's, cures for diabetes." That's a breath of fresh air.

Everyone knows that Republicans want to cut the growth of Medicare--so do, indeed, the Democrats. So the breakout issue is not on the finance side, but rather, on the science side. That is, cures and hope. Bachmann makes the same point on her campaign website:

As President, I will work to unleash the power of medical innovation and personal choices. Because a cure is always better and cheaper than care – after all, it was once predicted we would spend billions a year on polio. I will empower your families and doctors, not unelected bureaucrats, to make the right decisions about the shape and form of your health insurance, your quality of care and your course of treatment. And I will push for greater competition in the healthcare market.

Exactly. On top of Bachmann's many other strengths as a leader, she has articulated a transformative Jack Kemp-like issue that benefits all Americans. And the economic benefits, too, are incalculable, in terms of savings to government programs such as Medicare, as well as the jobs and wealth that would be created within the healthcare sector, selling not only to America, but also to the world.

Just as Jack Kemp provided the intellectual firepower to energize the US economy in the 70s, so Bachmann could do it again in the 21st century.

An X-Prize for a Tricorder. And hurray for Qualcomm.

2011-06-17T15:22:00.002-04:00

Earlier this year, I speculated on the prospect of a Tricorder as an ultimate vision for digitalizing healthcare records, improving healthcare outcomes, and moving patients nearer to the level of medical equality with doctors. (That's not a rap on doctors, merely an observation that more high quality information is better than less.)

Admittedly, the Tricorder was a fictional invention, from "Star Trek," but as with so many other inventions, it has to be imagined before it can be invented. Indeed, to go back and look at the original Tricorder, from nearly half-a-century ago is to be reminded that personal electronics have actually gone further by today than people back in the 60s thought they would by the 23rd century. The ubiquitous iPhone is, in fact, the beginning of a Tricorder process; it just needs a lot more apps.

And so if the imagination part of the challenge is in gear, we can now note that new things often must be incented before they can be invented.

If that's true, then we just took a big step forward, thanks to Qualcomm. As Brian Dolan writes in MobiHealthNews reports:

Marty Cooper, the inventor of the modern cell phone, has on occasion credited the fictional TOS Communicator device, featured in the 1960s television series Star Trek, as inspiration for the mobile phone. While the mobile phone has served as the de facto platform for most mobile health services today, yet another device from the very same popular science fiction series could inspire a new generation of inventors: The Tricorder.

Yesterday I had the pleasure of participating in a “visioneering” meeting set up by the X Prize Foundation, which is working to set up a new X Prize that would incentivize the development of a device similar to the handheld diagnostic device featured in Star Trek. Qualcomm has already agreed to fund the development phase of the Tricorder X Prize (the name may change), but a prize sponsor for the competition (one of the prizes is a $10 million check) has yet to sign on.

For those unfamiliar, the X Prize Foundation has set up a number of “audacious” yet “achievable” competitions over the years, including private space flight; self-driving cars; affordable genome sequencing. A Tricorder-like device is right up there.

“What we’re trying to do is develop a mobile solution that can diagnose patients, better than or equal to a panel of board certified physicians,” Michael Timmons, X Prize Foundation spokesman, told NPR in an interview this week. “So essentially what it would do is enable anyone, pretty much at any location, to quickly and successfully assess health conditions.”

Qualcomm Vice President Don Jones provided NPR with his vision for the type of system this competition might inspire:

s, software, kind of innovative approaches to collecting data and information to make it really, really easy to make a diagnosis. And do it in a way that’s relatively inexpensive, lightweight, small, portable,” Jones said. “And as minimally invasive as possible.”

“Come up with sensor

If it comes to fruition, the Tricorder X Prize competition will become a key catalyst for mobile health devices and services. Actually, after spending the last day and a half with two dozen healthcare “visioneers” discussing the potential future for health devices and services, I am certain it already has.

We can't yet know if this X-Prize effort will be successful. But what we do know is that once the human imagination is unleashed, the results will astound the skeptics and the cynics and the naysayers.

Serious Medicine meets the economic crisis: If you can't afford to retire till your 80s, it will help to be healthy

2011-06-12T08:06:00.003-04:00

Robert Powell, writing for MarketWatch, makes this provocative assertion: Many of us will have keep working into our 80s to afford "retirement," what remains of it, after that:

We all think it’s a panacea. If you don’t have enough money saved for retirement, you’ve got a few ways to close the gap between what you have and what you need in your nest egg: Save more, invest more aggressively, and/or work longer.

Well, it turns out that working longer is indeed an option, according to the Employee Benefit Research Institute latest study. The only problem is that the latest research shows that you’ll have to work much longer than you anticipated. In fact, many Americans will have to keep on working well into their 70s and 80s to afford retirement, according to the study, titled “The Impact of Deferring Retirement Age on Retirement Income Adequacy.”

Needless to say, not everyone will agree with these bleak conclusions, but as we read the grim economic news--falling stock prices, falling real estate values--we are all free to draw our own conclusions about the future economic prospects for the nation.

The Serious Medicine implications are these: If people will need to work for, say, five decades, instead of four decades, then it's their interest, and our interest, for them to be as healthy as possible. And so that means real focus on the chronic diseases that afflict the aging and the elderly--Alzheimer's, diabetes, cardiovascular disease, and arthritis, for example. Because if our workforce isn't healthy enough to work, then where does that leave us?

Michele Bachmann: "In the midst of all the talk about facts and figures and insurance policies, we can't forget humanity. I want to see us focus on finding cures as well. Cures for Alzheimer's, cures for diseases that particularly deal with senior citizens, diabetes, for instance, that’s what we need to do."

2011-05-31T16:23:00.003-04:00

Michele Bachmann continues to effectively address the twin concerns that people have about the healthcare system today.

On the one hand, people fear the cost of the healthcare system--and of course, the rapidly rising cost of Medicare is a major flashpoint political issue these days. But on the other hand, even more than they fear the cost of healthcare, folks fear the ravages of ill-health. To paraphrase the great medical philanthropist Mary Lasker, if you think the healthcare system is expensive, consider the expense of not having a healthcare system. People live longer and better today, not because they have health insurance, but because healthcare providers have the medicines and treatments that secure their good health.

So the challenge is to simultaneous grapple with the important cost issue and theeven more important health/medicine issue. And Bachmann has found the formula.

The latest display of her political/policy acumen came this morning on "Fox & Friends." As always, Bachmann was resolute on the issue of controlling taxes, spending, and the debt. And yet at the same time, as she said, there's more to American life than "facts and figures and insurance policies." What else? For openers, there's life itself. So in addition, there's the issue of the good health and long life--and economic productivity--of the American workforce. And that means medical progress and cures.

Here's the Serious Medicine-related portion of the transcript:

FOX & FRIENDS: Are you somebody that's going to back off from Paul Ryan's plan to reform and preserve Medicare and Medicaid? Because of what happened in New York in that race in Buffalo where the upset happened because they claim, because of the ryan medicare and medicaid plan, his path to prosperity?

BACHMANN: I voted for Paul Ryan's plan. He's right, we have to save and keep solvent Medicare. What's the alternative? It goes into bankruptcy. Paul is exactly right.

The asterisk I put on that level of support are two things:

Number one, I want everyone to know this is the 55 and under plan. No one 55 years of age or older will be touched in anyway. The only reforms affect people 55 and younger.

The other thing is, in the midst of all the talk about facts and figures and insurance policies, we can't forget humanity. I want to see us focus on finding cures as well. Cures for Alzheimer's, cures for diseases that particularly deal with senior citizens, diabetes, for instance, that’s what we need to do. Just like we were able to eradicate polio, that's make that same type of effort for cancer and Alzheimer’s. That's an important area for us to concentrate as well.

The Medicare "Hangover"?

2011-05-28T09:07:00.002-04:00

Mike Huckabee, Serious Medicine Strategist, on the Ryan Plan, and what Republicans--and all Americans--need to do next.

2011-05-26T11:55:00.006-04:00

Mike Huckabee was on Greta Van Susteren's "On The Record" show last night, discussing the Paul Ryan Medicare plan. Using his trademark humor, as well as his insight in the practicalities of politics and the potential of science, Huckabee applied himself to to the crucial challenge of saving money on Medicare--and to the equally crucial challenge of saving money in a politically acceptable way. Huckabee expressed his support and admiration for Ryan, but then added an essential supplement: A serious research effort aimed at reducing Medicare costs. We might call it "The Ryan Plan Plus."

The point, he said, was to combine spending cuts and medical progress. Here's the key passage from his appearance last night:

Look, nobody claims that Paul Ryan got the Medicare proposal that he got on two tablets of stone postmarked Mount Sinai. But the fact is, he's put something on the table. Now Republicans and Democrats can say, We like this piece, but here's how maybe we can improve the under 55.

One thing we ought to be doing, Greta, is putting more focus on the prevention of disease, and then the cures and management of disease. We're going to be spending trillions of dollars on Alzheimer's disease alone over the next several decades. It is a huge issue. Let's put more cost in trying to prevent what is going to bankrupt Medicare. That makes a lot of sense, and it's a great message for Republicans to adopt.

And, for the record, here's the whole of the Medicare-discussion transcript:

VAN SUSTEREN: Nice to see you, sir. Governor, is the budget -- the Ryan budget plan sort of a litmus test for the Republican Party? And do you agree with Rush Limbaugh that somebody within the Republican Party needs to step up?

HUCKABEE: Well, the most important thing to remember is that Paul Ryan is the only person who's actually put a plan on the table. Democrats keep talking about that they don't like Ryan's plan. Where's theirs?
Where is their plan?

I think the Republicans need to make this a messaging battle and put it in terms people can understand. For example, if I go shopping for milk, I look for the milk that has the longest life in it. I don't buy a carton of milk that's going to expire tomorrow, I buy one that's maybe going to last for two more weeks.

What we need to understand is Ryan's not trying to get rid of milk, he's trying to make sure that the milk that we sell has the longest possible shelf life. Now, Americans get that. And so it's a matter of how we message this. And it's very important, I think, for Republicans to say, Look, we like Medicare. We think it's been a great safety net for a lot of people. But we like it enough, we want to keep it on the shelf longer and not let it go bankrupt in the next few years, which is exactly what's going to happen.

VAN SUSTEREN: Well, as I understand Congressman Ryan's plan -- see if I have it straight -- is that if you are 55 or older or 56 or older -- I can't remember the cut-off -- is that Medicare is as we know it, if you're under that age, that there is -- that it -- that it would change under his plan. And that's in recognition of the fact that we can't sustain it like it is because we can't afford it. It's going to implode, It's not going to work out.

So the debate between the Republicans and the Democrats, assuming that they're sitting in the same room, talking, would be, is how do we fashion for the people under the age 55 so that they can get the best case scenario with -- that's practical and reasonable based on our economic forecast, our demographics of who's going to be alive at that age, all those sorts of things.

Is that a fair description of where we are?

HUCKABEE: It's a very fair description. And I think one thing we have to remember. I'm a big fan of Paul Ryan because I do think that he is a cerebral member of Congress that's not just throwing out some cute little sound bites, and he's taken an honest look and he's put some real numbers down.

Look, nobody claims that Paul Ryan got the Medicare proposal that he got on two tablets of stone postmarked Mount Sinai. But the fact is, he's put something on the table. Now Republicans and Democrats can say, We like this piece, but here's how maybe we can improve the under 55.

One thing we ought to be doing, Greta, is putting more focus on the prevention of disease, and then the cures and management of disease. We're going to be spending trillions of dollars on Alzheimer's disease alone over the next several decades. It is a huge issue. Let's put more cost in trying to prevent what is going to bankrupt Medicare. That makes a lot of sense, and it's a great message for Republicans to adopt.

VAN SUSTEREN: I don't -- I don't have -- I don't have the answer (INAUDIBLE) have the answer. But I certainly have strong feelings that anyone who doesn't have a plan or an idea is a big jerk, you know, in the sense that, you know, they've been sitting up there on Capitol Hill. And it's not just enough to say no. It's not just enough to say, I don't like your idea. You know, there are a lot of them sitting up there, you know, saying, you know, without any ideas. And the American people really care about the health. If any American has sat in an intensive care unit and listened to the equipment and the breathing equipment some loved one knows how important it is. And I find it appalling that they aren't working this out better.

HUCKABEE: Well, and I think what you just said is what the Republicans need to hit upon, is that they're willing to listen to ideas. They're willing to make changes in the proposal. But they're not willing to sit back and do nothing. And they're willing to put their political careers on the line so that their kids and their grandkids don't see a country that goes bankrupt and they end up having to, you know, learn Mandarin just so that they can learn the language of their new country that's going to own every dollar they've ever earned.

That's why I think Paul Ryan has got to be given some support. And again, this is not about saying we're going to get rid of Medicare. Barack Obama was going to take half a trillion dollars out of Medicare through the "Obama care" budget. And the Democrats act like he didn't even propose it! Well, you can't take that much out of a system in which you got 10,000 Baby Boomers every single day retiring into it and spend less money. That's simply not logical.

Predictable surprise:The Obama administration has not come up with a medical malpractice proposal

2011-05-19T09:24:00.001-04:00

Politico Pulse scoops:

FIRST IN PULSE: E&C LOOKING FOR DEM MED-MAL BILL- In a video, Republicans on the House Energy and Commerce Committee wants to know where the White House's medical malpractice proposals are, quoting President Obama's comments at the State of the Union. "Mr. President, we look forward to your response," the video is called. The video http://bit.ly/jc8a93

But of course, there's been no follow up from the administration, and probably won't be.

Human Genome Project generates a 20,900 percent return on investment. Could such wealth--and health-creation have any bearing on Washington DC's framing of the healthcare issue?

2011-05-12T09:34:00.000-04:00

Fast Company's Ariel Schwartz takes note of a new report calculating the economic value of the Human Genome Project; the return on investment--$3.8 billion begetting $796 billion, for a more than 20,000 percent increase--makes even Apple’s massive stock appreciation look small:

The project has, in fact, driven $796 billion in economic impact and generated $244 billion in total personal income, according to a new report from Battelle. Sometimes, pricey long-term science projects are well worth it.

According to the report, the nascent genetic research industry generated $67 billion in U.S. economic output and created 310,000 jobs in 2010 alone. "We were surprised by just how large the economic impact had been," says Greg Lucier, CEO of Life Technologies (the foundation that sponsored Battelle's research). "What was even more interesting for me is that we're just getting going. The ability now to read genes quickly and economically is opening up entirely new vistas of opportunity."

These are good numbers, of course, although they are basically unheard and unobserved by the political class in Washington.

Why? Because the future benefits of scientific transformation are not factored into policymaking. As a general rule, the Congressional Budget Office will not "score" anything that doesn't involve "normal accounting"--measured in the most linear manner.

The IRS, to be sure, is happy to collect the tax money from added profits, of course; and ordinary Americans are happy to have the better health and more jobs, but the CBO doesn't calculate scientific advance in its projections. Perhaps, as a matter of policy, the CBO is wise not score "anticipation," but that self-imposed limitation only means that policymakers elsewhere in the government should factor in the inherent limitations of the CBO, and should be looking elsewhere, as well, for policy inputs and metrics.

Unfortunately, Washington does not see the limits of we might call "CBO-ism." Instead, CBO serves as a crutch to both parties, although it is more valuable to the Democrats. Thanks to CBO scores, both parties can claim justification for their fiscal policies, although the Democrats--being the party determined to defend the big-government status quo--seem happier with the CBO and its number-crunching works.

But even if the Republicans get less satisfaction from the CBO, they still tend to rely on it, because they can use CBO numbers to show that they are moving toward balancing the budget--or that the Democrats are not.

Yet thanks in part to the enormous power, the common shared fallacy of both parties is that they seem to think that such budget-balancing is the most important thing that they can do--even if they disagree, of course, on how to get to a balanced budget. And that common commitment to the centrality of a balanced budget--whether it is to be achieved by tax increases or by spending cuts--only further blinds the parties to the promise of profound scientific transformation.

But there's another way of looking at fiscal policymaking: And that is, if the economy is growing--or better yet, booming--the deficit will disappear. And for that matter, many other problems will disappear, too.

That's the thing about scientific transformation, and one of its subsets, Serious Medicine. The strength of scientific transformation is that it obviates partisan fighting, allowing society to move up the escalator of progress. But of course, that's also the downside, because in the heat of the political moment, both parties seem to prefer the partisan fight, as opposed to the conciliation that comes from problem-solving.

No wonder the Human Genome Project gets so little traction in DC policy circles.

Fortunately, the march of science continues, as Schwartz explains in her Fast Company item:

And that nearly $800 billion is just the start of the money that will start rolling in as technology improves. "In my view, DNA sequencing will become as ubiquitous as the stethoscope in medicine," says Lucier. This could happen sooner rather than later; the same sequencing services that cost billions of dollars 10 years ago cost only thousands of dollars today.

"Companies like ours have been investing hundreds of millions of dollars in development [of DNA sequencing technology. Our knowledge of chemistry and computing have been combined to where you can do things at the molecular level quickly," explains Lucier. . . . At the end of the day, we'll bet the $3.8 billion turns out to be a fantastic investment.

The reality of scientific transformation is what Washington bean-counters can't get their heads around. For reasons I explained for the Manhattan Institute’s Medical Progress Today, politicos and Washington-oriented policy mavens can’t deal with outside-the-Beltway forces, such as technology and the transformation it begets.

Instead, the Beltway political class seems enraptured with its own version of numerology--that is, a fascination with purely financial transactionalism, as scored by the great idol of Powertown, the Congressional Budget Office. And that numbers-obsession, dealing within the zero-sum environment of accounting, leads Washingtonians, right and left, toward healthcare rationing schemes. Rationing schemes, of course, which were soundly rejected by the voters in 2010 and will be again in 2012.

Perhaps after both parties find themselves rebuked by the voters, one or both parties will look up and notice that the real secret to politically acceptable healthcare is better health. Although, of course, there's still time for the parties to wake up before 2012 and realize that science holds the key to a better healthcare platform.

If so, even the bean-counters will be happy, once they get over their bad case of "not invented here." Because better health also means lower healthcare costs over the long run.

Newt Gingrich, announcing for president, puts Serious Medicine on the national agenda

2011-05-11T20:09:00.000-04:00

Newt Gingrich announced today for President, offering a distinctly different kind of message to the American people.

This passage from his brief and succinct announcement video stands out: "There's a much better American future ahead. More jobs, more prosperity, a better health system, longer lives, and greater independent living."

Every presidential candidate, in both parties, talks about jobs and prosperity--including Gingrich.

But Gingrich then went off in a different direction: He didn't say a cheaper healthcare system--he said a better healthcare system. As we all know, the standard mantra of both parties has been cheaper--"bend the cost curve," pols like to say. And then he continued, in the vein of "better": longer lives and greater independent living. In other words, better health, including for senior citizens.

And let's be blunt: That's an attractive offer to a lot of people. To just about everyone, in fact. Bad healthcare isn't worth very much, even if it's cheap, and good healthcare is worth a lot, even if it's expensive. Although, of course, history shows that when something gets good, it usually also gets cheaper. That's the story of mass production and economies of scale.

So why hasn't it been the case that improvements in health, life expectancy, and greater independent living are a standard part of the policy repertoire? Good question.

One possible reason, of course, is that it's simply easier for a politician to say that he or she will spend less on healthcare (or more). That is, if nothing else, politicians control the tax-and-spend spigot.

But that could be changing. Gingrich has put the better healthcare issue on the agenda. Gingrich, in fact, has always been a proponent of this argument, going back decades. But never before, of course, as a presidential candidate.

Eventually, of course, the American people will come to see that their healthcare system is not giving them what they really want from that healthcare system, which is better health. Not health insurance, but health itself.

It might seem like a complicated argument, because it is so different from what the extant political class is saying.

But it's actually a rather simple point that Gingrich is making: Cure is better than care. It's cheaper to beat than to treat. It's the sort of argument that Ronald Reagan used to make.

Fewer Drugs, Shorter Lives, Less Prosperity: The Impact Of Comparative Effectiveness Research on Health and Wealth

2011-05-10T11:34:00.011-04:00

Editor's Note: This is an important piece on Comparative Effectiveness Research from the Center for Medicine in the Public Interest, a leading voice in the struggle to improve our national health through the expansion of personal freedom and the advancement of Serious Medicine.

Fewer Drugs, Shorter Lives, Less Prosperity:

The Impact Of

Comparative Effectiveness Research

on Health and Wealth

John Vernon, Ph. D.

Robert Goldberg Ph. D.

Peter Pitts

Executive Summary

1. Advocates of comparative effectiveness research (“CER”) claim it can be used to reduce healthcare spending because a large portion pays for medical technologies that add little health or social benefit. This assumption runs counter to evidence that medical innovation is associated with lower and greater longevity

2. To the extent that CER is used to reduce the development and use of new drugs, devices, and diagnostics, it is important to estimate what impact the reduced rate of innovation would have on quality of life and life expectancy.

3. Using empirical models that establish a direct relationship between pharmaceutical returns on investment and clinical development costs, we developed an estimate of the cost of CER and it’s impact on rates of research and development (“R&D”).

4. We found that CER could conservatively increase R&D costs by an amount equally to 50 percent of the most complex and time-consuming part of drug development. The added cost would reduce R&D spending by $32 billion over ten years.

5. Based on research that quantified the relationship between increased R&D and greater life expectancy and well being, we conclude that CER would cost Americans 81 million life years and $4 trillion dollars.

6. CER advocates ignore the impact of such requirements at the possible expense of longer life and economic growth.

Introduction

Many observers maintain that the increase in healthcare spending is the result of the development and overuse of new medicines, devices, and diagnostics. In arguing this case, proponents of this view three assumptions. First, that most of the ‘overuse’ does not improve health or extend life. Second, that CER information about the costs, risks, and benefits of different treatment options, combined with new incentives reflecting the information, could eventually alter the way in which medicine is practiced and yield lower healthcare spending without having adverse effects on health. Over the long-term, the potential reduction in spending below projected levels could be substantial. Third, CER can be used so “that Medicare spending—and perhaps all health spending in the country—could be cut by about 30 percent if the more conservative practice styles used in the lowest spending one-fifth of the country could be adopted nationwide.”(1)

Based on these assumptions the Patient Protection and Affordable Care Act both requires the development of CER and its use in defining healthcare quality and in making coverage decisions. Some of the strongest proponents and contributors to the body of CER “as Congress moves toward substantial reductions in Medicare spending, the program will be under increasing pressure to ensure that dollars are directed to services providing known benefits.” Dr. Donald Berwick, who is administrator of the Center for Medicare and Medicaid Services, put the case for CER more bluntly: “We can make a sensible social decision and say, ‘Well, at this point, we have access to a particular additional benefit [new drug or medical intervention] is so expensive that our taxpayers have better use for those funds.’”(2) Indeed, the Institute of Medicine charged with developing methods for determining what technologies and innovations should be part of and added to the package of benefits covered under the new health care law. CER will be the major tool for making such determinations.(3)

If these assumptions were true, medical innovation overtime should have led to both a significant increase in spending and almost no result in the worst of both worlds – a large increase in cost and little or no increase in well being and life expectancy with improved quality of life. Previous studies have cast doubt on such assertions. Indeed, a rich body of empirical research demonstrates “that medical innovation has yielded significant increases in life expectancy without increasing medical expenditure.” Frank Lichtenberg has shown that the pace and intensity of medical innovation is associated with lower growth in per capita medical expenditures, longer life and economic growth.

Yale University's William Nordhaus has estimated the value of innovations in medicine during the second half of the twentieth century to be roughly equal to the gains in the economy’s real output, as measured by the Gross Domestic Product (“GDP”) over the same fifty-year period. The value of improvements in health (e.g. life expectancy) unlike the economy’s real productive output of goods and services is not reflected in national accounting statistics (which when aggregated, measure economic growth and national income, i.e GDP).

Nordhaus posits a simple, and indeed, quite clever question to demonstrate the intuitive reasonableness of his conclusion, which is based on highly technical research methods:

You must forgo either the health improvements over the last half-century or the non-health improvements. That is, you must choose either (a) 1950 health conditions and 2000 non-health living standards or (b) 2000 health conditions and 1950 non-health living standards. Which would you choose?(4)

In another study, one that was prospective rather than retrospective, University of Chicago Economists, Kevin Murphy and Robert Topel, estimated the social-economic value of a 10 percent reduction in the mortality associated with cardiovascular disease and cancer around $10 trillion (roughly $4 trillion from reductions in cardiovascular mortality and $6 trillion from reductions in cancer mortality). To place this number in perspective, note that the size of the U.S. economy, as measured by the GDP, surpassed the $10 trillion level a few years ago in the early 2000’s.

The productivity of investment in pharmaceutical R&D is remarkably high—perhaps one of the most productive uses of capital in the economy. Hence, our research looked at whether incentives to either maintain or increase investment in R&D would be affected by the need to conduct CER prior to and a condition for coverage of a new medicine.

En route to engaging in this research, we looked at the impact of the introduction of cholesterol lowering drugs called statins on the death rate from heart disease. Advocates of CER argue that requiring its development and use can produce better health at a lower cost. Or, to use the language of the Nordhaus Paradox, CER can lead to better health and (because it would save money) improved non-health living standards.

As Table 1 shows, the development of statins is associated with a significant decline in 10-year death rates among men and women regardless of whether or not they have a history of heart disease. CER proponents would argue that CER could produce similar gains at a lower per patient cost.

The Impact of CER on Medical Innovation

Yet, CER is not generated overnight or at little cost to companies whose products are to be compared. Rather, as with any requirement for additional evidence, there are both direct and indirect costs associated with its production. (This is a point that CER advocates often make when justifying the establishment of a government agency that would set the CER agenda as well as subsidize CER projects.)

In previous research, we have demonstrated how CER regulations have the potential to result in increasing clinical trial sizes (and costs) and perhaps clinical development times; the latter would increase the cost and risk of drug development from an investment, decision-making perspective.(5)

The mathematics of clinical research are the same whether an innovator needs to provide more clinical data before or as a condition of receiving Food and Drug Administration (“FDA”) approval or CER data before or as a condition to being coverage by health plans or government. Either way, requirement for more information will require companies to increase the size of clinical trial samples. CER can increase the complexity of clinical trials, the number of people enrolled in a clinical trial, and the number of studies conducted after a product receives approval. In Europe, “about one-fourth to one-third of the regulatory costs are estimated to go for reimbursement issues.

Further, CER can delay time to market and reduce the rate and extent of technology diffusion. A recent study looking at the impact of CER on market access in Europe and the United States, found the process delayed use by over two years. Moreover, the same study found that CER use, as part of reimbursement decisions in cancer was associated with 60 percent fewer medications being made available than when such reviews were not used.(6)

CER also adds to the risk of investing because it increases the uncertainty about whether a product will enter the market. The uncertainty ranges “from the impossibility of demonstrating the full scope of a product’s value at the time of authorization, through to the impossibility of knowing precisely what will be on the market (and how good it is compared to your product) by the time you get to seeking authorization. As research departments and company finance offers have frequently lamented, there is a profound discouragement to innovation when every new product runs the risk of flat rejection by
regulators at the last minute, because of some unforeseeable arrival of another, arguably superior, therapy just before you seek authorization.”(7)

Unless CER costs nothing, it will make more developmental R&D projects less attractive. That is, with higher expected drug or device development costs, slower access to market and increased uncertainty, there will be fewer R&D projects with generating positive returns (particularly cash flows). Figure 1 shows that as the cost of conducting CER increase the number of R&D projects decline in order to maintain the same rate of return on innovation.

Next, we estimated how much the R&D investment would decline or be “lost” due to an increase in CER costs. We assume that CER would be 50 percent of Phase III clinical development costs. This estimate is based on empirical data of development costs and the recognition that the complexity of clinical trials and number of patients required to do comparative research would increase throughout the FDA evaluation stage.

As Table 2 shows, over a 10-year period, R&D investment would decline by $31.6 billion. Over the long term, R&D would increase but at slower rate due to CER.

CER Impact on Life Expectancy and Dollars

As we discussed earlier, the investment in and consumption of new medicines continually increases life expectancy, quality of life, and productivity. To estimate the social impact of CER, we estimate how much lost R&D will cost Americans in terms of lower life expectancy and dollars. To translate life years into dollars, we use the conservative assumption that a life year is equal to $50,000. While much higher estimates exist, we are opting to be conservative in all of our assumptions so that our estimates may plausibly be viewed as lower-bound approximations. Table 3 shows that the R&D lost due to CER will cost the United States 81 million life years and $4 trillion over 20 years.

Conclusion

Proponents of CER have responded to general criticism of using findings to make coverage decisions by claiming that absent such research, the United States will be unable to control rising health costs because of the unfettered adoption of medical innovations. Some have gone so far as to suggest that “the antagonism toward cost-per-quality adjusted life year comparisons also suggests a bit of magical thinking — the notion that the country can avoid the difficult trade-offs that cost-utility analysis helps to illuminate … It represents another example of our country’s avoidance of unpleasant truths about our resource constraints.”(8)

Our research shows that there is hard evidence behind our concern about using CER to “illuminate” difficult tradeoffs. On the contrary, our analysis suggests that because CER will lead to a loss of innovation, Americans will live shorter lives, and in poorer health than would otherwise be the case. Simply put, we will produce less health. People will be less productive and less able to enjoy life. Living longer will be worthless. (Since people who are in poor health cost more to care for than healthy people even if they live longer, CER will also add to healthcare spending.) That is the "unpleasant truth" CER advocates consistently avoid.

###

Footnotes

1) CBO Research on the Comparative Effectiveness of Medical Treatments: Issues and Options for an Expanded Federal Role, December 2007.

2) Donald Berwick, June 2009 interview in Biotechnology Healthcare.

3) http://iom.edu/Activities/HealthServices/EssentialHealthBenefits/2011-JAN-12/Agenda.aspx

4) William Nordhaus. “Irving Fisher and the Contribution of Improved Longevity to Living Standards” The American Journal of Economics and Sociology 64(1): 367-92. 2005.

5) Vernon JA, Goldberg R, and Golec J. Economic evaluation and cost effectiveness thresholds: signals to firms and implications for R&D investment and innovation. Pharmacoeconomics 2009; 27 (10): 797-806.

6) Anne Mason, et al., “Comparison of Anti-cancer Drug Coverage Decisions in the United States and United Kingdom: Does the Evidence Support the Rhetoric?” Journal of Clinical Oncology, http://
jco.ascopubs.org/content/28/20/3234.abstract.

7) Peter O’Donnell, “One Step Closer to the Fourth Hurdle: Drug Evaluation Criteria Could Soon Include an Intrusive Health Technology Assessment.” Applied Clinical Trials, March 1 2010.

8) Jonathan Skinner, NEJM.

^^^

About the Authors

John A. Vernon, PhD

Dr. Vernon is a professor in the Department of Health Policy and Administration at the University of North Carolina at Chapel Hill, where he holds appointments in the Kenan-Flagler School of Business and the UNC School of Pharmacy. He is a Faculty Research Fellow with the National Bureau of Economic Research and a Senior Economic Policy Advisor to the Office of the Commissioner at the US FDA.

He has twice testified before the US Senate on pharmaceutical policy issues and advises both government and industry on a wide range of policy issues. He was previously a professor in the finance department at the University of Connecticut and a visiting professor at the Wharton School of Business at the University of Pennsylvania. He also guest edited a special issue of Managerial and Decision Economics on the political economy of the pharmaceutical industry.

Dr. Vernon has published articles in numerous publications, including The Journal of Law and Economics, Health Economics, Healthcare Management, The Journal of Healthcare Management, The National Law Journal, The American Journal of Law and Medicine, and PharmacoEconomics, where he sits on the editorial board.

Dr. Vernon holds doctoral degrees from the University of Pennsylvania's Wharton School in management science (health policy and management) and the University of London in economics.

Robert M. Goldberg, PhD

Robert Goldberg is co-founder and vice president of the Center for Medicine in the Public Interest. (CMPI) Along with Peter Pitts, Dr. Goldberg hosts the popular and controversial blog on the pharmaceutical industry and healthcare, www.drugwonks.com.

Prior to founding CMPI, Goldberg was Director of the Manhattan Institute’s Center for Medical Progress and Chairman of its 21st Century FDA Task Force that examined the impact of the FDA’s Critical Path Initiative on drug development and personalized medicine.

He has written for The Wall Street Journal, The Washington Post, The Los Angeles Times, National Review Online, The Chicago Tribune, The Philadelphia Inquirer, The New York Sun and writes regularly for The American Spectator, where he broke the story about Obama Medicare director Donald Berwick’s admiration for Britain’s National Health Service; The New York Post and The Weekly Standard. He is an expert on Medicare reform, comparative effectiveness and FDA’s Critical Path Initiative and the author of many papers including, "Insta-Americans: The Empowered (and Imperiled) Health Care Consumer in the Age of Internet Medicine," and with John Vernon, "Alzheimer's Disease and Cost-effectiveness Analyses: Ensuring Good Value for Money?" and “Economic Evaluation and Comparative-Effectiveness Thresholds: Signals to Firms and Implications for R&D Investment and Innovation.” He is also author of Tabloid Medicine: How the Internet is Being Used To Hijack Medical Science For Fear and Profit. (Kaplan, December 2010).

Peter Pitts

Peter Pitts is President and co-founder of the Center for Medicine in the Public Interest and Partner/Director Global Healthcare, Porter Novelli. Prior to founding CMPI, Pitts was a Senior Fellow for healthcare studies at the Pacific Research Institute. From 2002-2004 Peter was FDA’s Associate Commissioner for External Relations, serving as senior communications and policy adviser to the Commissioner. He supervised FDA's Office of Public Affairs, Office of the Ombudsman, Office of Special Health Issues, Office of Executive Secretariat, and Advisory Committee Oversight and
Management. He served on the agency’s obesity working group and counterfeit drug taskforce.

His book, Become Strategic or Die, is widely recognized as a cutting edge study of how leadership, in order to be successful over the long term, must be combined with strategic vision and ethical practice. He is the editor of the new book, Coincidence or Crisis, which deals with the public health crisis of counterfeit medicines. He has served as an adjunct professor at Indiana University’s School of Public and Environmental Affairs and Butler University.

About CMPI

The Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness. CMPI can be found at www.cmpi.org and www.drugwonks.com.

Rep. Michele Bachmann, Serious Medicine Strategist, pointing the way to not only a better Medicare policy, but also a better policy for medical care overall.

2011-05-02T14:00:00.002-04:00

Rep. Michele Bachmann (R-MN) showed the political power of the Serious Medicine argument when she led off "Fox News Sunday" yesterday. Of course we have to control and even cut federal spending, she said, but we have to do it the right way--a cure is cheaper than care.

Bachmann points the way for Republicans to keep faith with Paul Ryan-type budget cuts AND get re-elected. As the polls show, people object, strongly, to cuts in Medicare. But nobody minds if the price of medical care falls. And that's what technology can do, if we let it happen. So Ryan + Bachmann is a winning formula.

But let her speak for herself. Here's the transcript of her interview with Fox News' Chris Wallace:

Congressman Michele Bachmann, welcome back to "Fox News Sunday."

REP. MICHELE BACHMANN, R-MINN.: Thank you, Chris.

WALLACE: Let start with the budget, because you want to go even farther than House Budget Chairman Paul Ryan. You voted for the Republican Study Committee plan which would cut spending by $3 trillion more over the next 10 years and balance the budget by 2020, not 2040, as Paul Ryan does.

Let's take a look, though, at some of the big differences. You want to cut $700 billion more than Ryan from Medicaid. You want to raise the Social Security retirement age for people who are now 59. And you would change Medicare to a voucher system for those who are now 59.

Question -- Paul Ryan doesn't go far enough?

BACHMANN: Well, remember, both Paul Ryan's budget and the Republican Study Committee budget changed the trajectory that we're on. We are on a trajectory of failure right now. So, both Paul Ryan and the Republican Study Committee were making very good responsible choices, they're trying to get America's house to balance. That's what we have to do.

WALLACE: But, if I may, you're saying let's go even further, faster than Paul Ryan?

BACHMANN: Well, remember again, what both of those bills are. They aren't pieces of legislation. They're aspirational documents, which means these are goals that we're trying to come toward.

And one thing that I have heard all across the United States, people want us to get our financial house in order. They recognize we may not have 26 years to get our financial house in order. We may need to do it sooner.

And so, people want to us get serious. People who have been doing this in their own lives and with their own businesses don't understand why Washington is taking so long to get our house in order.

WALLACE: But I just wanted to make it clear -- you stand by your vote for the Republican Study Committee plan. There is nothing in there that you say would go too far?

BACHMANN: Well, remember, what -- again, this is an aspirational document. It's not legislation. It may --

WALLACE: But would you support all of those things we just talked about?

BACHMANN: What I'm saying with that vote is that we have to make decisions. We aren't saying that every single decision that's in that bill, or aspirational document, will be the final result. But what we are saying is we have a conviction, those of us in the Republican Study Committee, those of us who supported Paul Ryan that we thank them and applaud them, that they want to get in the game and they want to make sure that we don't go down in flames with our economy.

WALLACE: Let me ask you about one specific -- and it may be the most controversial in both plans. The nonpartisan Congressional Budget Office says that under Medicare premium support, which both plans would have, seniors would bear a much larger share of their health care costs, than they would under the current plan.

What do you tell people nearing retirement who say I can't afford to pay more of my own health care costs out of pocket? Which is what the Ryan and the Republican Study Committee plans would do.

BACHMANN: And I understand that. I put an asterisk on my support and I put a blog posting up that said just as much. That is my area of concern. I support these bills with that proviso, because there are a number of people across the United States who have exactly expressed the fear that you just mentioned.

I think that's what we need to do with Medicare. It isn't that we are saying that we don't want people to have the health care. It's -- will there be a better way to fund it?

I think there is a better way than the way that the federal government is currently funding the program. Various ideas were put out on the table. Even Paul Ryan said he was open to tweaking his position that he has staked out.

One position that I'm concerned about is shifting the cost burden to senior citizens. Seniors are saying, "Look, I'm not in a position to be able to handle that." I also share that real fear. That's why I put the asterisk out there.

Will there be greater efficiencies? I think so. Will there be choices and options that I think we should offer people? Absolutely.

In the private sector -- I'm a private business person, my husband and I have our own business. What we try to do is offer better solutions all the time for our customers. The federal government isn't keen on doing that.

That's what I think the ingenuity is behind what Paul Ryan wants to do and behind what the Republican Study Committee wants to do, new and different ideas. That isn't the be all and end all. We're only just starting.

WALLACE: But --

BACHMANN: But with the proviso and the asterisk that I agree with the concern for senior citizens and their fear that they will have to assume the cost themselves. One thing we also need to focus on --

WALLACE: Well, let me -- let me ask you this. You're not wedded to the idea of a voucher plan for Medicare?

BACHMANN: I'm wedded to the idea of efficiencies and cost-cutting and savings.

WALLACE: But not a voucher plan?

BACHMANN: How we get there is open to discussion. Plus, the other thing that we should focus on would be cures -- cures for things like Alzheimer's, cures for things like diabetes. It's very expensive to just cover the care for sickness. I'd prefer to see money that we have at the federal level go for cures.

Probably one of the best examples is polio. If you look in the 1950s, polio was a huge issue. And government was forecasting at that point that we might be looking at $100 billion in costs.

Today, polio costs us really virtually nothing. Why? A private charity, March of Dimes, put money in to finding a cure. We all have the little vaccines that Jonas Salk came up with. Thank God. I would like to see that with Alzheimer's and diabetes and others.

Exactly. If we want to save money on Medicare--and on medical care in general--let's unleash the ingenuity and productivity of the American people. Not only will we improve health, not only will we save federal healthcare dollars, but we will also create a new industry for Americans to find employment--as well as exports, because the world will want these same medicines.

Here come the WHO-crats. World Health Organization takes on chronic disease. But how? With research, medicine, and cures? Or with national, and now international, nanny-statism?

2011-04-30T13:18:00.012-04:00

The Washington Post reports this morning on a World Health Organization (WHO) meeting in Moscow on public health, food, and lifestyle. In the pages of the Post, the issues seem so clinical and laboratory-like. But in reality, popular passions are certain to be provoked--and so popular sovereignty must once again be invoked.

It's great to eat right and be healthy, but those who wish to eat wrong still have rights--and they will fight to preserve them. As we shall see, new rules on what you can eat--that is to say, new rules on personal freedom--are coming. And the Obama administration appears to be an eager participant into the next round of a restrictive rule-writing process. Post reporter Will England sets it up:

The World Health Organization focused for decades on infectious diseases, but now it’s putting non-communicable diseases near the top of its agenda. The fight against heart disease, diabetes, stroke, lung cancer and chronic respiratory disease may not seem as heroic as the struggle against smallpox or H1N1, but chronic illnesses account for 63 percent of deaths worldwide — 70 percent in the United States and 90 percent in Russia.

Important statistics, reminding us that the stakes are, indeed, high. And then he adds these hopeful words about improving the quality and length of life:

“And these [chronic diseases] are preventable,” said Margaret Chan, director general of WHO, at a three-day series of meetings here this week devoted to chronic diseases. “People don’t have to suffer. People don’t have to die.”

OK, so far, so good. The Serious Medicine argument is that health insurance, for example, is a lot less important to people than health itself. It’s medical science we need, much more than healthcare finance. And so just as we eliminated many killer infectious diseases in the last century, it would be a humanitarian achievement if we could eliminate many killer chronic diseases in the next century.

But as the Post article makes clear, the WHO vision of better health for the future is driven more by politics than by science. That is, the leaders of his new health push will be bureaucratic regulators, not disease-eradicators. We also need medical science more than we need governmental red tape, however well-meaning that red-tape might seem to be.

Indeed, as we keep reading the Post article, a disturbing pattern starts to appear. We see much discussion--and real action--leading toward government regulation of human behavior, and little or nothing about the transformative or curative science. It would be useful, for example, if leaders were focusing on better treatments and cures for diabetes or chronic respiratory disease. And while of course such scientific research is occurring, it does not appear that such scientific research is anywhere close to the top of WHO’s international agenda.

Instead, we see what appears to be nanny-statism--not only at the national level, but also at the international level. That is, WHO and various governments and NGOs are coming together to start passing restrictions on diet and lifestyle and behavior patterns. Education about health is fine, so long as its genuine, fact-based education, provided by an unbiased trustworthy source. Freedom means freedom, but freedom can always be better informed by the truth.

Indeed, many companies are heavily involved in good-hearted public education. One such company is Dole Foods. Inspired by the visionary leadership of owner David Murdock, Dole has created the Dole Nutrition Institute, which spends many millions each year in pro bono efforts to inform Americans, especially, the young, about the benefits of healthy eating and a healthy lifestyle. To be sure, Dole is in the healthy foods business to begin with, but the Nutrition Institute's health-promotion efforts reach far beyond what Dole sells. Indeed, Murdock has personally endowed an entire research campus in North Carolina, dedicated to public-spirited research on nutrition and health.

Murdock and the Dole Nutrition Institute provide a sterling example of education for health. And their efforts are all voluntary; we can note that neither Murdock nor the Dole Nutrition Institute, has any power to make anybody do anything.

Yet as we know, government operates on a different principle--the principle that if persuasion doesn't work, there's always the option of coercion.

As we have learned here in the US on other issues, government-funded “education” has a way of turning into hectoring, taxing, and mandating. Indeed, even research itself can be skewed, in the name of driving such research to a pre-designated conclusion. That has been, for example, the twisted and coercive fate of much "research" and “education” about global warming and climate change. Without attempting to delve into the science at all, suffice it to say that the US government got way ahead of what was scientifically demonstrable, to say nothing of politically feasible. Indeed, the backlash against climate change should serve as a sobering warning sign to would-be food czars.

And while the science of, say, the dangers of some lifestyle habits, such as smoking or snuff, are completely settled, it's still the case that tobacco users have rights--even if not everyone agrees.

So we can only wonder what future policy directives will be coming out of WHO and lesser entities in the months and years to come. Here’s more from the Post report:

No tobacco and less sugar, fat and especially salt are WHO’s top targets; reducing alcohol consumption and increasing exercise are right behind. Those factors alone account for 25 million of the 36 million deaths attributable to chronic diseases annually, according to WHO, and place a huge economic burden on families and nations. But a cigarette is not like a microbe: It can’t be eliminated by a doctor. Fighting chronic diseases requires political decisions — in areas as disparate as finance, regulatory policy, agriculture, education and trade — and the will to see them through.

OK, so we are starting to see a pattern here: The WHO meeting seems to be a chance for international officials to gather together work through their whole policy arsenal; as the Post piece says, “in areas as disparate as finance, regulatory policy, agriculture, education and trade.”

A cynic would say, here’s a big opportunity for big government to get a lot bigger, as regulators, inspired by this Moscow conference, return to their home countries full of newfound zeal.

And once again, we can note: Even in that litany of governmental tasks mentioned above, there was no mention of medical research. What if we could develop a cure for diabetes? Or a foolproof appetite suppressant? Or some other outside-the-box approach that we might not have even thought of yet? Wouldn’t such a techno-fix be an easier way to solve some of these public health issues, thus obviating the need for heavy-handed regulation? Sure it would. Which leads one to wonder: Could it be that those WHO officials and their allies are uninterested in scientific transformation precisely because they are more interested in social regulation? That is, the WHO-crats would rather have the bureaucratic regulation (imposed, of course, by people like them), than the scientific transformation (achieved, most likely, by scientists they barely know).

And in fact, in the hands of bureaucrats education always seems to turn into regulation; as the Post article suggests, the Moscow conference is just the beginning. That is, the corporations will get their say, and then the bureaucrats will take it from there.

Unhealthy food, and what to do about it, was the most sensitive topic at the gathering here. Representatives of PepsiCo, Coca-Cola and Nestle joined the discussions after a decision by WHO to allow the big international food concerns a voice as the organization prepares an agenda for a U.N. meeting in September.

So we can expect that in that next meeting, in tandem with the UN General Assembly this September, we will see a lollapalooza of new decrees and rules. UN pronouncements don’t have force in the US, of course--except when they do; there’s no shortage of internationalist-minded activists and even jurists in the US who think that it is their job to “harmonize” American policy and culture with that of the rest of the world.

For her part, WHO director-general Chan jumps in with her own view on the future. Speaking of voluntary industry actions: “Self-imposed voluntary action is a good first step.” And if voluntary action is the "first step," what, we might ask, is the second step? For her part, US Health and Human Services Secretary Kathleen Sebelius, also in Moscow, agreed that companies ought to get the first opportunity to do the right thing. But then she added, “there’s definitely a role for regulation.”

So stay tuned for a fight on the US homefront. Fighting off the excesses of the WHO-crats and their US allies will be another mission for libertarians, tea partiers, and all those who think that people should have freedom of choice--even the freedom of choice to make mistakes. Yes, there are a many ways to weave personal responsibility into society--variable pricing for health insurance is one of many possible incentivizers--but there will be a backlash against overweening regulation that crimps freedom. This is America. Here, the people rule.

Healthy eating is good, and informed consumer choice is good, too, as part of our overall commitment to personal freedom and individual dignity and autonomy. But if the Affordable Care Act of 2010, aka "Obamacare," is an indication, any idea that paternalistic public health officials think is a good idea--will soon be a mandatory idea.

And so, once again, the American people will have to rise up and defend their rights. Including their right to do things that Washington DC doesn't approve of. Such populist rebellions have happened before, even very recently. And now it looks as if another such upsurge is coming.

A Vaccine for Alzheimer's?

2011-04-26T12:30:00.001-04:00

The basic argument of this blog is that it's better to pay to cure a disease than to merely pay--and pay, and pay, and pay--for care.

So now we are reading in the thepharmaletter:

A vaccine that has the potential to stop Alzheimer's disease progression could be available within a few years, according to reports in the UK’s Daily Mail and Daily Express newspapers. The product in question, known as CAD106, comes from the research laboratories of Zurich, Switzerland-based biotechnology firm Cytos Biotechnology (SWX: CYTN), which is also developing anti-smoking, obesity and flu vaccines.

There's no guarantee that any of these new potential vaccines will work, of course, and they may all prove to be an absolute fizzle. Still with good leadership and the right economic and regulatory climate, we would be having a lot more of this productive scientific research. And history tells us that good things come out of a heavy commitment to research.

Here in the US, that would mean a lot more hope about Medicare, for example, and a lot less fear.

And by the way, shouldn't this industry be in the US? Or is the economic plan for the 21st century to simply print dollars? How long do we really think that will last?

Serious Medicine Crash Update--The world confronts a new "superbug" that could jeopardize modern medicine. Yet the antibiotic pipeline is drying up, an 81 percent decline. Health insurance can finance that sickness, but it can't prevent or cure that sickness. In other words, we have an elaborate and expensive system for caring for illness, but not for curing illness.

2011-04-09T09:55:00.013-04:00

Once again, we are confronted with a new and potentially lethal epidemic. The Lancet, the British medical publication, reports on the rise of a bacterial "superbug" that could reintroduce the risk of incurable infection, thus threatening all contemporary surgical practices. As The Lancet puts it, "The potential of NDM-1 to be a worldwide public health problem is great, and co-ordinated international surveillance is needed." And yet as the chart above shows, new antibiotics are down by more than four-fifths in the last quarter-century.

As of now, nobody really knows the extent of the ultimate danger--although public health experts are worried. After all, even before NDM-1, we have seen the deadly resilience of other kinds of infections, such as MRSA and extensively drug resistant tuberculosis. In other words, even as we have turned our attention to major new killers among us, such as Alzheimer's Disease, we confront the potential recrudescence of mass contagions, even epidemics.

Oh wait. we haven't really turned our attention to Alzheimer's. We have mostly ignored the public health threat posed by Alzheimer's, too--except when it comes to paying for its costs. We are heavy on insurance and light on cures. Which, of course, is a formula for ruinous expenses, for individuals and for nations, combined with lack of hope against the ravages of disease.

And thus we are reminded of the reality that health is more important than health insurance. That is, medicine is more important than medical-finance mechanisms. If new deadly strains of bacteria emerge, it matters little that we have health insurance, if at the same time we lack a cure. Health insurance wouldn't have done any good in the 14th century, during the Black Plague, which killed perhaps a third of Europe. Nor would health insurance done much good in the 20th century, when the Spanish Flu killed perhaps 50 million worldwide. And the same could be said, more recently, of HIV/AIDS. Health insurance is essentially retrospective; it is the financial after-effect, or shadow, of the medicine's ability to prevent or cure a disease--or not.

Meanwhile, in the 21st century, we face a new superbug in the form of an enzyme, New Delhi metallobeta-lactamase, or NDM-1, that destroys carbapenems, an important category of antibiotics used for challenging hospital infections. NDM-1 has been found in many different kinds of bacteria, as The Wall Street Journal reported. The Journal's Sten Stovall writes that "some experts warn health-care provision is in danger of reverting back to a pre-antibiotic era in which hip replacements, care of preterm babies and advanced cancer treatment are no longer possible." And then Stovall quotes David Livermore, director of antibiotic resistance monitoring at the U.K.'s Health Protection Agency: "So much of modern medicine—from gut surgery to cancer treatment, to transplants—depends on our ability to treat infection. If resistance destroys that ability then the whole edifice of modern medicine crumbles."

NDM-1 has been observed in Bangladesh, India, Pakistan, where it is easily found in drinking water and sewage near healthcare facilities. As The Hindu reported in New Delhi, the Indian government is "in denial" over the threat to public health posed by NDM-1. And, more ominously for Americans, NDM-1 has also been found in Britain, which qualifies as a near neighbor to the US in this globalized world.

So we can ask: What is the US government doing about NDM-1? No doubt officials at the Centers for Disease Control and the Public Health Service are monitoring the news, and doing what they can, but who thinks for a minute that the threat of NDM-1 is anywhere high on the Washington DC agenda? And even if it were, monitoring a disease is little better than providing health insurance--when confronted with a serious health threat, what's really needed is science, as opposed to finance.

Meanwhile, as Stovall explains, there's little in the way of new antibiotics: "Over the past three decades only two new classes of antibacterial medicines have been discovered, compared with 11 in the previous 50 years." Indeed. As the chart above, put together by Eric Utt of Pfizer, shows, the "pipeline" of new antibiotics is, indeed, running dry--down 81 percent in the last quarter-century.

As the Journal’s Stovall observes, in the US, hospital-acquired, drug-resistant bacterial infections kill 63,000 patients each year and cost $34 billion. And yet in the current political and economic climate, he continues, we see a lack of financial incentives to spur pharmaceutical companies to invest in researching and developing new antibiotics. Stovall quotes Astra Zeneca CEO David Brennan: “Discovery needs to be underpinned by new financial mechanisms that allow companies to receive a return on their investment in new drugs, while limiting their use to situations of greatest need."

And yet, Stovall continues, “Experts say it isn't viable for drug companies that spend millions developing a new antibiotic medicine then to be told by regulators to hold it in reserve for the next emergency. A fresh approach and new business model for antibiotics R&D is needed, they say. Options include new models for compound-sharing in discovery research, the revisiting of previously discarded compounds with modern methods, and the involvement of public funding in antibiotic R&D.”

The collapse of the antibiotic production line is another instance of the Serious Medicine Crash; we are seeing plummets in the larger category of new drugs and devices that parallel the collapse of antibiotic production. Indeed, we are also seeing a collapse of the medical venture capital market.

If this crash continues and worsens, leaving us vulnerable to public health threats such as NDM-1, then the debate over health insurance that has transfixed American public policy for the last three decades will look like small potatoes--or worse, the debate will look like a dangerous diversion, a diversion that took our collective eye off the ball of our own health and longevity.

Here's a screengrab of the WSJ story:

National Health Service Rationing--Nothing new there. And meanwhile, a "game-changer" in the US, if we want it.

2011-04-06T09:27:00.005-04:00

The BBC reports that the UK's National Health Service traditional approach to medicine--rationing by queue--is worsening. Meanwhile, there's hope on the horizon, in the form of a new treatment for heart disease--not that the DC political class seems interested.

Let's start with the BBC story. Yes, resources are scarce, but as noted here many times at SMS, healthcare is a good that people want--they will pay for it. Indeed, it's a "superior good"; as incomes rise, demand for healthcare rises. And while it's certainly true that incomes have been flat or even negative in many sectors of late, the overall income trend is up, around the world. And so of course, demand for healthcare has risen. It's foolish, indeed, to fight something that people want--especially in recessionary times, when the US market, in particular, is looking for new demand drivers.

For some reason, surging demand for healthcare is regarded as being in a different category from other kinds of demand. We have to "bend the curve," we are constantly told. But we might ask: What if some "curve bender" had decreed, in 1910, “We are spending too much on cars”? After all the 1910 thinking might have gone, we have enough cars--defined as the “right” people have them. And o there’s no need for anyone else to have them, cluttering up the roads, etc. If such a decree would have stuck in 1910, thus thwarting the Model T and everything else that came out of mass production, lower prices, and higher wages, not only would a whole new industry of been thwarted, but so would the American Dream of prosperity and mobility. And so instead we'd have a world of relatively few hand-crafted cars--very expensive, and not very good, in spite of the hand-crafting. What really guarantees the functioning of a machine, we have learned, is mass production. And oh, by the way, speaking we might not have had the industrial plant that we later needed, in two world wars, to make war-winning vehicles and tanks and airplanes.

The same process--mass-produce it to make it better and cheaper--has been in medical procedures and devices. That's how we got from open-heart surgery to angioplasties and stents, and now, to a new kind of heart valve from Edwards Lifesciences, Medtronic, and Abbott Laboratories. In the words of one scientist, the Sapient Valve is "a game changer," because surgery won't be required--the devide can be snaked into the chest through a catheter. If it's a game-changer for patients, it will also be a game-changer for healthcare providers. And assuming that the FDA and the trial lawyers don't find a way to shut this innovation down, it could be a major export item.

So the goal should be to provide the most efficient, least-obstructed--and therefore cheapest--pipeline from consumer demand to medical supply. If the government wants to help, it can mostly help by funding the sort of medical research that makes disease and treatment cheaper. Rationing is not popular, especially in a news-rich environment; indeed, to the extent that rationing cripples the process of ramping up supply--and the lower costs that come from economies of scale--then that rationing process leaves healthcare not only scarcer, but more expensive on a per-patient basis.

Thus the choice: Do we want less of an item and more expense, or do we want more of an item at less expense--and greater quality? That should be the no-brainiest of no-brainer questions, but in Washington, the issues are always cast in the shortest of short terms. If it bumps up the deficit in the next year or two, it's bad. Period. End of discussion. And that means that long term health and wealth are consigned to the present-value dust bin of the over-the-horizon the future.

Newt Gingrich Defends Serious Medicine--update

2011-04-01T18:08:00.000-04:00

Tweeted out to more than 1.3 million people.

Newt Gingrich and Serious Medicine--Vindicating the Upward March of Science and Technology

2011-04-01T09:45:00.005-04:00

Newt Gingrich has taken a bold stand on behalf of scientific advancement, better public health, and economic growth: As reported in Politico this morning, he stood up for funding of the National Institutes of Health. At first blush, Gingrich’s stance might seem like standing up for apple pie--not bold at all. But in fact, the politics of science, left and right, are prickly and tricky. It seems, today, that it’s a lot easier to find opponents of science than proponents, at least in policy circles. And yet of course, it’s science and its handmaiden, technology, that opens the door to both better personal health and more economic growth.

From the left, Gingrich is confronting a peculiar school of ideology that holds that medical science is less important than social science. That’s the sort of politico-bureaucratic thinking that gave us Clintoncare and then Obamacare; it’s an obsession with health insurance, as distinct from health itself. Furthermore, it’s the idea that scientific advancement is less important than social justice; indeed, it’s the fear that scientific advancement will somehow waylay the march toward equality and social justice. On top of all anti-technological thinking come the Greens, who see just about any sort of progress as a transgression of their steady-state worldview.

And on the right, Gingrich confronts a strain of libertarian purity that rejects the idea that collective political action can accomplish anything worthwhile. Such a vision would be news to the leaders who mobilized science and technology to win, say, World War Two, or to eradicate smallpox or to build the Internet, but it’s a strong and well-funded impulse in Washington today. The Cato Institute, for example, has called for abolishing the NIH. The scientific establishment, to be sure, does itself no favors when it embraces the “magical thinking” of the Greens on carbon dioxide, but that’s an argument for checking-and-balancing Big Science, and for pointing it in more constructive directions--not eliminating it.

Ideological blips aside, the last three centuries of the industrial revolution have demonstrated the power--and popularity--of scientific discovery, technological innovation, and a rising standard of living. Indeed, as China and India remind us, the rest of the world is now joining in. We can all benefit from techno-marvels (even as we defend against some of them), but we know for sure we will have to compete to reap the greatest benefit.

It’s to Gingrich’s enormous credit that he sees the value of that big-picture reality, even it costs him politically in the short run. As Politico’s Kate Nocera reports:

Gingrich differentiated himself a bit from cut-first-ask-questions-later Tea Party Republicans, saying he helped balance federal budgets in the 1990s through a combination of smart reductions and targeted funding increases to critical research agencies that help improve care and contain costs long-term, the Institute of Medicine and the National Institutes of Health.

Gingrich said he was “deeply opposed” to the proposed billion-dollar cuts to the NIH and while the medical center needed bureaucratic reforms, investing in research now would save incredible amounts of money in the future – especially relating to diseases like Alzheimer’s and Parkinson’s.

Gingrich is right. We won’t save much money on healthcare by chipping away at existing treatment models. Instead, we will save money by transforming existing treatment models, to the point where the disease itself is transformed out of existence. That is, we will cure diseases, not just care for them. It’s cheaper to beat than to treat.

Let’s take Alzheimer’s Disease (AD) as an example. As former Supreme Court Justice Sandra Day O’Connor wrote last year, we are spending nearly $200 billion a year on AD care, mostly through Medicare (plus another $200 billion a year, we might add, in uncompensated costs for caregivers), and yet we are spending only around $500 million a year on AD research. That’s penny-wise and pound-foolish.

Obviously, it’s cheaper, as well as more compassionate, to cure the malady than it is to care for it. As O’Connor observed, we don’t spend money on polio anymore, not because we streamlined treatment, or because we are heartless, but because we eliminated the disease itself. Or as the Alzheimer’s Association puts it:

Meeting unmet medical needs for both prevalent and rare conditions promises even greater benefits. Consider again Alzheimer’s disease. In addition to the heartbreaking human toll, without a disease-modifying breakthrough, the cumulative costs of care will exceed $2 trillion in the next decade and $20 trillion from 2010 to 2050. The number afflicted will soar to 13.5 million. A breakthrough by 2015 that delayed the age of onset of Alzheimer’s disease by just 5 years, however, would mean 1.6 million fewer affected by Alzheimer’s and savings of $42 billion a year to Medicare and Medicaid by 2020, and more than $362 billion a year by 2050. Research into Alzheimer’s treatments and even potential vaccines is underway in America and, with enhanced and sustained support, provide our greatest promise for reducing the spiraling Medicare and Medicaid costs associated with this disease.

To put it another way, in 2010, AD is costing America about 1.2 percent of GDP, headed toward four of five percent of GDP in the coming decades. Speaking of the financial impact of AD treatment last year, one top researcher chose a vivid metaphor that’s even more vivid this year: "We have a tsunami coming at us, and we're sitting in a rowboat," said neurologist Richard Mayeux of New York's Columbia University to the Washington Post in 2010. Surely that can’t be a good idea. So a “cure strategy” might seem like an obvious approach. We will all still die, of course, but we live longer and better first. As an economist might say, in living longer, we will more fully amortize the investment we and society made in our own human capital.

And there’s an important lesson here for conservatives and libertarians: The reality of rising costs is what drives people to seek health insurance of various kinds, and to seek government help in paying their bills. And that treatment, as we have seen, is expensive. It’s expensive because disease is expensive. In February, I elaborated on this point for The Washington Examiner, citing Baumol's Law. So the goal is harness the power of industrialization and mass-production to make goods cheap. That’s why aspirin and bandages, for example, is cheap. The wondrous inventions of one era are the commonplace of a later era. That’s part of progress.

As we have seen, the left has sought to address health concerns by overlaying social science on top of medical science, even if such spending is a) unpopular, and b) not the real solution. So Gingrich was on to something when he said in the same Politico piece: “When Obamacare is repealed we can’t go back to a world that led us there, which was the same world that led us to Hillarycare which is why we have to have a replacement.” In other words, even if Obamacare is repealed--and Gingrich hopes and expects that it will be--the same political forces that propelled its enactment will still be in place, waiting for a future opportunity to re-enact a similar bureaucratic program.

For his part, Gingrich’s healthcare solution is more than just cures: In the same talk that Politico reported on, he also called for tort reform, which would help end the Serious Medicine Crash. And he advocates rooting out Medicare and Medicaid fraud, suggesting that anti-fraud efforts could save $70 billion to $120 billion a year.

And he further added, “And the cost of defensive medicine today is $800 billion a year.... If we fixed these two things we would have more than enough money to cover the uninsured.” Eliminating defensive medicine is another way of saying, “improve treatment.” And one key to improving treatment is the profound acceleration of medical technology, to Silicon Valley levels of productivity and achievement, as argued here at SMS.

So when Gingrich talks about healthcare overhaul, he is talking about many interlocking elements: funding medical research leading to cures, weeding out fraud and abuse, squelching abusive and counter-productive lawsuits, and then using information technology to improve healthcare delivery across a nation of 300 million Americans. This is a huge challenge, of course, because these gains must be frameworked within a proper respect for ethical and privacy concerns. To that list we can add, by the way, a thorough overhaul of the way that both the FDA and the NIH do business--as Gingrich has advocated many times. The FDA is too restrictive, and the NIH, in the mordant phrase of Lou Weisbach, co-founder of the American Center for Cures, “seems more interested in doing curiosity studies” than in focusing on translational research. It would, indeed, be easier to justify NIH spending if it thought of itself in more of a DARPA model. That is, decide what needs to be done, and then finance the doing of it.

In other words, this medical agenda won’t happen without a lot of thought--including thought by governments at all levels. We might ask ourselves: Is anybody going to trust private companies to do all this? Give insurance companies, for example, the power to push aside lawsuits? No. True reform will only come from massive buy-in across the whole of our society. And the process of achieving that buy-in is inevitably political. Indeed, American history shows that what’s popular, and what works, and what endures is a productive cooperation of the two sectors, public and private.

And there’s abundant recent evidence that this public-private approach has succeeded in healthcare--that is, the fusion of medical research and entrepreneurship, for the betterment of both.

Harvard health economist David M. Cutler has been prominent in quantifying the economic gains of better health; he has showed that the gains vastly exceeded the economic cost of healthcare. This is an important point: If one only looks at the cost of healthcare--$2.6 trillion at last count--and not at the benefits (not limited, of course, to economic benefits), then healthcare looks fantastically expensive. Yet if one calculates the value of better and longer living, then the picture looks completely different---like a bargain, in fact.

As Cutler wrote in his 2003 book, Your Money or Your Life, "The conclusion is clear: We spend a lot more on heart attack care than we used to, but we get even more in return.” And the same applies to other kinds of medicine: “We spend a lot on medicine, but we get more in return. . . . a central feature of the medical system is the increasing value it provides over time.”

We might note, of course, that not all healthcare is that productive. It’s smarter and cheaper--and ultimately more compassionate--to deal with disease before it strikes. That’s the logic of vaccines. But at the same time, the requirements of compassion necessitate spending money even on “futile care.” The challenge, then, over time, is to improve health so that we spend money on genuine rehabilitation. Helping the paralyzed to walk again, for example, is vastly superior to merely financing wheelchairs.

Other economists have done similar work on other illnesses, showing how cure is cheaper than care. Two academics, the University of Chicago’s Tomas Philipson and Stanford’s Eric Sun, estimate that the savings in the US from a single treatment for AIDS--the so-called HAART “cocktail”--have totaled at least $330 billion. Once again, healthy people live longer, produce more, and pay more taxes. Another study on cancer found similar results: For a single decade, 1990 to 2000, researchers calculated that improvements in cancer survival generated a social surplus of between $1.6 trillion and $1.9 trillion.

Who made money from that progress? We all did. Out of those gains, health care providers and pharmaceutical companies did well, but in fact, they captured only between 6-19% of that total. In other words, of all the economic gains from enhanced cancer survivability, individuals, and the economy as a whole, captured between 81 and 94 percent. That’s a lot of money--in the trillions. So we can see, greater wealth for a healthy workforce is a spillover of Serious Medicine.

And the prospect of using Serious Medicine to nurture a healthier workforce should attract the attention of political leaders looking for solutions to the deficit crisis. Otherwise, when they tell the truth about fiscal challenges they will be greeted with partisan criticism--and little science-based support, because science was not engaged in the policy formulation process.

Last summer, for example Rep. John Boehner, then the Republican Minority Leader, observed that an entitlement-cost solution should probably include raising the retirement age to 70. Many Democrats rounded on Boehner, even as “deficit hawks” agree that a raising of the retirement age is an obvious solution. So Boehner and like-minded leaders would have been well advised to embrace the idea that curing AD is cheaper than paying for its ill effects. And how much would it add to the GDP if everyone works ten years longer? Unfortunately, the prospect of science as a transformative agent is little heard in Republican circles these days. It’s just not found in the talking points. Some on the right seem to think that rhetorical escalation and ideological zeal will do the job of crushing Big Government. They are wrong. The problem of AD, to name just one costly illness, is not a problem of ideology, or market forces. It is a problem of science and medicine. If people get AD, they will suffer--and we will pay. In such an instance, the financing mechanism is less important than the costly reality of the disease itself.

For his part, Gingrich has always understood that conservatism can’t flourish without a modernizing, pro-technology spirit. After all, it was the bourgeoisie--the Tea Partiers of their era, some might say--that championed the Scientific Revolution of the 17th century (Newton, Van Leeuwenhoek, Leibniz, Boyle). And it was the enlightened fusion of science and statecraft in that era that led to the institutionalization of scientific and economic progress. In 1660, for example, the Royal Society for Improving Natural Knowledge was established. For three-and-a-half centuries, the Royal Society as been the intellectual equivalent of a holding company for just about every English scientist. And Britain, of course, was the mother country of the industrial revolution.

As far back as his book Window of Opportunity, published in 1984, Gingrich argued that the American right, by itself, was not strong enough to change the political culture. The right needs to keep a principled alliance with science and technology, because it’s in technology that the invisible hand of the market is so often manifested. That is, people know that market-capitalism works better because they can look around and see its fruits. That’s a political winner: aligning the right with the forces of change and progress to do battle, if necessary, with the anti-technology left. (Although one can always hope, of course, that pro-technology Democrats, in the FDR/JFK tradition will join the effort, and make scientific advancement a consensus issue, as opposed to a partisan issue.) That's the Reagan model; the Gipper always wanted to associate himself with science and technology.

Indeed, technology is the great game-changer--consider the device on which you are reading this blog posting. And oh yes, it's better technology that enables wars to be won at less cost.

If we want to be healthy here at home, if we want to shrink federal spending, if we want to avoid defeat in the brain race with China--to say nothing of an actual conflict with China--we will have to embrace science. In a better America, support for science and technology would be completely bipartisan and mostly non-controversial.

Unfortunately, that’s not the case. So we should be all the more grateful that someone such as Gingrich stood up and said what needed to be said. Politics aside, the fate of the nation is at stake. We should all be able to rise above the blinders of ideology to see that centuries-old reality.

"Evan Bayh Admits Health Care Bill Does Not Stop Rising Health Costs"

2011-03-29T18:49:00.004-04:00

Mediaite's Alex Alvarez catches this damning admission from former Indiana Senator Evan Bayh; Obamacare doesn't do anything to control healthcare costs:

The real issue that was not addressed, Laura, that you’ve raised now, and I think appropriately, is the cost, the cost to both the government and to your listeners. We need to take steps now to get the costs of health care under control. That was not dealt with really in an aggressive way in this legislation. I think it now needs to be.

Interesting that Bayh voted for the bill that passed last year. And yet now he says, present and future tense, that "we need to take steps now."

So when will start controlling healthcare costs? Answer: When we realize that the intellectual model that we have been following--rationing not only care, but also, in effect, rationing medicine and medical research--is a non-starter. Yes, Obamacare promised to do just that, but, well, that's politics.

The real-world reality is that restricting payments for the treatment of ill people is not politically acceptable. By contrast, restricting the flow of capital to medical research is, unfortunately, possible, because the public doesn't quite know what's going on. But such a restriction makes healthcare even more expensive, because it's cheaper to vaccinate than to treat, and it's cheaper to cure than to care.

Unfortunately few Americans understand the nature of the drug and device "pipeline." As the economist Bastiat said, there's the "seen" and the "unseen" in political economics, and longterm medical research is mostly unseen.

The opposite model, of course, is Serious Medicine, which argues that what when people are healthier, they are less expensive to care for. And can work longer and more productively.

The US Government neglects a once-great industrial sector--pharma. Where exactly, are the jobs we need going to come from? To say nothing of the cures?

2011-03-27T22:00:00.005-04:00

The Export-Import Bank of the United States is holding a conference in Washington DC this week, and what's notable about the agenda is the absence of any representation of the pharma/medical device sectors on the list of speakers. One would surmise, therefore, that the medical sector just isn't that important to export-minded economic planners. Instead the speakers are heavy with diplomats, reps from tech companies, from construction companies--and, of course, well-connected DC-based lobbyists.

Indeed, it's easy to see why the pharma sector was overlooked. In 2009, according to the International Trade Administration's Office of Health and Consumer Goods, pharmaceutical exports from the US were about $46 billion, and imports were $82.5 billion; thus the US has a negative pharma trade balance of $35.5 billion. Not so long ago, the US pharma sector was a huge net exporter, but decades of political attacks on the pharma industry, combined with restrictive legislation, have taken their toll. This decline in US pharma competitiveness is measurable and quantifiable, as Michael Milken noted recently.

We should worry about the decline of any US industry, of course, but surely we should worry in particular about the decline of the medical industry, for the simple reason that medicine is a key variable as to whether or not we keep our health Admittedly, the rest of the world is making medicine, but overseas firms are making mostly generics--copies of extant medicines. In other words, the rest of the world is mostly not innovating, it is instead free-riding, and so that's why we are suffering a Serious Medicine Crash. In the long run, we will have to find a way to recapitalize the medical sector, and we probably will, because demand for medicine is always strong. That renascent pharma sector just might not be in the US, that's all.

In the words of Serious Medicine strategist Jeremy Shane:

One of the fastest ways to reduce costs for American consumers and increase use of American technology would be to export the fruits of our drug research and diagnostics. The larger the population to which new drugs or genetic or diagnostic tests are distributed, the faster we will learn which drugs work best for which groups of people, and the greater the opportunity for US-based innovators to realize value from great science and US based manufacturing of new therapies.

But none of these economic opportunities seem to be of interest to the Obama administration. Having enacted a new healthcare finance scheme at enormous fiscal and political cost, the Obamans don't seem interested in revisiting any facet of the healthcare issue. Indeed, to the extent that the the drying up of the drug pipeline means that government agencies spend less on healthcare--no matter what the longterm consequence to public health--the Obamans might even be happy to see the medical sector wither away. That's speculative, of course, but we know from the Ex-Im speakers' roster that nobody in Washington is doing anything to change the faltering status quo.

Improving Alzheimer's Treatment: The Key to Solving the Retirement/Entitlement Crisis

2011-03-27T16:10:00.002-04:00

A sobering article in Newsmax about what Americans expect to see in their own retirement. Under the headline "Obama's Fiscal Policies Doom Retirement for Millions," writer Chris Gonsalves cites data from the Employee Benefits Research Institute, showing how Americans fear that they won’t have enough money for their retirement and, as an understandable consequence, are planning to work longer.

It’s perfectly understandable that Americans are pessimistic about the traditional retire-at-65 scenario, and are resigned to working longer. But from a public policy point of view, all of us could help if we could create a political constituency in favor of a cure--or even a significant improvement in treatment--for diseases that afflict the elderly. Arthritis is one such malady, as are COPD and diabetes. But perhaps the most fearful of all is Alzheimer’s Disease (AD).

It’s AD, among other illnesses, that could hobble aging Americans, preventing them from working the jobs they will likely need to be working in the decades ahead.

According to the EBRI report, a rising percentage of Americans are fearful that the retirement income they need won’t be there for them:

27 percent of American workers are not confident they'll have enough money to retire and live well. That's up 5 percent from last year, and marks the highest level of unease ever measured in the 21 years of the survey by EBRI, a Washington-based nonprofit research firm focused on health, savings, and retirement issues. Only 13 percent of the 1,258 adults surveyed in January say they are very confident about their retirement outlook, tied for the all-time low set in 2009.

And so as a result, people are planning on working longer:

Fully 36 percent of Americans expect to be working after age 65. That's up from 11 percent in 1991 and 25 percent in 2006. Nearly three quarters of workers, 74 percent, say they expect to have to work after they retire to make ends meet. Currently fewer than 23 percent of retirees report working for pay.

The EBRI report focuses on the need for seniors, and future seniors, to save more money now. But we might further note that these numbers underscore the reality that, as a practical political matter, nobody in Washington is going to be slashing away at entitlement spending, no matter what the elite deficit commissions might wish. If Americans are fearful of their retirement security, and the retirement security of loved ones, they’re not going to agree to cuts in such spending--the polls show that overwhelmingly.

And yet if we step back, we can see that the entitlement crisis is really a retirement crisis. That is, people need money on which to live. If they can depend on the government, that's not so bad, so long as the government has the money. But fi they can't depend on the government, at least not as soon as they thought, well, they had better be healthy enough to work.

To be sure, if America were to confront a genuine Greece-style crisis, everything will be on the table, and everything will be subject to cuts. But for now, so long as Washington can find money to pay for Afghanistan, Libya, NPR, and wasteful education programs, few senior citizens, nor their advocacy groups, are going to agree to any kind of cuts. So if the policy elites wish to continue their anti-deficit campaign, it would be behoove them to heed the wisdom of, for example, Sandra Day O’Connor and Maria Shriver, both of whom wrote last fall that we are spending hundreds of billions, headed toward trillions, on AD, while spending virtually nothing on a cure. The real cost savings for Medicare, they added, will come from successfully treating AD. And of course, as noted here at SMS in the past, if we could forestall AD, we could then talk about raising the retirement age for entitlement benefits. And that would eliminate much of the deficit/debt overhang.

Oh and by the way, if we could develop an AD treatment, we would have developed a new export industry, because an enriching and aging world wants the same medicines that we want.

But alas, few in the political/policy world seems to be talking about a cure strategy. They would rather, instead, argue about financialist ideology. Such debates can be important, but the problem staring us in the face is medical, not financial. And so the gloom deepens.

"The Pro-Diabetes Board" -- a reminder of the ultimate cost of shortsighted penny-wise, pound-foolish approaches to health spending

2011-03-18T14:48:00.007-04:00

A powerful editorial in The Wall Street Journal this morning, "The Pro-Diabetes Board," detailing efforts by Washington State to use comparative effectiveness review (CER) methods to crimp down on Medicaid and other state spending by de-funding glucose self-monitoring tools, such as finger sticks. As the Journal edit notes, self-monitoring is long established as the best way to deal with diabetes, but now, in this new Obamacare era, rationers--motivated in part by saving money and in part also, we can say, by an ideological desire to shrink the healthcare sector, just as the President says we must. And in their zeal to "bend the curve," they are ignoring established medical best-practice.

As the Journal notes, this "Scarcitarian" approach to diabetes is likely to travel from Washington State to Washington DC:

Which brings us from Washington state to Washington, D.C. The Health Technology Assessment program's director, Leah Hole-Curry, was appointed last year as a governor of the comparative effectiveness board established by ObamaCare. The national board is known as the Patient-Centered Outcomes Research Institute, yet at an early meeting in November, Ms. Hole-Curry and the other 14 governors debated whether or not patients were the institute's "primary constituents."

Now this agenda is on autopilot. The institute is built on self-executing funding—that is, not subject to annual appropriations like other federal programs—and dedicated taxes on insurers. At the very least Americans deserve some honesty about who these people are and what they favor.

Former Arkansas governor Mike Huckabee has been attacked for questioning CER in his recent book, but here we see the way the rationing process works out in practice, just as Huckabee said. We might pause to note that the idea of CER is a perfectly valid, because more information is always better than less information.

CER is valid, that is, with two caveats: First, it has to make room for personalized medicine (and personalized medicine will not flourish till the trial lawyers are pushed out of the way, as discussed here many times) and second, CER has to be managed by experts that people trust. The "death panel" allegation struck a nerve because there's just too much evidence, here and around the world, that nationalized health systems end up pushing toward euthanasia. And so the public simply will not have trust if they get the feeling that those running the healthcare system do not have their best interests at heart.

We might further note, by the way, the ultimate futility of this Scarcitarian approach to cost-saving. Washington State is not going to save money, long term, with this CER-ish method, and neither is Washington DC. Why? Because people are still sick, whether or not they are being properly treated. Indeed, if they aren't treated, they will get sicker faster. It is shortsighted, penny-wise and pound foolish, because diabetes needs to be treated properly from the beginning, and good treatment includes good monitoring.

The cynical "best" that can be said about such an approach is that it saves money for the incumbent regime. If Washington State, or Washington DC spend less money on healthcare this year or next, that's good news for whoever's in charge. That is, he or she can say, "Hey, I saved money on my watch!"

Never mind, of course, that ass diabetes worsens, it gets more expensive--nerve damage and intense pain, limbs have to be amputated, and, of course, kidney failure resulting in dialysis, costing an average of $77,000 a year per patient. Of course, from Washington State's point of view, there might be a kind of sneaky fiscal logic, because the dialysis program is a federal program. So if patients get sick enough, they become a federal burden. That's a federal entitlement, in place since 1972, and no sign of it going away, even if we wanted it to.

And thus a key Serious Medicine Point: We have had universal coverage, long before the enactment of Obamacare. It's just that the way we provide that coverage, at present, is fundamentally incompetent, because we mostly focus on healthcare finance, as opposed to actual health itself. Sick people are more expensive than healthy people. So by managing national health badly, we spend more. It's almost as if our healthcare system were designed by the nursing home industry.

Gary Puckrein, president of the National Minority Quality Forum, makes the further point that four in ten diabetics are admitted to a hospital every year--that's expensive, and inevitably costs localities and states money, as well as the feds. Indeed, overall, diabetes costs the US some $174 billion a year, according to the American Diabetes Association.

So if we really want to save money on diabetes, we would make the hardheaded calculation that it's time to do something preemptive about diabetes--like cure it. But that's not a thought that the Obama administration, locked into to its retroactive fiscal model, seems to be contemplating.

An American Center for Cures in Los Angeles

2011-03-11T15:59:00.002-05:00

Intriguing article in the Los Angeles Business Journal by Dr. Robert Kotler, arguing that Los Angeles should be the home of the American Center for Cures (ACC). The idea is to establish one place to be a hub for not just medical research, but medicine development. As in, consciously turning research into cures for people, the way that the Defense Advanced Research Projects Agency funds specific ideas and inventions for the US military.

The ACC is the brainchild of Chicago businessman Lou Weisbach and Miami urologist Dr. Rick Boxer.

Weisbach had been arguing to locate the ACC in Chicago, but of course, the ACC could flourish anywhere there's adequate capital and sufficient legal and regulatory protection. What's most important is to get the ACC going somewhere.

Alzheimer's Disease: "I say the cure will come as quickly as the American people want it to come.”

2011-03-08T14:33:00.013-05:00

Writing for the Penn Gazette, the alumni publication of the University of Pennsylvania, Samuel Hughes takes a close look at the Ivy League school's efforts against Alzeheimer's Disease.

One of the Penn experts quoted is Dr. John Trojanowski, the William Paul Measey-Truman G. Schnabel Jr. Professor of Geriatric Medicine and Gerontology, who notes that the annual cost of Alzheimer’s care in the US now at about $172 billion. Globally, the cost is about $604 billion, and by 2050, that number could rise as high as $3 trillion, Trojanowski says. A five-year delay could cut that number to around $1.5 trillion. “Half of $3 trillion is certainly a lot of money,” he adds. “But it’s far less than $3 trillion.”

The whole article is fascinating and full of detail, but in these paragraphs, Hughes lays out both the enormous cost and the enormous potential. We could have a cure, if we really wanted one, says Trojanowski:

Thirty years ago the late, great medical essayist Lewis Thomas called Alzheimer’s “the disease of the century.” While AIDS may have justifiably stolen the spotlight in the 20th century, the demographics and staggering costs associated with Alzheimer’s make it well-positioned to reclaim the title in the 21st.

“When Alzheimer described Alzheimer’s disease in 1906, life expectancy was 48, and the top 10 or 20 causes of death were infectious diseases,” points out Trojanowski. “A hundred years later, people are living to an average age of 78 in developed countries. And now Alzheimer’s, which was ignored, has become an epidemic. Alzheimer’s has replaced diabetes as the sixth leading cause of death in developed countries.

“The current [global] cost of Alzheimer’s disease is $604 billion,” he adds. “If those costs were the economic output of a country, then the cost of Alzheimer’s care would mean that Alzheimer’s is between Turkey and Indonesia as the 17th-largest economy in the world. If it were a company, it would be the largest company in the world, larger than Walmart and Exxon Mobil. It’s affecting China, Southeast Asia, Australia, Indonesia. So it is a global problem. A global epidemic—with horrendous costs.

“We really owe it to ourselves and future generations to create a world without Alzheimer’s disease,” he adds. “And I think we can. Twenty years ago I wouldn’t have said that. We didn’t know enough. When asked at support groups by families that had an Alzheimer’s patient, I would almost tearfully have to say, ‘I have no idea.’ As a physician, to admit that there was nothing that you could do—and that you had no idea when something could be done—was emotionally difficult. And now it’s changed so dramatically that I say the cure will come as quickly as the American people want it to come.”

Words worth repeating: "The cure will come as quickly as the American people want it to come."

One of the arguments of of this blog is that Serious Medicine does, in fact, need a strategy. And strategy, of course, means aligning means and ends. That is, can we mobilize what we have to achieve our goals? It's not easy, of course, but the greater the stakes, the greater the reward for success, and the greater the cost for failure. And right now, we are losing the war on Alzheimer's. But, as Dr. Trojanowski says, we don't have to lose. We could win this fight against AD if we wanted to.

“The operating environment for pharma is worsening rapidly.” If the pharma sector is under-capitalized, then we will be under-medicalized.

2011-03-07T09:22:00.005-05:00

“The operating environment for pharma is worsening rapidly." That's a quote from a Morgan Stanley research document, cited in The New York Times story this morning, headlined, "Patent Woes Threaten Drug Firms."

This is what a Serious Medicine Crash looks like.

The reality is that the pharma sector has suffered a severe de-capitalization--and it's likely to get worse. As the Times piece notes, the stock prices for Pfizer and Merck have fallen some 60 percent in the last decade, even as the S&P index has risen 19 percent. And that's why Big Pharma is laying off thousands--including researchers.

This shrinkage is due in part to a drying-up pipeline of the new-drug pipeline--a drying-up exacerbated, of course, by the trial lawyers and the FDA--and also to other factors, such as the rise of generics. Some 75 percent of prescriptions drugs consumed in the US are generic; in addition, governments are imposing ever-tougher price controls, around the world and now, increasingly, in the US. As the Times observes:

The drug industry has long said that Americans fueled the research engine, spending much more per capita on prescriptions than in any other nation, and paying the highest prices for prescribed medicines.

In other words, just as the US dollar has been the reserve currency for the world, and the US military has been the "reserve defense" for the world, so too the US drug market has been the "reserve pharmacy" for the world. That is, demand here in the US provided the economic surplus to the pharma companies to make the drugs needed.

But that "reserve pharmacy" role seems to be ending. Here's a look at this chart in the Times, based on the same data depicted in past postings at SMS. As we can see, expenditures up, drug approvals down.

So we can ask: What's the new plan for replenishing the drug pipeline? Not just for us, here in the US, but for the world? Some people, of course, despise the pharma industry, and would like to see it crippled or crushed. And so we might ask: What's their alternative plan for new medicines? Where, in their reckoning, should new drugs come from? Of course, most people don't really have an opinion on the pharma industry, either way. Still we might ask those folks: What are you going to do when you confront a Serious Illness, and you discover that the medical cupboard is bare? As Thomas Hobbes said, "Hell is truth seen too late."

Ultimately, American leaders--and world leaders--are going to have to figure out a new way to inject capital into the pharma sector. Not for the sake of next-gen lifestyle drugs such as Viagra or botox or Latisse, but for the sorts of drugs needed to combat premature death and disability. Alzheimer's, for example, is a worldwide problem; if hundreds of millions of people suffer premature dementia, that's going to be a lot more expensive to treat than it would be to preempt.

The world may or may not be able to agree on a lot of things, but surely Serious Medicine is one area in which every human being has a stake.

If war is too important to be left to generals, then medicine is too important to be left to politicians. The US Marines and Afghanistan; DARPA and Serious Medicine: Are we fully mobilizing our national potential for Serious MILITARY Medicine?

2011-03-03T12:51:00.009-05:00

Are we utilizing technology to the fullest extent possible to protect our service personnel in combat zones? And to minimize fatalities and help the wounded to completely recover? And by that I don't mean "fully recover as much possible within the constraints of current medical technology." Instead, we mean, "fully recover given the maximum mobilization of medical potential." There's a huge difference between the present-day actual and the future-possible.

And, as we shall see, the same idea--apply as much technology as possible--is as applicable to Serious Medicine as it is to the US military. Indeed, counterintuitive as might seem to some, there's a robust common link between military technology and medicine. In the end, what matters in both "miltech" and medicine is the application of science and technology. And while war and medicine have much different purposes, in their technological dimension they share a common ancestor: The Industrial Revolution. That is, the power to produce not just one, but millions. Just as we can and should mass produce the tools we need for national security, so, too, should we mass produce the tools we need for medical security. If we do mass produce them, they will be not only more abundant, but also better and cheaper.
Unfortunately, we have fallen out of the habit of thinking that way, and that’s bad for both the military and for medicine.

We can start by focusing on medicine. Specifically, we illustrate the difference between the medical actual and the medical possible by considering a news article that appeared in the front page of The Washington Post this morning. In a well-reported and also deeply moving story, reporter Greg Jaffe chronicles Marine Lieutenant General John F. Kelly, who lost his son, Marine Second Lieutenant Robert Kelly, in Afghanistan last November. That's Gen. Kelly pictured above, awarding a Purple Heart to a comrade of his late son, Lance Corporal Sebastian Gallegos.

After paying due respect to 2Lt. Kelly and LCpl. Gallegos--and all the other heroes who have sacrificed so much--we might next consider whether we are doing all we can to keep safe our armed services and their personnel as we put them in harm’s way.

Here we should note that the US military has already made enormous progress in military medicine. Back in January, The New York Times reported that the survival rate for American service personnel taken to hospitals in Afghanistan has improved dramatically, just in the past five years. In 2005, according to the Times, 19.8 percent of those evacuated to military hospitals died. By 2010, that death rate was down to 7.9 percent.

To put it another way, that's a 60 percent decline in fatality in just five years. It would be easy to go back further, to earlier wars, to the point where the death rate was half or more--and of course, it wasn't that long ago, that military hospitals were little more than amputation mills, or didn't exist at all.

Meanwhile, there's the additional issue of restorative and regenerative medicine. Physical therapy is much improved; war has often been a catalyst for such advances, which then spin off. It’s worth remembering that plastic surgery emerged during World War One, as doctors started trying to give wounded troops at least the beginnings of a renewed post-war life. And World War Two saw the mass production of penicillin, opening the door to a cornucopia of antibiotics.

It’s heartening to see some f what the most forward-looking unit with the Defense Department is thinking up in terms of medicine; Wired magazine recently cited some what the Defense Advanced Research Projects Agency has been working on. It's quite a list, according to Wired's Madhumita Venkataramanan, including programs for battlefield diagnostics, improved tissue engineering and regeneration, and even improved eyes for soldiers.

We need all of this--and much more. Whatever our opinion as to the wisdom of the Afghan war, we will always, of course, support the troops. They are, in the most literal sense, our brothers and sisters, and they are doing what we, through our elected government, have asked them to do. But our support should consist of more than admiration and compassion--and maybe chipping in to a USO fundraiser. As a nation, our collective support should be not only the best available wisdom about true national security for America, but also the best available wisdom about military technology and military medicine. If we do that, as we have seen, not only will we be doing right by our men and women, but we will also find the benefits feeding back to our own society.

And yet at the same time, it would be nice to think that we are prosecuting our wars in the most cost-effective way possible. Let’s take a look at this passage from Jaffe's article, describing the paternal concern of the elder Kelly, the general, in regard to his son, the lieutenant:

Kelly knew that Robert went out on almost every patrol with his men through mine-filled fields. One of the Marines at Bethesda told him that Robert was "living on luck." [emphasis added]

Now we might just step back and ask ourselves: Isn't it, er, interesting that the US military is still fighting in Afghanistan by sending Americans on patrol through fields of landmines? Yes, boots on the ground are a good idea, but boots on landmines are a bad idea. I understand the idea of counter-insurgency, or COIN, but surely we understand that we can't win hearts and minds by marching our people around so they get blown up. Aside from the obvious humanitarian considerations, the Afghan hearts and minds we are trying to win are not impressed with us and our ways if we can't outsmart the handmade bombs that the Taliban are planting. Meanwhile, US casualties drain away support for a war on our homefront.

As Clausewitz, patron saint of all military intellectuals, reminds us, wars occur within a political context. That is, public opinion in both Afghanistan and America will be just as decisive as any military battle. So COIN, without the proper strategic thinking--about not only military buildup and preparation, but also the politics of the countries involved--is unlikely to prove effective over the long run.

Yes, of course, some might say, planning is nice. But sometimes nations must react, and quickly.

Perhaps we had no choice, therefore, in the War on Terror. After all, as former Defense Secretary Donald Rumsfeld once put it, “You go to war with the Army you have. They're not the Army you might want or wish to have at a later time.” So sure, we had to go to Afghanistan with what we had. But wait: Rumsfeld made that "you go to war" comment on December 8, 2004. That is, he was making excuses for a lack of preparation more than three years after US forces first arrived in Afghanistan. In other words, by the time Rumsfeld said those words, he had had plenty of time to think about what equipment our warriors needed and to ask for whatever resources he felt were necessary. But perhaps, as I wrote at the time, Rumsfeld was too busy writing CYA memos to think cogently about the battlefield situation.

So there should be a better way. But what better way? The answer is as old as the industrial revolution: Replace "labor"--that is, the lives and limbs of our young people--with capital, and the technology that capital + ingenuity can create.

We've done it before. Within four years of Pearl Harbor, the US government had totally transformed its warfighting. A war that began with infantry and battleships ended--successfully, of course--with dozens of new aircraft carriers, effective radar, B-29s and, of course, A-bombs. Yes, there were some fiascoes of inadequate technology during the course of that march to victory, but our ultimate victory speaks for itself.

Indeed, we won WW2 suffering a tenth of the KIAs that the enemies that we defeated suffered fighting against us. In a nutshell, that's the way to win a war. As Gen. George Patton said, you don't win a war by dying for your country, you win a war by making the other s.o.b. die for his country. Admittedly, we were spent close to 40 percent of our GDP on the military, but it was worth it. America’s fighting men and women were worth it. And if the Global War on Terror is worth it, then we should be willing to spend what it takes to fight it effectively.

Instead, we tried to fight in Afghanistan and Iraq on the cheap, at least financially. That is, we scrimped on the sort of military R&D that could have saved lives--that’s why our men and women are still working their way through minefields.

Perhaps politicians figured that it was too risky, politically, to ask for the resources needed to rapidly develop effective countermeasures to the insurgents, or perhaps the pols were too busy with other priorities.

But we do know this: The result, on the ground, has been an inadequate hodgepodge of technological improvisations. As one Marine combat veteran of Iraq in 2004-5 recalled of the on-the-ground miltech that he saw in Al-Anbar province:

Nothing more frustrating than sitting in the opened air rear of a Humvee without up-armor while watching anti-IED [improvised explosive devices, aka land mines] engineers roll along in a "Star Wars"-looking machine. The USMC has never had the funding to do much more than the basics and when we have been given $'s we have usually botched it.

In other words, more than a year after the US invasion of Iraq, Leathernecks were still riding around in the “opened air”--that is, our troops were fully exposed to enemy fire--Humvees. Disgraceful. And yet as we know, through grit and determination, the Marines made a magnificent accounting of themselves in Iraq, anyway.

After nine years, we should be doing better than marching young men and young women through mine-laden fields in Afghanistan. Our fighting forces shouldn’t have to be “living on luck.” If we had really wanted to, this past decade. we could have figured out something completely different--something as radically innovative as that which emerges from Silicon Valley every few months. I have no doubt that DARPA has plenty of ideas for Iraq and Afghanistan--after all, DARPA's predecessor agency created the Internet. Indeed, we recently learned that DARPA is experimenting with a “cheetah-bot” that would bound across the landscape like a fast cat.

If DARPA can do that in the future, it could have done it in the past, with enough resources. Maybe, for example, DARPA could have made a "daddy long legs"-ish vehicle for COIN, so that human feet never touch the ground on patrol. Or maybe some sort of hovercraft. Or perhaps something altogether different. At minimum, the Pentagon, properly resourced, should have been able to figure out how to disable every mechanical device in a given area--that is, landmine clearance on a vast scale.

Speculative thinking? Sure. But that's how we win wars. And as the French statesman Georges Clemenceau declared, "War is too important to be left to generals."

Indeed, history shows us that generals are instinctively suspicious, even mistrustful, of technology. That's why, for example, Billy Mitchell--one of the most brilliant American officers ever, the visionary of American airpower--ended up being courtmartialed. (Fortunately, President Franklin D. Roosevelt posthumously vindicated Mitchell.)

This is not the place to delve too far into military psychology, but suffice it to say that the record shows, over and over, that top brass have rejected new ideas more often than not. The airplane was viewed with suspicion, as we have seen. And so to another military innovation, the tank--it took an outsider, Winston Churchill, to push armor on the British Army, which seemed perfectly satisfied with trench warfare. The trench warfare, of course, in which, as Churchill said, men fight machine guns with their chests.

History will eventually show what DOD knew and didn’t know, and what it asked for and didn’t ask for. But if generals weren’t getting what they thought they needed, they should have protested--or resigned. A prominent resignation or two would have gotten America’s attention.

And all the same arguments apply to military medicine--and to Serious Medicine. If war is too important to be left to generals, then medicine is too important to be left to politicians.

We need everything DARPA is doing now, and 10 times more. Our troops are worth it. So we need someone in the military, or in the civilian leadership at DOD, or in the government somewhere to say that we will set as a goal repairing spinal cords, so that those wounded in war will regain their motor power. And if we achieve that breakthrough, it will be a breakthrough for all of us. And so that's where the medical discussion ought to lead--toward all of us getting the benefit of DARPA-like leadership, whether we are in the military or not.

One last point: I think that a similar deep problem runs through both our medical thinking and our military thinking. And that is, a certain de-materialization of our approach to the world. Instead of medicines and drugs, and nuts and bolts, we seem to think in terms of bailouts and finance and ideology. We--or at least our leaders--think not in tangible realities, but intangibles of rhetoric and spin. And yet it is real thing--real machines--fight wars. And then it is other machines, and the products of machines, that save lives.

UPDATE: Another Washington Post reporter, David Brown, chronicles the rise of double-amputee and groin injuries among US personnel in Afghanistan. As Brown notes, the number of amputations and genitourinary (GU) wounds is up sharply:

In 2009, 75 soldiers underwent amputation and 21 lost more than one limb. In 2010, 171 soldiers had amputations and 65 lost more than one limb. GU injuries increased from 52 to 142 over the same period.

Of the 142 soldiers with genitourinary wounds who arrived at Landstuhl last year, 40 percent — 58 men in all — suffered injury to the testicles. Body armor, which has greatly reduced fatalities, usually includes a triangular flap that protects the groin from projectiles coming from the front. It doesn't protect the area between the legs from direct upward blast. Various laboratories are reportedly working on forms of shielding that would provide such protection. Medical staff at Landstuhl also noticed a rise in severe genital injuries last fall.

Uncle Sam and trial lawyers loot the medical sector as Naderites cheer: The capital strike on the healthcare sector--and our health--continues and worsens.

2011-02-26T22:57:00.013-05:00

The pharmaceutical sector needs capital. Not so the industry can get richer, but rather so that we can get better. It's not shareholders we should be worried about--it's us.

Everyone is free to criticize "Big Pharma," and muckrakers will sometimes make powerful and condemnatory points. But as we listen to the critics who have made a career out of Pharma-bashing, we should keep in mind a basic point: Nobody ever was cured through criticism. Medicine is life-improving and life-saving technology; by contrast, exposes, regulatory findings, and lawsuits are at best a means to an end. In the end that is, somebody has to figure out how to fix abuses and make healthcare processes cleaner, better, and more effective. And that's never the lawyers.

And yet today, the medical system is seriously out of kilter; it has, in word, been "lawyerized." Not just "regulated," which is fine, because the way our system works, but "lawyerized" in the sense that the real whip hand of regulation is not the career lawyers in the government, but rather entrepreneurial trial lawyers who form a new layer of regulation on top of the "alphabet soup" federal agencies and can make personal billions as they do so. That is, the lawyers and regulators are gaining, while the scientists and doctors are waning. This state of affairs might please the activist graduates of elite law schools, but in the long run, it's not going to please medical patients and their families.

To put it another way, we've had a decades-long experiment. The experiment was this: How best to advance personal and public health: Should the leaders be lawyers and regulators, or doctors and scientist? And the results are in--we are getting both higher costs and less medicine. The worst of both worlds.

Back on February 10, we took note of an important piece by Michael Milken noting the existence of what could be called a "capital strike" against the pharmaceutical industry--which is to say, of course, a capital strike against our future health. A "strike," we might add, in the sense of a stoppage, but also a "strike" in the sense of an attack--like a hammer coming down.

For many of us--indeed, for just about all of us--it's the existence of medical drugs that spells the difference between a healthy future and a future of pain, disability, and premature death. And so here at SMS hwe we have augmented Milken's argument, because there's plenty of evidence that a combination of negative forces--the role of the FDA, the impact of the trial lawyers, Obamacare price controls, and a general lack of leadership from Washington--have all conspired to ratchet down the pharma industry and thus to dry out the new-drug pipeline, as well as the medical device pipeline. This dolefully downward phenomenon adds up to what we have called the Serious Medicine Crash.

Now another piece of evidence comes from the Health Research Group at Public Citizen, the Ralph Nader-inspired activist group. It shows clearly how governments are taking billions away from the Pharma industry:

The Public Citizen/Health Research Group (HRG) report finds that fines against the Pharma industry levied by the federal and state governments--mostly the feds under the False Claims Act--have jumped from $10 million dollars in 1991 to $4.4 billion in 2009. (2010 data are only partial.) Have a look:

Needless to say, the HRG celebrates this spike in fines as a triumph of their left-litigious ideology. Naderite activism rules; lawyers overwhelm corporations, even corporations engaged in activities that have much more to do with the public interest than left-wing lawyers substantially funded by the tort bar, which uses Naderite activism as the battering ram for billion-dollar cases. As the website Trial Lawyers Inc. observed of Public Citizen back in 2005, "Public Citizen Foundation's board looks like a Trial Lawyers, Inc. leadership meeting, including Lisa Blue of plaintiffs' firm Baron & Budd and Joseph Cotchett, who's also on the Association of Trial Lawyers of America board." So low-paid activists and high-paid tort entrepreneurs find common cause in lawsuits. The Naderite presumption is that corporations are evil, and that the antidote is a stern dose of regulation and litigation; while the trial lawyer presumption is that great wealth is fine, so long as it is made by suing other people.

In the meantime, HRG, ever true to its Naderism, writes,

While the defense industry used to be the biggest defrauder of the federal government under the False Claims Act (FCA), a law enacted in 1863 to prevent defense contractor fraud, the pharmaceutical industry has greatly overtaken the defense industry in recent years. The pharmaceutical industry now tops not only the defense industry, but all other industries in the total amount of fraud payments for actions against the federal government under the False Claims Act.

You can read the whole report here. To sum up, though, in the minds of the HRG authors, the issue is simple and easy to solve: As with every other problem in America, the answer to any possible Pharma abuse is another lawsuit, another big judgment, another contingency fee, and then maybe a new bureaucracy--preferably with criminal enforcement power.

As a national political cause, we might note that this Naderite vision crested back in the 70s--the idea that we could litigate and regulate our way to a better society was firmly repudiated by Ronald Reagan in the 1980 presidential election--but as politicians have chosen to concern themselves with other issues, the trial lawyers have been free to enrich themselves in certain sectors, aided, of course, by the Naderite activists. As the report says in its conclusion:

Over the past two decades, there has been a marked increase in the number of settlements between pharmaceutical companies and the federal and state governments as well as in the size of the accompanying financial penalties paid by these companies. The reasons for these increases are unclear, but are likely related to a combination of increased violations by these companies and increased enforcement on the part of federal and state governments. Despite increased government enforcement, illegal pharmaceutical company activities continue to endanger public safety and rob the government of increasingly scarce state and federal resources. These offenses require a more robust response. Given the small size of current financial penalties relative to these companies’ profits, we believe that both significantly increased financial penalties and criminal prosecution--including jail--of company leadership would provide a more effective deterrent to this unlawful behavior.

Yet at the same time, we might step back and ask: Why it is that fines against the industry have jumped 44000 percent in less than two decades? Are we really to believe that Big Pharma is 440 times as corrupt as it was in the early 90s? Or are we to believe that something else is at stake?

Many observers think that the Justice Department, across presidential administrations, has found an easy way to make itself look good. That is, it can win these kinds of cases, and thus up its "batting average." In addition these cases are an easy way to raise revenue. Indeed, as a former Member of Congress told me, "The Department of Justices sees these cases as a guaranteed piggybank." That is, DOJ brings cases, and the Pharma companies pay up--or else. So they pay up, and a mutant form of "public sector entrepreneurialism" prevails.

A further part of the problem is the abuse of the so-called "whistleblower provisions," which have been greatly expanded in recent years. In recent years, whistleblowers have taken home as much as $96 million for their efforts. And of course, of that sum, trial lawyers' contingency fees might well total 40 percent, or nearly $40 million. Is that really a good way to regulate drugs and to protect the public safety? Of course not. Indeed, the retrospective nature of whistleblowing can actually hurt public safety.

In the words of attorney Marty Robins, the huge rewards for whistleblowers actually seem to encourage employees to ignore mistakes or wrongdoing until it "ripens" into a lucrative case to take to the government:

What the new incentives for whistleblowers will do is at the least encourage and cause more whistleblowing and probably more -- not less -- wrongdoing. What is optimal for society is to deter and stop wrongful activity by business before it starts and not after it comes to fruition and does its damage. Giving people 10-30 percent of fines and settlements resulting from wrongdoing encourages those who become aware of such incipient wrongdoing to wait until it "ripens" to the point that a fine or settlement is in order. It also provides no deterrent for the firm in question if the fine or settlement is a fixed amount which is shared by the SEC and whistleblower.

Is this really the way that we are going to raise capital to produce new medicines and cures? Or is this just an example of why investors are shunning the Pharma sector, as Mike Milken says? The answers to those questions, respectively, are "no" and "yes."

No wonder the Serious Medicine Crash continues.

Anyone familiar with this blog knows that the point of Serious Medicine Strategy is not to defend the Pharma industry. Instead, the goal is to push for medical advancement. Here at SMS, we are open to ideas for private, public, or private-public cooperation. We also think that the international community should be much more involved in the effort, especially when leaders in other countries realize that the US pharma sector is no longer the dynamic and robust force that it once was.

That's a daunting process, to be sure, and yet it must begin with a clear-eyed understanding of where we are right now. And the Public Citizen Health Research Group points to a big part of the current problem.

New York Governor Andrew Cuomo joins the fight for Serious Medical reform--UPDATED

2011-02-26T17:42:00.006-05:00

New York Governor Andrew Cuomo obviously means business when it comes to reducing his state's budget deficit, and its overall expenses. As part of that effort, he is pushing to reduce Medicaid spending, and of course, any comprehensive review of such spending will have to include a targeting of costly malpractice litigation. As explained in many places by many experts, including Walter Olson of the Cato Institute, much or most of the money being siphoned out of the healthcare system by trial lawyers spells no good for the healthcare system--it only damages the system and enriches trial lawyers.

So yes, Cuomo is absolutely right to seek to cap pain-and-suffering damages at $250,000, which could save $209 million a year--and every little bit, or not so little bit--of savings will help the newly inaugurated chief executive reduce a deficit estimated to be $11 billion.

And yet as the New York Daily News' Kenneth Lovett explains, Cuomo's meritorious effort is certain to be opposed by the Speaker of the New York State Assembly, Sheldon Silver. Silver, who has led the Assembly since 1994, is a longstanding opponent of any kind of tort reform, for reasons not limited to his lucrative association with the buccaneering law firm of Weitz & Luxenberg, one of those law firms you see advertising on TV, angling for clients. Here's a look at Silver in his legal oeuvre:

If the screengrab above, the words "ACT NOW!" are prominent--here's a closer look, at a blatant pitch for business:

So let's wish Cuomo luck in this effort--and take note of his courage, taking on a powerful constituency, not only in New York State, but within his own party. After all, the tort bar is a linchpin of the Democratic Party's political and financial structure. Yes, it's strange that the self-styled party of working people has also made room for millionaire and billionaire trial lawyers, but that makes it all the more impressive that Cuomo is doing what he is doing.

If Cuomo succeeds, we might add, the effect could be to inspire similar efforts in other political jurisdictions. And the result would be both lower healthcare costs and better medicine. Estimates of the cost of medical malpractice range from $55 billion to $200 billion. Yet as noted here at Serious Medicine many times, the real cost of trial lawyers is not the cost of paying malpractice bills, it's the damage done to R&D.

UPDATE: The Wall Street Journal's Jacob Gershman reports that some of the supposed savings that Cuomo has proposed might not come to pass, or might be outweighed by spending increases tucked away in the legislation. Concludes Gershman:

A big unanswered question is where the Cuomo administration will aim the scalpel if its savings projections fall short, which they are expected to do. Unless providers shrink costs on their own, Mr. Cuomo would have freedom to change rates, levy surcharges, and eliminate services—and choose which sectors would shoulder the burden.

A reminder that the fiscal devil is always in the legislative details. More than one politician has declared a target, and gotten credit for that target in the political here and now, and then arranged to be somewhere else when the reckoning for an unmet target came to be paid.

Yet even so, Cuomo's malpractice reforms, which are the most relevant to the cause of advancing Serious Medicine, do seem to be real--real proposals, that is. Now we must see whether Cuomo can prevail over Silver.

Thanks to Fred Siegel for this update.

Metrics for Future Health: A Way Out of the Inputs-Outcomes Conundrum

2011-02-24T18:48:00.000-05:00

Published by the Manhattan Institute: Full text here.

Serious Medicine Strategy comes to Fox News

2011-02-24T14:34:00.002-05:00

That's me on Fox News Watch "Bias Bash" this morning, holding up an edition of Wednesday's Washington Times, which included an editorial, "Obama's race against the cures," which focused on the scary numbers about medical innovation in my February 19 blog posting, "The Serious Medicine Crash."

The Serious Medicine Crash--update

2011-02-24T09:23:00.001-05:00

The Wall Street Journal's Pui-Wing Tam reports on the continuing drought in venture capital funding for healthcare, even as other vc sectors recover. As we can see from this chart, venture capital funding for electronics is up, vc funding for healthcare is down. (Energy vc funding is down too, presumably because the "green jobs" bubble has burst.)

But what's more important to all of us--not just entrepreneurs and vc's--than health?

Mike Mandel provides more proof of the Serious Medicine Crash

2011-02-23T13:11:00.001-05:00

Mike Mandel has been writing persuasively about how technological stagnation endangers America for years--first at Business Week and now as a senior fellow at the Progressive Policy Institute. His work, which echoes the work of Robert Solow, William Baumol and many other economists, reminds us that the single biggest driver of economic growth is scientific discovery and technological innovation. A recent post from his blog, Innovationandgrowth, shows how the decline of US innovation has real consequences--the chart above shows how the once-steep decline in the death rate of Americans aged 45-54 has been basically flat for the last decade. We might that Americans aged 45-54 are likely to be in the prime of their working and child-rearing lives. So these premature deaths are not only personal tragedies, but they also represent an enormous loss of human capital.

As noted here at SMS, the Serious Medicine Crash is not just an abstruse dispute--it has real consequences.

So what to do? Mandel offers some concrete suggestions, such as a Regulatory Improvement Commission to operate the same way as the BRAC process. As Mandel puts it, "If we want growth and rising living standards, we need to avoid adding on well-meaning regulations that drive up the cost of innovation."

Indeed. And we'll live longer and better, too.

Serious Medicine Crash Update--Hospitals running out of Serious Medicine

2011-02-20T20:20:00.001-05:00

A startling report from The Chicago Tribune's Bruce Japsen, outlining shortages in life-saving drugs. It's interesting that this is happening less than a year after Obamacare was signed into law. And it's just as interesting that the federal government has had other priorities all this time. Here are some excerpts from Japsen's report

Hospitals across the country are running out of key drugs used in surgeries and to treat some diseases, including cancer, causing doctors to turn to older treatments. In some cases, hospitals are paying higher prices to get their patients necessary care because wholesalers are hoarding needed medicines. . . .

"These are the worst shortages I have ever seen," said Thomas Wheeler, a hospital pharmacist for three decades and director of pharmacy for Advocate Illinois Masonic Medical Center on Chicago’s North Side. "The most troubling aspect is that it is critical drugs for which there are limited alternatives. Many are involved in cancer care and surgery."

There are about 150 drugs — triple the number from just five years ago — that are in short supply, according to the American Society of Health-System Pharmacists, a trade group that works with hospital pharmacists on ways to deal with the shortage.

Next, reporter Japsen outlines some of the problems. As might be expected for any complicated event, there's more than one possible cause:

Drugmakers say they are obliging tougher safety rules put in place by the U.S. Food and Drug Administration, which has intensified scrutiny to avoid allowing unsafe medicines on the market. The FDA came under fire for its role in monitoring the blockbuster pain pill Vioxx, which was pulled off the market in 2004 by its manufacturer, Merck & Co., after the drug was linked to heart attacks and strokes.

The drug shortage is being exacerbated by consolidation in the pharmaceutical industry, which leaves fewer companies making drugs. For example, Teva Pharmaceuticals Ltd. makes generic forms of certain cancer medications. So when quality issues temporarily closed its plant in Irvine, Calif., in April, medical professionals were faced with limited supplies of an array of cancer drugs.

As noted, the Obama administration seems to be AWOL, at least as far as this story is concerned, but some politicians are taking notice:

The drug shortages have gained the attention of members of Congress. Last week, Sens. Amy Klobuchar, D-Minn., and Bob Casey, D-Pa., introduced legislation that would require drugmakers to give the FDA an early notification "when a factor arises that may result in a shortage," according to a joint statement.

"Several major hospitals in our state have experienced shortages that are jeopardizing patient care, and this bill will provide the knowledge required to help address and prevent future shortages," Casey said. "Knowledge is one of the most important tools for combating problems associated with drug shortages, which are a growing threat to public health in Pennsylvania and across the U.S."

We might note that Sens. Klobuchar don't seem to be offering any solution--they just want to be notified.

That might be the beginning of a good response, but for now, all we know is that while Uncle Sam was busy trying to assure that everyone in the country had insurance, the supply of drugs was faltering. As noted here at Serious Medicine many times, there's not much point to insurance if there aren't drugs and other kinds of treatments and therapies to consume.