Competition and Health Care Reform
In October of 2008, The Backgrounder, a publication of The Heritage Foundation, devoted its issue to an article proclaiming that the United States was the greatest innovator in the world in the area of pharmaceutical research. The article then went on to explain how health care reform, with its intent to import price-controlled drugs from other countries, would crush the innovative urge of American drug companies and destroy their ability to compete.
On May 4, 2009, in The Wall Street Journal, John C. Lechleiter, the chairman and CEO of Eli Lilly Company, warned that a government-run health care plan would adversely affect drug companies' ability to be – you guessed it -- innovative.
The common words in the preceding paragraphs are "competition" and "innovation." Both words are very much a part of the mythic American story. Americans are by their nature innovative; that's how America got to be America. And we're competitive, too. That's why we're the best country in the world. So goes the myth.
A bill that seeks to continue that myth was released on May 20, 2009. One of its sponsors is the aforementioned Rep. Tom Coburn, and the bill is entitled The Patients' Choice Act. Remember back when Harry and Louise reminded us that Americans always want choice? The text of the bill tells us confidently that the "freedom to choose creates better competition." But who does this competition help?
The Health Savings Accounts touted in the bill do not help the poor, who have no extra money to place into such accounts. The tax rebates for low-income families mentioned in the bill do not help people so poor that they pay no income tax -- such as people who are disabled and live on Social Security disability payments. Does a deregulated, free choice, competitive system help them? And remember, there but for fortune go you or I.
The Patients' Choice Act bluntly states that the fastest-growing market for Health Savings Accounts is small-business owners. I'm not against helping them, but the Act also offers the elderly poor "a broad, flexible array of services and supports," while saying nothing about whether the allotment that seniors would use to choose from this buffet of benefits would be sufficient to cover all of their health care needs.
Here's my answer to the Republicans' concerns about innovation: According to the February 26, 2009 AARP Bulletin Today, President Obama's plan calls for an increase of seven percent in the amount of rebates the drug companies give to the government for Medicaid prescription drugs. I think that some fine American pharmaceutical researcher can be innovative enough to get the job done with seven percent less funding.
As for competition, I want to know who is competing to offer the most services at the best price to those with the most need. That's a plan I’d like to see.
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