Friday, February 22, 2008
The Great 2008 Medgadget Debate
Filed under: Medgadget Exclusive
Reuters, the wire service, has just published what looks to us as nothing less than an editorial about politics and medical devices. The article, titled "Medtech firms see benefit from Democratic plans", claims that the current presidential nominee lineup, especially coming from the side of the Democrats, is a good omen for makers of medical devices. The basic claim, supposedly supported by Advamed, an industry association, is that greater mandated medical coverage of the population will lead to higher sales of medical devices.
Undoubtedly, as was pointed out in the Reuters article, things aren't so simple. In reality the situation is that politicians are leaning towards controlling pharmaceutical prices as a method to keep already skyrocketing healthcare (Medicare, really) costs down, and medical devices are naturally next in line.
Of course the nominee plans call for more spending on top of a system that is already generating debt everyday. Given that the healthcare industry is already close to capacity, an infusion of approximately another 100 million people should, if the free market exists, drive through the roof the already high cost of medicine. This last sentence assumes that additional patients are actually additional consumers creating extra demand within the old supply/demand charts. In reality, instead of creating additional individual consumers that participate in the mechanics of the free market, the tendency, at least from the Democrats, is to lump these people and insure them through the government, creating the dreaded "single payer" entity that exists the world over. Just like a monopoly supplier that can set prices, the monopoly consumer has almost universal mandate powers to make manufacturers submit to its whim.
Moreover, a monopoly consumer in the form of an indebted state, where the legislation-writing individuals fear no personal loss (being neither patients receiving care, nor the ones that directly pay for it), have a much easier time of demanding cheap supplies, while having no scruples of limiting provided care. The result, given enough time, is a system where neither the patients nor medical suppliers are making any decisions anymore, but are mandated by the state to produce so many syringes at given prices for a stated population, and for the patient to receive this or that treatment and no more.
We believe there is a reason why the pages of Medgadget are dominated by American medical technology. We believe that is thanks to a multitude of independent manufacturers and suppliers, as well as the millions of unique individuals with different conditions, calculations of cost/benefit, and individually suited health insurance plans from hundreds of competing companies.
American healthcare is indeed going through an important period that requires specific changes, and yet one must keep in mind the strong, unyielding forces that come to life when bureaucrats take over and a critical industry such as healthcare is taken from the civilian world to the political. Perhaps Reuters will consider long term consequences of more interest to ponder than short term results provided on borrowed terms.
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