Re: capitalist religion (was: NANO: _Forbes_ cover story)

From: Mike Lorrey (
Date: Mon Jul 16 2001 - 16:11:59 MDT

Miriam English wrote:
> I just think it is a little rash of you to say that. Profit motive sees
> much more "sense" in promoting expensive medical maintenance programs that
> keep people on medications for the rest of their lives. Medical companies
> don't like to spend money on researching ways to prevent or cure ills. That
> cuts out their market.

I wouldn't say that. I would say that they only focus on health problems
for which there is a significant market, generally, and when they find a
drug treats a rather rare disease, with lets say only a few hundred
cases in the entire world, they have to not only divide the cost of
tooling up, producing, and distributing the few doses of the drug to
such a small market, that market has to absorb the huge amounts of
research that went into discovering that drug. If, say, one dose costs
many thousands of dollars, the drug company generally won't even put it
through FDA trials (which is necessary to make it coverable by
insurance), because such trials would require the company to treat the
entire population that is sick, which kills the market, and you can't
get paid for it after the fact by the insurance company.

> Many of the great success stories in clobbering diseases are publicly
> funded. They drive such things as health and sanitation education, and
> vaccination programs. Of course these then provide the market and incentive
> for corporations to refine and supply the vaccines, etc. Both sides
> (capitalist and publicly funded organisations) need each other to create a
> balanced environment.
> If we had just capitalism managing medicine then we would see incredibly
> expensive medicine that would serve the rich (that's where the money is),
> but not much else.

You are improperly assuming that no capitalist would engage in
philanthropic activities, which is actually how much of the non-profit
research is funded.

> If we had only publicly managed medicine then we would see medicine ossify
> and become more and more entrenched in tradition.
> Neither is the whole solution. Diversity, as in most things, is important.
> I worry when the economic rationalist religion is propagated as the
> ultimate truth. It isn't. The world just isn't that simple.
> Did you know that many people who travel to USA worry about getting ill
> while over there and accruing massive and crippling medical bills for
> treatment that in Australia or UK or Europe would be relatively
> inconsequential? Your medical system is heavily privatised and the most
> expensive on the planet.

Part of the reason it is so expensive is because socialist health
systems externalize their highest costs onto our market, which drives up
demand and therefore prices. How is this done? By purposely rationing
expensive treatements such that the waiting lines for these treatments
are longer than the life expectancy of the patients, so they instead
come here to the US, pay out of their own pocket to get treated, and
their buying that treatment here drives up the price here for our sick
people to get the same treatment.

If socialized health care systems provided the same access to care that
we provide here, then our system would not be so expensive.

> Don't get me wrong. I am not saying the US medical system is crap. It has
> its uses -- its advantages and disadvantages... but that doesn't make it
> better than other systems. In fact American medicine is becoming irrelevant
> to large parts of its own society thru its inability to attend to the needs
> of the great numbers of poor.

Because the health market is being distorted by the externalities of
socialized medicine in other countries.

> Darn... I have this horrible, sinking feeling I have just started a
> patriotic, capitalist, flame war... oops. :-)

Nope, not at all. I think that hospitals themselves are also to blame.
For example, the largest local hospital here has lost its non-profit
status with respect to local property taxes because it only provides
2.5% of its services for free to poor people, which is less than the
average for for-profit hospitals in this state, and less than half that
of other non-profit hospitals in this state (which still means that
non-profits in this state on average only provide 5% of their services
for free). At the same time, this local hospital generates $2.5 million
in 'profits' each year that are funnelled into an umbrella fund raising
organization that owns everything, which has no employees, and which
spends $5 million a year in order to 'raise' $2.5 million (the other
$2.5 million comes from the profits of its subsidiary corporations). Of
the funds it spends, this includes $2.5 million that organization pays
out to the five trustees of the hospital for being trustees....

This is a hospital that claims to be 'non-profit'....

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