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  • New Study Reveals Obamacare's Threats to the Economy — And Medicine as We Know it

    Moving into the 21st century, the practice of medicine is on the cusp of exciting new territory. Advances in medical and pharmaceutical research, particularly in personalized medicine, promise new cures to diseases that affect millions of Americans.

    Now more than ever, Washington should get out of the way of innovation and strive to encourage investment in medical technology. Sadly, the reverse is true. Stringent FDA regulations and nightmare approval processes are sending investors’ dollars to other areas of the economy and forcing medical breakthroughs overseas.

    Obamacare changes could cause even further damage. The new law creates the Patient-Centered Outcomes Research Institute to advance and fund research comparative effectiveness research (CER).

    CER can be beneficial if used solely to inform doctors and patients to guide decision-making. However, the new law lays the groundwork for bureaucrats to use CER in Medicare to make coverage decisions and otherwise compel physicians to treat patients not according to what is best for the individual but according to what the evidence shows is best in most cases. Tracey Walker of the Managed Healthcare Executive writes that, according to the experts who participated in a recent Avalere Health audio conference:

    The investments built in to the [stimulus] and [Obamacare] significantly increase the capacity for the federal government, including Medicare, to generate and use CER in making decisions about what technologies and services should be reimbursed.

    Used in this way, CER will end the practice of medicine as we know it.

    According to a recent econometric study from researchers at the Center for Medicine in the Public Interest, the effects could extend beyond the care patients receive, negatively impacting the economy and society at large. John A. Vernon, Ph.D., and Robert Goldberg, Ph.D., argue that the productivity gains of investment in medical research make it one of the most effective uses of capital, but “the economic cost of new CER regulations will have a deleterious impact on social welfare.” They explain:

    Requirements to conduct and use CER to control rising costs and expand the number of people receiving subsidized health by slowing the development and diffusion of medical innovation could actually increase healthcare spending and have a deleterious effect on human progress.… The underlying assumption of CER is at direct odds with empirical evidence that medical innovation—not regulation—increases life expectancy and reduces the cost of services needed to obtain such gains.

    Writes Walker: “Expect changing evidence standards that products and services must meet for coverage and payment.” As CER becomes more entrenched, it will increase the costs of bringing new technology to market by increasing the size and cost of clinical trials, delaying the time it takes to bring a new product to market and decreasing the rate of diffusion of new technologies.

    The result will be increased uncertainty and risk of investment in medical and pharmaceutical research. Reduced investment in medical innovation could lead to large reductions in health and longevity and a less productive workforce, which would harm the economy.

    Advocates of CER and top-down use of its findings argue that it will “bend the cost curve” in health spending by paying only for what works. In practice, however, it’s much more complicated. According to the researchers, “If CER regulations and policies are advanced and implemented with a blind eye towards their effect on long-run innovation, the socio-economic cost to society could be detrimental.” Before embracing CER as a silver bullet to reverse rising health care costs, the lawmakers and bureaucrats responsible for Obamacare must consider the likely negative effects of its use.

    Posted in Obamacare [slideshow_deploy]

    17 Responses to New Study Reveals Obamacare's Threats to the Economy — And Medicine as We Know it

    1. John Dulleck, San Jo says:

      I'm of the opinion that ObamaCare is not the end-game, but only an intermediate step. The end-game is single payer. The purpose of ObamaCare is to create such a huge mess in health care that the government can step in and save the day.

      Notice, government has become quite good at rescuing the people from problems they created. And the answer is ALWAYS the same,


    2. Jim McGovern, Florid says:

      This plays right into the scheme for "central planning." Eventually the controlling factor will be the amount of funding that is available for delivery of medical care, instead of favorable outcome. Welcome to the Soviet United States.

    3. LaVonne Hull, Eugene says:

      The new law creates the Patient-Centered Outcomes Research Institute, and Comparative effectiveness research (CER) , most likely Responsible for the Continued Negligence and Harrassment of Healthcare Professionals in my Treatment following the Negligence of My Surgeon during surgery that caused me to be DISABLED, Physically and Monetarily. The MOST IMPORTANT OUTCOME of my REHABILITATION WAS TO COVER UP THE DOCTORS' NEGLIGENCE AT MY EXPENSE NOT THEIRS OR THEIR INSURANCE COMPANIES. Two years later, The statute of limitation, this was CONFIRMED BY AN OUT OF TOWN NEUROSURGEON. HE CONFIRMED MY SPINAL CORD INJURY, IN ONE APPOINTMENT. THE DOCTORS IN MY TOWN COULD NOT CONFIRM THIS IN OVER 200 APPOINTMENTS…






    4. Brian, Chicago says:

      Really? So spending 16% of GDP on healthcare isn't a problem? Spending nearly twice as much per capita as Europe on healthcare isn't a problem? Being ranked 37th in the world for healthcare effectiveness isn't a problem? Paying 2X-5X as the rest of the world on prescription medicine isn't a problem?

      Put down the free market kool-aid. We're the only industrialized country in the world without universal healthcare. The healthcare vampire has sucked this country dry. Time to put on our big boy pants and clean up the mess they've made.

    5. James, Champaign IL says:

      Brian – You really only stated two problems, although in four different ways.

      You asked if expensive healthcare was a problem (three times). The obvious answer is yes.

      You asked if "being ranked 37th in the world for healthcare effectiveness" is a problem. Taking that statement with a grain of salt (how well does the U.S. rank in cancer recover rates?), I'll humor you. Sure, that's a problem.

      But in a country plagued with an inefficient Medicare/Medicaid program that is full of waste, rationing, and cost-prodding, how do you figure that these problems exist because there isn't enough centralization?

      Nobody wants what you are selling big boy. We just want choices and low costs. And that only comes through free market competition. The NHS is a disaster and makes for miserable conditions. It's time for the centralists like yourself to start seeing things the way they are, and not the way you want them to be.

    6. Bryan says:

      Solution: Give drug companies the option to use more relaxed regulations. However, if anyone dies as a result of a medication that went through the relaxed process, all people who were members of the board of that corporation will be executed for murder.

      Thus, we have freedom to choose. Companies that want indemnification can use strict regulations. Companies that want to play Wild West get to live by Wild West rules.

    7. Steve, California says:

      Gee Brian, sounds like once again, too much government interference in the marketplace is causing the problems that you mentioned.

      The ranking that you mention is based on skewed data. Other countries consider stillborn babies as dead, and they aren't counted as living patients, we try to resuscitate them, some get saved, the rest count against us. The reason why we pay more? We are paying for the innovation AND the REGULATION! Other countries use the technology we developed. No development costs for them, results in lower costs.

      The only one without socialized healthcare, and the one with the best healthcare.

    8. Dee Va. says:

      If you believe Obama then you are traveling down the wrong road for Obama has no intention on doing anything for Our Country..If you will just remember the last time he was campaining and what he said he was going to do well it never happened for Obama was very busy traveling to other Countries to get them to stand up with him just like you The People That Voted For Obama…Obama has been Taking We The Peoples Country down and will continue as long as WE THE PEOPLE LET HIM…I for 1 am not giving up my Kids and Grandkids deserve better then him……………………

    9. Jon, Pittsburgh says:

      @Brian-I absolutely think that spending 16% of GDP on healthcare is a problem, but I don't see how the Obama legislation will reduce spending on healthcare. It will skyrocket costs. It may divide how things are being paid for, but the total cost will absolutely be higher. Really? We're ranked 37th in the world for healthcare effectiveness. Can you really think of 36 countries you'd rather visit for care with a serious medical issue? Really???

      Lastly, the comment about the free market kool-aid is laughable. Wonder why healthcare is so screwed up? Start w/ Medicare and Medicaid–2 government programs that are hardly free market. Programs that force medical providers to provide care at less than what it costs to provide the service. Think maybe that has an impact in the costs the rest of us pay?

      Add in the enormous issue w frivolous lawsuits where the person filing the lawsuit stands to lose nothing—clearly not something that would be considered a free market principal. In the free market, parties enter into a transaction with potential benefit and potential risk. Yet there's no risk for someone filing a lawsuit against a medical provider? Think this maybe has an influence in the insurance premiums that medical providers have to carry to protect themselves? Think maybe that has an impact in the costs of medical care that are passed along to us?

      Let's not forget about the medical profession being highly unionized, which will always add to costs because of the above-average wages and benefits paid—those costs will always be passed down. Let's also not forget about the ridiculous cost of education for most medical providers. That cost drives the salaries that they expect, and those salaries drive the costs that we have to pay.

      Last but not least, the entire set-up of having your medical insurance provided by your employer has created such a convoluted process that the average person doesn't really know what medical care costs. They have no idea that a trip to the emergency room costs several hundred dollars (or more, probably). They only know their co-pay and/or co-insurance. That's the cost in their mind. This set-up has allowed the cost to skyrocket without any effort to control it, b/c the cost is spread out to so many different entities.

      There's a lot wrong with healthcare, but pinning it on the free market is simply incorrect. Typical, but incorrect. And believing that Obama's legislation will cure what ails the healthcare industry—-well, believe what you want, but the economics of it just don't work. In the end, it probably won't even solve most of the problems that it claimed to be solving, and that doesn't even touch on the fact that the legislation isn't attacking the right problems.

      Let the free market work, w/ enough common-sense regulation of laws that already exist to protect us, and this problem can be solved.

    10. V. Moore, North Caro says:

      Obama is making this nation's healthcare go from of the best in the world to one of the worst. His decision to implete obamacare was nothing more than a push toward socialized medicine and that makes everything go from best to worst. Also, there is a major drug shortage in this Country now. Who is to blame for that? Obama and his healthcare overhaul. If you don't think there is a death panel – wake up and smell the coffee brewing! The drugs that are in short supply are diabetic meds, chemotherapy meds, meds used for heart attack patients, stroke patients, etc and the list goes on and on. On Fox News the other morning, one doctor was saying that it was in part due the wars in Iraq and Afghanstan. Do you believe that?

      Why would war veterans injured need chemo drugs? I feel that it is becasue these drug companies backed obamas healthcare overhaul, and then decreased the production of these medications, knowing that care would be rationed and the need for these drugs lessened. That doctor on Fox News said as much — he said that he has a patient that has lived 10 years with liver cancer due to the drugs the has been given, but said that with the shortage of these drugs now, it is necessary to choose which patients will have the best survival chance and give the drugs to that person, when there was more patients that less chance of survival, then they would have to be denied those drugs. If that isn't rationing care, then what is. So it comes down to that doctors and the government committee that will over see these matters will detrmine if you have a good chance of surviving cancer and if you do, you get the drugs, if not, then you get to die a miserable death.

      I don't care what anyone else thinks but that is wrong! Everyone should have the chance at these life saving drugs because there people out there right now that doctors gave up on, but because these people chose to fight their cancer, not only with drugs, but with their faith, and changing lifestyles, holistic treatments, etc, they have survived to tell their stories. No one can tell who is going to respond to cancer treatments better. Each person is different and responds in different ways to these treatments. One patient that doctors are certain will respond well and survive, may not – when another patient that might have been though of less likely to survive, under go these same treatments, respond well and survive many years. Doctors are not God and don't need to be playing God by saying this person can have treatments and this person can't. It is just plain WRONG!

    11. CA says:

      Brian of Chicago: No Brian, no one on the free market side is saying that there are no problems in the current system. We simply recognize that removing the individual patient and doctor from the ultimate decisions about treatment, and putting beaurocrats in that place of decision making does not solve the problems, but makes a whole new set of problems that free people do not wish to endure. Reforms must be made, but reforms within the context of liberty of the individual, ie free market solutions. By the way that 37th in the world for healthcare effectiveness statistic is totally bogus, a pernicious invention of those who do not appreciate the value of liberty and the free market.

    12. Jenn, Oregon says:

      I just wish that the justice system weren't so messed up & skewed. It more & more favors the "favorite darlings" of the far left, and ignores the reasonable & right-minded majority. If there were a perfect solution to these ignorant far-reaching problems, it would be to PROSECUTE the crimes, and stop rewarding the lazy. That would be the best of both worlds & then we the people could get back to the business of HELPING only those who MOST need it. Doctors would be in a much better position to assist in the health & wellness concerns of their patient(s), and we could become our own advocate, letting free-markets reign, getting Government AWAY from our hard earned tax dollars….letting the USA be a respected nation that doesn't settle for 3rd place in the world. Proceed with FIRING OBAMA & his radical Leftists in 20-12 and we will have a GOOD CHANCE of correcting this disaster!

    13. Pingback: “New Study Reveals Obamacare’s Threats to the Economy — And Medicine as We Know it” «

    14. Kenneth D Coburn, MD says:

      We do need health reform given that the current system is economically unsustainable and does not improve health outcomes nearly to the degree it could. I'm quite skeptical that we'd be better off eliminating all government involvement in health care, though. Thought experiments: 1. Is there empiric evidence to suggest that health care in the U.S. was better before Medicare and Medicaid was implemented? 2. Would the overall health of our nation improve, worsen, or remain the same if we discontinued government sponsored programs like Medicare and Medicaid?

    15. Eric, APO says:

      well since the socialists in our country love socialized medicine so much we could go off of a mirror of the country im currently in, you get sick you go to the doctor pay ALL expences out of pocket AT THE TIME of service (dont have the money to bad to sad, so sorry it we cant help you) and maybe get reinbursed 6-9 months later by the government if you managed to fill out all of your forms correctly and get the proper witnesses and addendums signed ect ect ect

    16. Pingback: Panel formed to give patients reliable treatment information | Seattle/LocalHealthGuide

    17. Robin Lennon says:

      They keep talking about the FDA and cancer drug shortages–but I have already had my blood pressure medicine disappear a few weeks back (generic tier 1). You wouldn't believe the hoops we had to go through to get the doctor to issue a new prescription for an alternate form of the same drug. Was off my meds for almost a week going from capsule to tablet form of the same drug.

      They've done a great job vilifying those "terrible" pharmaceutical companies because they hope to earn a profit on the few successful drugs that actually make it to market (I believe the average profit margin when Pres. O was running was 2%–how outrageous! (/sarcasm). I guess all those drug researchers should just donate all their time, and not have healthcare while they're reseaching the majority of drugs that don't make it past the FDA regulations, and money pit?

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