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Business

Moneychangers in the medical temple

Medical suppliers are hurt by a centrally-controlled health care system. Incentives to save gore their ox in may ways. It's not just that a central system buys in bulk. It's also that central control may not favor the cool-and-expensive new treatment, but the cheap-but-effective old one.
Written by Dana Blankenhorn, Inactive

I have had this New York Times article from Harvard on my screen all week, and don't know what to make of it. (1st Art Gallery sells handmade reproductions of this Rembrandt for as little as $176.)

It's about the inherent conflict-of-interest in having vendors, or teachers whose work is backed by vendors, giving medical students what may (or may not) be a sales pitch instead of an honest lesson.

These conflicts don't just exist in medical education. They exist throughout the health care system. And doctors are going to extraordinary lengths right now to appear clear of them, even turning down coffee mugs emblazoned with drug labels.

My guess is all this reflects a larger debate, over whether health care should be driven by public concerns for public health or private concerns for innovation and profit.

The problem, for capitalists, is that the experiment has been run and they're better off supporting public solutions.

Most businesses save money when decisions about care are made centrally. This was at the heart of the HMO movement. It's at the heart of the comparative effectiveness movement. It's what insurers want, and what the government is now demanding.

There are exceptions. Medical suppliers are hurt by a centrally-controlled health care system. Incentives to save gore their ox in many ways. It's not just that a central system buys in bulk. It's also that central control may not favor the cool-and-expensive new treatment, but the cheap-and-effective old one.

That reduces innovation. It reduces profits. It reduces sales. And it hastens the day when medical research moves to other countries, as so many other industries have.

For now those who sell medical products are beating a strategic retreat. Drug companies have cut out the coffee mugs. The medical device industry is tightening its rules on advertising. Suppliers are using fighting words but are generally backing down.

Cynics may say the sellers are just looking to create loopholes in the new system they can then exploit, but it's also possible we are at a genuine sea change here.

The interests of industry and the health care industry have long diverged. They are now negotiating the terms of their divorce.

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