The two big lies in the health IT debate

The health IT components of the stimulus bill are designed to accelerate changes already underway in the marketplace . But when the buyer saves, the seller loses.
Written by Dana Blankenhorn, Inactive

There are two big lies being told in this health IT debate, one by opponents of reform, one by proponents. (Is Betsy McCaughey better-looking as a blonde or a redhead? We report you decide.)

Opponents claim government is driving the move for EMRs, for evidence-based medicine, and for payment based on comparative effectiveness.

In fact the insurance industry is driving it. The trends being endorsed by the stimulus package are the trends insurers have been pushing for years. Insurers like reform for the same reason the government does -- it provides better care at lower cost.

The big fear of reformers is that government will respond to political pressure and back down from evidence-based care. The first fight is happening now over payments for cancer drugs used as they were not intended,  so-called "off-label use."

Groups devoted to finding cures for dread diseases, like the American Cancer Society, rightly fear that evidence-based medicine will eliminate payments on unapproved therapies.

Insurers, who have their own profits on the line, are less susceptible to the political pressure of these groups. Violations of evidence-based guidelines are pressure on their pockets.

The big lie being told on the proponents' side is that no one is going to be hurt by reform. McCaughey gave this away in her now-infamous column, as published by Bloomberg, writing "the bill treats health care the way European governments do: as a cost problem instead of a growth industry."

One man's higher payment is another's higher profit.

Most of the big drug and device research firms are based in the U.S., or have a major presence here, for a good reason. This is where the profits are.

Thanks to strong patent protections and channels which price drugs at retail, rather than in bulk, American consumers subsidize our pharmaceutical and device companies to the tune of tens of billions of dollars each year.

In Europe or Canada, the payer takes control of product at the wholesale level. They buy in bulk and handle the distribution.

In the U.S. the producer controls the product down to the retail shelf, except in the case of sales to hospitals or, say, the VA, which have the buying power to "break bulk" themselves.

This control of the channel has a huge impact on the bottom line, even for patented medicines. It means the producer here dictates the price. Buyers have no leverage.

If this control is lost, if  the subsidies to industry end, America could lose thousands of jobs, and some companies could go bankrupt. That is an economic hit we need to remind ourselves of.

It's for this reason that, as Countdown reports, drug and device makers pay the bills for groups like the Hudson Institute to attack reform. They did the same thing in 1994.

The health IT components of the stimulus bill are designed to accelerate changes already underway in the marketplace . But when the buyer saves, the seller loses.

The debate over health IT has nothing to do with IT, but the reform we know results from its use.

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