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A news article regarding shortages of medicines at hospitals was sent to me, and the sender asked my thoughts.
I wanted to share those with you.
Here's a situation that has been in the making for many years. We have reached a place in modern medicine where the focus has shifted from that of healing, curing, comforting those of us who are ill, to a full-blown economic system. Don't get me wrong, I am a strong proponent of the free market system and it has traditionally served all of us very well.
Producers should be allowed to make what they want and sell it to anyone who is willing to pay for it. The prices will float, but will always work out best for both buyer and seller. If the price is too high, buyers won't spend their money for it. It the price is too low, the producers won't be able to stay in business by selling their product below cost. - unless a willing third party steps in.
Only governments can spend more than they take in. Herein rests the key to understanding today's shortage problems.
The sad fact today is that health care is a miserable hodgepodge of systems. On the one hand, we still have a free market philosophy that should allow medicines to flow into and out of the market. On the other hand, we find that government and social programs have significant impact on the business of health. In fact, third party involvement has such a stranglehold on the practice of medicine that doctors have stepped aside from the role of professional healer. They have turned their autonomy to decision makers who sit at desks in government buildings or in insurance companies.
The cost to make a medicine is beyond the means of even the wealthiest individuals. Only the largest and richest drug companies can afford the costs needed to bring a new product to market. The idea of generic drugs is good, but third party interference even makes it very expensive to copy a product after its patent expires. Those costs add to the final price. There are often new drugs entering the market as the generics emerge. The original companies use their skills in the free market to price their new-and-improved drugs and shift attention away from the older, effective product that would cost far less.
The old drugs are ignored. Yet, when they are made, it is at stiff prices. As I mentioned above, high prices discourage purchases and the companies look for other products to make that will generate better margins. Around and around we go.
Today's shortages are gaining attention, yet few are looking for solutions. The free market environment for health is the most lucrative segment in our modern society and those on the profitable end are in no mood to make changes. They are so powerful, in fact, that they are also able to interfere with anyone who would suggest a change that could lower their margins.
There are three groups responsible for the mess we're in;
- the drug makers
- the insurance companies, and
- the government. In a free market, these three elements would be distinct, each working to find ways to maximize their profits. Instead, each of these pieces is intertwined with the others.
Example: Someone might decide to make a drug and charge $10,000 for a month's supply, even though it only costs $50 to make and distribute. Outrageous? Maybe. The customer says it's too much and he won't pay it. No problem. The insurance company pays for it. But, what if the customer doesn't have the right kind of insurance? No problem. The government pays for it. Where does the insurance company get the money? It charges premiums sufficient to pay whatever is on the bill. What about government? Even easier. It can just make the tax revenues match the costs.
To get a glimpse of just how powerful this system is, consider the Federal Health plans that have been passed. With nary a whimper, we will be moving into a place where the above scenes will dominate everyone's life. The three basic elements are, together, party to criminal acts.
Important medicines are in short supply; impossible in a true free market. The shortages are real, but artificially induced. They are but a single example of how a perverted system can damage all of us. Health care will not be reformed as long as that three-way alliance persists. Do you think it is likely that the drug makers, the government, and the insurance executives will be open to change?
To read the original article I am responding to, click here.