subject: Will Health Insurance Reform Reduce Innovation? [print this page] As a Republican Senator, it is not a surprise that Judd Gregg is against the Obama administration's health insurance reform efforts. However, he has introduced a less-publicized concern into the debate.
Like others in his party, he is worried about the bill's impact on the deficit and negative effects on the solvency of Medicare. Gregg also believes that the legislation will result in lower quality of care, but for different reasons than other opponents.
One of Gregg's primary concerns with the bill is that it has the potential to stifle innovation. According to him, fewer medical devices and drugs will be developed. Less capital will be invested into the system, because there are fewer opportunities for burgeoning profit.
While technological innovations in health care have helped extend our lifespan and are clearly important, not all changes are created equal. Some treatments and screenings have been proven extremely effective. Unfortunately, others have been shown to have relatively little impact on health outcomes--but a far larger impact on the bottom line.
There is a difference between the invention of a breakthrough medication, such as penicillin, and minor tweaks in the laboratory in order for pharmaceutical companies to retain their patents. Sometimes, drug companies will make small changes to the dosage mechanisms (such as gel caps instead of tablets) to avoid competition from cheaper generic drugs. Proponents of the bill believe that it will be more likely that the latter, so-called "innovations" will be stifled.
Gregg believes that the attempt at increasing access to affordable health insurance will result in somewhat of a price-controlled system, which reduces the motive for companies to innovate. While it is true that many important medical breakthroughs have occurred in the United States, those who disagree with him would point to the increasing number of breakthroughs coming from scientists out of Western Europe. Those nations have even more explicit price controls on prescription drugs and medical devices. Granted, multinational corporations may have been doing more research and development for the American market, and that could decrease significantly.
Moreover, the health insurance reform bill includes some increases in scientific funding. Over the years, many medical discoveries have been made in universities through federal grants, in addition to private laboratories. Gregg's concerns may be premature.
by: Yamileth Medina
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