Dean Kamen, defending innovation in healthcare:

The reason 100 years ago everyone could afford their healthcare is because healthcare was a doctor giving you some elixir and telling you you'll be fine. And if it was a cold you would be fine. And if it turns out it was consumption; it was tuberculosis; it was lung cancer—you could still sit there. He'd give you some sympathy, and you'd die. Either way, it's pretty cheap. We now live in a world where technology has triumphed, in many ways, over death. The problem with that is that it's enormously expensive. And big pharmaceutical giants and big medical products companies have stopped working on stuff that could be extraordinary because they know they won't be reimbursed, according to the common standards. We're not only rationing today; we're rationing our future.

I agree with him but add the following points. 1. Healthcare is expensive for two reasons: new treatments and machines are expensive and also doctors are ordering many tests and wasteful care because it's in their incentive to do so. 2. Insurance companies also have tremendous bargaining power, which means they only pay a fraction of what hospitals actually bill them. The result is hospitals bill more and more so the fraction rises. The uninsured actually have to pay the full amounts. I don't regard this as a good thing; see the discussion here. 3. We could keep the incentive for private companies, without patents, by offering large government prizes for innovation in healthcare, say, a $1 trillion prize for a cure for diabetes. Of course, that cure could be massively expensive to implement, but over time things become cheaper. General comments on healthcare: 4. Navarchos summarizes the problems with the current healthcare system very well, in about three paragraphs. If you are confused about what everyone is yelling about, and what Congress wants to fix start there. H/t Matt Steinglass. 5. I agree that our healthcare system has serious flaws but I have serious misgivings about the ability of the Congress to pass a bill that would make things better. There are too many people with a vested interest: insurers, hospitals, the elderly, the unemployed, businesses, etc. Furthermore any bill must address a number of different issues: it must address adverse selection, problems with an employer-based system, more coverage for the uninsured, and cutting expensive and rising costs at hospitals (for the waste reasons above), and we need some way to pay for it. 6. How do you tell a loved one "The treatment to save your life (or, more often, extend it by a few months) exists, but is too expensive?" If you haven't read Peter Singer's New York Times article on rationing yet, you should. I am worried that this problem may bankrupt the country.

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