I'm not saying i believe it but the counterargument i've heard to this is that the US also funds the most medical research.
I havent seen anyone clearly explain how more expensive bandaids trickle down into the pockets of researchers, but nevertheless it is a common counterargument to the US spending much more than other countries on healthcare
I don't think any of your links substantiate the claim that US healthcare expenditure subsidises global R&D on healthcare, only that healthcare is more expensive in the US (which I personally think is more due to an extremely ineffective system with an unhealthy amount of middlemen that inflate prices).
US industry accounts for ~60% of US medical research. The rest is NIH, donations etc.
US pharma companies like Pfizer gets more than 50% of their revenue from foreign markets. Thus if we split research contributions by region, only about 30% of US medical research is likely to come from US healthcare expenses.
Even if you took away all of that funding you still wouldn't account for the cost differences.
But that's not the whole story: US sales costs are substantially higher, as in many non-US markets you can't legally advertise, so the net contribution of US healthcare funds to US medical research is likely less,
It may still be true that the US pays more per capita for to medical research than most, but it simply doesn't make up all that large a proportion of overall medical research.
The original claim was "The United States is subsidizing the medical expenses of the rest of the planet."
When some evidence was provided, you stated that per capita they're only doing 1/3 more than the UK.
The thing is, that original claim that others were arguing with had nothing to do with per capita. The proposition is based on absolute numbers.
And for the larger argument about what current proposals would do to innovation in medical treatments, what we're really talking about is the total amount of research, not per capita -- the latter is a red herring.
The fear is that, if the USA clamps down on healthcare spending, then much of the research that's done in the USA won't continue. And if that's the case, then the pace of improvements in healthcare will slow, and in the long run that's a very bad thing.
That proposition is certainly open to debate. But decomposing the facts into per capita data is a red herring that does nothing to resolve the question one way or another.
That may be so, but doesn't necessarily imply that health care is more expensive in the US. It's possible that in the US they simply spend more money on useless things, or do more screenings with better technology, for example.
The US spends a huge amount on medical research compared with other countries-- both in the form of direct government subsidies and high drug prices. We also spend a huge amount on direct and indirect foreign aid, and privately funded programs by US citizens... like the Gates Foundation that explicitly funds medical research and cures for tropical diseases.
High health care spending is yet another way the US subsidizes other countries. From the article:
"This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.”
In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
Again, that claim is easily refuted by considering the state of medical spending in the US.
Unless by 'government' you mean only the US government. Many other governments are daily demonstrating their ability to deliver more affordable and cost-effective healthcare than the US.
Bullshit. Show me where you get this 70% figure from? Are you talking about spending or results? I think you pulled it out of your arse, but would love to know. What I found was, European r&d spending is close to what the USA spends. Individual countries spend more as a percentage of GDP than USA. World wide, USA does not appear to be spending anywhere close to 70% of the total on medical r&d.
* 2011 Nobel prize for medicine went to an international crew (2 from europe, 1 USA)
* 2010 Nobel prize for medicine went to a British man.
* 2009 2 women from the USA, and one man from UK.
* 2008 1 german man, 1 french woman, 1 french man.
Anyway, medical care isn't just about what drugs multi national companies produce (with much funding from Asia and actual research done in Asia and sales done in USA+worldwide). It includes things like reducing obesity, stopping people smoking in bars, and providing good medical care for all people - which reduces sickness spreading. It does take research, and development to figure these things out and implement them on a social level successfully. Many of these things are classed as social science, and not included in R&D in many places. They can't even get R&D funding for this stuff in some places because it is not real science apparently.
Tax credits for r&d also distort the real costs. The UK gives 225% r&d tax credits, and Australia gives 175% tax credits of the cost now(USA has them too, but lower). This means you make money purely from just doing the R&D without worrying about the results.
btw, the USA is massively in debt, and over 22% of US companies being foreign controlled. So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries? With all the funding into the USA also coming from other countries, shouldn't some of that be counted towards the other countries? Shouldn't the fact that lots of the workers in R&D labs for US companies have been outsourced to other countries count towards those countries?
while it is probably true that US healthcare is subsidizing drug discovery (perks of being the strongest economy), there still seems to be an asymmetry in the US. E.g You spend 6-8 times more in administrative costs and about 2 times more in drugs:
Administrative costs of care (activities relating to planning, regulating, and managing health systems and services) accounted for 8% in the US vs a range of 1% to 3% in the other countries. For pharmaceutical costs, spending per capita was $1443 in the US vs a range of $466 to $939 in other countries. Salaries of physicians and nurses were higher in the US; for example, generalist physicians salaries were $218 173 in the US compared with a range of $86 607 to $154 126 in the other countries.
Everything from basic cancer therapies to stem cells to the human genome were invented / discovered / cracked by US money. And it's a very, very long list that covers most types of advanced drugs and therapies in some form or another. Growing organs? Pioneered by US research. Robotic surgery? US money.
It is however true that a lot of US medical costs are tied up in labor, namely healthcare workers and administration. Nobody wants to talk about what happens when you cut costs there however (unemployment, lower wages, et al.).
It does include both private and public. You'd have to dig into the different reports to figure out exact methodologies (which I'm too lazy to do right now), but most reports converge on the USA being the country that spends the most on healthcare, both on a per capita basis (which is less interesting, we're richer than most other countries so we should spend more) but also on a % GDP basis. And we win by a large margin on that metric, despite getting pretty mediocre bang for buck.
Various theories explain this: inefficiencies, the USA subsidizing research for the rest of the world, etc. Really they're two sides of the same coin--those inefficiencies line the pockets of various medical-related corporations, some of which ends up going into research.
What are you talking about? We’re subsidizing every other nations healthcare system. Not just the medications.
The US in finances provides 60% of the worlds medical research. We produce 40% of the worlds medical journals, and research.
People bitch about the United States healthcare being this or that. But what they’re really saying is our healthcare is too expensive, bloated in cost, and inaccessible to lower income and at risk individuals. Which I would agree.
US medical R&D spending is about $500/year per capita. US overspending on medical care compared to other first-world countries is about $3000/year per capita. That doesn't account for more than a small part.
This really is a matter of what variables you choose to measure.
For example, the US is by far the world leader in medical research spending - 44% of global medical research is spent in the US. (Until recently it was even higher). [1]
On the same note, many nations regulate the price of prescription drugs - drugs where the initial R&D was done in the states. (Yes, drugs are sold at a huge markup, but that's to recoup the huge initial costs of research). In other words, Americans are taking it in the chin to invest in pharmaceutical innovations, which other countries then treat as a public good.
An additional point that's often obscured: there's no purely capitalistic healthcare system in the world. Even pre-Obamacare, the US system was about 46% funded by the government. (As with the US education system, the availability of government funds has massively pushed up prices). [2]
On a personal note - I'm a brit, but I've lived abroad, and the NHS is one of the reasons I'm considering settling abroad long-term. I simply don't trust the organisation as a whole to take care of my health. If you get assigned a good doctor for your condition, you're OK, but I have my own stories (and I've heard many others) of conditions being ignored or misdiagnosed, even after multiple visits.
In contrast, I went to a hospital in Bangkok that was of far higher quality than the average NHS hospital. (Granted, this was a private hospital, but it puts things into perspective). One Israeli friend said that walking into a UK clinic was like walking into a clinic in a third-world country. It's shabby, the wait is long, the bureaucracy is confusing, etc.
Strange as it may sound, I trust a for-profit entity more with my health, because their livelihood directly depends on taking good care of me. The common argument that healthcare can't be a market because of information asymmetry and doctors being in a position of power doesn't wash: the same holds true for other complex services, like auto repair, and the solution is simple: third party reviews. (On the moral argument, about affordability, I think with a truly private healthcare system entrepreneurs would be able to drive the costs down for people on middle-incomes, and only the bottom 15-20% would be reliant on government or charity spending).
The original claim was about private medicine leading to greater investment. That's why it was pointed out that the largest single investor was a US government agency.
Showing that other nations with socialised medicine have higher per capita investment is entirely germane since the point is at what level the US could be investing if it chose another approach. It's evidence that directly contradicts assumptions in this thread.
I havent seen anyone clearly explain how more expensive bandaids trickle down into the pockets of researchers, but nevertheless it is a common counterargument to the US spending much more than other countries on healthcare
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