Scott Adams Blog: My Views on the Dilbert Survey of Economists

As a general rule, I find this argument to be a good approach on a lot of issues. However, I have to disagree with you on this issue because I think there are fundamental reasons why it's impossible for us to copy the health care systems that "work" elsewhere. I'm going to assume that you are talking about the socialized systems that exist in Europe in my argument below.

Having just lived for a year in England, I had a chance to learn a bit about how the NHS (the UK National Health Services) system works. Everyone receives cheap and reasonable health care through the NHS, but the system is always short on funds and looking for good ways to cut costs. Medical care is inherently expensive and even the more socialist governments can't throw unlimited amounts of money at it. Since the NHS is legally required to pay for any approved medical treatment that a doctor deems necessary, they stand to lose a lot of money whenever a brand new and expensive drug/treatment is invented. Thus, they've identified a convenient loophole to the problem: don't approve any medical treatment as "safe" until the patent runs out and a generic brand is available. The consequence for Europeans is that they may not have access to the latest/greatest new medical treatments and are always a few years behind, but they still get good cheap health care that's guaranteed.

The problem, though, is that their system depends entirely on the US. The pharmaceutical industry in Europe is basically dead because there is no longer a market to sell new products. There's plenty of good basic research still done at universities, but no new drugs ever come out of universities directly. University researchers are concerned with scientific research, not fulfilling legal requirements for getting drugs approved and making a profit. There are still big European drug companies out there that invent new drugs all the time, but their entire business models are based on the profits they expect to earn selling new drugs to Americans overseas. Overall, the medical industry worldwide continues to invent new drugs/medical devices and improve our overall lifespan and standard of living, but only because Americans are willing to pay for it.

By now you probably know where I'm going with this. The only way we can successfully copy the European system is if we could find some large external market that's willing to keep paying the huge costs for new, patented drugs. We are that large external market for Europe and no other large market exists. If we copy their system, all these drug companies (both American and European) are either going to go bankrupt or they're going to just manufacture drugs they've already invented. This means nor more medical advances, no new medical technologies, and the same health care available to us when we're 30 as when we're 80. It's not worth it.

Scott Adams Blog: My Views on the Dilbert Survey of Economists 09/17/2008

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