What is the SDN opinion on Single Payer Health Care?

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Unlike Mr. Putin, we don't jail or exclude political adversaries from government, and, as is the case in other countries, programs that affect the population at large carry more political weight. This doesn't mean a national insurance will automatically turn out better than Medicare, but it does mean that for about 10 percent of our population (about two thirds of the currently Medicare-enrolled population) which lack any coverage whatsoever there would indeed be some coverage.

The question isn't whether or how much this new system would raise the coverage among the uninsured by. Obviously since they are uninsured, any coverage is better than no coverage. That goes without saying and I believe that much is obvious to a monkey who reads this. The question is what sacrifices we are making to get them that coverage. If that coverage comes at the cost of this devolving into a Medicare-like system where the government skims the coffers or raises premiums/taxes-that-are-really-just-premiums to put towards other things, then that is a price that we as a country may not be willing to pay to get x amount of people covered.

I took the quote below "R&D goes first - that's why so many big companies now have M&A departments instead of R&D" to mean just that. If I misinterpreted it, I apologize.

I stand by "R&D goes first" but I should have said that M&A departments are getting bigger and encroaching on territory that was once occupied by R&D. The R&D departments haven't gone completely and I would indeed be hard pressed to find a big pharma company that has entirely replaced R&D with M&A. The point is that R&D falls whereas M&A goes up.

While you may argue that decreases in revenue are not adjusted for in periods of time under 3 years, to quote this same study "As a group over the decade, these companies grew their investment in R&D (compound annual growth rate (CAGR) of 1.76%) and cut SG&A (−1.12% CAGR), even as revenues remained essentially flat (−0.01% CAGR) (Fig. 1a). Individually, R&D growth rates exceeded revenue growth rates for 8 out of 10 companies over this 10-year period, and exceeded SG&A growth rates for 9 out of 10 companies (Fig. 1a). Individually, R&D growth rates exceeded revenue growth rates for 8 out of 10 companies over this 10-year period, and exceeded SG&A growth rates for 9 out of 10 companies (Fig. 1a)." This doesn't mean that the growth in R&D is insensitive to revenue, but that it doesn't necessarily correspond in strategy or funding. As for whether your experience is generalizable, it's worth mentioning that one of the authors was director of strategy of AstraZeneca's "Oncology Innovative Medicines unit" (I'm going to assume this means cancer drugs, if I'm wrong in doing so, please correct me,) and currently runs a healthcare investment bank. Either the author is being intentionally disingenuous given that he would understand how strategic choices in R&D budget are not identifiable on a year-to-year basis, or his experience is different from yours.

As a group, these companies are incredibly diverse and I would not put much stock in that outcome. A difference in spending of just under 2% on the average does not reflect the more nuanced changes that companies must make. In the course of a decade, many things happen - in fact, it's an off-cited rule of thumb in the industry that a blockbuster drug comes along about once every ten years. Things like Lipitor or Zoloft. These things end up affecting revenue and decision-making in the long run. Show me data that tracks these companies in the very same way the authors tracked them in that study, just in over longer time scales after the revenue decrease. If that shows consistent increases in the R&D spending, then I will rest my case. Again, the very data they show demonstrates the very opposite. In most years and for most companies, the R&D spending tracks revenue for the companies they show in Figure 1a.

The author is looking at short-term trends when he should know that the pharma industry responds to longer-term effects. I can't speak to his motivation but his own data is clear. For most companies, R&D tracking generally tracks revenue except in the a few companies specifically in the last few years. Longer-term trends are also diluted and can be reversed by many market effects. For example, having one blockbuster drug come in can make up for reductions in spending due to loss of revenue from another drug/failed trial/drug being pulled from the market/etc. He's looking at overall revenue and overall R&D, which ignores cause and effect entirely.

Not for lack of trying (and probably because data about the market in the 1940s, 50s and 60s when most of these programs were implemented in Europe is not necessarily translatable to the present day) I cannot come up with such a study. How radical is a reduction of, say, 30% in the price of medications that the global pharmaceutical market changes structure? Given that the United States is about 33% of this market per your earlier source, this means a 10% global reduction, which may be of significance but isn't market or R&D shattering, even assuming that Europe does not adjust its prices to provide a more equitable share of, and save the market that we all benefit from (which they should, if this turns out to be an issue.)

Interesting question. Alright, let's do a case study on chemotherapy. Usually, chemotherapies can cost in the tens of thousands for a couple month-course. How much would you negotiate that price down by? Let's say it's $30,000. A reduction of 30% would be a final cost of $21,000. Is that an acceptable reduction for you?

That the "no, we won't pay you a price above this" that falls under the negotiating power of public and private sectors alike does not exclude the rest of the market and is adjustable for negotiation (because the public insurance providers, as was the case with the NHS and Palbociclib, also have an interest in providing those medications, particularly when they offer significant therapeutic advantages) whereas a price control is just that, a price control, and may be entirely unilateral is the difference.

What rest of the market?

This is another semantic argument we're stuck in. I chose my words well enough. This is how Merriam-Webster defines significant

1 : having meaning; especially : suggestive
  • a significant glance
2 a : having or likely to have influence or effect : important
  • a significant piece of legislation
; also : of a noticeably or measurably large amount
  • a significant number of layoffs
  • producing significant profits
b : probably caused by something other than mere chance
  • statistically significant correlation between vitamin deficiency and disease

I created a significant turd last night. Astronomically significant, actually.

It has. And, though it doesn't include single-payer in its definition, the Physicians for a National Health Program page on basic healthcare system models refers, when speaking of the multi-payer Bismarck model, to "the single-payer Beveridge Model," and adds a note at the end:"Reid’s “Beveridge” model corresponds to what PNHP would call a single payer national health service (UK); “Bismark” model refers to countries that PNHP would say use non-profit “sickness funds” or..."...Reflecting that this isn't some misuse I've made out of thin air, but what may be the admittedly commonly ambiguous use of the word
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I don't disagree that people have been using the term quite loosely. Doesn't justify continuing to use it. There's an age-old adage that I shouldn't have to repeat here, as you've probably heard it sometime during your childhood.

There are pure and adjusted community rating, where the latter establishes some demographic guidelines on which premium costs may be raised (for instance, the 3:1 ratio on the basis of age and 5:1 on the basis of tobacco use in the ACA.) While I'm a tad ambivalent on tobacco-based adjustments, the former seems like burdening our elderly and aging population on the basis of age, which is no more controllable than health history (which does not permit premium adjustments)

That "adjusted" community rating is just risk rating by category. Again, it's a matter of terminology and this one is again in common usage but even the ACA is risk rated. It just allows less risk rating than before.

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The question isn't whether or how much this new system would raise the coverage among the uninsured by. Obviously since they are uninsured, any coverage is better than no coverage. That goes without saying and I believe that much is obvious to a monkey who reads this. The question is what sacrifices we are making to get them that coverage. If that coverage comes at the cost of this devolving into a Medicare-like system where the government skims the coffers or raises premiums/taxes-that-are-really-just-premiums to put towards other things, then that is a price that we as a country may not be willing to pay to get x amount of people covered.
I think you're referring to the use of current medicare trust funds (among the people who are collecting wages and not using that medicare) and use toward current costs that may or may not be limited to the Medicare program (which in theory should not be the case but I can conceive as happening in one way or another.) This is not necessarily entailed by the public nature of the system, and carries the political weight of being everyone's insurance fund (and not just in the future.) In systems without any legislation to keep healthcare tax levying separate from other taxes, like Spain's, there is a catalogue of services that must be provided by autonomous communities (which are the healthcare-providing units) at minimum but which may be exceeded. If taxes in general are exceeded, this is not distinct from the power of raising taxes currently given to our legislators.

I stand by "R&D goes first" but I should have said that M&A departments are getting bigger and encroaching on territory that was once occupied by R&D. The R&D departments haven't gone completely and I would indeed be hard pressed to find a big pharma company that has entirely replaced R&D with M&A. The point is that R&D falls whereas M&A goes up.
This doesn't seem sustainable in the long run (even less so than R&D in general,) I assume that there is a finite number of acquirable companies to absorb R&D risks. How is this discussed in terms of long term strategy, to your knowledge?


As a group, these companies are incredibly diverse and I would not put much stock in that outcome. A difference in spending of just under 2% on the average does not reflect the more nuanced changes that companies must make. In the course of a decade, many things happen - in fact, it's an off-cited rule of thumb in the industry that a blockbuster drug comes along about once every ten years. Things like Lipitor or Zoloft. These things end up affecting revenue and decision-making in the long run. Show me data that tracks these companies in the very same way the authors tracked them in that study, just in over longer time scales after the revenue decrease. If that shows consistent increases in the R&D spending, then I will rest my case. Again, the very data they show demonstrates the very opposite. In most years and for most companies, the R&D spending tracks revenue for the companies they show in Figure 1a.
That the R&D growth rate tended to decrease with decreases in revenue was not at dispute, again they say that while revenue growth rates are essentially flat over the sampled period the R&D grew on average and the SG&A shrunk on average. And while these changes are small (as are the sampled changes in revenue, the largest of which is Roche at 3.77%) they show priority does not shift out of R&D growth relative to revenue growth, but adjusts accordingly. As such, we may see a decline in R&D if revenues go down, but in the long term it does not seem that "R&D goes first" - its growth dips below that of revenue in the revenue decreases of Merck and Co, Pfizer (except around the last few sampled year(s,) and of Sanofi in some years. On the other hand, when AstraZeneca, Bristol-Myers Squibb, Lilly, and Novartis keep R&D at levels above their revenue while Johnson & Johnson keeps it below revenues consistently until around the end, when it dips above. At best, from looking at the data, we can say responses in terms of what parts get cut out the most when spending goes down (though everything does go down) are not uniform in the short or long term.

The author is looking at short-term trends when he should know that the pharma industry responds to longer-term effects. I can't speak to his motivation but his own data is clear. For most companies, R&D tracking generally tracks revenue except in the a few companies specifically in the last few years. Longer-term trends are also diluted and can be reversed by many market effects. For example, having one blockbuster drug come in can make up for reductions in spending due to loss of revenue from another drug/failed trial/drug being pulled from the market/etc. He's looking at overall revenue and overall R&D, which ignores cause and effect entirely.
I'm not following you, would having a blockbuster drug not be reflected in the revenues? And should the delay in tracking or in strategic reaction, if not reflected in one-year-change graphs, still show up in 10-year trackings of those companies?

Interesting question. Alright, let's do a case study on chemotherapy. Usually, chemotherapies can cost in the tens of thousands for a couple month-course. How much would you negotiate that price down by? Let's say it's $30,000. A reduction of 30% would be a final cost of $21,000. Is that an acceptable reduction for you?
Again, you ask too much of me. I'm assuming that neither the manufacturer wants to be insolvent nor the administrating body wants to be gouged and incentives move from there as each. The nuances of specific drugs with specific production costs and specific therapeutic advantages are probably beyond generalization, but even if they were not I would not be able to come up with those numbers. I would venture to guess that if production costs and some extent of profit margins remain at $21,000 that would be reasonable. It seems that if Germans pay $21,000 for this theoretical drug and it is worth manufacturing and selling for the theoretical manufacturer, it can be worth manufacturing and selling at adjusted price levels for the same manufacturer for Americans. If continuation of the billions of dollars in R&D invested by the private sector every year requires fatter profits, then Germans, Brits, etc. as much as Americans should need to adapt prices. Assuming we're overburdening our taxpayers and unhealthy citizens to pay for the world's R&D, it's worth asking whether that R&D investment burden per se is helping more than it's hurting in America (not to say, again, that R&D isn't immensely valuable for humanity.)

What rest of the market?
Private insurance, the alternative we have referred to before.




I created a significant turd last night. Astronomically significant, actually.
I'm glad you have healthy bowel movements.


I don't disagree that people have been using the term quite loosely. Doesn't justify continuing to use it. There's an age-old adage that I shouldn't have to repeat here, as you've probably heard it sometime during your childhood.
Sure, but given that people do use it we can understand what they may mean even if it's not what we think it should mean. No need to divert from the relevant argument over semantic discrepancy.
As for the adage, I'm foreign-born so I did not get to hear it in my childhood, but I can vaguely imagine how it goes.

That "adjusted" community rating is just risk rating by category. Again, it's a matter of terminology and this one is again in common usage but even the ACA is risk rated. It just allows less risk rating than before.
Indeed.
 
I think you're referring to the use of current medicare trust funds (among the people who are collecting wages and not using that medicare) and use toward current costs that may or may not be limited to the Medicare program (which in theory should not be the case but I can conceive as happening in one way or another.) This is not necessarily entailed by the public nature of the system, and carries the political weight of being everyone's insurance fund (and not just in the future.) In systems without any legislation to keep healthcare tax levying separate from other taxes, like Spain's, there is a catalogue of services that must be provided by autonomous communities (which are the healthcare-providing units) at minimum but which may be exceeded. If taxes in general are exceeded, this is not distinct from the power of raising taxes currently given to our legislators.

I'm not saying this is an inevitable feature of the public system. I'm saying that there can be abuses in any public system (as I am sure you are well aware) and we need to guard against that if we are to undertake such a massive project. I cannot see any scenario in which you could disagree with that statement without sounding delusional.

This doesn't seem sustainable in the long run (even less so than R&D in general,) I assume that there is a finite number of acquirable companies to absorb R&D risks. How is this discussed in terms of long term strategy, to your knowledge?

That number is finite but large and as of yet, we have not run out of smaller companies willing to take on that added risk. This is because they know that they only have to invest in R&D and if they have a successful drug, they can sell it to the bigger companies which have the marketing machinery to turn it into a blockbuster. Under the current system of incentives, big pharma pays a high premium for these drugs because they know they will, in turn, get a lot of revenue from it. But once you change the incentive system, i.e. drops in revenue due to a large market negotiating down drug prices substantially, this whole model no longer applies. The incentives have shifted. Since the U.S. isn't close to moving to a single-payer system, we generally don't discuss the contingencies associated with that in long-term strategy.

That the R&D growth rate tended to decrease with decreases in revenue was not at dispute, again they say that while revenue growth rates are essentially flat over the sampled period the R&D grew on average and the SG&A shrunk on average. And while these changes are small (as are the sampled changes in revenue, the largest of which is Roche at 3.77%) they show priority does not shift out of R&D growth relative to revenue growth, but adjusts accordingly. As such, we may see a decline in R&D if revenues go down, but in the long term it does not seem that "R&D goes first" - its growth dips below that of revenue in the revenue decreases of Merck and Co, Pfizer (except around the last few sampled year(s,) and of Sanofi in some years. On the other hand, when AstraZeneca, Bristol-Myers Squibb, Lilly, and Novartis keep R&D at levels above their revenue while Johnson & Johnson keeps it below revenues consistently until around the end, when it dips above. At best, from looking at the data, we can say responses in terms of what parts get cut out the most when spending goes down (though everything does go down) are not uniform in the short or long term.

Again, in the long term, they're only measuring average effects which nullifies any counterbalancing fluctuations in spending. More below. You'd make a great investor. If you just track the market index, you can probably end up making money most of the time. But the market index doesn't track daily changes in the market and that's why day traders can make (or lose) so much money.

I'm not following you, would having a blockbuster drug not be reflected in the revenues? And should the delay in tracking or in strategic reaction, if not reflected in one-year-change graphs, still show up in 10-year trackings of those companies?

Not if they're sustaining losses in other areas. The point is that overall revenue is a delicate balance of how much money you have vested in failed projects and successful projects. You can make up for many failed projects if you have some successes on a yearly basis. The average will remain fairly consistent. I'm sure you know how an average works. All I see in the figure you cite is R&D funding tracking with revenue. There are rises and dips in both and so in the long term, you see that those average out.

Again, you ask too much of me. I'm assuming that neither the manufacturer wants to be insolvent nor the administrating body wants to be gouged and incentives move from there as each. The nuances of specific drugs with specific production costs and specific therapeutic advantages are probably beyond generalization, but even if they were not I would not be able to come up with those numbers. I would venture to guess that if production costs and some extent of profit margins remain at $21,000 that would be reasonable. It seems that if Germans pay $21,000 for this theoretical drug and it is worth manufacturing and selling for the theoretical manufacturer, it can be worth manufacturing and selling at adjusted price levels for the same manufacturer for Americans. If continuation of the billions of dollars in R&D invested by the private sector every year requires fatter profits, then Germans, Brits, etc. as much as Americans should need to adapt prices. Assuming we're overburdening our taxpayers and unhealthy citizens to pay for the world's R&D, it's worth asking whether that R&D investment burden per se is helping more than it's hurting in America (not to say, again, that R&D isn't immensely valuable for humanity.)

And that assumes that 1) each country can leverage that price out of manufacturers, either in isolation or with transnational coordination and 2) that this fact won't change the long-term strategy of pharma companies. I maintain that if revenues decline, so will R&D funding. It hurts future drugs even if you can get a concession from the company on the current, already-developed drug.


In your idealized single-payer system, there isn't a significant private market. In fact, you believe the public option to be so good that the vast majority of people will adopt it and there will not be any demand for a private market.

I'm glad you have healthy bowel movements.

Healthy? No. Significant. I have significant bowel movements. Those aren't even remotely close to being synonymous.

Sure, but given that people do use it we can understand what they may mean even if it's not what we think it should mean. No need to divert from the relevant argument over semantic discrepancy.

Incorrect usage of terms causes confusion, just as it caused confusion at the beginning when we were talking about a single-payer system. What kind of society would we have if people started to loosely use terms? While I'm sure you would have no problem with someone barging into your "single-occupancy" stall, I certainly would. We're just different in that regard.
 
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I'm not saying this is an inevitable feature of the public system. I'm saying that there can be abuses in any public system (as I am sure you are well aware) and we need to guard against that if we are to undertake such a massive project. I cannot see any scenario in which you could disagree with that statement without sounding delusional.
Certainly no system is immune to abuses. Ours seems the most prone, however.

That number is finite but large and as of yet, we have not run out of smaller companies willing to take on that added risk. This is because they know that they only have to invest in R&D and if they have a successful drug, they can sell it to the bigger companies which have the marketing machinery to turn it into a blockbuster. Under the current system of incentives, big pharma pays a high premium for these drugs because they know they will, in turn, get a lot of revenue from it. But once you change the incentive system, i.e. drops in revenue due to a large market negotiating down drug prices substantially, this whole model no longer applies. The incentives have shifted. Since the U.S. isn't close to moving to a single-payer system, we generally don't discuss the contingencies associated with that in long-term strategy.
Would this "pay a high premium" not be causative of some of the price inflation? Seems like an entirely unnecessary layer pharmaceutical production, if a profitable one at that.


Again, in the long term, they're only measuring average effects which nullifies any counterbalancing fluctuations in spending. More below. You'd make a great investor. If you just track the market index, you can probably end up making money most of the time. But the market index doesn't track daily changes in the market and that's why day traders can make (or lose) so much money.


Not if they're sustaining losses in other areas. The point is that overall revenue is a delicate balance of how much money you have vested in failed projects and successful projects. You can make up for many failed projects if you have some successes on a yearly basis. The average will remain fairly consistent. I'm sure you know how an average works. All I see in the figure you cite is R&D funding tracking with revenue. There are rises and dips in both and so in the long term, you see that those average out.
I understand variations occur in the long term, but we're looking at a 10-year period. When the average revenue declines in the long term, we should see declines in R&D that are of greater proportion either at the time or down the line if R&D is consistently "going first." I also understand that the average is contingent on failed and successful projects, which doesn't detract from the fact that R&D spending in most cases doesn't shrink more than SG&A or revenues, long or short term (to the extent the table resolution allows.) And in the long term, even if we assume that the R&D growth is not significant it can't be said that R&D is shrinking relative to revenues.


And that assumes that 1) each country can leverage that price out of manufacturers, either in isolation or with transnational coordination and 2) that this fact won't change the long-term strategy of pharma companies. I maintain that if revenues decline, so will R&D funding. It hurts future drugs even if you can get a concession from the company on the current, already-developed drug.
Countries leverage even lower prices out of manufacturers (I mentioned Germany specifically because it is closer to the upper end of Europe, though it is not even a Beveridge model country) for whom evidently the production of those medications remains cost effective (Pfizer and others aren't making medications at a loss, even if they're making it at a lesser profit.) If it shrinks 10% of the world pharmaceutical market, it may still turn out a benefit for Americans even if R&D funding for the world from the American pocket declines. A system that charges more than the rest of the world and still excludes 10% of the population from healthcare beyond the ER has to be cut somewhere, and a great deal of that, as I mentioned earlier, may not even be at the level of pharmaceutical manufacturers, but present coverage for everyone on treatable conditions and sustainable spending levels seems worth a measured decline in R&D spending.



In your idealized single-payer system, there isn't a significant private market. In fact, you believe the public option to be so good that the vast majority of people will adopt it and there will not be any demand for a private market.
Except, as the link I included mentioned, patients in the NHS can and do join private insurance to get medications not covered by the NHS. That they don't do it more often reflects a strong public market and infrequent need for it. Not some idealized fantasy, but a system in practice abroad.


Healthy? No. Significant. I have significant bowel movements. Those aren't even remotely close to being synonymous.
I wasn't implying that they were. I'm getting too much out of this discussion to turn it into some petty argument over what significant means, if only 30% of $40 billion in federal medial and health research investment goes into useful medications that's still a number in the billions and significant. If you took "significant" to be synonymous with "majority," I don't know what to tell you. It wasn't what I meant remotely, and I wasn't distorting the meaning of the word.


Incorrect usage of terms causes confusion, just as it caused confusion at the beginning when we were talking about a single-payer system. What kind of society would we have if people started to loosely use terms? While I'm sure you would have no problem with someone barging into your "single-occupancy" stall, I certainly would. We're just different in that regard.
Except single-payer is frequently used to mean more than one type of system, and "single-occupancy" has a pretty fixed meaning. Whether we can prescriptively call it wrong is a different argument, and one which I won't divert this discussion towards. We're not here to talk about terminology or semantics, but the systems behind them, and evidently we both know what the other is talking about by now.
 
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