But Mr. Goldhill didn’t mention that pharmaceutical companies in the United States spend more on sales and marketing (including consumer advertising and direct marketing to physicians and other health providers) than on research. Why, for instance, do we allow advertising of prescription drugs, when its only function is to have ill-informed patients pressuring physicians to prescribe particular drugs? A substantial amount of medical research is performed in our universities and financed by research grants from the National Institutes of Health, i.e., the taxpayers.
Mr. Goldhill asked why competition doesn’t bring U.S. health-care prices down. He blamed the insurance industry for the fact that hospitals and doctors “avoid competing on price.” Instead, he advocated that, except for a separate “safety-net function that insurance provides,” a “consumer economy could drive [price] competition” in the health-care system. Really? As “patient-consumers,” we first ask several providers how much they would charge for some treatment. Never mind that, as patients, we are often under stress or sometimes in an emergency situation. Most of us are also incapable of judging the quality of alternative treatments recommended. Similarly, how would “hospitals compete on price for patients”? None of this is possible without insurance. The almost 10 percent of Americans without health insurance are definitely not being wooed by health-care providers. But here again, our problem is a for-profit insurance industry that is spectacularly complex and inefficient, with more than 1 million people employed, requiring mountains of paperwork from providers as well.