SECTION TWO: Hidden Economics of Healthcare
Here are samplings of the reasons Healthcare Reform still isn't going anywhere.
Healthcare Reform: Looking Ahead (2)
New topic 2015-07-12 03:32:17 description
Medicare spends about $56 billion a year. The National Institutes of Health spends $30 billion, rising at a rate of 3% a year, or about the national inflation rate. Full disclosure: I was an employee of the NIH for two years, and think highly of the place. The Director of NIH at that time was James Shannon, who had been in charge of the New York division of Goldwater Hospital on Welfare Island in New York harbor, while I was a medical student on the Columbia division of the same hospital. I didn't meet Shannon in New York, but I heard everyone who knew him, speak with awe. The big news when I was a student was that he had accepted a job in the commercial drug industry, which was deemed a degrading sell-out. There was much cluck-clucking, which medical students intended as giving the drug industry a not-so-subtle warning from us their betters, that we would never, ever, consider such a sell-out to the money-changers. Shannon persisted in the drug industry for a few years, and then turned up as Director of the NIH.
He never confided his goals to me, but it was widely reported he only accepted the political job, on condition Congress would absolutely never introduce political goals into the research process. No scientist would ever be forced to study a project because some Congressman's wife had a disease, or thought she did. Grants would absolutely never be awarded with a geopolitical bias, and the consideration of favoring a particular drug company's research leads, would absolutely never be tolerated. And indeed, the NIH was pretty much run on such starchy principles for at least fifteen years. By the end of that period, its reputation was immense.
During that period, the grounds of the NIH in Bethesda grew from an expansive, golf course-like, estate with only a billion or so budget, into an extensive little city of research buildings, with traffic lights and uniformed policemen to direct traffic. And, a $30 billion budget whose composition is not easy to come by, but only 10% of which is reported to be spent in-house. The greatest proportion of the budget is now dispensed to far-flung academia in the form of grants. The emphasis of current research can be inferred from its list of specified targets, which concentrate on cancer, antibiotic resistance, brain disorders and Alzheimer's disease. A few years ago, HIV/AIDS was targeted, and so successfully, it dropped off the targeted list. Let me tell you a trade secret about research: most proposed research is a waste of money, accomplishing little. The art of selecting which proposal to fund is therefore a difficult one, but there is no doubt some scientists are better at both selecting it and doing it than others; only about 20% of grant requests are selected to be funded. How many potential Nobel prizes are in the rejected 80% is unknown, but there must be some.
Successful researchers quite often prove to be high-stakes gamblers, and some people seem to have better hunches than others. Some people just don't have the right temperament, but it's pretty hard to identify just what that is. On the other hand, some people only flourish when surrounded by others with the "right stuff", while others work best when left alone in solitude. I hate to say it, but a few people also excel at the fine art of stealing the ideas of others with less drive and energy. Some people burn out at an early age, others keep producing good work past the retirement age. All in all, it's probably remarkable that the 20% who are selected, produce so much. But since so much time and money comes to nothing, the environment is a dangerous one, rather glibly leading to a conversational conclusion that someone else should have got the grant. On the other hand, we have made it possible to become a billionaire before you are thirty, so some real pirates get attracted to research. Observations of this general sort lead me to believe, if we should suddenly get the announcement of a cheap effective cure for cancer, there would immediately be a chorus of voices, demanding next year's NIH budget be cut in half. And the frustrating thing would be, no one could be entirely sure that was wrong.
That summarizes one way this promenade could end; not with a whimper, but a bang. A famous success, with prizes and speeches and even statues -- followed by a steep budget cut. The other way, would be the slow exhaustion of contemporary protein chemistry, followed by nothing which could match it for glamor. For the past twenty years, the five hundred peer-selected papers chosen for presentation at prestigious three-day research seminars-- have overwhelmingly shown slides displaying ink blots.
What will follow protein chemistry?
Let me explain. Until twenty years ago, most successful new drugs and biochemical discoveries have involved small molecules. It seemed clear most of the remaining secrets were hidden in the coils and recesses of protein chemistry, but protein chemistry was just too hard to do quickly. We spent a billion dollars exploring the human genome, only to find it explained no more than 2% of disease. So we doubted the research and repeated it, spending another billion to no avail. Almost all these experiments involved chromatography, so almost all of the experiments showed their results as blots on a piece of paper, rather uniformly resembling ink blots in a psychiatric personality test. Either a novel bulge appeared, or two sets of bulges (amazingly) showed no difference in bulges. After twenty years of watching slides showing ink blots, I retired from the scene and started clinical practice and writing books.
When a new miracle is discovered, its particular ink blot will probably look a lot like other ink blots, so why go to so many meetings. It looks to me as though ink blots of mitochondria, or ink blots of Golgi bodies will demonstrate the new miracle, or else every conceivable ink blot will be performed on those particles, and nothing striking will turn up. Somewhere, some cure for cancer and Alzheimer's disease will exist, but its effect need not be demonstrated in its protein chromatography. But at least until the cure is found, or every imaginable ink blot has been photographed, the ink blot parade will continue, and then it will gradually wear out. At least to me, it seems incredible the present approach can continue much longer. What I'm saying is we need a new cure fast, or else we need a new experimental tool.
There's another danger I haven't mentioned. Like the cost overruns of clinical practice, the best place to direct the accountants who count the beans of research grants, is the indirect overhead. It's characteristic for grants to come as direct and indirect costs, and the indirect costs are approximately 70% of the direct ones. Research institutes who operate on a for-profit basis all agree that 70% is if anything far too little, and the non-profits nod in agreement. It sure doesn't feel appropriate to give the administration of academia a 70% cushion for the library, air conditioning, etc, necessary to sustain these billions of dollars for research. Sooner or later, someone will apply the old government technique for dealing with an expense account you don't understand: Cut its indirect overhead budget 10% and see what happens. If nothing bad seems to happen, cut it 10% more. And so forth until you have starved it to death, forced it to commit suicide, or identified its legitimacy. No, don't do it. Either you do research or you don't, and if you want the right answer you must do it the right way. But if Shannon's rules are egregiously flouted, disaster will more likely be the consequence.
After the Second World War, America decided to do what only America could afford to do. We decided to spend astonishing amounts of money, curing disease. The unproven theory for gambling this enormous fortune was -- in the long run, it would cost less than subsidizing everybody to be treated in old-fashioned ways. And it really has been shown to work. In 1950 we had 500,000 state and municipal hospital beds for mental disorder. Today, we only have about 40,000. Can you imagine how much money that has saved? Or the 100,000 beds for tuberculosis? Or the fifty thousand beds for polio? What is left to do is treat about five diseases of late-life onset, and there is a reasonable chance to do it in the next two decades. Just double those numbers, and you still have a bargain. Yes, it's true we have not resorted to expedients every other civilized nation in the world has resorted to, and yes it is true the medical profession will never be the same. But this is America, right? We plan to give it away to all those other civilized nations, mostly free, to foreigners who might never dream of doing the same for us. That's part of the overachieving American character, too.