On Government Vs Markets in Picking Health Care  Winners and Losers

The ultimate good desired is better reached by free trade in ideas – that the best test of trust in the power of thought to get itself accepted is the competition of the market, and that truth is the only ground upon which their wishes can be safely carried out. That at any rate is the theory of our Constitution. It is an experiment, as life is an experiment.

Oliver Wendell Holmes, Jr. 1841-1935, Abrams v. United States, 1929

Winning isn’t everything. It’s the only thing.

Saying, 1953, Attributed to football coach, Vince Lombardi

May 30, 2012 -  Ekekiel Emanuel, MD, formerly President Obama’s medical advisor, agrees with the Obama administration that government is capable of  picking economic winners and losers based on their political philosophies and comparative effective research data, as long as the latter is not applied to politial allies. 

President Obama and his advisors, backed Solyndra, the California solar panel maker, as a winner and  provided it with $575 million in federal loans, only to see the firm go bankrupt despite warnings of its approaching insolvency.   Markets and consumers are not yet ready for green energy products as market winners.

In his New York Times blog, Dr. Emanuel blasts the da Vinci  robot as a “fake innovation” for performing prostate surgeries (“Opinion: In Medicine Falling for Fake Innovation, “ May 30. 2012). He cites a study showing people who underwent robotic surgery had  less complications and blood loss in the short run, but who  later experienced more incontinence and erectile dysfunction (Jim Hu, et al, “Comparative Effectiveness  of Minimally Invasive Vs. Open Prostate Surgery, “ JAMA, Octobrt 24, 2009).  “In other words, “ Emanuel concludes, “this is  pseudo-innovation.”

Not so fast, McDuff.  The market believes in robotic surgeries. In a March 6, 2012 blog,  I wrote:

“Marketing of surgical robots have been remarkably successful. In part, this is because it’s in the human DNA to jump ahead of your competitors, your creditors, and your rectifiers.  As of June 2011, the manufacturer had installed 1,933 robotic systems. By June 2010, surgeons had performed 278,000 robotic-assisted surgical procedures, up 35% from 2009. The company projects one million assisted procedures will be performed in the United States over the next few years (Investor Report 2011). To reach this goal, the manufacturer will continue to market to smaller hospitals and surgeons, who it is assumed, will, in turn, market to communities and to patients.”

Emanuel argues, the Affordable Care Act,  through the strength of  data based comparative outcome research,  will end such marketing activity. Government  will pay  only for  cost-effective and outcome-documented  government-endorsed  tests and procedures.   

I would remind Emanuel that tests and procedures once considered as mere “flashy” Johnny-come lately innovations  are now considered medical standards.  In his words, “We have benefited tremendously from medical innovations like MRI scanners,  cardiac stents, and powerful new drugs, and we should celebrate the United States as the leaders in developing medical technologies.”

Indeed, we should.  And we should stop labeling market-tested innovations  as “fakes” and “pseudo-innovations,” and we should stop pretending the government can weed out winners from losers.  Over time, the market place will do that.

Tweet:  The U.S. medical marketplace has embraced surgical robots as an innovative, effective new advance although all evidence is not yet in.