Monday, June 06, 2011

Should Cancer Be a Profitable Opportunity?

In 2003, my wife was treated (successfully, thank God) for breast cancer. And right now, her sister is preparing to be treated for a serious blood disease by means of a bone-marrow transplant, which is also used to treat many kinds of cancer. So my close relatives and I have personal experience with an industry that accounts by some measures for as much as $60 billion of economic activity, much of it going to advanced high-tech science and engineering work (which is how I’m relating it to this blog).

Picture my emotions, then, when the other day I received in the mail a thing that looked at first glance like an issue of Time Magazine, with the red border on the cover. Only the top line was not “Time” but “Timing” and the headline read “Cancer: The $60 billion industry” It turned out to be an investment flyer boosting all kinds of “opportunities” to put your money into this or that promising cancer treatment. This brings up an issue that goes to the heart of how we as a culture handle illness: to what extent should the profit motive be involved in medical care?

Historically, physicians have been among the best-educated and well-paid members of the community, even back when they could do little but listen and give fatherly advice. Since the Scientific Revolution revolutionized medicine starting about 1700, the field has developed in the direction of highly organized combinations of institutions, corporations, and societies all exchanging information, products and services of value, and delivering health care which by most measures continues to improve in quality year by year—but at a steeply increasing price. Anyone who hasn’t totally ignored the news over the last year or two knows that we in the U. S. pay a higher proportion of our GDP (gross domestic product) for health care, but what we get for our money is generally not that much better than other industrialized countries that pay less.

Any discussion along these lines has already made an implicit assumption: namely, that the problem consists of maximizing health-care delivery efficiency, and we simply aren’t doing it as well as some other countries. But is that really the issue?

What if the problem is not so much macroeconomics and political and social forms of organization, but the motivations and ethical stances of the people involved? Here is what I mean.

Would you rather have a doctor who went into medicine because he wanted to heal people, or because he wanted to afford vacations at Cap Ferrat? Would you rather deal with an organization whose members are dedicated primarily to the healing of patients, or whose owners are anonymous stockholders simply wanting the best return on investment possible? I think the answer in the case of the doctor is pretty clear. In the case of the organization, things begin to get a little fuzzy.

If you look at the history of medical innovations, it is fairly clear that the most favorable environment for them appears to be a place where the profit motive plays a fairly unrestricted role in guiding developments, rather than dictatorial control by some government-funded bureaucracy. This is not to neglect the role of such agencies as the U. S. National Institutes of Health in supporting basic medical research whose future profitability is unclear. But medicine is so complex today that large and expensive organizations are needed to pursue technologically-intense advances (including drugs as well as other forms of treatment). And judging by results, the best environment for such organizations appears to be places where taking risks with large investments in new medical ideas can pay off in commensurate profits, and the marketplace is used to signal the distribution of resources.

But I’m still bothered by the notion that a thing which on a personal level is an unmixed curse and tragedy—namely, cancer—is also the basis of what is being promoted by the flyer I mentioned as a wonderful opportunity to get rich quick. The reason that individual doctors have been well-paid members of society is that they have both invested years of their lives learning their profession, and have also (historically, at least) sworn an oath to use their knowledge in socially beneficial ways. The fact that most doctors no longer take the Hippocratic Oath as part of their medical training is not encouraging, and may have something to do with the rampant abuse of prescription pharmaceuticals that we have today. The medical business used to do pretty well with almost no advertising at all: no ads for doctors, no ads for prescription drugs. As I understand it, the prohibition against ads by doctors was self-imposed by their professional associations. There have always been advertisements for over-the-counter medications, but until recent times they were looked down upon and relegated to the small-type back pages of magazines.

One can argue that the consumer should be king in all this, and in some ways we suffer from a lack of consumer control in the health-care industry. But consumers can decide only if they have a clear financial incentive to do so, and if they have competent professional guidance about matters beyond their understanding. The so-called “twelve-cent problem” is the fact that only 12 cents out of every medical dollar comes out of the U. S. consumer’s pocket. If we had to pay only 12 cents for every dollar of food we consumed, I expect the food industry would become as inefficient and bloated as the health-care industry (not to mention bloating us too). And the presence of huge amounts of TV and other advertising for prescription drugs of questionable utility distorts the environment in which medical decisions are made. I for one would not miss most medical advertising, especially camouflaged brochures asking me to profit from someone else’s misery. But in so many things in politics, the question is how to get from here to there. And for that, I don’t have an easy answer.

Sources: The 12-cent problem is described in many places, among which is a blog by Dr. David Gratzer posted on Jan. 26, 2011 at

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