Problems with Government Run Hospitals

I found an article that clearly demonstrates the problems with a government run healthcare system so in light of some of the recent conversations I though I’d share with everyone for sake of discussion.

Sally Pipes in an article found here writes about some of the problems already found in our government run VA hospitals:

Only 19 percent of drugs approved by the FDA since 2000 are listed on the VA formulary, and only 38 percent of drugs approved in the 1990s are listed.

The cholesterol-lowering drug Lipitor, for example, isn’t on the VA’s list, even though it’s shown remarkable success at lowering the risk of heart attack and stroke.

Similar cholesterol-lowering statins are on the formulary, and Pelosi would likely suggest directing patients to one of them. But what about patients who have adverse reactions to the other drugs? The fact is, in medicine, one size doesn’t fit all: Patients react to different drug variations in different ways.

In the six years before the formulary was introduced in 1997, both overall U.S. male life expectancy and veterans’ life expectancy increased significantly. From 1997 to 2002, though, while overall U.S. male life expectancy continued to rise, growth in veterans’ life expectancy came to a halt.

When a single buyer must meet the needs of 4 million people, the result is predictable — rationing. That’s because the buyer, in this case the VA, tries to control costs by limiting the availability of certain drugs.

With its enormous purchasing demands — and backed by the overwhelming financial and regulatory power of the federal government — Medicare would simply dictate prices, distorting drug markets on an unprecedented level.

As a result, drug manufacturers would be forced to sell drugs at below-market prices. In Pelosi’s economic fantasyland, that doesn’t matter because drug companies have infinite profit margins. No matter how much we squeeze profits, this magical theory says, the companies will keep on inventing new cures out of the goodness of their hearts.

But in reality, it costs a company hundreds of millions of dollars to develop a new drug and see it through the FDA approval bureaucracy. And sometimes, that research and development is fruitless. In early December, after spending nearly $1 billion, Pfizer decided to halt clinical trials on its latest cholesterol-lowering drug.

Government intervention has already choked off drug innovation virtually everywhere else. That’s why people the world over use cancer and AIDS medications invented in the United States.