JACK SPENCER: Obamacare - selling to the uninformed

The more one knows about a particular topic, the less likely they’ll be to believe false claims about it.

A customer who understands automobile engines isn’t apt to fall for a line of fast-talking babble such as: “We’ll just replace the doohickey sensor and convert the flapwinkle rods. All we need is your written approval — sign here.”

But if a customer knows next to nothing about automobiles, they are vulnerable. Due to their lack of knowledge; they won’t even know what questions should be asked.

Most people only have time to become expert in a handful of topics. Exactly how everything else they use works is pretty much a mystery.

Politicians like to portray themselves as either being experts or having intimate access to experts about almost everything. Actually, they are rarely experts and the experts to whom they have access promote a specific policy position. Often this is a theoretical position rather than a practical one.

Ultimately, the selling of the policy position becomes the first priority. If the policy position turns out to be lousy – well, they’ll deal with that little problem later.

Now that we’re beginning to experience Obamacare, it’s a good time to do an honest assessment of our nation’s former health care system. Yes, it had problems, and the most often complained about was the cost.

Most people are already figuring out that the costs of the old system couldn’t be any greater than the costs of Obamacare. Rationing of access to health care should be included among these costs. Obamacare can’t and won’t lower the overall cost of health care. It just changes how the costs are presented and usurps individual decision-making.

In reality, the old system’s biggest drawback wasn’t cost, it was complexity. The vast majority of Americans simply didn’t understand the system. And, let’s face it; those who worked in the system did little to help them understand it.

Possibly the best example of this is miracle drugs, which comprise the most promising and increasingly expensive aspect of modern health care. Miracle drugs are the life-savers. Many that go on the market are important advances in medical treatment.

People want these drugs and doctors prescribe them because they work. But often the chief reaction from the patients is — “Wow; that costs too much.”

No one likes paying a lot for medicine. Yet, understanding why the price is high usually helps mitigate the complaining. There is a reason why new miracle drugs are so expensive. A lot of people know part of the reason, but it’s probable that few know the full story.

It costs a pharmaceutical company about $1.7 billion and takes seven to 10 years to get a new drug researched, tested and passed through all of the regulatory hoops to put it on the market. However, just because the company spends a billion dollars doesn’t mean a new drug will pass all the tests. If the drug turns out to be a failure, the company simply absorbs these costs. Even when they do get on the market, only three out of 20 approved drugs bring in sufficient revenue to cover the cost of developing them.

Therefore, when a drug with high profit potential is approved, the company not only has to recoup what it cost to test and produce it, the company also needs to make up for the failed and unprofitable products as well. Beyond recovering these costs, the company still has to make a big profit in order to survive in the expensive pharmaceutical field and continue researching and testing newer drugs.

OK, let’s say a drug produced here, in pill form, goes on the market. All someone in Canada, South Korea or Whatchacallitstan has to do is get one pill, take it to a chemist, and then they can reproduce it themselves.

To prevent this from happening, companies make deals with other nations. For a certain period of years, the new drug is sold to the other nations at cost. That kills the incentive for folks in the other countries to reproduce it. These deals protect our medical market.

Get the idea? Patients in the United States, to an extent, end up subsidizing all the other patients in the world. Now if you’re thinking that’s why the same medicine costs less in Canada, or where-ever, than it does in the U.S. — bingo, you’re right.

Obviously, this system would work most equitably if the other nations of the world invented as many miracle drugs as we do. But they don’t. More than half of the money spent on research and development of pharmaceuticals comes from the U.S. The United States has held a dominate position in miracle drug invention for 25 years.

So, what would be a better deal – having access to the miracle drugs of the future or saving prescription dollars because they never get invented? As Obamacare moves forward we might have the chance to find out.

How will Obamacare affect miracle drug invention here and abroad?

That’s the sort of question that never got asked because millions of customers, called “voters,” fell for babble like: “We’ll just replace the doohickey sensor and convert the flapwinkle rods. All we need is your written approval — vote for us.”