An Industry Slipping Away

One of the guests at our highly successful conference yesterday on innovation in health care thanked us for providing “a vehicle for those of us who believe in the marketplace as the source of solutions to exchange ideas and spark creativity.”

Every one of the speakers was terrific, making focused presentations about innovations in health care delivery, technologies enabling better health, and policies needed to support these transformative innovations.

Virtually all of the focus in the health care debate has been on Washington’s top-down decisions about how to restructure one-sixth of our economy, and yet the real transformative changes are coming — as they always do — from the private sector.

We heard from Nate McLemore about Microsoft’s health information solutions that allow hospitals and health systems to integrate information from hundreds of different software systems into a common platform to gather all of the data about a single patient. And we heard from Dr. Ron Silverman about a wound therapy device created by Kinetic Concepts, Inc., which has reduced wound infection rates from 80% to ZERO, saving lives, limbs — and health costs.

But there are real threats on the horizon to these and many, many other amazing examples we heard about yesterday because of the tremendous uncertainty created by ObamaCare and by the avalanche of regulations companies face to get products approved and threats that government payers won’t pay, even after they are proven safe and effective.

Kelly Slone of the National Venture Capital Association said that the number of new ventures funded in the U.S. is declining dramatically as VC investors become risk averse because of the unpredictability of government decisions impacting the sector.

Former Rep. Jim Greenwood of Pennsylvania, now president and CEO of the Biotechnology Industry Organization, was our luncheon keynote speaker, saying that progress in medical discovery must continue if we are to have any hope of getting health costs down in the future. As 77 million baby boomers hit Medicare and as Medicaid is expanded dramatically, government payers simply can’t afford to stifle progress into cures and treatments for the chronic diseases that consume the greatest share of health spending.

Sen. John Barrasso spoke about his serious concerns that ObamaCare is preventing advances in medicine, including the coming threat of the Independent Payment Advisory Board and the heavy hand of so-called Accountable Care Organizations. Our health sector just can’t fit into Washington’s one-size-fits-all approach, he said. Dr. Barrasso is known as “Wyoming’s Doctor” for his public service in the state over 20 years. With his weekly “second opinion” speeches about ObamaCare on the Senate floor, I’m nominating him for “America’s doctor.”

Rep. Erick Paulsen spoke about his work as co-chair of the House Medical Technology Caucus, which supports policy changes that will lead to a positive climate for this vitally important industry — for the life-saving technologies it creates and the hundreds of thousands of jobs it supports.

He says most of the medical technology companies are small businesses that have few resources to handle the stresses of government hurdles in getting products to market. He says there are 400 medical device companies employing 35,000 people in his home state of Minnesota. He gave examples of companies that had met every deadline and target established by government regulators, but the delays and arbitrary demands for ever more information kept moving the finish line ever farther into the future. Too often, venture funding dries up, and jobs and the technologies the companies had created simply vanish.

Our kick-off speaker was Rep. Andy Harris, one of the newly elected physician members of Congress, who continues to practice a day a month in his specialty of anesthesiology in Maryland. He is another public servant who recognized that the real battles to protect his profession must be fought in the political arena, and he is a champion in advocating changes that put patients, not politicians, at the center of health care decisions.

He and others warned that the over-politicization of health care in America poses a huge threat to innovation in our health sector.

Europe and China are actively making policy changes to attract this research-based industry from the U.S. Many companies are deciding to simply skip the U.S. approval process and go directly to Europe to bring their products to market. China is investing hundreds of billions of dollars in attracting companies to base their operations there. And that poses another huge risk in intellectual property protection.

Bruce Artim of Eli Lilly and Company said Congress is making important progress toward passing much-needed patent reform legislation. Protecting inventors is fundamentally important to protecting this industry, medical progress, and high-paying jobs. More than 700,000 patent applications are backlogged at the Patent and Trademark Office, with vital discoveries and countless potential jobs sitting on the shelf as patents await government approval. Modernizing the PTO and expediting patent approval are vital to continued progress.

My takeaway: The vitality of the American entrepreneurial spirit is poised to offer an abundance of solutions to problems in the health sector, but they are at great risk because Washington is stiffing introduction of new technologies through regulatory and payment barriers. Not only could they be delaying or even killing vital medical discoveries, but they could be shipping one of our most promising industries to other countries who see the value and potential of this vital industry sector.

Beware, Washington.

CLIP OF THE WEEK

Why ObamaCare Is Wrong for America

Grace-Marie Turner, Jim Capretta, Tom Miller, and Bob Moffit talk about their new book, Why ObamaCare Is Wrong for America. They explain what’s in the health overhaul law, what it will mean for your health care, and what you can do to take back control.
Watch now >>

 

 

HEALTH REFORM

Clarifying the Research on Medical Bankruptcy
Aparna Mathur and Thomas P. Miller, American Enterprise Institute, 04/27/11

State Health Insurance Exchanges Will Impose Federal Control
Twila Brase, Citizens’ Council for Health Freedom, 05/11

Emergency Room Doctors Say Health Law Will Make ER Crowding Worse
Julie Rovner, NPR: Shots, 04/28/11

Kathleen Spitzer
The Wall Street Journal, 05/02/11

Some Employers Already Sending Workers To Exchanges to Buy Health Insurance
Julie Appleby, Kaiser Health News, 04/29/11

Piping Up: A Plan That Leads Health Care To Nowhere
Sally C. Pipes, Forbes.com, 05/03/11

MEDICARE AND MEDICAID

CMS Bidding System Will Increase Medical Costs: A Cost/Benefit Analysis
Steve Pociask, American Consumer Institute, 05/04/11

Contrasting Obamacare’s Individual Mandate with Ryan’s Proposed Medicare Reforms
Jeffrey H. Anderson, The Weekly Standard: The Blog, 05/04/11

Medicaid Provides Poor Quality Care: What the Research Shows
Brian Blase, The Heritage Foundation, 05/05/11

Yes, Cut Medicaid -? It Won?t Be As Painful As You Think
Michael F. Cannon, Kaiser Health News, 05/05/11

The Hypocritical And Reckless Attacks On The Ryan Medicare Plan
James C. Capretta, Kaiser Health News, 05/02/11

An Important Step Toward Medicare Reform
Merrill Matthews, Forbes: Right Directions, 05/06/11

PRESCRIPTION DRUGS

Breast Cancer Drug Gives Patients What They Want: More Time
Peter J. Pitts, The Tennessean, 04/27/11

Events

Personalized Medicine: Why the Future Will Work and the Present Doesn’t
RTI International Policy Forum
Tuesday, May 10, 2011
9:00am – 10:30am
Washington, DC

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