February 14th, 2008
AdvaMed says of health care inflation, not me
We have reached the stage in the health care debate where everyone is pointing the blame, and pointing it elsewhere.
It’s like the Family Circus Not Me. Who did it, Billy? Not me.
In this case the Not Me is a study, from AdvaMed, the trade group for device makers, showing that prices for such devices are rising at a fairly moderate rate.
The authors, Roland Guy King, former chief actuary for Medicare and Medicaid, and Gerald F. Donahoe, would seem as unimpeachable as, well not Roger Clemens anymore, but as President Bush himself.
The argument of the group is that their industry is highly competitive, and thus it’s not their fault that prices are rising, although they’re perfectly willing to see regulation of some medical tests “modernized.”
But it doesn’t take a rocket scientist to see the flaw. General device inflation is modest, but what about the devices people are being sold? Aren’t we seeing a lot of latest-and-greatest pushed when tried-and-true still works fine?
Of course we are. This wouldn’t be a competitive and innovative industry otherwise. Companies must always seek improvements in their products, and profit from that search, if they’re to be worthwhile investments.
The real argument in terms of medical devices involves when and how new devices will be recommended, in preference to older ones. The question is also how do we keep supplies high enough to meet demand, and profits reasonable?
These are questions most of us would like to think do not belong to the government. But they’re fights insurance companies are having with device makers all the time. Aren’t the insurers acting as the government in this instance?
So the device makers need regulation, to keep the competition between them and the insurers fair. Yet they reject regulation which might question their own profit margins.
That’s the real “not me” at issue here.
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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