Bending the Productivity Curve: How Would Health Care “Reform” Affect Medical Innovation?
New research by the Cato Institute shows that America generates more medical innovations than any other country, and in some cases, more than all other countries combined. Medical innovation may be more important than covering the uninsured or controlling health care spending, inasmuch as a treatment must first be invented before its costs can be reduced and its use extended to everyone. The Democrats’ health care legislation focuses on expanding health insurance coverage, which should encourage innovation — yet it does so by expanding price controls, government purchasing, and health insurance regulation, which reduce innovation. What would be the net effect? What are the alternatives?