Former House Speaker Newt Gingrich has a great article in today’s Wall Street Journal on what a government-run health plan will mean for innovation in American medicine.
Premature babies survive in America to live full lives more often than anywhere else in the world. New drugs now arriving on the market cure once-lethal leukemia. On the horizon there are vaccines to prevent other types of cancer. Modern science and technology offer even more exciting treatments in the future for diseases like AIDS, Parkinson’s and Alzheimer’s.
Standing in opposition to this world of hope is the vision of reform advanced by President Barack Obama and congressional Democrats. That vision would destroy the economic incentives that drive health-care innovation because it starts with a fundamental conceit: that government planners can spend health-care dollars better than patients and doctors in the marketplace. This planning is the foundation for the arbitrary insistence that spending 17% of our GDP on health care is “too much.”
The new bureaucracies that would be set up to reduce health-care spending by slashing payments to doctors, hospitals, surgeons, specialists, drug companies, high-tech equipment makers and others will kill the innovation that has served us so well. The essential incentives for the huge capital investment necessary to develop breakthrough treatments will be gone. And so too will high-paying jobs that these investments create.
Indeed, the plan released by Sen. Max Baucus (D., Mont.) last week would impose new taxes on medical device manufacturers of $40 billion over 10 years. That’s more than industry venture capital investment.
Much of the world’s research and development takes place in America because it is one of the few places that companies are able to recoup their investment costs. Without the profit motive provided by the American market, innovation and medical breakthroughs would be frozen in time, to the detriment of people around the globe. Companies and research facilities that develop these life-saving technologies should be allowed to dream big and win big – not be regulated and taxed out of existence.