October 08, 2010
Total 2009 US Medical Research $139 Billion
People want relief from disease and public and private sources spend big to find better ways to cure and avoid disease.
WASHINGTON—October 7, 2010—The U.S. invested $139 billion last year in health research from all public and private sources, according to Research!America's latest annual estimate. That amount represents only 5.6% of the $2.47 trillion overall U.S. health spending in 2009—or 5.6¢ of every health dollar—which varies no more than 0.2% from 2005 levels.
The estimate is available here: http://www.researchamerica.org/uploads/healthdollar09.pdf.
The 2009 investment grew by only 0.1% over 2008. This small increase can be attributed largely to the federal stimulus funding for research provided through the American Recovery and Reinvestment Act of 2009. Federal research investment was nearly $46.8 billion in 2009, up from $38.6 billion in 2008.
We are all growing old. We are all aging and our parts are breaking down and wearing out. A portion of those billions of dollars flows toward science technologies that will eventually put an end to aging. Human bodies will become as repairable as cars. Replacement organs, cell therapies, gene therapies, and even nanobots will, at some point in the 21st century, halt and reverse the process of aging. Will you still be alive when that day is reached?
About $138 billion of that is for clinical trials.
As for immortality, the human body is a complex system of systems that scientists are only beginning to understand, so it's unlikely anyone over, say, 40 will live to have their life extended substantially. We over 40 can hope, however.
"at some point in the 21st century?"
I honestly don't see that end coming within the next hundred years. But the implications of long life are very interesting... if one could live up to 150 or 200, would people start to mature later in life? Would people act as brats up to their 30s and 40s? Delay marriage until one is in his 50s or 60s? Would people value the passage of time any less? I wonder.
In a recent 60 Minutes feature on the Bill & Melinda Gates Foundation, they talk about their programs to teach the world's poor to reduce infant deaths by not leaving newborns in the dirt, and using blankets to keep them warm. It's nice that they're so selfless, but a lot of what they're doing seems to be just increasing the world's dirt-poor population, and there are really bigger fish to fry. Aging causes more death and suffering than all other sources combined.
The worldwide public health evidence is clear: if you improve maternal and infant survival rates, investment in family planning will increase; moreover, overall population growth also decreases. This is practically common knowledge among public health providers and nurses.
Mthson, the differences in parental investment in r and K-selected humans are staggering. Unless the parents do care, but were too stupid to keep their children alive.
A good measure of the degree to which an area of endeavor is simply rent-seeking is the percentage of its expenses that could have gone into monetary awards for achievement of objective criteria, such as the M-Prize, vs the amount that actually has gone into such objective prizes.
If you want to extend your life, get rid of the rent-seekers. And, yes, they are a type.
ernest carl said: "This is practically common knowledge among public health providers and nurses."
Boy did you just nail two rent-seeking groups...
Those of us in the real world see "the demographic transition" for what it is:
The global imposition of an experimental treatment, the likely outcome of which will be the selection out of the gene pool those who are susceptible to the treatment, leaving the resistant strains to continue exponentiating.
Pardon me, but I'm not sure I understand you.
I'm not an economist and english isn't my native language so I had to look-up what this word meant: rent-seeking -- "When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation."
So you mean to say you're afraid of being out-bred by other human 'strains' such as Africans and Hispanics? Moreover, you think that public health providers and nurses are master economic exploiters/human manipulators? I'm a nurse, BTW, and just recently studied counseling psychology in grad school. It would seem to me that counseling psychologists are rent-seekers in your worldview as well.
Yes, there are probably some people like that... but they exist in ALL professions out there... And so singling out health care providers as 'rent-seekers' is a bit thick. You mean to say that those who are trying improve physical health, mental health, and health literacy in the world are not giving back anything to society that is of worth? What objective prize are you talking about? Eternal life and material wealth for a special 'strain' of people? Please clarify.
Your assertion is not true in all cases. Modernity has actually lowered living standards in Africa because the place is still stuck in a Malthusian Trap. See UC Davis economics historian Gregory Clark's book A Farewell to Alms: A Brief Economic History of the World. It will change the way you look at economic development.
I think James was making two separate points, one about rent-seeking health workers and a totally separate one about genetic selection. I will address the rent-seeking behavior:
References to rent-seekers usually (including in the case above) refer to special interest groups who manage to make a living off the government, either thru getting a slice of tax revenue or by regulations and laws and court rulings that create demand for whatever they are selling (mostly advice and approval rather than physical products) or that prevent competition.
So, for example, public health workers who exaggerate some public health threat can increase funding for their organizations. Or bankers can claim some crisis requires their bail-out for the public good whereas the bail-outs benefits can flow overwhelmingly to them.
I am already aware of that. Yes, in some cases, aid really has done more harm than good: http://www.guernicamag.com/interviews/953/aiding_is_abetting/
But I was thinking of the common public health provider and nurse... the majority of us who actually work directly with people who have dengue, malaria, AIDS, risky pregnancies; those who have experienced child, domestic, or sexual abuse... we, who actually endorse family planning and safer sex practices.
James did write: "If you want to extend your life, get rid of the rent-seekers. And, yes, they are a type."
and later identified "public health providers and nurses" as "two rent-seeking groups..."
His last statement didn't exactly elaborate on the points you later made, making me wonder about the measure of his own ethics. I'm not saying that James indeed has questionable ethics... but rather, it only makes you wonder.
one of the typical forms of rent seeking by a profession is keeping salaries excessively high by unjustifiably restricting entrance into the profession. E.g. the reason why we have only a few thousand string theorists in the world is because relatively few people are intellectually capable of understanding string theory, let alone making useful advances in it. Even for the more mundane stuff, like airplane mechanics, many professions truly and undoubtedly require months or years worth of training plus some inherent ability.
By contrast, over here in America nurses is a classic example of a field occupied by fairly ordinarily, not in any sense high intelligent or exceptional, people that keeps its wages up through unionization, collective action, spurious academic requirements and generally through the "regulation" and not competition. Could half of the hospital work now being done by the licensed and credentialed nurses be done by low cost $10 per hour assistants of normal intelligence after 10 days worth of intensive training? Well, we will not know the answer to that question any time soon because medical establishment is not interested in finding out. It is interested in protecting its own excessive salaries, including salaries of the nurses.
For what it's worth, as a programmer I have heard that training the nurses to use some sort of software as part of an effort to computerize the hospital work is a hard, expensive task. You know why? Because, in the words of the nurse manager who explained, they are simply stupid. Well paid, well credentialed and so forth, but there is no cure for stupid. Incidentally, they are also "experienced", you can be sure of that. They have many years of proven experience in being a dumb nurse, at everybody else's exorbitant expense.
Of course, the above applies here in America. It may well be that in Africa medical wages are more inline with reality and hence nurses are not rent seeking over there.
Michael, your example of nurses being rent seekers is way off base. For one thing nurses do about 75% of the work pre and post op. Secondly would you really want a guy/girl making the same amount as a burger flipper taking care of you? If there were a revolving door of nurses leaving for better jobs, like at retail or fast-food, don't you think the interruptions would take a heavy toll on the patients themselves. Hospitals do not want their nurses to leave and additionally their jobs are a little more sophisticated that the "10 day intensive course" that you describe. The higher salaries of nurses are a preventative measure against poor customer service. Doctors on the other hand are way overcompensated because of the AMA and their monopoly on medical schools. By artificially limiting seats in medical schools they vastly limit the supply of doctors in relation to their demand. As such it keeps doctors wages high, especially specialists, but it also cuts out thousands of potential candidates who would be just as qualified. (Although medical schools have gotten wise to this circumstance and have raised the price of tuition to the point where the average med student graduates with $200,000+ of debt!) In Europe I think the average specialist makes three times what the nurses make. In America on average I think they make five. Nurses arguably have more schools to choose from since they have hundreds of state and community colleges with seats. The nurse's wage is in fact normalized under competitive pricing in America simply because the hospitals don't want flakes. This is because the hospitals know the gals will be saddled with higher volumes of work as the boomers age and start filling up emergency rooms. Hospitals also pay their staff well as a preventative measure against negligence lawsuits. Your myopic argument seems to want to bizarrely punish people who you deem inferior with "increased competition." You are unfairly reducing the complexity of the profession with sweeping generalizations. I am not a nurse by the way, but it annoys me when I hear "programmers" speak off the cuff with poor rationalizations. Replacing a janitor with robots is easier to argue since it doesn't really involve customer service to a litigous creature like a human. I don't think you are being very astute to all of the factors involved. You seem to wish that prices would benefit those who occupy highly intellectual scopes that sate your egotistical example of supremacy rather than what the market actually demands from the workers. Your whole argument is dripping with cheap, half-baked, intelli-snobbery. (And since when was String Theorist a profession limited by supply??? It's more likely demand! Arguably anybody could crack open the books and dabble. It's more like a hobby.)
I believe that medical costs in America must be decreased by any and all means possible. Which includes, inter alia, reducing salaries of doctors, reducing salaries of nurses, making sure that things done by registered certified yadda yadda is only what really has to be done by them (and not by candystriper type people at low wage), eliminating unnecessary procedures and runaround (e.g. cannot go to a specialist until the GP graciously allows you to do so, kaching) etc.
Incidentally, what's this snobbery against people who make a low wage? Not all people who get a high wage got there by being smart and competent. Not all who work low paid jobs are dumb and incompetent, all the more so amidst the ongoing meltdown. I would much rather be attended by somebody who can pass a decent IQ test and learned his stuff in employee training (think military/Walmart type |cheap and gets things done" approach) than by a highly paid, "experienced" dumbbell.
Incidentally, the very high salaries of medical personnel is one of the big reasons why stupid people end up crowding into these jobs. When was the last time you heard about the need to remedy lack of diversity among the lathe operators? When was the last time you saw a commercial college type shop advertise expensive training courses to become said operator to people who might lack every requisite ability involved but can sign on the dotted line of a student loan? I haven't seen much of this, the ads are mostly about "exciting" careers in medicine and law enforcement (they forgot mortuary home management :-) ) But when the government creates these islands of rent-seeking, exorbitant pay for low qualifications and plentiful opportunity for BS type of employment, that's where the incompetent greedy people of all colors and genders stampede for their share of the public cake.
Medical Doctors are a classic case of rent-seeking in the US although I think it is more accurate to call it the reimplementation of the Guild System. They have grossly limited the supply on purpose to keeping many highly qualified people out of medicine (Personal observation: I knew a guy who had a 3.93 GPA (B.S)in Pharmaceutical Sciences with an MCAT in the top 5% who applied to 3 elite Med Schools, ~8 Mid tier Med Schools, and 4 Lower tier Med Schools. Had research experience and a well rounded personality. He was rejected by all the Med Schools but 1 of the lower tier Med Schools. Ridiculous!) Further constricting the supply is the undesigned habit of females of leaving Medicine entirely. Last stats I saw said ~50% of female MD's/DO's in the US are no longer practicing Medicine by 10 years out of Medical School further constricting supply.
US Nurse although currently well paid are now in the process of moving toward a similar Guild System and are erecting new barriers to entry.
1) Recently the Nurses Associations have pushed away from Diploma RN's and Associates RN's. The Nurses Associations now wish to require a BSN (BS of Nursing) as the minimal level for entry for RN's in the US. (Classic protectionism reduces numbers)
2) Recently the Nurses Associations have started pushing for a 4-5 year Doctor of Nursing Practice (DPN) to replace the current 2-3 year MS Nurse Practitioner.(Classic protectionism reduces numbers))
US Pharmacists already implemented their Guild System. Replacing their BS/MS in Pharmacy with a Doctor of Pharmacy (PharmD.(Classic protectionism reduced their numbers)
US Physical Therapists already implemented their Guild System. Replacing their BS/MS/Certificates in Physical Therapy with a Doctor of Physical Therapy. (Classic protectionism reduced their numbers)
The Guild System appears to have been silently reimplemented in the US and appears to be in rapid expansion.
Interesting information... I'm not in the U.S.
As to how one should interpret these changes spearheaded by the U.S.... I'm not very certain.
I see a lot of people making comments about the medical profession that have no idea what they're talking about.
Why do people feel compelled to do that?
I think it essential to automate. Reduce the amount of labor needed. Expert systems could help a lot.
Yes, definitely attempts (successful in many cases) to restrict entry.
Because medical costs keep expanding and now are over 17% of GDP and rising those who practice medicine can not expect to operate uncriticized. The bigger it gets the heavier the burden it becomes on the rest of society and the more criticize and debate it will attract.
Doctors make a lot less than they did 20 years ago... what other profession can say that?
Regardless, peope that have no idea what they're talking about should refrain from making sweeping uninformed statements.
It's just not helpful.
If it were a simple issue, it would have a simple solution.
When we reform the US system, you have to be careful not to destroy the unique beneficial aspects. For example, the US market directly and indirectly stimulates advances in surgical, medical, and pharmaceutical technologies. Our society pays the entrepreneurial costs that provide the incentives to create new technologies. The rest of the world benefits from this type of indirect subsidy. Is this fair? Well, no... certain rich countries could pay a lot more, but use their single payer monopolies to negotiate minimal markups over cost (eg Canada, the EU etc).
Medicine changes monthly here in the US. I don't operate the way I did 15 years ago... the operations are so different as to be unrecognizable. Cancers, transplant... all have made huge strides forward. These strides are expensive.
Finally, why is it a big deal if healthcare ends up at 25% of GDP or sometong? No one cared when farming was 90% of GDP 150 years ago, or when manufacturing was 40% of gdp. Big deal. Is there something I'm missing there?
"Doctors make a lot less than they did 20 years ago... what other profession can say that?"
Uh many that I can think of. Butchers currently at large processors commonly make ~$10-12hr now vs $16-20hr in the late 1980's thanks to illegal immigration driving down their wages. Painters, drywall hangers, carpenters, laborer, etc all commonly make less than they did 20 years ago thanks to the wage pressure from illegals. Even skilled people are taking a hit thanks to Legal H1Bs VISA wage pressure examples many IT and Biotech people are now making less when adjusted for inflation than 20 years ago.
Inflation adjusted you may be correct that General Practitioners(GPs)and Family Practice doctors make less now than they did 20 years ago what with Malpractice Premiums Skyrocketing, Regulator overload, and paying off Massive Student Loans. But 80-90% of Medical Doctors in the US are specialists who earn considerably more than Family Practice or GPs Doctors.
Anecdotal: I personally know of a Small Rural Hospital in Ohio where about 3/4 of the doc's in their Emergency Room (ER)are Family Practice Doctors/ GP's about 1/4 are Emergency Medicine Doctors. They pay their Emergency Room(Family Practice Doctors/ GP's)doctors a base salary of $400,000 per year plus a bonuses based on the # of patients seen. I'm uncertain but suspect they pay the Emergency Medical Certified doctors more. What seems to happen somewhat frequently is the Family Practice Doctor's(who generally seem to be replacing GP's) come in and work 5 years to payoff their massive student loans then leave to set up a lower paced private Family Care Practice earning about 1/2 their previous pay.
Currently there is a shortage of GP's/Family Practice Doctors in the US and a lesser shortage of many specialists.
1) Double enrollment into all Medical Schools with the a contract stipulation of Family Practice/GPs only for the new expansion.
2) Offer non taxable Student Loan Forgiveness for Family Practice/GP's Doctors over 10 years working in Family Practice.
3) Allow Family Practice Doctors/GPs to Apprentice into a Family Practice for 5-6 years in place of a Residency (I know, I know "HERESY!")
Discloser: I am not a Medical Doctor but my wife is a FNP(Family Nurse Practitioner).
I'm a surgeon.
I make betwen 150k and 200k per year after training for 10 years after college. If I were busier I might make a little more.
Certain specialities are more ammenable to working for a hospital or company as an employee (eg ER docs, Anesthesia, Radiology etc). They are able to demand higher salaries in part because they have collective leverage).
They don't have to run a small business at the samt time (I employ ~10 people in my office with two other MD partners).
Most other MDs (other than thoose that work on salary) work on collections from 3rd party payers and Medicare (which pays less than HALF for many surgical procedures compared to what it did in 1985). And those fees include 3 months of after care.
It's hard to run a small business on those collections.