Healthcare inflation is driven by bad medicine

According to the Commonwealth Fund (an endowment-supported US foundation), US healthcare spending has increased to 16.6% of GDP in 2014.  Other countries have seen less rapid increases in healthcare spending.  For the most part, inflation is being driven by doctors with a vested interest in pushing medical services, expensive treatments, and pharmaceutical drugs.  To my surprise, what I’ve found is that many aspects of modern medicine aren’t supported by rigorous scientific evidence.  While the FDA drug approval process superficially appears to be scientific, it often isn’t.  One way that pharma companies game the system is to prove that a drug (e.g. statins) affects a dubious biomarker (e.g. cholesterol) rather than prove that the drug causes more good than harm (e.g. lower mortality).

Unfortunately, mainstream views on science and medicine are quite ignorant of what goes on.  We are taught to only trust medical advice from “trained and licensed professionals”.  Much of society worships technology and has blind faith in the claims made by medical authorities.  I would argue that this environment is a fertile ground for the trend in healthcare inflation to continue going forward.  And if that trend continues, it is likely that American health insurance stocks will continue to do quite well.

Pharmaceutical companies researching active placebos may also do quite well.

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US healthcare is worse than a free market system

Americans would like to think that their healthcare system resembles a free market system.  Canadians would like to think that theirs resembles a single payor system.  In reality, the reverse is true when it comes to prescription drugs.  In Canada, most Canadians pay for their drugs directly (out of pocket).  You could think of many Canadians as being uninsured when it comes to buying drugs.  In the US, most Americans receive prescription drug benefits from their employer, with the administration of those benefits being handled by a private company.  This is essentially private health insurance that employers are legally forced to pay for.  I would argue that this is the main reason why Americans pay dramatically more for an EpiPen than Canadians do (the listed price is roughly $600 for a pair while Canadians pay around $200 for a pair).  Private health insurance leads to higher costs.  When for-profit companies are compensated on a fee-for-service basis, they are incentivized to spend very little money on lowering drug prices for their clients.  In turn, drug makers take advantage of the situation by charging higher prices in the US than the rest of the world.  The drug makers exploit the payor.  Meanwhile, the insurance companies and PBMs spend very little money on protecting their clients.

This makes me more confident that the American government and states will continue to enact laws that benefit pharma companies, health insurers, and PBMs.  American citizens have the mistaken belief that their system resembles a free market.  On top of that, many people have difficulty understanding the US healthcare system.  Explaining healthcare shenanigans (here and here) is like trying to explain options: many college-educated people have great difficulty in grasping the concepts.  Change is unlikely to happen when American voters don’t understand the problem and its solution.  While the morality of US health insurers is questionable, their favorable economic dynamics may persist for a long time.

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The danger of our own beliefs and ideologies

Human beings are wired to hold self-serving beliefs about the world regardless of the accuracy of those views.  While it is easy to see these tendencies in other people (e.g. flat earthers, Donald Trump’s anti-vaccination views, conspiracy theories), all human beings are wired to have blindspots when it comes to the inaccuracy of their own views.  Why?  Ideologies are often arbitrary but they serve social and political purposes.  Nelson Mandela was once on US terrorism watchlists; nowadays, he is celebrated as a freedom fighter and human rights activist.  Clearly, it’s not possible for Nelson Mandela to be both a terrorist and a hero.  Yet, society conveniently ignores conflicting evidence when it distorts history to fit a particular political agenda.  My theory is this: human beings participate in the mainstream ideology when it benefits them.  When it doesn’t, social outcasts and misfits band together to form their own alternative ideology that benefits them.  In both scenarios, the ability to ignore, downplay, and dismiss conflicting evidence lessens the mental burden of upholding a particular ideology.

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Psychiatry is mostly a scam… and why it has been good for drug manufacturers

Warning: this post discusses child abuse and may make you uncomfortable…

Our society teaches us that scientists deal with the truth and facts.  Scientists’ results are supported by controlled experiments, the scientific method, peer-reviewed journal articles, etc.  However, there are charlatans in the world that masquerade as scientists.  They do science-ey sounding things without actually doing science.

In the medical field, psychiatry is the worst offender.  Conventional psychiatric views are driven by money as the deranged profession ignores very obvious evidence that contradicts their world view.  For example, the National Institute of Mental Health website (archive.org, live version) claims that schizophrenia is a “chronic” disease, which means that it is ‘impossible’ for schizophrenia to go away.  The reality is that people commonly experience full recoveries from schizophrenia (regardless of medication or treatment).  You can see this for yourself on Youtube.  Daniel Mackler’s film Take These Broken Wings has interviews with people who recovered from schizophrenia (trailer, full film).  One of recovered schizophrenics, Joanne Greenberg, is the bestselling author of “I Never Promised You a Rose Garden” (it has over 26 thousand ratings on GoodReads and became a 1977 film).  Despite obvious evidence, the conventional psychiatric field would still like to believe that schizophrenia is a brain disease, lasts for a lifetime, and is something that should be treated by psychiatric drugs (or whatever snake oil therapy is in vogue at the time like lobotomies/psychosurgery, insulin shock, or seizure-inducing ECT).

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