Thursday, October 10, 2013

Obamacare Will Stifle Medical Innovation Due To Its Centralized Command And Control

From The Federalist, "What The Internet Teaches Us About Healthcare: Why decentralized decision-making drives innovation." by Pascal-Emmanuel Gobry:
Obamacare could cause untold unnecessary deaths by destroying healthcare innovation. To explain, let me offer an analogy.

In 1993, almost everyone in the technology industry agreed that the next wave of innovation in computing was going to be related to some global network to which consumers and businesses could be connected and shop and converse.

However, almost no one thought that this global network could be the internet, which was the province of academia and wasn’t user friendly.

In Silicon Valley in 1993 the conventional wisdom was that this global network would be some sort of connected TV run through the cable system, and that it would be controlled by gatekeepers (such as cable companies and media companies) which would approve and run the services that would be on top of it.
Again, I want to emphasize the point that the key thing isn’t "the free market" vs "the gummit. [government]" As all ideological advocates note, the government had plenty of a role in creating the internet. But it did so in a decentralized fashion. If you read about the history of DARPA, when a guy had the idea for TCP/IP (the fundamental protocol on which the internet runs) he basically went to his boss who was an engineer like him and the guy said "Sure, I’ll give you $3 million [of 1960s money] to try it out" and the engineer went and convinced other guys who were assigned to other projects to work on it with him. That’s not how government typically works, but it’s definitely how decentralized trial-and-error innovation works.

When you see how extensively we use hospitals even though they are inherently dangerous places, you see potential for innovation being untapped.

Similarly, in healthcare, discussions of "free market" and "gummit" quickly lead to dead-ends. There’s no telling where one begins and the other ends. And because of widely-shared (including by me) moral intuitions about the desirability of common access to healthcare, government will always be involved in that sector. But the question is: how decentralized is decision-making? And the answer is: in most non-US countries, very little; in the US, not by much, and Obamacare makes it worse. This centralization is much more the fault of the insurance-driven view of healthcare than of the government as such.

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