Thursday, September 17, 2009

Innovation At Risk

Blogger Tigerhawk points out an under-reported aspect to the health care debate, namely that medical innovation will at risk.

Read his post, "The health care 'reformers' go after medical technology".

Too often, the high cost of health care is blamed on the cost of technology. But in other sectors of the economy (cell phones, computers, DVD players), technology keeps getting cheaper and better with the time. It's only because of government interference in the health care marketplace that we see the current perverse trend of rising costs.

The September 17, 2009 Wall Street Journal confirms that the Baucus plan will levy "fees" on "drug makers, medical-device makers and clinical laboratories". I guess calling it a "fee" makes it sound less ominous than a "tax".

These "fees" will be based on market share -- i.e., based on how successful a company is in creating value for its customers. So the more innovative a company is, the higher the "fee".

I can think of no faster way to destroy innovation than to punish it.

(Tigerhawk link via Instapundit, who has his own take on the issue.)