Why Would Government Involvement Kill Medical Innovation?

Critics of socialized medicine often claim that a single payer system and even a public option would kill medical innovation. If this claim were true it would certainly be reason enough to vote against any form of government run healthcare. Unfortunately, this claim, to my knowledge, has never been backed up by sound reasoning. I am going to provide some sound reasoning on why government healthcare would not kill medical advancement.

The first reason is the abundance of research universities in the United States. Research done at universities will continue regardless of what the healthcare system looks like. The labs provide some of the most valuable knowledge of everything and are not tied into healthcare. A graver problem when it comes to university research is the cost of tuition. Education inflation poses a greater threat to research than healthcare reform. It is becoming more and more difficult for kids to afford top-notch colleges especially with the state of the student loan industry. But that’s a separate issue.

Obviously, not all research is done at colleges. Pharmaceutical companies and biotech companies do their fare share as well. And it is possible that they could lose profits and therefore research and development funds if the government uses its size to negotiate better prices. But this does not have to be the case. The government is capable of negotiating fair contracts that can protect or even enhance R and D. The government does have more resources to offer. More importantly, if healthcare reform provides universal coverage, it can offer more customers, which means more money. The private insurance industry has proven they cannot provide universal coverage, separating all healthcare innovators far away from millions of customers.

Some of the resources the government has to offer are those colleges I mentioned earlier. I would think that private companies would love the opportunity to take advantage of publicly funded labs with really smart people working in them. And then there are taxes. The government could increase existing R and D tax breaks to counteract any loss for private companies due to lower prices. And what about immigration. The government could grant visas to private companies so they could bring in top talent from around the world.

The biggest reason why I cannot understand the stifling innovation argument is the defense industry. We have no shortage in innovation in weapons or anything else the military needs. Our military is better equipped than any other country with the most advanced technology on earth. I think it is safe to say that public money has actually enhanced innovation in defense. Why wouldn’t enhance innovation in medicine?

One possible argument where the government stifles innovation is education. It can be argued that the government has stood in the way of new methods of teaching. This may be true but I would argue that it isn’t something inherent about government that stifles innovation. I would instead argue that while government may be guilty in the case of education, there’s no reason to believe that this would also happen to medicine. The question is whether there is something about government that inherently leads to less innovation. I don’t think that that question conclusively.

In conclusion, it cannot be proven that an expanded role for the government in healthcare would lead to less innovation. On one hand, innovation in the defense industry has benefited greatly from the government. On the other, innovation in education may have stagnated because of government’s role. It may be the case that government will smother medical innovation. But you can’t stay inside because you might get struck by lightning.