With Medicare for All Democrats are riding a dead horse

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While slowly moving forward towards the next presidential election in 2020, Democratic contestants start making their bids and it looks like they want more Socialism. Besides all sorts of hot topics like abortion or border security, one burning long-term issue is health care. The debate shows that a good part of the political left still wants to nationalize the entire industrie and finally bless the entire US-population with cheap and reliable coverage. But as I strongly believe, health care doesn‘t need a fix, because over the course of the next 20 years it will fix itself. In this article, I will explain you why.

Cancer treatment incoming

Just a few days ago, an Israeli medical research team announced that it has finally found a cure for cancer and it will be on the market in one year. Even though this was kind of coming in light of genetic research and trillions of public and private money going into R&D to find said cure, it still is exciting, since it marks a significant milestone in medical history – and perhaps even the history of mankind given the impact of cancer or the coming absence of it.

The treatment itself is said to be applicable for most cancer types and comes with a high probability of success. On top, it doesn‘t even have significant side-effects like chemotherapy, which is really good news for those who know about the side-effects of successful chemo treatments. The share of deaths caused by cancer is still above 20 per cent. A number will soon be near zero and the former patients will be not just alive but also well.

A look at other diseases and their treatment

So far, no information has come out about the price tag for this new cure. My hunch would be that at the beginning it will cost about as much as current treatments cost. That would be in the area of some 150,000$ or as comparison, one house, one Porsche GT3 or one child plus college tuition.

But looking at other recent cures for mankinds‘ plagues like Hepatitis C, where the initial drug cost close to 100,000$ in the United States, it may not take too long until the costs for the treatment of cancer will go down significantly. The reason for this is that not long after the first safe and reliable cure for Hepatitis C turned up, competitors entered the market with other substances and offered them for a quarter of the price the first drug.

This step from first to several cures for Hepatitis C took less than half a decade. This for a disease that can easily match other nasty diseases from virusses like HIV to cancer in its consequences for people who suffer of it and society as a whole.

Hepatitis C is not the only disease where there has been a recent break-through. Hemophilia would be another case for which there is now a reliable cure and there are surely other so far incurable diseases that have found or will soon found their match in modern medical research. Even Type 2 Dabetes is surprisingly far near the top of this list.

Genetics, data driven research and big money

As surely everyone knows, the knowledge about genetics and the capabilities to alter genetic information makes up the core of todays R&D activities in the medical area. It‘s most important element is genome sequencing, which is why it is also the most important factor in the speed of further medical research. Accordingly it is the price of sequencing, which gives us the best clue of what will be possible next and when that will be.

And ideal benchmark to compare the price pattern of sequencing for research is to look at how the price for the sequencing of the first human DNA developed. The first one was rather expensive. It cost around $3bn which was in 2003 - or 15 years ago. Today, you can get your DNA analyzed for only 1,000$ and if you believe what they say in the industry, the same service will soon be only 100$ per set.

Although „soon“ can mean a lot, it surely won‘t take another decade until we get there. With such a cheap method to get to the core of the human biological essence, the trajectory for medical research as a whole will change massively.

„Soon“, the critical path for finding new ways of curing acquired or genetic diseases will not anymore be a matter of brilliant ideas by doctors, molecular biologists, pharmacists or Professor Coincidence, but there will be billions of datasets from humans, other animals and plants available. These only need to be skimmed through in order to find a matching cure for a disease.

Logically, that will turn the fate of medical research into a matter of calculation power as it already is the financial industry and too many other sectors of our economy.

With cheap DNA sequencing in place, people giving away their spittle for free or as part of living in a country with an absolute ruler, plus enough computers worldwide and still enough money to be made thanks to funcioning patent markets (at least in the Western hemisphere), there is no doubt that investors will keep on pumping money into commercial medical R&D to milk the cow until the final pill kills it off. On top of all that, countries too have an interest in further research, especially the ones with expensive public health care sytems.

How much will the costs go down and when?

All these elements that make up the global field of medical research combined, and with past break-throughs in mind, it really isn‘t far fetched to assume that in around 20 years, the entire cake will be eaten. Besides massively extended life-spans, the main consequence will be that the costs go down – gradually, of course and not in a rush.

Patents on medicine usually are active for 20 years, which means competitors have to find new chemical forms of a substance or find an entirely new cure within this period in order to get their own product on the market. Only after this protected patent period is over, generic products can enter the market. In case this does not happens, the prices will go down by around 80 per cent after these 20 years and with that to a level on which everyone can afford it.

Important is that this duration is only the extreme case. Normal is that drugs get their competition much faster as you can see for example in the Hepatitis C case.

There are other relevant factors that will help pushing prices down like medical tourism. As soon as a potent cure enters the market, countries with potent pharmaceutical industrie but weak patent laws like India start developing their own generic treatment. Cheap flights and the outlook to the alternative of dying or having to sell your house to be cured from cancer will lead to a steadily growing number of people who get their treatment on the other side of the planet.

With every high-profile disease for which there is a cure found, the pressure will mount on the health care industry. They will have to drop their prices to a level that matches the treatment in India plus flight, the trouble of going there and the residual risk that comes with seeking for a treatment in a place like India.

If you now assume one break-through cure every four years for one of the ten so far most expensive diseases to treat and for each soon after the price drops by 50 percent given the global circumstances, in 20 years from now the total health care industry will be down by up to one trillion Dollar or almost one third given its current market size of $3.7bn.

And in 40 years, when all the expensive cures will have their cure, the US health-care market will quite likely not even amount to $1bn anymore, since there is a lot to catch-by in new treatments for diseases with lower profiles on the way to curing the big ones.

So.. would it really still be worth setting up a new health care system?

With the described perspective, one has not to wonder about alternatives to the current US health-care system, but whether there will be a need for a new one in the first place. After all, public institutions and social and economic systems of such a grand scale need long-term planning as they have long-term repercussions and the political as well as administrational process usually takes years to get something done.

Effecticely, not too long after such a new Democratic health-care system is set up, most of the 12 most common causes for death in the US will be a thing of the past with the exception of the ones with non-medical reasons. 

And as the political process is loaded with corruption, incompetence, the side-effects coming with a new health-care may be more severe than just leaving the current system in its place, while just waiting another 20, perhaps 30, years until political action on the issue is obsolete.

The bottom-line therefore is that health-care as a hot political topic in the US is basically dead – at least for everyone who can afford to look at the issue in its perspective. Luckily, they are still the vast maiority.

On the other hand of course, these millions of saved lifes will cause new and massive questions about the countries pension systems. But that is an entirely different story.