| | Good for health, bad for business In a recent Money Stuff newsletter, Bloomberg's Matt Levine examined the entangled interests of pharmaceutical companies , consumer goods, and the stock market, which, as he points out, is now "owned in large part by the same group of big asset managers, index funds and quasi-indexers and other diversified investors." This "universal ownership of the stock market should mean that companies are more likely to do what is good for companies in general, and less likely to do what is good only for one particular company," he notes. "But imagine a pharmaceutical company that has invented. . .a drug that reduces consumption in general, a universal demand suppressant." Of course, Levine is talking about the popular drug Ozempic, originally developed to treat diabetes and widely prescribed for weight loss . In Levine's hypothetical market, institutional investors would be quick to shut down a drug that keeps consumers from consuming. While that won't happen, consumer goods conglomerates including PepsiCo and Conagra are keeping tabs on how Ozempic and similar drugs are affecting sales, as Levine shows. (The drugs could already be causing a small but noticeable decrease.) But on the whole, the math may check out, for investors at least, if the profits made from Ozempic prescriptions top the losses in consumer goods. And that's the real kicker for Levine: I do think that it would be a crowning achievement of postmodern capitalism if the corporate world, in aggregate, was able to make more money by charging people for not consuming stuff than it does by selling them stuff. + Ozempic has proved so popular that other pharma companies are rushing to get in on the action; so are compounding pharmacies. | | | | | High prices? Blame the middlemen. Pharma companies take a lot of heat for the high price of care in the US. (At $4.3 trillion a year, twice as much as similar nations.) But as the Economist argues, it's middlemen firms that profit the most : "They do not make drugs and have not, until recently, treated patients. They are the intermediaries—insurers, chemists, drug distributors and pharmacy-benefit managers (pbms)—sitting between patients and their treatments." These middlemen currently account for 45% of healthcare bills. And they're only getting bigger, as these companies expand their influence throughout the healthcare industry—buying provider networks, pharmacies, and more. As the Economist acknowledges, in theory, this kind of vertical integration could lower overall costs (and thus prices). But in practice, it hasn't happened. Instead, these huge healthcare groups most often exert their oligopolistic power to raise prices while lowering care, extracting rents without adding any real value. + Here's what happened when a private equity firm bought up most of the anesthesiology groups in Colorado. | | | | | Uber for nursing Clipboard and ShiftKey are apps that let nurses and nurse aides book single shifts at a range of healthcare facilities. Like most gig-work platforms, they offer service providers flexibility and choice—and often a better paycheck at first. But over at the Markup, Colin Lecher examines "what happens when nurses are hired like Ubers." Spoiler alert: the gamification and penalties long decried by gig workers in all sectors quickly made the job intolerable. But unlike other gig-work platforms, what's at stake isn't a missed ride or a cold dinner; it's a patient's health. Good care depends on institutional knowledge, support, and the relationships medical providers build with patients—things that are impossible to develop through individual hours-long shifts across multiple hospitals. It seems the current gig-work model just isn't suited for care-focused labor. + The staffing crisis in nursing that's made gig work a viable option (and fueled a boom in travel nursing) was at the heart of the recent strike at Kaiser Permanente. And the workers—nurses, ER technicians, and pharmacists among them—were successful, bargaining for a 21% raise over the next four years to help retain staff, as well as imposing restrictions on hiring temporary staff. | | | | | The problem with telehealth Telehealth has been a game changer during the pandemic—particularly for those without easy access to healthcare. But as researchers Gordon Burtch, Xuelin Li, and Meizi Zhou explain in Slate, this has also proved ruinous for rural hospitals and clinics, which are often already struggling to stay afloat. In a recent study, they found that telehealth is effectively cutting rural healthcare providers out of the equation in favor of urban providers: While a rural patient may choose to see a rural doctor over video, this isn't, on balance, what tends to happen. Our data indicates that more than 80 percent of rural patients' telehealth claims involve urban providers. Rural patients substitute local, in-person visits with remote, virtual consultations supplied by urban providers. Then, those virtual consultations frequently lead to in-person follow-up visits at urban facilities. As Burtch, Li, and Zhou note, preserving rural providers—which still provide necessary services—will require purposeful policy changes and perhaps a rethinking of service models that integrate urban and rural hospitals through complementary care. | | | | | Protecting nature with biomedical alternatives You may not know it, but humble horseshoe crabs are vital to modern medicine. Their blood contains the substance LAL, which since the '90s has been used to test vaccines and intravenous drugs for endotoxins. But unfortunately for horseshoe crabs, this means that for 30 years, we've been catching them to harvest their blood. Synthetic alternatives to LAL exist, but current regulations require that they be approved for use on a case-by-case basis. The tide is changing, though: as Kristoffer Whitney and Jolie Crunelle report in the Conversation, the regulatory group US Pharmacopeia, along with the FDA, is reviewing standards that could make synthetic alternatives easier to use—protecting horseshoe crab populations in the process. | | | | | | —Tim O’Reilly and Peyton Joyce | | | |
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