The U.S. Health System: a complicated web of government and private industry relationships

What do you do when you’re a health policy professor? In the case of Robert Field, health policy professor at Drexel University, you answer lots and lots of questions about the Affordable Care Act and one of the big underlying issues: government’s role in health care. And those discussions tend to get really heated.

“I think it’s because it affects us so personally, everyone uses health care, everyone knows someone for whom it’s a matter of life and death,” Field tells The Pulse. “It will always be a personal emotional issue for decades to come.”

Field is the author of a new book, “Mother of Invention: How the Government Created ‘Free Market’ Health Care.” A four year endeavor, he says the purpose is to break down what he sees as a misunderstanding in many of the charged debates around health care, that the government and the health care sectors are separate from one another. Field argues that the U.S. government has long played an important role as a “silent partner” in key parts of the health system, most notably the hospital industry, the medical profession, private health insurance and the pharmaceutical industry.

He recently sat down with The Pulse’s Elana Gordon and zeroed in on that last sector, the pharmaceutical industry. Below are some interview highlights:

FIELD: [The book] is in part a pushback against the cries that we hear to keep the government out of our health care. And we’ve been hearing it since Obamacare was proposed in 2009, we’ve heard it recently in the last couple of months with the glitch-filled rollout. The question is, is government up to the task of reforming our health care? But it’s important to understand the context because we’ve been hearing this for 100 years. And as the government does things like National Institutes of Health [NIH], Food and Drug Administration [FDA], Medicare and Medicaid, Obamacare and countless other smaller programs, we see the government intricately interwoven into our health care. And it’s important to understand that the government does not always act wisely by any means, there are all sorts of problems in these partnerships, but if the government weren’t there, we wouldn’t have private sector health care and our health care today would be a shadow of what it is.

GORDON: And you actually say that the government has created our health system and the hospital system, the medical professions, the insurance industry and the pharmaceutical industry, which I think in a lot of our minds is the most private, entrepreneurial sector that you can imagine.

FIELD: Absolutely. When you look at the way the government nurtures and supports the pharmaceutical industry, it’s happening from many different sides. To look at where the story begins, a scientist at a private university may have an idea to understand the way a gene works. The NIH funds that research. That results in some findings that give clues to where a drug might lie. The NIH may then actively try to find a private company that will then develop that drug and may actually come up with an explicit agreement for them to help develop the drug. It then will go to the Food and Drug Administration, which will review it, certify that it’s safe and effective, which gives us as patients and doctors confidence to go forward with it. The company will also take advantage of tax breaks for research and development. If this an orphan drug that treats a rare disease, meaning a disease with fewer than 200,000 patients, the company will get special regulatory consideration and perhaps special funding to help develop and market it.

GORDON: Can you help trace that back? Where did it start?

FIELD: We had drugs up until the early 1900s that were drugs in name only. They came out of a physician’s black bag, you were lucky if they merely didn’t hurt you. We then had an FDA act in 1906 that allowed the government to assess drugs for safety, and that was a quantum leap in the respectability and the capabilities of the industry. It then took another leap in 1938, when the FDA got new powers to approve drugs before they came on the market. But then starting in the 1930s, we began funding basic, biomedical science. That’s something private companies can’t invest in themselves because it’s too speculative.

GORDON: How did the government, why did the government want to step in?

FIELD: Well to give a little bit of history, after World War I, we saw the value of science in our military victory and the way it was able to protect troops against infectious diseases, to help them heal from their wounds. And a group of scientists lobbied private industry to get involved, to set up a fund to fund basic research. And private industry wasn’t interested. So they turned to a Senator from Louisiana, Senator Ramsdell, who passed a bill to create this new creature, the National Institute of Health – it was still singular – to have the government step in, create the basic science so that private industry could take advantage of it and create products.

GORDON: I hear a lot now about pharma restructuring and I hear a lot now about this disconnect between the basic research and bringing discoveries to the market – are we at another pivotal point in that relationship and what’s happening now?

FIELD: We are definitely at a pivotal point. We’ve had a paradigm of drug development that basically attacks receptors in cells and either inhibits them or promotes them to deal with disease. We have now a lull in the development of new drugs using that model. People see the future as being genomics. Medicine will be based on our genes and turning on and off genes that will either hurt or help us. We are there because the National Institutes of Health spent the decade of the 1990s mapping the entire human genome. And as of 2011, there’s a new institute, the National Center for Advancing Translational Science, which actually takes drug possibilities and develops them directly through the government, through NIH, and then searches for a private partner. The hope is that eventually this will become lucrative enough and routinized enough, that private companies will be able to carry the full ball on their own. But to get us over the hump, the government is very much promoting the science, promoting the research, and promoting the financial partnerships that allow the private sector to take over. Think of it, to use a metaphor, think of it as a field that has to be tilled to get those flowers. Do we want the flowers or do we want the gardener? We actually have to have both or neither one will serve any purpose.

Disclosure: Robert Field is a member of the WHYY resource group.