Can Regulating Prescription Prices Hurt Americans' Health?

Source: Wall Street Journal

The economic principle I’m exploring is “What are the current regulations regarding medicinal prices?”
My research question is: “Why lowering prescription prices could hurt the US?”

An article published in DrugCostFacts.org titled “Shouldn't the U.S. Government do more to regulate high drug prices?” demonstrates this economic principle by showing how the free market system of the US has led to growth in the prescription industry, how history has shown the free market has incentivized innovation, and how innovation is stifled when profits are capped.

The article first goes into the numbers of “drug production” in the world. The graphic from the Milken Institute displays that 57% of the entire world’s new drugs are being created and produced in the US. To explain this whopping number, the article writes that “what makes the United States stand out is its commitment to a competitive, free market system for drugs that doesn’t impose artificial limitations on successful innovations.” By not controlling the boundaries for net gain on companies, the US offers an incentive to create and innovate, because the companies could win huge from their inventions. Even if what the companies gain is less than what the cap is in other areas, the mere idea of possibilities for these companies is enough to drive them to create.

To bolster its point, the article cites many examples as to why “throughout history, advances in science and drug development in the United States have increased when Congress passed legislation that supports, promotes, and incentivizes the innovation being conducted in the lab.” They cite many acts from Congress over the years as being beneficial to the growth of American medicine. To name a few, “the Orphan Drug Act, the Hatch/Waxman Act, the Prescription Drug User Fee Act, the Food and Drug Administration Modernization Act, the Biologics Price Competition and Innovation Act, the creation of the Small Business Innovation Research program, and the Jumpstart Our Business Startups Act, among others.” The vast array of examples this article uses shows us why the US controls 57% of the medicinal market. Even though the US is not the only free market state in the world, the scale to which the US has incentivized this market for companies has shown profitable for both companies and everyday Americans who need the medicine being created.

Finally, the article argues against the claims I have explored in previous posts: the US should more firmly regulate the US drug market. They write “The reality is that short-sighted laws, regulations and insurance policies can scare away the private investment that is needed to fund biopharmaceutical research and to deliver new cures to patients in need.” Regulations that can stifle the profit of companies, can affect the core of the company. Most companies have to spend to make, so researching companies often rely on private investors or philanthropists rather than subsidies for the bulk of the money going into research. If investors see the loss of profit from these regulations, they may back out from the start, blocking the companies from making any progress. This article argues that these new drugs will cease to exist if we force investors hands with pricey regulations.

In my next blog post I will summarize the research I have done to this point

How do companies use the markets voice to influence innovation

Source: Customer Feedback

       The market is very important to companies especially because it drives innovation. Innovation is very important for companies to stay ahead and competitive in all segments of the market. So how do companies allow get this feedback from their customers, they allow them to share their thoughts, engage the right group of people, and get the consumer involved early.
     
          A great example of this is Apple, the company at first did not really reach out to customers but after the IPhone 5C tanked they started really asking the consumer what they thought they could do better and their sales have been growing ever since this started. Other companies like Southwest airlines use customer feedback to maximize the passenger experience from doing things like giving free checked bags and easy options to reschedule if you miss a flight, because of these changes there earning and stock price have been growing exponentially according to a yahoo finance article.  According to an Inc.com article companies can maximize their profits by appealing to what their costumes like about the product or service they provide.  An example the article gave was Southwest took a customer survey to see what the most memorable part of the flight was 1.5% of the people surveyed said that the pre-flight safety talk was the most memorable part of the flight.  the article cited that if Southwest could increase that number to 3% they could increase there profits by 140 million a year.

     I think that this is the most important thing a company can do is use customer feedback.  In the case of Southwest a very low percent of people found the safety talk to be memorable if they can improve the satisfaction of the pre-flight talk to 3% their profits increase greatly.  Customer feedback is a very important tool that gets underused way too much and that should change. 

What Drives the Cost of Healthcare so High?

Source: 123RF

The economic principle I’m exploring is: “Institutions are the "rules of the game" that influence choices"

My research question to help me study the economic principle is: "What are the top drivers for cost in the American Healthcare system?

The article “9 Drivers of High Healthcare Costs in America” published by Beckers Hospital demonstrates this principle by breaking down many of the different reasons that Healthcare costs in America keep on rising without end.

First, a lot of the reasons for high cost has to do with the patients themselves. Lots of the cost stems from unhealthy behaviors leading to chronic illnesses like heart disease, cancer, and diabetes. These types of preventable diseases “cause about 70 percent of all deaths in the United States, and they are the most expensive to treat”. Americans also tend to choose the most expensive procedures and technologies when it may not be necessary. The article states that “MRI’s in the United States occur twice as often compared with the average country in OECD data”. This shows that Americans tend to use more expensive procedures more, driving up the cost of everything else. Data from Perelman School of Medicine also found that “Americans average $9,403 per person in annual health care spending. By comparison, Germans and Dutch, average $5,182 and $5,202 respectively.” All of this data really goes to show how much Americans overspend on healthcare.

Secondly, many medical technologies are just expensive to maintain in general. The article states that “Data from the Organization for Economic Cooperation and Development have consistently showed the average unit costs for U.S. physicians, hospitals, facilities and drugs are the highest in the world”. The U.S. is so expansive in its medical care procedures that it just naturally takes up a lot of money. The difference between the US and many European countries that they are always compared to is that the US has nearly 330 million people, whereas most other countries have somewhere between 30-80 million. This puts more strain on the health budget for the U.S. than any other country in the world. 

Thirdly, administrative costs in the US are jacked up way too high. The article states that “The morass of health insurers and billing processes cost the U.S. healthcare system billions in wasted costs every year.” Data from the Perelman School of Medicine found that administrative expense differences were massive compared to other countries “accounting for $752 per-capita of Americans' annual healthcare spending, versus just $208 in the Netherlands, and $232 in Germany.” This is nearly a 3-5 times bigger increase than the other countries, which is ridiculous. If the US can find a way to reduce the administrative costs then our system would save billions of dollars overall.

In my next blog post I will research the question: What should the government change to make healthcare in America better?

Fashion economics

The economic principle I’m exploring is “When in scarcity of something, how do people choose what to buy?”
 My research question to help me study the economic principle is “How does being closed minded affect sales?”
The article published in Elle titled “Trans Model Geena Rocero to VS: I Can Sell “Fantasy” Just Fine, Thank You Very Much” demonstrates this economic principle by showing How Transphobia affects sales, How what you say on a big platform reaches many people, and how inclusivity is the now now. First, Just within the week of 11-12-18, Chief Marketing Officer Ed Razek made incredibly Transphobic comments, and when this got out to the public, the backlash was huge. Many people, not just the Trans community, felt incredibly offended over his remarks of how Transgender women could never model their lines because “they just can’t sell Fantasy”. A well known Trans model by the name Geena Rocero fired back on her instagram posts about how it has always been hard to be a model in such a competitive industry, but she, a trans woman, has made it to the top. It isn’t impossible, and it’s not that they don’t have “the look”, Rocero remarking that “[She] can sell a 10 million dollar hair flip” just fine, it is that these big companies simply refuse to watch their mouths and see what customers really want.
Second, After these words left Razak's mouth, of course it spread like wildfire. And it makes them look incredibly bad. They don’t realise that the new customer is now the new generation, one which is for the most part very inclusive and pushing for realistic representation. They need to realise that because they are a big company, they hold a lot of influence, each word they put out is amplified and heard by hundreds. As the article puts it, “The show is televised globally, so it's one of the biggest platforms you can think of when it comes to a model's exposure”. For those who know better, they will fight back and prove Victoria’s Secret wrong, but for those younger who are in the LGBT community, this is a shot fired directly at them. It harms mental stability. Already there is not nearly enough representation in big companies, but to have your group directly attacked, it’s something that stays with you for a long time and hinders self esteem.
Third, the biggest thing companies like Victoria’s Secret need to learn, it’s that being inclusive is the key. While they have slowly started including more women of colour, it is not nearly enough. Including only one group really erases a giant section of consumers, “It's a complete erasure of a big demographic—not just for a trans person, but plus-size models, and the average American size is 16”.

Predicting future tech innovations

Medium

It is easy to see that smartphones have come a long way in terms of innovation from the first phones with touch screen in the late 2000's to the iPhone X that can now recognize your face. It is obvious that innovation is a main focus in this industry and as more features are released it seems companies aren't running out of ideas but are actually innovating faster. Since there is essentially an endless amount of possible ideas and companies only have a limited amount of money for research and development, what features are likely to be seen in the future? According to the article "Future Technology of Mobile Phones: What We Saw at Mobile World Congress 2018" the some of the biggest innovations we will see are improved smart recognition, durability and fold-ability, and augmented reality.

Smart phone companies have been in a constant search for ways to make their products more secure, Apple made a huge step in with its "touch id" released in 2013 with the iPhone 5s. Since then other smart phones have followed suit with fingerprint scanners. Apple has recently released "face id" with its iPhone X which is facial recognition used to unlock. While both face id and fingerprint scanning are huge innovations they have both proved they can quite easily be hacked or bypassed, in the future smartphones could evolve to recognize their users in multiple ways. A future smartphone may recognize its users by face further than by appearance, but also by contour of the face--to prevent hacking with a picture. Phones may also be able to recognize you based on patterns, such as how you type or tone of your voice--no longer will your friends be able to ask Siri to send prank messages on your phone.

Another innovation that may be seen in the future is increased durability of phones and even fold-ability. In a few years smart phones will be very hard to break, research and development is going into a new type of glass that is harder to break and could be "self-healing". Along with this there is also research being done on flexible screen materials so you could fold your phone up in your pocket.

Possibly hardest for most people to visualize in every smart phone is augmented reality. Augmented reality is the addition of virtual reality into reality, for example the game "Pokemon Go" projects virtual characters over your camera to appear in the real world. Apple recently released a measuring tool that uses augmented reality, point you camera at an object and a virtual measuring tape will appear next to it showing you almost exact dimensions. As this technology advances we could see countless possibilities for it in our smart phones like object recognition or more tools. For example you could hold your camera up and see information, reviews, and ratings on restaurants and businesses around you. These predictions are based on what new technologies companies are investing in, however new discoveries and developments can happen quickly, therefore it is impossible to say for sure.

US Healthcare vs. other Healthcare Systems: How are they different?

Source: Jerusalem Post

The economic principle I’m exploring is: “Institutions are the "rules of the game" that influence choices"

My research question to help me study the economic principle is: "How does the United States differ from other countries in healthcare policy and structure?”

 The Article “Comparisons of Healthcare Systems in the United States, Germany, and Canada” published by the National Center for Biotechnology demonstrates this principle by breaking down all of the different healthcare structures in each country and highlighting the key differences between them. 

 First, the largest difference between most healthcare systems and the United States is that The United States operates on private market healthcare systems, and does not have a single nationwide system of health insurance. Most other countries have some form of universal health care, in which there is only one system that everybody falls under, but the US is not this way. In the US, health insurance is either purchased in the private marketplace or provided by the government to certain groups. Statistics show that “About 84% of the population is covered by either public (26%) or private (70%) health insurance.” And about “61% of health insurance coverage is employment related” due to savings. This is much different from Germany for example, who provides free healthcare for all under one system. Healthcare in America is also not mandatory, so more than 42 million Americans are living without healthcare insurance.

 Secondly, another difference between them is cost of healthcare. The article had a table showing the three different countries, and healthcare spending by each country. The table showed that the United States has the “largest GDP per capita and the largest healthcare spending per capita”. The article also goes on to state how the US Medical care spending is the highest in the world, both person to person spending and as a percentage of GDP. This could be detrimental for the US in the future, as these costs begin to rise more and more until it gets to a point where it is just too high and the whole system needs a reboot.

 Thirdly, I will discuss some of the overall struggles that each system of healthcare faces due to their own structures, and some of the trade-offs. The US has the highest expenditures on healthcare, but also with the private healthcare system the wait times are often shorter. The article also goes on to state how generally most Americans feel unhappy with our current healthcare system, and believe that changes need to be put in place for large reformations of the system. However with all of the up and down sides of it all, the article states that “data from different countries may not be directly comparable for several reasons and therefore, should be accepted with some skepticism”. While all of this data shows clear differences and some of it points to one healthcare system being better than another, there are so many other minor factors that it is really hard to tell what should be done and that is what makes healthcare such a big issue.

In my next blog post I will research the question: What are the top drivers for cost in the American Healthcare system?

How Fast Will Your Computer Be?

pcworld.com

The economic principle I’m exploring is “Because of scarcity, people choose. All choices have an opportunity cost.”

My research question to help me study the economic principle is “What are your choices when it comes to memory and storage?”

The article published in Tech Guided titled “How to Choose RAM: 4 Things to Consider” demonstrates this economic principle by showing the opportunity cost of RAM and storage.

First, of course, what are you building? Different builds require different amounts of memory. If you’re building a simple house computer, nothing too special, you’re looking at around 6GB of memory. With 6GB, your computer can perform any basic function or task while being able to run low-end internet games. If you’re building a computer for gaming, you need 8GB of RAM minimum. My current gaming computer houses 8GB and it can run any game I want to play at a high frame rate, however, it cannot run most recent titles at max graphics while speeding 60+FPS. When it comes to high end gaming and design software, you’re probably going to need about 16GB minimum, but don’t be alarmed! RAM isn’t very expensive and you can accomplish this easily with just under $140.

Second, I want to talk about compatibility. Not all RAM is compatible with every system. First, DDR Generation. This is significant because if the generation of your RAM doesn’t match your motherboard, you won’t have a fitting stick. For example, according to Brent Hale, “DDR3 memory in a motherboard that has DDR4 DIMM slots and you can’t put DDR4 memory in a motherboard that has DDR3 DIMM slots.” Another thing to look out for is CPU Heatsinks. CPU coolers can be bulky, hanging over DIMM slots. These can prevent RAM kits with taller heat spreaders to be installed. The last thing you need to know is that there’s 2 different types of RAM form factor: DIMM and SO-DIMM. This basically means Desktop vs. Laptop. It’d be a silly mistake to buy memory for your laptop when you meant to buy some for your desktop.

Third, I want to talk about is your storage unit. This is where you’ll keep all your precious files and this is also the part that is mostly responsible for the boot time of your computer, it’s apps, games and files. The main choice to be made here is between HDD and SSD. HDD is the classic storage card, costing around $50-$60 for 1 Terabyte. The pros of an HDD is simple: they’re affordable, they have lots of space, and they get the job done. You don’t necessarily need an SSD, however, they do offer some unique traits. First, they usually hold less storage. Bad right? No. SSD’s are known for their ability to boot up your computer and load up all of its beautiful files at incredible speeds. This is exactly what you want if you’re going for anything more than a simple house computer. And if you’re on a budget but need to make an upgrade, this is the first thing I’d have to recommend to you. SSD’s are usually around $100, which isn’t much more than $50, giving you lots of bang for your buck.