Matt Yglesias channels the CW on medical innovation:
Arguably the rest of the world gets by free-riding on American generosity. We provide the windfall profits that drive innovation and they offer payments much closer to marginal costs and save money.
Cry me a river.
According to the Migration Policy Institute, drawing on hard Census data:
In 2005, 15 percent of all US health-care workers were foreign born. … Of the 10 million persons engaged in health-care occupations ages 18 and above …1,454,883 were foreign born. … The foreign born accounted for 26.3 percent of 803,824 physicians and surgeons.
This army of professionals is very close in number to all the US armed forces put together: 1,445,000 in May 2009. The great majority of these doctors and nurses were educated at taxpayer expense in their countries of origin, which are mostly far poorer than the USA, like India and the Philippines. Not many Swedish or Japanese doctors choose to emigrate to greener pastures. The US health care system is a huge free rider on the developing world.
This regressive transfer of human capital far outweighs the hypothetical free riding on American medical and pharmaceutical innovation – usually overstated anyway.
The French Communist politician Jack Ralite was French Health Minister in 1981-83, during the swan song of the PCF in Mitterand’s early years. (The PCF ministers all quit government when Mitterand was forced into an economic policy U-turn in 1983.) Ralite tried to raise the number of medical students, but gave in to pressure from the professions. (Article in French).
Ralite understood basic capitalist economics better than John Boehner. If the US wants to cut bloated medical fees, it needs to tackle the Malthusian cartel that blocks the opening of new medical schools – and hoovers resources from the Indian poor.