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Blue Cross bashes publicly funded innovations at public universities

Blue Cross and Blue Shield of North Carolina has new radio ads bashing the government.

The speaker in one of the spots says:

Government does have a role to help those who can’t afford coverage to pay for it. But the improvements that really matter will come from the energy of the private sector, just like they always have.

The theme of the ads is that private companies provide the only innovations in North Carolina — not UNC Chapel Hill, or North Carolina State University, or East Carolina University. Bob Greczyn must have been quite an inspiration while chairing the ECU Board of Trustees. I wonder if he informed them that public universities have no role in finding new solutions to vexing medical problems.

The truth is that much of the basic research for everything we do in health care is performed at public universities with money from the National Institutes of Health.

As Marcia Angell, former editor of The New England Journal of Medicine, explained several years ago:

Since the United States is the major profit center, it is simply good public relations for drug companies to pass themselves off as American, whether they are or not. It is true, however, that some of the European companies are now locating their R&D operations in the United States. They claim the reason for this is that we don’t regulate prices, as does much of the rest of the world. But more likely it is that they want to feed on the unparalleled research output of American universities and the NIH. In other words, it’s not private enterprise that draws them here but the very opposite—our publicly sponsored research enterprise.

As the latest issue of BusinessWeek explains, insurance companies stand to profit handsomely from health reform. They will have thousands of new customers. The only thing that could slightly reduce the windfall is if a public competitor exists. Blue Cross wants all the money it can grab, so it will take every chance to bash any government program.

Blue Cross is wrong about innovation. What kills innovation are monopolies like the one it enjoys in the North Carolina insurance market.

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