Modern medicine has found responses to so many diseases in recent decades that we often are taken aback when an old scourge re-emerges. Yet that has happened in the 17 cases of drug-resistant tuberculosis seen in Ramsey County over the past two years. These were the direct cause of three deaths and a contributing factor in three more.
The near-eradication of this age-old disease in the industrialized countries was one of the medical miracles of the 1950s, similar in impact to the near eradication of polio with the Salk and Sabin vaccines. However, this horrible disease’s re-emergence in a drug-resistant forms over the last 25 years is a sobering notice that medical advances are not always permanent.
I have a personal interest. My mother was a U.S. Navy nurses’ aide at a tuberculosis facility in California during World War II. Highly virulent strains of TB were endemic in the South Pacific. Marines and sailors who contracted the disease there were her patients. My sister and I grew up hearing stories of how the disease had affected so many — and so many who died. Early in grade school, I had a positive skin test, probably because of a dormant bacillus from my mother. I have never had an active case but am interested in the disease.
There are several economic issues in all of this:
The first is retrospective. Seventeen cases in one country is bad, but is only a blip on overall vital statistics. A century ago, TB took tens of thousands of working age people out of the labor force, often for many years before their painful deaths. Many were sent to state-run sanitoriums, the cost of which was a significant item in public budgets.
Yet this particular disease was only the tip of the iceberg. Other communicable diseases and non-communicable ones like osteoarthritis and cataracts reduce the overall productivity of the labor force. They curtailed people’s lifetime incomes. Things we now can correct in a day-surgery center ended blue collar and white collar careers alike. Such now-curable diseases that once sapped U.S. economic productivity are a much smaller factor
Second, the eradication of disease is a classic public good, something with large positive externalities or “spillover benefits” that a free market will never produce in optimal quantities. Without some government action to make it happen, society never can get optimal results.
This can occur in the phase of searching for cures. Yes, there was private medical research all along and some funded by donors like that by Rockefeller Foundation that eliminated hookworm. And yes, there were national campaigns like the March of Dimes that funded development of the Salk and Sabin vaccines that eradicated polio. But overall, without government action, any economy will underinvest in medical research. Fundamental research to find more effective antibiotics got large government funding precisely because tens of thousands of U.S. military, like the ones my mother nursed, came back with terrible diseases or were killed or scarred by uncontrolled infection.
Wartime health research — combined with weapons research like the Manhattan project — produced a program of federal research funding that was a major factor in the growing productivity and increasing incomes of the 1950s and 1960s.
Classic public health campaigns, like vaccinations in schools or skin tests of all students for TB or testing all cattle for brucellosis also are a public good. Without government action, these never would succeed either. Government action included the police power of forcing students to get shots or farmers to sell reactive dairy cows for minimal compensation to get an endemic disease out of the milk supply.
A third economic lesson is the way in which medical advances improve well-being, even though this improvement is not picked up in monetary growth indicators like Gross Domestic Product. Just in the past decade, I had a vitrectomy to correct a torn retina that would have blinded that eye just a few decades ago. I had two cataracts removed that would have impaired my vision. I had an appendectomy for an infection that might have killed someone a century ago. I had surgery, radiation and chemo for a neck cancer that has me well five years later. In January, I’m getting a knee replaced. All of these procedures were not possible or had much lower success rates when I was a kid. My well-being is enormously better because I have survived all these maladies. I could not put an exact price on it, but the value is enormous. Yet the only things counted in GDP are the billings of the providers. What is true for me is true for nearly everyone in our society at some time in their life.
Such non-priced improvements are not limited to health. Our DVR improves my life because I can skip commercials. A GPS saves time and reduces stress of travel in unfamiliar areas. Skype allows grandparents to see and talk to grandchildren in a more satisfying way than the telephone. Facebook allows us to maintain and cultivate friendships. Yes, these innovations also bring negative effects, but on balance our life is made better by an amount that exceeds what we pay for these services.
There is a fourth issue — and it is a negative one — the emergence of antibiotic-resistant disease strains such as we’ve seen in the recent TB cases. These often reflect external costs (essentially the opposite of spillover benefits). For decades, doctors overused antibiotics. Even if they didn’t help cure something, administering these drugs did not hurt and prescribing medicine made for happier patients, even if it was just a placebo effect. The only apparent cost was the bill at the drug store. But the additional external cost of over-prescription was the development of drug-resistant strains. Feeding antibiotics at “subtheraputic” levels to livestock improved their health, especially in “confinement systems” where livestock were jammed together. It improved feed efficiency. But low levels in millions of animals greatly favored growth of resistance. Most of the antibiotics and many of the bacteria acted the same way for humans.
TB is a different case because it was not common in livestock. But it is a disease that has always required treatment over an extended period. The patient may feel better long before the prescribed period of taking the antibiotic is over. It is expensive to closely monitor patients to ensure that pills are, in fact, being taken for all the time necessary. But without close supervision, people, particularly poorly-educated ones without regular contact with health providers, stop early. The organisms still in their bodies have been exposed to the antibiotic without having been killed, fostering the development of resistance.
Finally, TB and the development of antibiotic resistance illustrate an Achilles heel of imperfect economic incentives in pharmaceuticals. Pharmaceutical research is funded by a mix of public and industry funds. Public funds tend to go to basic research and corporate resources identify specific drugs and bring them to market.
The big money is in things like blood pressure or cholesterol or allergy meds that people will take day after day for decades. It is not in vaccines, where one or a few shots to children confer lifetime immunity. Drugs for rare diseases, especially ones common to poor countries, similarly have little return relative to development costs. And so do basic antibiotics. Yes, many people use them, but generally for short periods of time. The research involved is difficult. So private enterprise cannot be counted on to do the job. But federal funding for medical research is, at best, stagnant in real terms, and falling as a proportion of the federal budget and relative to GDP. We apparently have higher priorities as a society. And we will pay the cost of such priorities.