by Patrick Cox
August 5, 2018

Increasingly, my conversations with old friends center on their frustrations with our healthcare system. When I say “old friends,” by the way, I don’t mean that I’ve known them for a long time. I mean they are old.

For example, I got an email just a few days ago from an old friend complaining about the one-week delay before he could get access to an MRI for a brain scan. He seemed to think the delay was evidence that the US needs true socialized medicine along the lines of the Canadian model.

In his defense, I’d probably not be thinking clearly either if I had a condition requiring a brain scan. For that reason, I decided against sending him the Fraser Institute’s most recent survey of Canadian healthcare, which reports an average 10.8 weeks of wait time for an MRI scan.

Long waiting lists for diagnostic and surgical procedures are not only a Canadian phenomenon. The UK’s National Health Service (NHS) is also in a state of perpetual crisis over wait times.

British politicians campaign promising to fix the problem and periodically pass new laws to solve it, but it continues to get worse. There are so many articles in British media about this problem, I’ll try to keep the number of links small, but let’s start with this article from The Guardian, titled “NHS operation waiting lists reach 10-year high at 4.3m patients,”
published a few weeks ago.

While I’m not fan of bureaucratized medicine, neither do I attribute all of the UK’s and Canada’s healthcare problems to socialized medicine. Rather, they are suffering from the same demographic aging that is straining US healthcare and Medicare.

Because I regularly dwell on the economic impacts of societal aging, I’ll forgo that dismal topic today. Instead, I’d like to discuss the silver lining of nationalized health care: the UK’s openness to cost-reducing policies that were once anathema.

However, I’m not talking about rationing schemes. Rather, I’m referring to a new openness to cost-saving innovations that the medical community has opposed in the past. One such innovation is artificial intelligence.


AI to the Rescue

I don’t like the term AI because it implies machine sentience, which does not exist. Rather, these are programs—often based on decision tree algorithms—that combine the knowledge of experts with medical data to quickly make complex decisions. Using deep neural networks and machine learning, these programs can detect patterns human doctors may not be aware of.

Diagnostic programs capable of outperforming the average doctor have existed for decades, but they haven’t been widely adopted. Two of the reasons are regulatory hurdles and a misplaced fear among some doctors that they will be replaced.

But the need for a solution to Britain’s healthcare shortage is so critical that resistance to medical AI is fading. In May, the University College London Hospitals (UCLH) and the Alan Turing Institute announced a partnership that would integrate AI into the NHS.

This article in The Guardian about the program is titled, “London hospitals to replace doctors and nurses with AI for some tasks.” The title is somewhat misleading because AI won’t replace doctors—it’ll augment them, improving their output and reducing the shortage of physicians in the UK.

The NIH has already instituted policies that reduce demands on doctors’ time. This is more important than most people realize: physician costs are about twice as high as drug costs in healthcare budgets.


Over-the-Counter Statins?

One way to reduce the demand on physicians’ time, wait times, and healthcare costs is to shift prescription drugs to over-the-counter status. This makes sense because the price of visiting a doctor to get a prescription may be higher than that of the prescribed drug. Though patients may not pay directly for the consultation, the cost is borne by the system.

Some groups in the UK oppose this practice because the NHS may not cover over-the-counter drugs. Faced with extreme budgetary problems and increasing delays, however, it’s unlikely that the NHS will reverse the practice.

The US appears to be adopting the same strategy. According to a recently issued draft guideline, the FDA is preparing to make some current prescription drugs for chronic conditions such as high cholesterol available over the counter.

That could mean some drugs shifted to OTC status would no longer be covered by insurance plans—but the total number of doctor visits would be reduced. I suspect it will also be a boon for Amazon and Walmart, since both are aggressively seeking larger roles in the healthcare market.

Another indication that we’re getting close to a major tipping point: The FDA has qualified regenerative medicine for the accelerated approval process mandated by the 21st Century Cures Act. While I wasn’t particularly impressed by that law, things are moving in the right direction.

I’ve previously mentioned that Japan’s deregulation of regenerative medicine was motivated by the need to solve the aging problem. As you know, Japan has adopted a system of progressive approval that would allow anti-aging technologies to be marketed following relatively short and inexpensive safety trials.

Japan’s move to accelerate the approval of regenerative medicine hasn’t gone unnoticed in Washington or Silver Spring, Maryland, where the FDA is headquartered. You can download a PDF of the regulatory guidelines for regenerative medicine here.

Remember, things change in two ways: slowly, then all at once.


— Brace Yourself—Aging Will Destroy and Transform Our Healthcare System originally appeared at Mauldin Economics.