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September 12, 2000
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Re: Al Gore effect
I'm saddened to see an investment board turn to politics for purposes other than to assess political effects on our investment, but since this is the case I'll comment on it.
First, I try to keep my political views and investments separate. Why? Because I feel politics is the practical means by which we achieve society's idealistic ends. Investment on the other hand is the practical means by which I achieve my personal practical ends; there is nothing societal or idealistic for me in investing. I can believe in a solar power co. all I want, but I'm not going to throw my money at it unless I'm practically sure it will work. SO, beware mixing politics and investment.
Now on to the investment side facts of the further federalization of healthcare and/or prescription drugs. If medicine as a whole were federalized, my assessment is that there would be a term of turbulence while things shifted from an HMO basis to a government basis and that revenues would be lowered slightly from current levels. I do not, however, subscribe to doomsayers who see federalized medicine as the end of innovation in biotech or pharma. I do not believe this because virtually every other western nation has federally guaranteed health coverage and their respective pharmaceutical companies (Aventis, Bristol-Myers, Glaxo, etc) have been able to do fine (for pharma) in that environment in previous years. Biotech has also managed to become (and remain) a powerful force in the european economy despite federal regulation.
So, assuming the doomsayers' worst case scenario, if healthcare were to go federal, will pharma/biotech remain a worthy investment? Of course it will (IMO). I see nothing to worry about for a long-term (5-10yr) investor.
Now, on to my idealistic, political side. Almost every other western nation has health coverage. Why? Is it because they're evil socialists? Is it because they want people to receive substandard care? Are they stupid? Of course not.
They give coverage to all because they realize that good health, like good education, is a prerequisite for democracy. People have little care for politics when they're sick or dying, just as you cannot comprehend and decide upon political issues without a good education. Thus, good health is a requirement. Has our current HMO system provided good health? No. 16.3% of our adults and 15.4% of our children have no health coverage (US census, 1998), and 1/4 of those adults and children make under $25000/year. Any serious illness for them is a direct ticket to poverty and the street if they're not there already. HMOs strategically avoid providing insurance for those who actually get sick, especially the elderly, to increase their profits. Again and again we see HMOs lying to the government to steal unearned medicare reimbursements, and lying to their patients to delay and deny coverage they've paid for.
Could we afford to insure everyone? Would it strain our budget? The question we should ask is can we afford not to. Can we afford for children and their parents to go without healthcare? Is it conducive to democracy that the poor die younger because of poor or nonexistent health coverage? I don't see any argument that it could be so. To advocate that position reflects a practical preoccupation with money that subverts our moral responsibility toward ourselves as a nation that people not die in the most prosperous nation on earth because they cannot pay for a doctor. I'm all for revenue as an investor, but if it's on the backs of the dead you can count me out. I cannot have it on my conscience.
The next time you get upset about what a political candidate's latest pronouncement on the sorry state of healthcare in this country has done to your balance book, think about being a poor, uninsured parent with an uninsured child. There should be shame in a country where the investing class cares so much more for themselves that they advocate the denial of basic healthcare to the poor, but I see little shame here.
Excuse my diatribe.
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