Health care in the United States is expensive, but its funding is crucial because it also is a major contributor to the economy and can better lives, according to an essay appearing in the June 2008 issue of the Journal of the American Society Nephrology (JASN).

Because of the cost of health care, this is not time to shrink the budget at the National Institutes of Health, which funds medical research that leads to potentially curative therapy, according to Dr. Eric Neilson, Editor-in-Chief of the Journal of the American Society Nephrology and Chair of the Department of Medicine at the Vanderbilt University School of Medicine in Nashville, TN.

As the US population increases, health care costs are sure to rise. To help stem rising health care costs, government officials are taking money away from Medicare and Medicaid programs, and budget planners are reducing the funds used to support medical science. But experts question this strategy, noting that health care employs a large segment of the national workforce (and is, therefore, a fundamental feature of the economy) and medical research is a critical enterprise that over the long run will provide more affordable health care—so called “high technology,” as Lewis Thomas once phrased it.

Neilson notes that the human papillomavirus vaccine, the antibiotic elimination of H. pylori–induced peptic ulcer disease, and the all-trans-retinoic acid cure of promyelocytic leukemia are all cost-effective advances that have improved lives and lowered costs. These advances took years to achieve and long-term robust funding of research was necessary for their potential to be realized.

Dr. Neils on admits that many aspects of health care are not cost-effective — for example, the sluggish economic productivity of the doctor-patient relationship is a chronic problem — the so called Baumol’s curse.

A number of other factors interfere with medicine’s productivity, including resistance to standardization, wasteful administration related to insurance reimbursement, unnecessary expenses created in the setting of medical uncertainty or futility, failure to embrace the hospice movement for end-of-life care, for-profit commercialism, and failure to provide good quality at a lower cost.

Also, because of a perceived shortage of physicians and nurses, the growing cost of labor will continue to plague health care. It is not the number of physicians, however, but their professional spending habits that will increasingly take center stage in whatever happens next. Physicians can work to lower these costs in the short-run but need to identify other solutions.

Over time, more and better research can help to counteract these expenses while benefiting the human condition. “The one immediate thing we can do now is maintaining our link to science. It is the discovery ground for future advances in high technology,” writes Dr. Neilson. “As a hedge against growing health care costs, the funding of science is priceless.”

The essay Baumol’s Curse on Medicine will also be in print in the June issue of JASN.