Network Welfare

Last night, and again today, I was watching cable channels (History, Discovery, CNBC) and I was struck by how many ads I see for motorized wheel chairs.

Nearly every ad includes an exhortation that you, too, can get your wheel chair for “no money out of pocket.”  One company even brags that 90% of their sales go to people who pay nothing for their five-figure devices.  It all comes from Medicare and private insurance.

Guess who pays for that.

My question is how much these companies spend on marketing?  Obviously as a health insurance buyer and taxpayer, I’m paying for those ads.  Every half hour, 24/7/365.

Of course, the money spent advertising upholstered scooters and catheter delivery services pales in comparison to the ad dollars spent exhorting us to “ask your doctor” about the latest advances from the pharmaceutical companies.

Which leads me to my over-riding concern:

How much of the revenue stream for drug and medical device companies comes straight out of taxpayer pockets?  After all, these are supposed to be medically necessary, and only given to people who need them with a doctor’s prescription.  Why all the money spent on general public advertising?

Those advertising/marketing dollars don’t just go from taxpayers to the networks, because they stop and drop off some of their friends along the way.  They fatten bank accounts at advertising and market research firms, pay for “seminars” that doctors attend in exotic beach and golf resorts, and who knows where else.  And all that increases the total cost of the drugs and devices, which increases the cost of processing the claims that pay for them.

What if we said that advertising should not be paid from taxpayer dollars?  How much would we save if drug companies and motorized wheelchair manufacturers were limited to support their marketing only from sales to true free market consumers?

Other countries ban direct advertising to consumers for prescription drugs.  That cuts the cost of those drugs in half, or alternatively, leaves more money for research (since US television advertising dwarfs the R&D budgets at major pharma companies).

Besides, I hate it when my television gets much louder at 2 AM to tell me about riding a wheelchair to the Grand Canyon “AT NO COST TO ME.”  It completely disrupts my ability to concentrate on Hitler’s sidekicks or the black holes that might eat the earth just in time for the Mayan end of the world next year.

Even worse is the list of side effects for the latest digestive complaint drug they advertise during dinner when I have the nightly news playing.

How about this?  If taxpayer dollars are involved, then the cost of marketing is deducted from the cost we pay.  Let the networks find something else to sell.  There’s no reason I can see for us to subsidize them.


11 Responses to Network Welfare

  1. jeff reynolds says:

    my late wife used a motorized scooter. i paid for it myself.


  2. Fred says:

    Howard, the wheelchair ads are on the nature of infomercials where there is no ad cost to the advertiser until someone responds to the listed phone number. They are considered “fulfillment” ads. When you see those ads, it is because it is dead space for the channel in their hard breaks or the damm things are selling well. Usually, the former cause.

    As for as the ads for prescription drugs, the companies are trying to create demand for the drug. I agree that many of the drugs have greater potential side effects than the condition they are trying to mask. I said “mask” because few drugs are cures, but are only palliatives.


    • hhill51 says:

      Wow! Do you mean I could start my super-Ponzi technical magic investment fund, and get them to run the ads with no cash out of my pocket? (Just like the lady in the wheelchair ad.)

  3. Bruce B says:


    This is a travesty! The government should regulate this! Of course, this is the same government that set up the system that encouraged it in the first place and many might say the problem is not that the government isn’t big enough and doesn’t have enough regulations in place. Do you think there’s a chance they might not get this right either if they regulate it further? I’ve had the same repulsed reaction as you about them being free. It’s almost as hideous as the radio ads saying, “You have the RIGHT to credit card debt relief.”

    BTW, how about the ads with the ladies on the elevator talking about their colons, cramping, gas, diarrhea and constipation? Thank goodness for DVRs. I hope you are also watching shows about the asteroids that are going to end the planet, although those are pretty interesting.

    • hhill51 says:

      I’m with you on this…. I suppose they could simply take the marketing budget as a percentage of the gross, and subtract that from the allowed Medicare payment, like they do with hospitals and MRI’s ….
      I paid for my own MRI a few years ago, and then had one that was covered recently. I got a bill from same local hospital showing that the one I paid out of pocket was more than three times as expensive as the one paid for by insurance (the bill being for my hi-deduct payment at the insured rate)…
      I think those credit card relief outfits are total scams dancing right at the edge of felonious behavior, and that they probably end up costing the lender zip, and the borrowers plenty. I do know that one of them calls my house all the time with a robo-call, even though I’m on the Do Not Call list, and I never carry a credit card balance unless it’s one of those special deals that costs less than I can get in interest payment elsewhere. (Ie I take the interest rate arb… not many these days, but happens every now and then.)

  4. Jolly says:

    If the source of money is private insurance, would you have an objection to the marketing?

    Isn’t the root problem that you object to your tax dollars being spent this way? Just as some might object to billions of tax dollars spent on medical needs of those who basically don’t take care of themselves (e.g. the parents who are culpable for 99% of the ‘childhood obesity’ problems, the lifelong fast-food junkie who is now battling cardiac diseases, etc.)

    Likewise, isn’t it great that now children up to age 26 are covered in their parents plan by law, “AT NO COST TO YOU”?

    There’s no free lunch. Someone’s gotta pay.

    • hhill51 says:

      That’s not quite as bad, but I still object to creating demand for prescription drugs and devices by general advertising. I think it leads to doctors giving the prescription (to both Medicare and private insurance patients) just to stop the patients from yammering on about it. That’s part of how we end up spending so much, as a country, and go around doped up with stuff that has unknown and pretty awful side effects for (sometimes tiny) minorities among us. Unfortunately, one patient losing liver or kidney function makes that one extra prescription for pills VERY expensive to the society. If you need it, your doctor should be able to know about it without the expense of general advertising.
      As one way to estimate the cost of this subsidized free market excess, I look at our total bill running 17% of GDP vs Germany, Japan, Switzerland to name three very capitalistic places with systems that work at about half the price. Putting that 8.5% of GDP in perspective, that’s more than all the income tax revenue, combined. So why aren’t the Taxed Enough Already crowd complaining about the tax we pay by being charged double for health care?

  5. Larry says:

    The core of the entire problem is that the people who are spending the money did not EARN it, they STOLE it. If they had to EARN it or WORK for it, they would be much more careful how they spent it.

    If participation in these government programs was VOLUNTARY, then they would have to PERSUADE people to participate. Then they would HAVE to function with some kind of restraint, or they would simply go out of business, like any other service-provider.

    As long as the money is taken from people against their will, the people who are on the receiving end of the thievery will NOT CARE how much they spend or waste.

    • hhill51 says:

      I’m guessing you’re not very popular at Tea Party rallies.

      • Larry says:

        My ideas are not popular with statists on either the right nor the left. I’ve been to two tea-party type gatherings, and some people “get it” and others don’t. The problem with most conservatives is “EXCEPT.” They want less taxation and less spending EXCEPT interventionist foreign policy and warmongering. They want more individual liberty EXCEPT for gays, muslims, non-preseribed drug users, etc.
        There are more and more libertarians like me though who realize that coercive government may be a “necessary evil” it is indeed still EVIL. And unless there really is no other way to fulfill a public need, then some other way should be found.
        The difference between the libertarian and the conservative is that the libertarian applies this principle to EVERYTHING, and doesn’t pick and choose based on their selfish agenda.

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