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LTCI Watch: Basic research

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Members of Congress and, sadly, members of the Federal Reserve Board of Governors seem to think in terms of a standard time horizon of about three days. 

From the perspective of our government, “long-term financial planning” might involve buying milk that will expire four weeks from now, as opposed to next week. Or possibly building a truly enormous of what they call “savings” — enough cash on hand to, say, buy three lottery tickets a week from now.

The latest national health expenditures forecast put the short-term nature of our government’s thinking in ultraviolet neon lights with a prediction that the slowest-growing health care spending item in the projections will “noncommercial research.” Spending may have fallen 2.1 percent in 2013, to $47 billion. It might increase just 0.1 percent this year, then fall 1.7 percent in 2015. It’s supposed to increase a little in 2019 and 2023 but still be the slowest-growing item in those two years.

Putting the brakes on noncommercial medical research is a terrible thing to do to long-term care insurance (LTCI) issuers, their producers and their customers.

The Fed does what it can to strangle LTCI because, hey, who cares about the future. In the future we’ll all be dead.

The Obama administration does what it can to smother the private LTCI community because it made a fuss about the likelihood that the CLASS Act voluntary LTC benefits program would not work. Obama administration officials eventually recognized that the LTCI community was right, but their attitude still seems to be, “Who cares if the CLASS Act was doomed. Ted Kennedy was a great man, you lousy low lifes.”

Now, skimping on medical research is hurting LTCI issuers’ secret, erratic claim-reducing weapon: The possibility that someone could come up with a cure for Alzheimer’s, or a vaccine for preventing Alzheimer’s, and make all of the current worries about aging boomers and iffy actuarial assumptions irrelevant. In a world in which scientists cured Alzheimer’s, all LTCI pricing actuaries would look clairvoyant.

Companies have recently developed huge new gene sequencing machines that can discover and profile vast colonies of microbes that live inside people and influence us in surprising ways. The sequencing machines and other new tools could be the key to figuring out what causes conditions like Alzheimer’s and preventing them. Researchers are also looking into the effects of all sorts of natural and artificial substances on dementia.

Of course, U.S. spending on dementia research is on track to increase. President Obama supports increasing dementia research spending and dementia research spending has strong support in Congress. No one in Congress is campaigning based on loud arguments about how great it would be to cut dementia research spending.

But, given that no one knows what causes Alzheimer’s, no one knows which research projects have the best chance of helping us find cures. The research that leads to the tour could focus on fights between amoebas, frogs’ sense of smell or the causes of indigestion.

Meanwhile, bright kids who are choosing between careers in science and careers in investment banking are usually thinking in terms of “doing some kind of medical research,” not in terms of doing dementia research. If potential star dementia fighters see their instructors having trouble getting research grants, they might not stop to find out whether those researchers were looking for grants in the highly desirable dementia sector or some washed up, has-been sector. They’ll just delete the bookmark to the biology doctorate program and click to open the application for the MBA program.

See also: Alzheimer’s R&D funding should double, witness says


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