Most informed observers agree that the United States overpays for health care by a wide margin. Which is good because it’s hard to argue with this graph:

But I’ve now seen a few conservatives argue that actually it’s good that the United States overpays by so much, because the juicy profits these high prices create incentivize medical innovation. It’s therefore unfair to compare costs across countries, because the US is subsidizing the world’s R&D. And while the United States does not reap the full benefits of these innovations — some spill over into other countries — the innovations are valuable enough that the extra costs are worth it.

At first I thought this was a silly argument, for reasons I’ll explain. But then I ran across an old column in this vein from Ross Douthat, whom I find to be usually careful and thoughtful, and he links to Tyler Cowen, whom I hold in higher regard still. (Cowen’s article is from 2006 — it’s possible his views have changed since.) Then just days ago, Northwestern economist Craig Garthwaite, an even higher authority on health care economics, made the same point in an interview with Vox. These authorities forced me into further contemplation and investigation, from which I have emerged again thinking that this is not a good argument in favor of the current US system.

First, the United States dominance in biomedical research is a bit overstated. In 2012, the US accounted for 44 percent of the world’s biomedical research expenditures. Cowen’s 2006 article uses Nobel Prizes as a metric, noting that in the previous 10 years, 15 Nobel Prizes in Medicine had gone to researchers working in the US, with only 7 going to researchers outside it. In the ten years since, 10 have gone to US-based researchers, compared to 15 to non-US researchers.

Second, much of the research in the United States is funded by public money, not investments from private companies. Total spending on biomedical research in 2012 was $116.5 billion. Of that, $44.3 billion was public spending. The U.S. share of global government expenditures on medical research (50%) was actually higher in 2012 than the U.S. share of private research expenditures (41%).

Third, while $116.5 billion sounds like a lot of money, it is dwarfed by the overpayments to the health care sector. The US spent $9,451 per capita on health care in 2015. The non-US OECD average was $3,648. Suppose the US were able to close only about half of this gap by lowering prices, and therefore saved $3,000 per capita per year. In a country of about 325 million people, that’s nearly a trillion dollars a year — nearly 10 times the total amount spent on research.

If you want to increase biomedical R&D expenditures in the United States, wasting an extra trillion dollars in the health care sector seems like a really inefficient way to do it. Spend 20% of that trillion saved on the NIH, and you’ll more than double US biomedical research. Even if public and private research dollars aren’t perfect substitutes, you can still throw in some more carrots — tax benefits, extended patents, loan guarantees, whatever — to spur private R&D if needed.

Third, as Noah Smith notes, it’s not just the prices of new, snazzy health care products that are high in the United States. Every price is high in the United States. What purpose does it serve for a box of gauze pads to cost a hospital patient $77? Are there American innovations in appendix removal that justify us paying $12k more per procedure than Australia?

Finally, though these sky-high prices might encourage some innovation, they don’t necessarily encourage the kind of innovation we’d like. Much of it goes to high-profile but low-impact treatments, or new — and therefore patentable — drugs that offer little advantage over cheap and generic substitutes. Thus massive amounts of resources are spent on things like proton therapy for treating prostate cancer, even though it “does not appear to provide additional benefit” over existing therapy. Sure, sometimes there is a new and expensive therapy that actually does give better results. Or perhaps a treatment begins as expensive an ineffectual, but with practice and improvement becomes economical. And some new — and profitable — drugs are cheap and effective alternatives to surgery. But in the rest of the economy, a lot of innovation is aimed at making the existing results cheaper to attain. The current system doesn’t incentivize that kind of innovation as much.

I do not rule out the possibility that other countries are, in Garthwaite’s words, “draft[ing] off of the innovation generated by the profits of the United States.” But I think the increase in effective innovation through this channel is relatively small, and a paltry return on the high prices throughout the U.S. health care system.