Improving the Harvest: Farming and Health Care

I love Atul Gawande’s writings on health care.

He has a rare talent for describing technical details of health care, insurance and finances in terms that most people can understand. His recent article in the New Yorker discussed the current health reform bills’ approach to curbing costs, using the agricultural industry as a potential model.

One of his basic points is similar to one I have made before. He describes two kinds of problems: “those which are amenable to a technical solution and those which are not. Universal health care coverage belongs to the first category . . . Problems of the second kind [referring to rising health care costs], by contrast, are never solved, exactly; they are managed.”

I would frame it somewhat differently. The two basic kinds of problems are those, which are amenable to a government solution, and those which are best addressed using decentralized market forces.

There are two serious shortcomings in our current health care system: lack of access to health care and insurance coverage for many low-income people, and the rising costs of health care. While private market forces do have the potential to address cost issues –”efficiency” in the jargon of economists – they don’t do very well at handling issues of “equity”. Specifically, private markets can’t do the following very well in the health care system:

Provide access to insurance or health care to low-income or very ill people. Ensure that reliable standardized information is available to consumers. Maintain the appropriate balance of power between providers and consumers

This means there is an important role for government:

  • Ensuring that coverage or care is available to low income and very sick people
  • Providing information is reliable and available
  • Maintaining healthy markets.

In the latter role, it is appropriate for government to establish the rules for the structure of the market in order to create:

  • Real choice
  • Healthy competition
  • Incentives for improving value (quality/cost)

Government can also play a role in providing financing for innovations (i.e., start-up funding for pilots). After this point, however, it’s probably better for government to get out of the way and let the market do what it can do best – drive improved value for consumers.

So far, so good. I basically agree with Gawande’s observation that different problems should be addressed by different means. But is Gawande correct in using the developments of the agricultural industry as a model for what might occur in health care? While there are a lot of parallels (e.g., fragmented and inefficient production, resistance to change), I am concerned that there are some important differences between agriculture and health care. I won’t offer a critique of the outcomes of U.S. agriculture (lower prices, yes, but also the growth of corporate farming at the expense of family farms and small town economies, as well as serious concerns about food safety); I want to focus on two other issues about the relevance of the agriculture model to health care.

First, the economic incentives in agriculture seem much more direct and consistent with consumer welfare. If the farmer can find more efficient ways to produce crops, it will result in higher net income. Lower production costs also allow the farmer to reduce prices, gain market share and increase revenue. Other farmers then have a strong financial incentive to adopt better production methods; otherwise they will lose market share, revenues and profits. This healthy competition results in lower prices and improved value for consumers.

In the health care world, however, the financial incentives for improving efficiency are much weaker. The knowledge about how to be more efficient is available, but the adoption of these methods is very limited. Simply introducing the health care equivalent of USDA extension agents and financing a lot of pilot projects are unlikely to change this. The incentives are weak for a variety of well-known reasons: health insurance, which shields most consumers from the real costs of health care; federal tax policy, which excludes employer-sponsored health benefits from personal income taxes; the ability for insurers to use risk management strategies to avoid high-risk enrollees; the ability for providers to use payer-mix strategies to avoid low-reimbursement patients; the well-entrenched use of fee-for-service payments that reward volume instead of outcomes, etc. Unless we make structural changes to address these issues, the financial incentives will not be aligned in a way that will cause the health care industry to embrace more efficient production methods.

The second potential problem is the difference in relative market power of buyers and sellers. In agriculture, the sellers (farmers) are much weaker than the buyers (consumers and middlemen), which forces the farmers to compete aggressively on price and quality. In health care, however, the sellers (physicians, hospitals, drug manufacturers) are more powerful than buyers. There are several reasons for this: providers have professional knowledge and expertise that consumers rely upon, and many areas have a high concentration or even monopolies of providers. Even if the provider payment incentives were aligned with consumer interests, health care providers would probably still be able to charge relatively high prices.

How do the current Senate and House bills line up with the issues raised by Gawande and my analysis? The underlying philosophy of the legislation is consistent with the two-sector approach described above: government helps low-income people to get access to health care and sets the rules for the health care market, while private sector providers and insurers compete to offer the best value to consumers. The bills also begin to address the issue of financial incentives, by encouraging alternatives to fee-for-service, eliminating the use of risk skimming by insurers, and taxing high cost health plans. Not surprisingly, the bills do not directly address the market power issue, although the proposed strengthening of the Medicare payment commission would be a small step toward curbing costs.

Will all of this work? We don’t really know, but at least the bills are built on a framework that has some chance of success. We do know, however, that the current system is cruel in human terms and unsustainable in economic terms, and we have to try something. We will have more work to do to get this right.

Bill Kramer is an independent health care consultant, focusing on health care management, finance and public policy. Bill served as a senior executive with Kaiser Permanente for over 20 years, most recently as Chief Financial Officer for Kaiser Permanente’s Northwest Region. More information about Bill may be found at his website. You can read more of his commentaries on health care management and policy at his blog, ” Now’s the Time, where this post first appeared.

14 replies »

  1. I hate to be a pessimist, but I have to think back to my Disease Management days, where it became very clear that any patient’s willingness to change typically goes through several stages including pre-contemplation, contemplation, preparation and action. What we found, as many others have, is that about 80% of the population with bad habits (smoking, excesses in various things, obesity, etc) still live in the world of pre-contemplation or contemplation — ie: just haven’t thought about it, or haven’t thought about it much. And even with professional work and face-to-face coaching, you may only get about 5-10% to ever move to the action level unless they are hit by some catastrophic or scary event in their lives. My sense is that, no matter what you put out there are mandates and incentives, it will not change the all too common theme in the population of self-harming human behavior.
    Couple this with the above sage discussions showing that patient’s cannot really determine quality, and I have to wonder if we will actually move toward healthier lives by mandating people have to have insurance, or whether we are merely moving money around.

  2. I don’t know if any of our medical experts can calculate how much of our heal thcare charges is for trying to diagnose the patient’s issues and how much is for actually treating the issues or, if it’s a chronic disease, administrate it.
    Can we manage things -in this important field- with more transparency?

  3. Did anybody read about James Bain? Released today after spending 35 years in prison for a crime he didn’t commit: http://www.cnn.com/2009/CRIME/12/17/florida.dna.exoneration/index.html
    This is just the latest example of our nation’s moral and financial legalcare crisis. Demand Affordable Accessible Legalcare for All! http://www.SinglePayerLegal.org . Read the damning article exposing our two-tiered legalcare system at http://www.jpands.org/vol14no4/rice.pdf

  4. No Nate, boob jobs and other consumer elective surgeries (e.g. Lasik) are very standardized projects in rather healthy and young people. This is not healthcare, these are selected procedures (and I don’t even know whether there is true price competition for cosmetic surgery, I rather doubt it). I would admit that there are quite a few procedures that are fairly standardized and that could be made more affordable with increased competition (e.g. carpal tunnel or cataract surgery… but that does not work well in healthcare as we all know that in the medical field, providers can, to a certain degree, generate their own business, and since there are still undersupplied areas in the US, providers that are in stiff competition will rather move elsewhere, e.g. instead of being a bottom price carpal tunnel release surgeon in metro Chicago, he/she will rather be a highly paid general surgeon in Fargo. Basically what Kramer already wrote: “difference in relative market power of buyers and sellers”.
    Anyway, my main point was: it is extremely challenging for patients to determine the quality of their health care – secondary indicators (how does the office look? is the doc friendly? is he/she busy) do not help much, and to truly measure HC quality is a very complex undertaking, frustrating many smart and practice experienced academics.
    If you have patients pay more for HC, they will defer necessary and unnecessary care, and likely not end up with the most effective physicians.
    Price- and outcome competition between a bare bones plan (all care via PCP/referral, guideline based restrictions for imaging studies that are mostly ordered by specialists, reimbursement for generics only etc) and a conventional plan, that would be interesting.

  5. Barry is wrong.
    There is absolutely one way to dramatically decrease total overall expenditure on healthcare in our economy.
    Pay for every medical student’s education with a stipend. Suspend admissions to all residency training programs except general internal medicine, fmaily medicine, pediatrics, general surgery and OB/gyn for a period of ten years. The money saved from suspending those programs will more than pay for subsidized med school training (which at 21 bil/10years without stipend by the CBO estimate is a literal drop in the bucket by health reform standards) and the PCP/specialist ratio will be turned on it’s head, resulting in significant cost savings if other countries experience is to be believed. Stopping specialty training is far less intrusive than say, criminalizing the lack of individual health insurance.
    Remove the in house safe harbor for outpatient testing, cut current inpt charges hospitals charge for surgery to current outpatient charges would help in oh so many ways as well

  6. rbar when your brother’s car made an odd sound then your car made an odd sound all the same comparisons stick. Same with hiring an attroney, fighting one DUI and winning doesn’t mean you can beat the next one.
    Sunday morning 5am your locked up and barely remember your name you going to comparsion shop bail bondsman? Driving through X inner city late at night and car dies you going to call 5 tow companies to see who has the best price?
    The fact that we usually don’t pay for all of our care was my point, the problem is not the system it is our detachment from the system. When people are forced to pay for all their care, boob jobs, suddenly they are quit capable of being edcuated consumers.

  7. I wonder if any of the medical experts can estimate how much of our healthcare spending is for trying to diagnose the patient’s problem and how much is for actually treating the problem or, if it’s a chronic disease, managing it. Treating a medical problem, with drugs, surgery, or lifestyle changes lends itself quite well to pricing in advance of treatment. Diagnosing the problem is trickier. While we can price some services like imaging and blood tests in advance, we often don’t know how much testing will be necessary before a diagnosis is determined. Moreover, care delivered under emergency conditions, including patients who are admitted to the hospital via the ER, does not lend itself to package pricing, transparency, or shopping around. I’m a long term advocate for price and quality transparency and the more of it we have, the better. It has its limits, however.
    I’ve also often said that there is no silver bullet for bringing healthcare costs under control but there are lots of silver pebbles. We should implement as many of them as we can. Cultures are very hard to change, however. This includes patients who think more care is better care and doctors who order lots of tests are “thorough.” It includes doctors who order lots of tests to CYA in our unpredictable and litigious legal environment. It also includes doctors who just want to make a lot of money including those who own their own imaging and lab equipment. While malpractice reform would be helpful and I support it, I would most like to see differential co-pays that would give patients and incentive to choose the most cost-effective doctors and hospitals so they are rewarded for choosing high value care and penalized for choosing expensive care. At the same time, doctors and hospitals who attempt to sustain high cost practice patterns will ultimately be penalized financially as patients seek care elsewhere.

  8. I have spent a little time checking sites and looking at the USDA Site on Approved antibiotics. See if you recognize some of these antibiotics and if they are methicillin Based”….new studies have found a link between deadly methicillin-resistant Staphylococcus aureus (MRSA) bacteria and CAFO practices. ”
    Now imagine that “70 percent of all antimicrobials used in the United States are fed to livestock. 1 This accounts for 25 million pounds of antibiotics annually, more than 8 times the amount used to treat disease in humans.2”
    I think there is a strong link between Agriculture antibiotic resistance and antibiotic resistance in Humans. According to the
    Union of Concerned Scientists there is a establish link. Agriculture has been instrumental in MDRO’s in in Humans and is a tremendous cause for concern. It seems as if that Confined Animal Feeding Organizations is a model to feed the Nation .But at what Cost? Also to use this Model in Health Care .Is to say;Patients are mindless animals that deserve No better than Cows.The fact are; the producers of the food supply are putting people at risk for the sake of Profits. Is this what we want to say about Health Care?
    “Antibiotic usage in animal industry is a consideration and a problem. It would be expected to produce resistance to the antibiotics given. However, I do not believe animals are given methicillin (or similar drugs), thus, I do not see how this caused MRSA. This needs further research. ”
    Antibiotic class (selected) Species treatment prevention promotion to humans
    Aminoglycosides 1 Beef cattle,goats, poultry,2 sheep, swine
    (gentamicin, neomycin,
    Ionophores Beef cattle, fowl,3 goats, poultry,rabbits, sheep
    (monensin, salino- mycin, semduramicin,
    Quinolones Beef cattle, poultry
    Sulfonamides Beef cattle, dairy cows, fowl, poultry,swine, catfish,trout, salmon
    sulfamethazine, sulfisoxazole)
    Bambermycin Beef cattle, poultry, swine
    Carbadox Swine
    Novobiocin Fowl, poultry
    Spectinomycin Poultry, swine
    Beta-Lactams Beef cattle, dairy cattle, fowl, poultry,sheep, swine
    (penicillins: amoxicillin,
    (Ceftiofur) Beef cattle, dairy cows, poultry, sheep, swine
    Lincosamides Poultry, swine
    Macrolides Beef cattle, poultry,
    (erythromycin, swine
    tilmicosin, tylosin)
    Polypeptides Fowl, poultry, swine
    Streptogramins Beef cattle, poultry, swine
    (virginiamycin, synercid)
    Tetracyclines Beef cattle, dairy cows, fowl, honey 4 bees, poultry, sheep,swine, catfish, trout,
    salmon, lobster
    (chlortetracycline, oxytetracycline,,
    1. Streptomycin has been approved for use on food plants.
    2. Includes at least one of the following: broiler chickens, laying hens, and turkeys.
    3. Fowl includes at least one of the following: ducks, pheasants, and quail.
    4.Oxytetracycline has been approved for use on food plants.
    Source: “The Agricultural Use of Antibiotics and Its Implications for Human Health,” Appendix II, GAO/RCED-99-74, U.S. General Accounting Office, April 1999.
    Economic Research Service, USDA
    Progress Curtailing the Use of Antibiotics in the Feed and Water of Animals
    UCS achieved major legislative victories in the summer of 2008 in our campaign to curb antibiotic resistance in humans by reducing the unnecessary use of antibiotics in CAFOs (confined animal feeding operations). Put together, the new legislation moves us toward the goals embodied in the Preservation of Antibiotics for Medical Treatment Act (PAMTA), a bill in Congress to curtail the use of these drugs in the feed and water of animals that are not sick.
    PAMTA contains three main sections. Thanks to thousands of calls and letters from UCS activists, provisions related to two of these three sections passed this summer as part of other bills. The recently passed Animal Drug User Fee Act included a provision that, for the first time, would require companies to report data to the Food and Drug Administration (FDA) on the use of antibiotics in animal settings. In addition, the Food and Farm Bill, enacted into law in June 2008, authorized new research on the prudent use of antibiotics in agriculture. PAMTA’s central section–reviewing the safety of antibiotics already approved for use in the feed and water of CAFO animals and revoking approvals for those uses found to cause drug resistance–remains to be passed by Congress. But thanks in part to ongoing support from UCS activists, Congress is closer than ever to taking this critical final step.
    An estimated 70 percent of all antibiotics used in the United States are regularly added to the feed of livestock and poultry that are not sick–a practice with serious consequences for our health. Bacteria that are constantly exposed to antibiotics develop antibiotic resistance. This means that when humans get sick from resistant bacteria, the antibiotics prescribed by doctors don’t work.
    This legislation is especially important, coming at a time when new studies have found a link between deadly methicillin-resistant Staphylococcus aureus (MRSA) bacteria and CAFO practices.
    UCS also praised federal regulators for taking aggressive steps to limit the use of important human antibiotics in CAFOS. The FDA recently banned all off-label uses of two kinds of cephalosporin antibiotics in food animals. These drugs are explicitly approved for use to treat respiratory infections in livestock and prevent infections in chicks, but veterinarians, like doctors, often prescribe medications for other uses. The FDA stepped in to ban off-label use of the cephalosporins because these drugs are particularly valuable to human medicine and scientific studies showed that off-label use poses a risk of creating antibiotic-resistant diseases
    FDA Rules Override Warnings About Drug
    Cattle Antibiotic Moves Forward Despite Fears of Human Risk
    By Rick Weiss
    Washington Post Staff Writer
    Sunday, March 4, 2007; Page A01
    The government is on track to approve a new antibiotic to treat a pneumonia-like disease in cattle, despite warnings from health groups and a majority of the agency’s own expert advisers that the decision will be dangerous for people.
    The drug, called cefquinome, belongs to a class of highly potent antibiotics that are among medicine’s last defenses against several serious human infections. No drug from that class has been approved in the United States for use in animals.
    Science and Medicine: Antibiotics
    Washington Post staff writer Rick Weiss will be online to discuss the FDA’s approval of a drug that is among medicine’s last defenses against several serious human infections.
    How Bacterial Populations Become Drug-Resistant
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    Read what bloggers are saying about this article.
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    The American Medical Association and about a dozen other health groups warned the Food and Drug Administration that giving cefquinome to animals would probably speed the emergence of microbes resistant to that important class of antibiotics, as has happened with other drugs. Those super-microbes could then spread to people.
    Echoing those concerns, the FDA’s advisory board last fall voted to reject the request by InterVet Inc. of Millsboro, Del., to market the drug for cattle.
    Yet by all indications, the FDA will approve cefquinome this spring. That outcome is all but required, officials said, by a recently implemented “guidance document” that codifies how to weigh the threats to human health posed by proposed new animal drugs.
    The wording of “Guidance for Industry #152” was crafted within the FDA after a long struggle. In the end, the agency adopted language that, for drugs like cefquinome, is more deferential to pharmaceutical companies than is recommended by the World Health Organization.
    Cefquinome’s seemingly inexorable march to market shows how a few words in an obscure regulatory document can sway the government’s approach to protecting public health.
    Industry representatives say they trust Guidance #152’s calculation that cefquinome should be approved. “There is reasonable certainty of no harm to public health,” Carl Johnson, InterVet’s director of product development, told the FDA last fall.
    Others say Guidance #152 makes it too difficult for the FDA to say no to some drugs.
    “The industry says that ‘until you show us a direct link to human mortality from the use of these drugs in animals, we don’t think you should preclude their use,’ ” said Edward Belongia, an epidemiologist at the Marshfield Clinic Research Foundation in Wisconsin. “But do we really want to drive more resistance genes into the human population? It’s easy to open the barn door, but it’s hard to close the door once it’s open.”
    The FDA knows how hard it can be to close that door. In the mid-1990s, overriding the objections of public health experts from the Centers for Disease Control and Prevention (CDC), the drug agency approved the marketing of two drugs, Baytril and SaraFlox, for use in poultry. Both are fluoroquinolones, a class of drugs important for their ability to fight the bioterror bacterium that causes anthrax and a food-borne bacterium called campylobacter, which causes a serious diarrheal disease in people.
    Before long, doctors began finding fluoroquinolone-resistant strains of campylobacter in patients hospitalized with severe diarrhea. When studies showed a link to poultry, the FDA sought a ban. But while Abbott Laboratories, which made SaraFlox, pulled its product, Baytril’s manufacturer, Bayer Corp., pushed back.
    Animal Feed – You Are What You Eat… and What They Ate
    Factory farm operators typically manage what animals eat in order to promote their growth and keep the overall costs of production low. However, what animals are fed directly affects the quality and safety of the meat and dairy products we consume.
    Factory farmers typically mix low doses of antibiotics (lower than the amount used to treat an actual disease or infection) into animals’ feed and water to promote their growth and to preempt outbreaks of disease in the overcrowded, unsanitary conditions. According to the Union of Concerned Scientists, 70 percent of all antimicrobials used in the United States are fed to livestock. 1 This accounts for 25 million pounds of antibiotics annually, more than 8 times the amount used to treat disease in humans.2
    The problem is this creates a major public health issue. Bacteria exposed to continuous, low level antibiotics can become resistant. They then spawn new bacteria with the antibiotic resistance. For example, almost all strains of Staphylococcal (Staph) infections in the United States. are resistant to penicillin, and many are resistant to newer drugs as well.3 The American Medical Association, American Public Health Association, and the National Institutes of Health all describe antibiotic resistance as a growing public health concern.4 European countries that banned the use of antibiotics in animal production have seen a decrease in resistance.5
    1 Union of Concerned Scientists, “Hogging it!: Estimates of Antibiotic Abuse in Livestock”. UCS, 2001
    2 Union of Concerned Scientists. “Food and Environment: Antibiotic Resistance.” UCS, October 2003.
    3 Keep Antibiotics Working. “The Health Threat.”
    4 “Antibiotics and Antimicrobials.” American Medical Association. “The Problem of Antimicrobial Resistance.” National Institute of Allergy
    and Infectious Disease. April 2006 “Antibiotic Resistance Fact Sheet.” American Public Health Association.
    5 McEwen , Scott A. and Fedorka-Cray, Paula J. “Antimicrobial Use and Resistance in Animals” Clinical Infectious Diseases 34(Suppl 3): S93–106, 2002.
    6 Francisco Diez-Gonzalez, Todd R. Callaway, Menas G. Kizoulis, James B. Russell. “Grain Feeding and the Dissemination of Acid-Resistant Escherichia coli from Cattle” Science, 281 (5383):1666-1668, September 11, 1998.
    7 “Greener Pastures: How grass-fed beef and milk contribute to healthy eating.” Union of Concerned Scientists, Cambridge, MA, 2006.
    8 Raloff, Janet. “Hormones: Here’s the Beef: Environmental concerns reemerge over steroids given to livestock.” Science News 161, (1):10. January 5, 2002.
    9 The Scientific Committee on Veterinary Measures Relating to Public Health. “Assessment of Potential Risks to Human Health from Hormone Residues in Bovine Meat and Meat Products.” European Commission, April 30, 1999.
    10 The Scientific Committee on Veterinary Measures Relating to Public Health. “Assessment of Potential Risks to Human Health from Hormone Residues in Bovine Meat and Meat Products.” European Commission, April 30, 1999.
    11 Bovine Somatotropin (bST)” Biotechnology Information Series (Bio-3) North Central Regional Extension Publication Iowa State University – University Extension, December 1993.
    12 Cruzan, Susan M. FDA Press Release on rBST approval. Food and Drug Administration. November 5, 1993.
    13 APHIS, “Bovine Somatotropin: Info Sheet” USDA, May 2003.
    14 Doohoo I. et al, “Report of the Canadian Veterinary Medical Association Expert Panel on rBST,” (Executive Summary) Health Canada, November, 1998.
    15 Epstein SS. “Unlabeled milk from cows treated with biosynthetic growth hormones: a case of regulatory abdication.” International Journal of Health Services, 26(1):173-85, 1996.
    16 Steinman G. Can the chance of having twins be modified by diet? Lancet, 367(9521):1461-2, May 6, 2006.
    17 “Fowl play: The poultry industry’s central role in the bird flu crisis” GRAIN, February 2006, p.2, website?
    18 “Turkey carcasses from Hungary linked to UK bird flu outbreak” The Observer, 2/8/07, Jo Revill.
    19 “Risk Management Evaluation for Concentrated Animal Feeding Operations,” US Environmental Protection Agency A National Risk Management Laboratory, May 2004, p. 7.
    Keep Antibiotics Out of the Food System
    by Elissar Khalek — last modified 2009-06-01 13:58
    In California, FWW has been working to address the overuse of antibiotics in the food system. In February 2009, Senator Dean Florez (CA-16) introduced a bill, S.B. 416, to prohibit the use of nontherapeutic antibiotics in animal agriculture starting in 2015. It would also implement a purchasing policy for state and local governments that favors meats produced without the use of nontherapeutic antibiotics.
    Our Work
    In California, we have been working to address the overuse of antibiotics in the food system. In February 2009, Senator Dean Florez (CA-16) introduced a bill, S.B. 416, to prohibit the use of nontherapeutic antibiotics in animal agriculture starting in 2015. It would also implement a purchasing policy for state and local governments that favors meats produced without the use of nontherapeutic antibiotics.
    Join us in supporting S.B. 416. Learn more about the bill.
    Antibiotics Background
    Many of our nation’s large livestock operations routinely feed healthy animals low doses of antibiotics in order to boost their growth and prevent disease from spreading among animals housed in close – and often unhygienic – quarters. This practice goes against everything we’ve been taught about proper antibiotic use: always get a prescription from a doctor, don’t take them if you’re not sick, and always take them as directed.
    When bacteria on and around the animals are exposed to low doses of antibiotics, they can become resistant to one or multiple drugs and spread that resistance to other bacteria. These bacteria end up in manure, in contaminated water, on flies, or on food.
    Today, the amount of antibiotics fed to healthy animals dwarfs the amount used to treat sick ones. Half of the antibiotics fed to animals are either the same or very similar to the antibiotics that are given to humans when they are sick – including critical drugs like penicillin and tetracycline.
    This is concerning news for public health.
    It’s bad enough for consumers to get a foodborne illness, but when they go to the doctor to be treated, some find that their illnesses do not respond to antibiotics because the bacteria that caused the sickness are drug-resistant. That means higher healthcare costs for consumers and public services and a greater chance that the illness will lead to death.
    Unless steps are taken to curb the overuse of antibiotics, we may soon discover that we can no longer treat common illnesses quickly and effectively. The American Medical Association, the World Health Organization, and other prominent medical authorities have called for a ban on feeding antibiotics to animals that are not sick.
    Hogging It!: Estimates of Antimicrobial Abuse in Livestock (2001)
    Download: Hogging It (2001): Executive Summary | Hogging It: Chapters | Hogging It: Appendices
    Antimicrobial resistance is a public health problem of growing urgency. Although use of antimicrobials in humans is the largest contributor to the problem, use of antimicrobials in agriculture also plays a significant role. Mounting evidence is confirming the view, long held in the public health community, that antimicrobial use in animals can substantially reduce the efficacy of the human antimicrobial arsenal.
    Now is the time to act to curb the overuse of antimicrobials in animals. But as public health officials and citizens turn to this task, data on quantities of antimicrobials used are not publicly available, even though these data are critical to designing an effective response to the problem.
    This report attempts to fill in that gaping chasm by providing the first transparent estimate of the quantities of antimicrobials used in agriculture. We have devised a methodology for calculating antimicrobial use in agriculture from publicly available information including total herd size, approved drug lists, and dosages. The method is complex but sound, and the results are startling. We estimate that every year livestock producers in the United States use 24.6 million pounds of antimicrobials for nontherapeutic purposes. These estimates are the first available to the public based on a clear methodology. We have been careful in making these estimates, always choosing conservative assumptions. We hope that any critics of this study who claim the estimates are incorrect will provide the documented data needed to refine them.
    The results of our study indicate the following:
    Tetracycline, penicillin, erythromycin, and other antimicrobials that are important in human use are used extensively in the absence of disease for nontherapeutic purposes in today’s livestock production.
    Cattle, swine, and poultry are routinely given antimicrobials throughout their lives. Many of the antimicrobials given to livestock are important in human medicine.
    The overall quantity of antimicrobials used in agriculture is enormous.
    Many consumers will be surprised to find that tens of millions of pounds of antimicrobials are used in livestock systems. We estimate that every year livestock producers in the United States use 24.6 million pounds of antimicrobials in the absence of disease for nontherapeutic purposes: approximately 10.3 million pounds in hogs, 10.5 million pounds in poultry, and 3.7 million pounds in cattle. The tonnage would be even higher if antimicrobials used therapeutically for animals were included.
    Previous estimates may be drastic underestimates of total animal use of antimicrobials.
    A study recently released by the Animal Health Institute (AHI) may have severely underestimated animal use of antimicrobials. Our estimate of 24.6 million pounds for animal use is almost 50 percent higher than industry’s figure of 17.8 million pounds — and ours includes only nontherapeutic usage in the three major livestock sectors. AHI’s covers all uses — therapeutic and nontherapeutic — in all animals, not just cattle, swine, and poultry.
    Approximately 13.5 million pounds of antimicrobials prohibited in the European Union are used in agriculture for nontherapeutic purposes every year by U.S. livestock producers.
    The European Union has prohibited nontherapeutic agricultural use of antimicrobials that are important in human medicine, such as penicillins, tetracyclines, and streptogramins. Total U.S. agricultural use of these banned antimicrobials is enormous.
    Driven primarily by increased use in poultry, overall use of antimicrobials for nontherapeutic purposes appears to have risen by about 50 percent since 1985.
    According to our estimates, total nontherapeutic antimicrobial use in animals has increased from 16.1 million pounds in the mid-1980s to 24.6 million pounds in 2001.
    In poultry, nontherapeutic use since the 1980s has increased by over 8 million pounds (from 2 million to 10.5 million pounds), a dramatic 307 percent increase on a per-bird basis. Growth in the size of the industry accounted for about two-fifths of the overall increase.
    In swine, nontherapeutic use has declined slightly (from 10.9 to 10.3 million pounds), although there is growing reliance on tetracycline-based products.
    The quantities of antimicrobials used in the absence of disease for nontherapeutic purposes in livestock dwarfs the amount of antimicrobials used in human medicine.
    Our estimates of 24.6 million pounds in animal agriculture and 3 million pounds in human medicine suggests that 8 times more antimicrobials are used for nontherapeutic purposes in the three major livestock sectors than in human medicine. By contrast, industry’s estimates suggest that two pounds of antimicrobials are used in treating human disease for every pound used in livestock.
    Livestock use accounts for the lion’s share of the total quantity of antimicrobials used in the United States. Our estimates suggest that nontherapeutic livestock use accounts for 70 percent of total antimicrobial use. When all agricultural uses are considered, the share could be as high as 84 percent. This estimate is far higher than the 40 percent figure commonly given in the literature for the agricultural share of antimicrobial use.
    The availability of data on antimicrobial use in fruit and vegetable production demonstrates that credible usage information can be obtained without unduly burdening either agricultural producers or the pharmaceutical industry.
    This report presents several years of data on the quantity of antimicrobials used as crop pesticides. These easily accessible data were compiled by the U.S. Department of Agriculture, which uses producer surveys to gather information on pesticide use each year.
    The Food and Drug Administration (FDA) should establish a system to compel companies that sell antimicrobials for use in food animals or that mix them in animal feed or water to provide an annual report on the quantity of antimicrobials sold. The information should be broken out by species and by antimicrobial. It should include the class of antimicrobial, indication, dosage, delivery system, and treatment period.
    The U.S. Department of Agriculture (USDA) should improve the completeness and accuracy of its periodic surveys of antimicrobial use in livestock production.
    The FDA, USDA, and Centers for Disease Control and Prevention (CDC) should speed up implementation of Priority Action 5 of A Public Health Action Plan to Combat Antimicrobial Resistance, the U.S. government’s recently published action plan on antimicrobial resistance, which calls for the establishment of a monitoring system and the assessment of ways to collect and protect the confidentiality of usage data.
    Last Revised: 04/07/04
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  9. Nate,
    your last questopn is easily answered. Apart from the fact that a lot of medical care is not subjected to a purchase decision in a competitive market (as geridoc pointed out), the benefit from a lot of medical services is far from obvious (while the value of a competent dental- or boob job or Lasik is quite clear): is the suggested back surgery a good deal for back pain? Your brother swears it is, but did he have the same mechanism of nerve root compression? And he was 58 while he had his surgery, and you are 77 and may not recover as well … and how about the known placebo effect of surgical intervention? And also, one does not have to pay for the entire service, differenciating this “purchase” from buying a car or hiring your lawyer or plumber. Etc pp

  10. I was hoping someone would post something about Dr. Gawande’s latest installment. I don’t know where he gets the pastoral descriptions of rolling green pastures, happy cows and earthy farmers.
    They fixed agriculture by turning it into, heavily subsidized, agribusiness and there is nothing pastoral about it.
    They loaded supermarket shelves with cheap, unhealthy, chemically treated “stuff” and conditioned us to love it starting at the age of 2.
    And, Nate, bumper crops are fine since there is a bottom price. Anything below that and the government pays the difference.
    We even subsidize tobacco!!
    And let’s not forget who is actually doing most of the agricultural work in this country and what their wages are.
    Efficiency in agriculture was achieved by consolidation, increasing volume per business unit, lowering product quality, automation, uniformity of processes and use of migrant low wage labor. All this was aided by a large advertising campaign to influence consumer preferences so they match the most cost efficient products.
    I am not going to even try to make the obvious analogies to health care……. No rolling green pastures here either….

  11. “those which are amenable to a technical solution and those which are not. Universal health care coverage belongs to the first category”
    Everything is amenable to a technical solution if you ignore the negative outcomes. When actual results don’t matter it’s easy to legislate outcomes. The fact those outcomes are seldom to never acheived by the legislation never seemed to bother the left, it has always been about saying you did it not actually doing it.
    Insurance and healthcare are two very seperate things, the failure to differentiate them is why so many proposals make things worse then fix them. If you want the poor to have access to healthcare you don’t buy them insurance you build them a clinic. It really is that basic of a difference yet people still can’t grasp it. If I bought every tribesman in Africa an insurance policy they would all have insurance yet few of them would have access, so why are we even discussing insurance when it comes to care for the poor?
    Very ill people thrive under our insurance system as long as they are insured. Those that have problems are those that get ill then try to buy insurance. The number of ill people with insurance problems is miniscule compared to the number of ill people insured and no problems.
    “Ensure that reliable standardized information is available to consumers.”
    This is very hard to do when the government passes laws telling you your not allowed to do this or if you do it and have even the slightest mistake or accident you will be sued out of business. You can’t make your arguments without looking at the role of government in causing them. Government would be the solution to everything if you first allow government to make everything a problem.
    What countries farms are you referring to, that is not at all how the US markets work. Farmers don’t set prices the market dictates to them what they will be paid. In other cases, milk, the government tells them what they will be paid. Leaps in efficency usually lead to excess crops, prices colapse, and farmers go out of business, hardly the higher income you would expect from increased efficency.
    “the well-entrenched use of fee-for-service payments that reward volume instead of outcomes,”
    How is it FFS manages to work in almost every other facit of the economy? Mechanics, gardners, electricians, plumbers, everyone else takes FFS and the system works. The problem is not FFS it is responsibility. When government pays for these same services they also see price inflation, this is the result of it not being their money, nothing to do with the system of payment. FFS works perfectly well in cosmetic and dentistry. How can a dentist deliver half his services efficiently under FFS then the part paid by insurance terribly and you blame the system?

  12. “First, the economic incentives in agriculture seem much more direct and consistent with consumer welfare.”
    Only if you discount the massive government subsidies that produce fattening, sugar rich foods which are not consistent with consumer welfare.
    “In the health care world, however, the financial incentives for improving efficiency are much weaker.”
    That’s because efficiency lowers cash flow, bonuses and profits.
    If you look at the marriage of agriculture and healthcared it is the perfect self sustaining scam. The government subsidizes food that makes us unhealthy and then the healthcare industry (also not without government subsidy) charges us to treat the diseases that cheap unhealthy food creates.

  13. This is one of the best analyses of the some of the real issues facing health reform that I have read. I agree with Mr. Kramer that the analogies applying market forces to healthcare have their limits, and that is possible to carry the application to agriculture too far. It seems the difference is that food markets are heavily influenced by direct consumer decisions. Health markets are not.
    By and large, supporting pilot innovation projects seems that it will be a good thing. But who will decide when an innovation works? Since most health care purchase decisions are not directly dictated by patients, who will make sure their voice is heard? And even when we look just at cost, what if an innovation saves money in one silo, but has downstream costs that that have implications for someone else’s pocket?
    An interesting example is hip fracture. A older person who has a hip fracture certainly does not make an informed decision about where they will be hospitalized, who will be their surgeon, what type of post operative care they will receive, or generally even what type of rehab they receive. It is possible that a pilot program will discover innovations that improve outcomes and decrease costs. But if we are not careful, we may fund innovations that lower costs, but worsen outcomes (but don’t show up as worsening outcomes—ie they have no impact on mortality—which we measure, but worsen functioning—which we do not measure). It is also possible that such a program could seem to improve outcomes in one silo (ie, costs in the 30 days post hip fracture), but increase overall costs (ie, greater need for long term nursing home placement).
    My thanks to Alex Smith, MD from whom I adapted this example (http://www.geripal.org/2009/12/how-will-pilot-programs-impact.html)