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Tag: Economics

Fast Science: The Uncertainty Paradox

Reading Barbara Ehrenreich’s “Bright-Sided” has been liberating in that is has given me permission to let my pessimistic nature out of the closet.

Well, it’s not exactly that I am pessimistic, but certainly I am not given over to brightness and cheer all the time. My poison is worry. Yes, I am a worrier, in case you had not noticed. So, imagine how satisfying it is for me to find new things to worry about. As if climate change were not enough, lately I started to worry about science.

No, my anxiety about how we do clinical science overall is not new; this blog is overrun with it. However, the new branch of that anxiety relates to something I have termed “fast science.” Like fast food it fills us up, but the calories are at best empty and at worst detrimental. What I mean is that science is a process more than it is a result, and this process cannot and should not be microwaved. Don’t believe me? Let me give you a couple of instances where slow science may be the answer to our woes.

1. Lies and damned lies

Remember this story in the Atlantic that rattled us with its incendiary message? Researcher John Ioannidis has been making headlines with his assertion that most, if not all, of what we know in medicine is in doubt, given how we do and publish research. And how we do and publish research has everything to do with the speed of “progress.” Academic careers are made with positive results, to sell news the media demand positive results, and to respond to this demand academic journals prefer only to publish positive results (this last phenomenon is referred to as “publication bias,” and is something Ben Goldacre rails against at length). A further manifestation of this fast science is that “no replicators need apply.” I am, of course, referring to an extension of the publications bias, whereby journals are not interested in publishing even a positive study that replicates a previous finding — this is simply not sexy. Thus, results have to be quick and positive to grab a share of our attention and sell academic prestige, journals and news.Continue reading…

Making Privacy Policies Not Suck

Privacy policies are long legalese documents that obfuscate meaning. Nobody reads them because they are indecipherable and obtuse. Yet, these are the documents that tell you what’s going on with your data — how, when, and by whom your information will used. To put it another way, the privacy policy lets you know if some company can make money from information (like selling you email to a spammer).

Creative Commons did an amazing thing for copyright law. It made it understandable.

Creative commons reduced the complexity of letting others use your work with a set of combinable, modular icons.

In order for privacy policies to have meaning for actual people, we need to follow in Creative Commons footsteps. We need to reduce the complexity of privacy policies to an indicator scannable in seconds. At the same time, we need a visual language for delving deeper into how our data is used—a set of icons may not be enough to paint the rich picture of where you data is going.

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If the Supreme Court Rules Against the Obama Administration …

If the Court throws out both the “individual mandate” (the rule requiring that virtually all Americans buy insurance, or pay a fine), and the provision that insurers must cover all applicants, and cannot charge higher premiums, even if a new customer has just been diagnosed with cancer?  This might sound like the end of reform, but in fact, many of the most valuable reforms in the legislation would almost certainly still stand–including those that will change the way we pay for care, reducing costs, while lifting quality. Under the Affordable Care Act (ACA), hospitals will continue to find ways to reduce preventable errors–or face financial penaltie.. Doctors who succeed in managing chronic diseases, keeping their patients out of the hospital, will receive rewards. Medical students willing to practice in underserved areas “Where No One Else Will Go” will receive scholarships, and their ranks will grow. New funding will double the capacity of Community Health Centers that can provide medical homes for many who now receive their care in an ER. Reform will go forward.

There is, of course, the possibility that the court could declare the entire Affordable Care Act unconstitutional, but this seems extraordinarily unlikely. Too many planks in the law already are being implemented, and patients are benefiting.  As Henry J. Aaron pointed out in an earlier post on this blog, overturning the law would be an “Rx for Chaos.”

Still, even if the judges “only” throw out  the mandate and the requirement that insurers cover everyone, the results will be, as former Obama administration adviser  Ezekiel Emanuel recently put it in a New York Times opinion piece “less than optimal.” (Unlike Rahm Emanuel, Zeke is known for understatement.)

Under this scenario, premiums for those who do buy insurance would climb because, without the mandate, insurers could no longer count on millions of new, healthy customers.  Instead of “the 32 million Americans predicted to gain coverage under the health insurance reform act, only around 16 million Americans would gain coverage,” observes Emanuel.

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The THCB Reader — the SCOTUS Oral Arguments

What if the Supreme Court Strikes Down the Individual Mandate?
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The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear.

The Broccoli Mandate
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If you’ve been paying attention to the debate over the constitutionality of the health reform law, you’ve probably heard mention of the hypothetical “broccoli mandate.”

Sizing Up the Obama Administration’s Defense of the Health Reform Law
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Back in 2009, when the Affordable Care Act was being written, few doubted that Congress can constitutionally impose a tax penalty on people who refuse to carry adequate insurance.

Health Care Jujitsu
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Not surprisingly, the Supreme Court argument over the so-called “individual mandate” requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a “tax,” and the question of whether the issue is ripe for review.

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Health Care Jujitsu

Not surprisingly, yesterday’s debut Supreme Court argument over the so-called “individual mandate” requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a “tax,” and the question of whether the issue is ripe for review.

Behind this judicial foreplay is the brute political fact that if the Court decides the individual mandate is an unconstitutional extension of federal authority, the entire law starts unraveling.

But with a bit of political jujitsu, the president could turn any such defeat into a victory for a single-payer healthcare system — Medicare for all.

Here’s how.

The dilemma at the heart of the new law is that it continues to depend on private health insurers, who have to make a profit or at least pay all their costs including marketing and advertising.

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The Return of the Ryan Plan

In announcing the Republicans’ new budget and tax plan Tuesday, House Budget Committee Chairman Paul Ryan said “We are sharpening the contrast between the path that we’re proposing and the path of debt and decline the president has placed us upon.”

Ryan is right about sharpening the contrast. But the plan doesn’t do much to reduce the debt. Even by its own estimate the deficit would drop to $166 billion in 2018 and then begin growing again.

The real contrast is over what the plan does for the rich and what it does to everyone else. It reduces the top individual and corporate tax rates to 25 percent. This would give the wealthiest Americans an average tax cut of at least $150,000 a year.

The money would come out of programs for the elderly, lower-middle families, and the poor.

Seniors would get subsidies to buy private health insurance or Medicare – but the subsidies would be capped. So as medical costs increased, seniors would fall further and further behind.

Other cuts would come out of food stamps, Pell grants to offset the college tuition of kids from poor families, and scores of other programs that now help middle-income and the poor.

The plan also calls for repealing Obama’s health-care overhaul, thereby eliminating healthcare for 30 million Americans and allowing insurers to discriminate against (and drop from coverage) people with pre-existing conditions.

The plan would carve an additional $19 billion out of next year’s “discretionary” spending over and above what Democrats agreed to last year. Needless to say, discretionary spending includes most of programs for lower-income families.

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What Republicans Argue When They Have Nothing Left to Say

Republicans are desperate. They can’t attack Obama on jobs because the jobs picture is improving.

Their attack on the Administration’s rule requiring insurers to cover contraception has backfired, raising hackles even among many Republican women.

Their attack on Obama for raising gas prices has elicited scorn from economists of all persuasions who know oil prices are set in global markets and that demand in the United States has actually fallen.

Their presidential ambitions are being trampled in a furious fraternal war among Republican candidates.

Their Tea Party wing wants to reopen the budget deal forged with Democrats after Republicans got bloodied by threatening to block an increase in the debt limit.

So what are Republicans to do now? What they always do when they have nothing else to say.

Call for a tax cut, of course.

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Rethinking Medical Education

Last spring, in his elegant commencement address to the Harvard Medical School, Dr. Atul Gawande appealed for a dramatic change in the organization and delivery of medical care.  His reason, “medicine’s complexity has exceeded our individual capabilities as doctors.”  He accepts the necessity of specialization, but he criticizes a system of care that emphasizes the independence of each specialist.  Dr. Gawande is not alone in thinking that scientific, technologic, and economic changes require reorganization of care.  Larry Casalino and Steve Shortell have proposed Accountable Care Organizations (ACOs); Fisher, Skinner, Wennberg and colleagues at the Dartmouth Medical School have focused on reforming Medicare, and many others have also called for major changes.

I expressed similar concerns in 1974 in my book Who Shall Live?, but at that time I rejected the claim that the problems of medical care had reached crisis proportion.  In 2011, however, I agree with those who say the need for comprehensive reform must be marked URGENT.  The high and rapidly rising cost of health care threaten the financial credibility of the federal and state governments.  The former finances much of its share of health care by borrowing from abroad; the states fund health care by cutting support of education, maintenance of infrastructure, and other essential functions.  These are stop-gap measures; neither borrowing from abroad nor cutting essential functions are long-run solutions.  The private sector is equally distressed.  Surging health insurance premiums have captured most of the productivity gains of the past thirty years, leaving most workers with stagnant wages.  Not only is there a pressing need for changes in organization and delivery, but Ezekiel Emanuel and I, in our proposal for universal vouchers funded by a dedicated value-added tax, argue that such changes must be accompanied by comprehensive reform of the financing of medical care (Brookings paper).

But that’s not what I want to talk to you about today.  My subject is the urgent need to change the structure of medical education.  It seems to me that such change is necessary, and perhaps inevitable, given the revolution in medicine over the past half century, and given the changes in organization and delivery of care that lie on the horizon.

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What Difference Does Health Insurance Make?

Almost everyone thinks we should insure the uninsured. I don’t recall even a single dissenter. Yet it is precisely when everyone agrees on something that thinking begins to get very sloppy. So let me be the devil’s advocate and challenge the idea.

Why do we want to insure the uninsured? Forget about the costs, for a moment. Are there any benefits? What are they? I can think of four candidates. If people are insured:

  • They may get more health care.
  • They may get better care.
  • They will enjoy protection from the financial effects of catastrophic illness.
  • They will be less likely to be free riders on the charity of others.

The first three items are “it’s for his own good” benefits and, frankly, the case for them is pretty lame — especially in the context of RomneyCare and ObamaCare. If you expand the demand for health care but do nothing to increase supply, people in the aggregate will not be able to get more care. One person’s gain in care will be offset by someone else’s loss. (At least that tends to be the case, when the principal currency patients use to pay for care is time and not money.)  Since the costs of non-price rationing will rise in the process, the whole exercise must make society as a whole worse off.

The same objection applies to the idea of “better care.” Better care for one person must be obtained at someone else’s expense, if the supply of medical resources is unchanged.

[I suppose you could make an additional argument: If we insure the uninsured, they will have a better chance of getting a “fair share” of health care. In other words, care will be distributed more equally. While that argument makes sense in the abstract, it doesn’t work if you segregate the previously uninsured into plans that pay providers below-market rates — as both RomneyCare and ObamaCare do — and cause them be pushed to the rear of the waiting lines. See below.]

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U.S. Health Care & U.S. Productivity: A Dissent

One of the great myths about American society is that our lack of a “universal” health plan harms our competitiveness.  The masters of this refrain, of course, are the American automakers.  Years before driving themselves into bankruptcy and the unwelcoming arms of their new owners, the American taxpayers, they used to claim that they spent up to $1,600 per car on health care.  This was more than they spent on steel, and a multiple of what they claimed their foreign competitors spent.  In her well received book, Who Killed Health Care? America’s $2 Trillion Medical Problem – And the Consumer-Driven Cure (New York, NY: McGraw-Hill, 2007), Professor Regina Herzlinger of Harvard Business School claims that these complaints are inflated (pp. 104-105).

Furthermore, we don’t hear Mark Zuckerberg complaining that Facebook’s health care costs are preventing him from competing against foreign social-media businesses.  Indeed, while all Americans complain about health costs, the argument that our health “system” reduces our competitiveness versus other countries with “universal” health care is actually quite weak.  Indeed, the percentage of all firms offering health benefits actually increased from 66 percent in 1999 to 69 percent in 2010, and a greater number of smaller firms have begun to offer health benefits, according to the Kaiser Family Foundation.

One oft-cited metric is that the United States spends far more on health than other countries as a share of Gross Domestic Product (GDP).  But this measurement can mislead.  It is a ratio composed of a numerator and a denominator.  The numerator – the real cost of medical care – has grown slightly slower in the U.S. than Europe.  Advocates of government monopoly health care point out that Canadian and U.S. health spending as a share of GDP was about the same before the Canadian government took over health care, but diverged starting in 1970, soon after the government completed its takeover.  They present this as evidence that the state can control costs better than the private sector.  However, real GDP growth in Canada dramatically outpaced U.S. growth between 1969 and 1987, meaning that the denominator of the health spending per GDP ratio grew much faster in Canada, not that the numerator grew much slower, according to research by Professor Brian Ferguson.

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