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US Politics Of Medicine

After presiding over an economy with a record disappointing performance, which usually gets incumbent presidents fired, Intrade puts Obama’s chance of re-election at 79%! I attribute an important part of this to the politics of medicine. Here’s recent US medical politics in a nutshell:

Seniors vote a lot more, and they love their free medicine, so US politicians have long written them a blank check, leading to rapid cost increases. Wonks have long said “something must be done” about costs, and the left has long wanted to expand the number with health insurance. So Obama pushed through a law requiring such an expansion, and declaring an intention to do something about costs. Later. But something, they swear.

This created a vague unease among seniors that their free medicine might get cut. Vague because seniors don’t really get how exactly costs might be cut. But still, cuts! Which created an opening for a Republican to get elected president by promising to never cut senior medicine. Except that the frontrunner Republican candidate was someone who had implemented a similar program when he was governor. And then he made a “bold” move to pick a running mate with a bold plan to turn Medicare into a voucher system. Which Romney thought would give him credit for taking problems “seriously.”

Bad move. Voters don’t really like “bold” politicians. Since seniors have a better idea of what “vouchers” mean, and how exactly they lead to cuts, that let Obama more effectively attack Romney as planning to cut seniors’ free medicine. Which is sticking, because although everyone says “something must be done”, seniors don’t actually believe that their free medicine needs to be cut. So seniors in key swing states move toward Obama, and he gets re-elected.

And after the election, there’s pretty much no chance Obama will let senior medicine get cut, at least in any way they could trace back to him. Nor will the next president after him. Maybe we’ll go into more debt, or raise taxes, or cut military spending. But no way will they stop writing medical blank checks to seniors, and letting costs rise as they will.

Here’s the recent data fleshing out this public opinion story: Continue reading "US Politics Of Medicine" »

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Dog vs. Cat Medicine

Yesterday I said that med spending increased faster for pets, vs. farm animals, suggests that med spending increases are due mainly to demand, not supply, effects. We spend more on pet medicine now more because we care more about pets now, or want to show we care, and less because doctors have invented new useful treatments.

Now consider dog vs. cat medicine. A 2007 source said that at one point annual med spending was $200 per dog and $81 per cat. (It was $92 per horse, $9 per bird. Today we spend $655 per dog; other current figures available here for only $3000. Sigh.) So we spent 2.5 times as much on dog med, vs. cat med. Yet dogs and cats have about the same lifespan (dogs, cats), and similar rates of medical problems:

50% of today’s cat owners never take their cats to a veterinarian for health care. … Because cats tend to keep their problems to themselves, … cats, on an average, are much sicker than dogs by the time they are brought to your veterinarian for treatment. (more)

I doubt we should blame this on cats. It seems more likely that cat owners pay less attention to cats, because they care less:

74 percent of the test sample like dogs a lot, while only 41 percent like cats a lot. … 15 percent of the adults questioned said they disliked cats a lot while the number who said they disliked dogs a lot was only 2 percent. … Dog people were 11 percent more conscientious than cat people. … Cat people were generally about 12 percent more neurotic. (more)

Yet there are more cats than dogs. Note also that both WebMD and wikipedia have pages devoted to dog lifespan; neither have such a page for cats. Dogs are famously more loyal than cats, and it seems plausible that dog owners thus feel more loyal to dogs, and more obligated to help when sick.

I tentatively conclude that we spend 2.5 times as much on dog vs. cat pet medicine mainly because we care more about dogs. This shows a huge demand effect on med spending.

Now consider that in our society many consider men more expendable than women. We send men to war, expect men to put themselves in harms way to protect women, and try to save “women and children first.” Women also go to the doctor a lot more often than men, even though men are on average sicker (they die faster). For 2008 US doctor office visits, here is the ratio of women to men by age:

All,  1.43; <15,  0.93; 15–24, 2.24; 25–44, 2.26; 45–64, 1.39; 65–74, 1.11; >75,  0.95. (more)

This also seems likely to be a demand effect – we spend more on female medicine mainly because we care more about women, or care more to show that we care about them.

Added 7p: That Marketplace show quotes similar numbers for dog and cat spending:

The average dog owner spends $655 a year on health care, that’s up 50 percent from a decade ago. Cat owners are in for $644, up nearly 75 percent.

So did we once to care more about dogs, and now care about the same?

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Farm vs Pet Medicine

We now spend a huge fraction of income on medicine. Today the US spends ~18% of GDP on medicine, while in 1940 we spent ~4%. Why the huge increase?

A supply explanation is that doctors have invented lots of new useful treatments. A demand explanation, in contrast, is that we want more medicine as we get richer, either because we care more about health, or about showing that we care.

One way to distinguish supply vs. demand explanations is to look at farm vs. pet animal medicine. Both kinds of animal medicine are treated similarly by most supply changes – new medical treatments help both kinds of animals. But most demand changes treat them differently – farm animals today aren’t that much more valuable than they were long ago, but we treat our pets as if they were far more valuable.

While I can’t find good historical data, what I do find suggests we’ve seen a huge switch in animal medicine, from a focus on food animals to a focus on pets. On recent pet med spending increases:

The average household in the U.S. spent $655 on routine doctor and surgical visits for dogs last year, up 47% from a decade ago, according to the American Pet Products Association. Expenditures for cats soared 73% over the same time frame—on pace with human health-care cost increases. Expenditures for people in the U.S. were up 76.7% between 1999 and 2009, according to the U. S. Centers for Medicare and Medicaid Services. (more)

On vets long ago:

Very early veterinarians were mainly concerned with the care of livestock and horses and mules. … Prior to World War II, very few people would consider paying more than a token amount for the medical care of their pets any more than the average person today would consider taking an injured chipmunk to the vet. (more)

On the focus of US vets in 2011:

Food animal exclusive 1.8%; Food animal predominant 6.0%; Mixed animal 6.8%; Companion animal predominant 9.7%; Companion animal exclusive 67.2%; Equine 6.0%. (more)

Thus much, perhaps most, of the rise in animal med spending is a demand effect. More careful data analysis might give a more precise estimate.

Now pets probably live to be older than farm animals, so a supply shock mainly relevant for older animals might explain an increase of pet med relative to farm animal med. But that seems pretty unlikely to be the main thing going on here.

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Medicine is Sacred

The Patient Protection and Affordable Care Act is a federal statute that was signed into law in the United States by President Barack Obama on March 23, 2010. Along with the Health Care and Education Reconciliation Act of 2010 (signed into law on March 30, 2010), the Act is the product of the health care reform agenda of the Democratic 111th Congress and the Obama administration. (more)

Better late than never, the New England Journal of Medicine:

The recently enacted Patient Protection and Affordable Care Act (ACA) created a Patient-Centered Outcomes Research Institute (PCORI) to conduct comparative-effectiveness research (CER) but prohibited this institute from developing or using cost-per-QALY thresholds. ,… The ACA’s language might be seen as symptomatic of the legislation’s aversion to policies that critics might see as enacting “big-government” health care or “death panels.” … The ACA … states that the findings of PCORI-sponsored research cannot be construed as mandates for practice guidelines, coverage recommendations, payment, or policy recommendations. … The antagonism toward cost-per-QALY comparisons also suggests a bit of magical thinking — the notion that the country can avoid the difficult trade-offs that cost-utility analysis helps to illuminate. It pretends that we can avert our eyes from such choices, and it kicks the can of cost-consciousness farther down the road. It represents another example of our country’s avoidance of unpleasant truths about our resource constraints. (more)

Yup.  To the US public, medicine is a sacred; tradeoffs are taboo:

When people receive monetary offers for relinquishing a sacred value, they display a particularly striking irrationality. Not only are people unwilling to compromise sacred values for money—contrary to classic economic theory’s assumption that financial incentives motivate behavior—but the inclusion of money in an offer produces a backfire effect such that people become even less likely to give up their sacred values compared to when an offer does not include money.

Doesn’t sound promising for controlling costs, does it?

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Tolstoy on Medicine

From the best novel ever, War and Peace:

“Natasha’s illness was so serious that, fortunately for her and for her parents, the consideration of all that had caused the illness, her conduct and the breaking off of her engagement, receded into the background. She was so ill that it was impossible for them to consider in how far she was to blame for what had happened. She could not eat or sleep, grew visibly thinner, coughed, and, as the doctors made them feel, was in danger. They could not think of anything but how to help her. Doctors came to see her singly and in consultation, talked much in French, German, and Latin, blamed one another, and prescribed a great variety of medicines for all the diseases known to them, but the simple idea never occurred to any of them that they could not know the disease Natasha was suffering from, as no disease suffered by a live man can be known, for every living person has his own peculiarities and always has his own peculiar, personal, novel, complicated disease, unknown to medicine—not a disease of the lungs, liver, skin, heart, nerves, and so on mentioned in medical books, but a disease consisting of one of the innumerable combinations of the maladies of those organs. Continue reading "Tolstoy on Medicine" »

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Municipalize Medicine?

The New Yorker‘s Atul Gawande on “What a Texas town can teach us about health care“:

McAllen is in Hidalgo County, which has the lowest household income in the country … McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. …

President Barack Obama said in a March speech at the White House. “By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care.” …

El Paso County, eight hundred miles up the border, has essentially the same demographics. … Yet in 2006 Medicare expenditures … in El Paso were $7,504 per enrollee – half as much as in McAllen. … There’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. … Nor does the care given in McAllen stand out for its quality. … The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine. … Continue reading "Municipalize Medicine?" »

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Good Medicine in Merry Old England

Here’s the abstract of an article by Martin, Rice, & Smith in the current issue of the Journal of Health Economics (generally regarded as the top journal in the field):

Empirical evidence has hitherto been inconclusive about the strength of the link between health care spending and health outcomes. This paper uses programme budgeting data prepared by 295 English Primary Care Trusts to model the link for two specific programmes of care: cancer and circulatory diseases. A theoretical model is developed in which decision-makers must allocate a fixed budget across programmes of care so as to maximize social welfare, in the light of a health production function for each programme. This yields an expenditure equation and a health outcomes equation for each programme. These are estimated for the two programmes of care using instrumental variables methods. All the equations prove to be well specified. They suggest that the cost of a life year saved in cancer is about £13,100, and in circulation about £8000. These results challenge the widely held view that health care has little marginal impact on health. From a policy perspective, they can help set priorities by informing resource allocation across programmes of care. They can also help health technology agencies decide whether their cost-effectiveness thresholds for accepting new technologies are set at the right level.

One shouldn’t overstate the importance of this; it’s only one study and it only deals with two medical conditions.  And of course the study was done on English data, not U.S. data.  We all know that there is evidence that the marginal unit of U.S. medicine has little or no health benefit, so this would be a noteworthy result if the study were done on U.S. data.  I don’t know how noteworthy it is for English data.  Does anybody know if there is any RAND study type evidence about the effectiveness of the marginal unit of medicine in England or in other European countries?

When I was a kid, a cousin who lived in England came to visit us and showed me how to crack open those little plastic cubes containing the four one-use camera flashbulbs we had back then and set them off with a battery.  That totally rocked my world.  So as far as I’m concerned those guys are all geniuses.

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Eternal Medicine

Most fans of modern medicine do not realize how similar in appearance was ancient medicine:

While the Greeks left a vast legacy of medical texts in a familiar language, we know of only 12 from the time of the pharaohs – written on papyrus in a vanished language that scholars are still grappling with. From their descriptions of diseases and treatments, the texts have left little doubt that the ancient Egyptians had considerable medical skills, but weighing up their pharmaceutical knowledge has proved trickier: although the papyri include some 2000 prescriptions, doubts surround the identity of many of the ingredients listed. ….

Continue reading "Eternal Medicine" »

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Buy Health, Not Medicine

To neutralize my nattering nabobs of negativity on medicine, here is a constructive suggestion.

The biggest problem in medicine is: what general process or institution can ordinary sick patients and concerned loved ones rely on to distinguish helpful from harmful medicine?  Recently there has been interest in "paying for performance," but that usually means small bonuses tied to statistics like how often doctors remind patients to stop smoking, or how often doctors prescribe antibiotics for ordinary flu symptoms.  In contrast, I published a pretty general solution in 1994.  (A similar idea appears in the 2003 book Why Not? )  I remain puzzled to see no interest in this idea.

For example, here is how we could reform Medicare.  If you were on Medicare, there would be a particular health plan responsible for paying all your medical expenses.  If a medical treatment were done to you, they would pay for it.  (You would still pay non-medical health expenses, like for diet or exercise.)  But your plan would also have wide discretion to veto treatment; no treatment would happen unless you and they both agreed.  This includes all treatment details, like where, when, and who. 

Why would you trust plans with such power?  Because they would "feel your pain."  Each year, the government would pay your plan a dollar amount based on your quality of life that year.  This might be $100,000 if you were healthy, $50,000 if you were disabled, $30,000 if you were in great pain, and so on.  (These evaluations of disability and pain might be based on random auditor visits.)  Thus bad medical choices would hurt them just as such choices hurt you.

Continue reading "Buy Health, Not Medicine" »

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Cut Medicine In Half

Today my medical skepticism appears as this month’s lead essay, "Cut Medicine In Half," at CATO Unbound. Distinguished health economists are scheduled to comment:  Harvard’s David Cutler on Wednesday, RAND’s Dana Goldman on Friday, and Stanford’s Alan Garber next Monday.  Open discussion begins next Wednesday.  Also, I just learned that next Tuesday a book with a related thesis, Overtreated, will appear. My essay begins: 

Car inspections and repairs take a small fraction of our total spending on cars, gas, roads, and parking. But imagine that we were so terrified of accidents due to faulty cars that we spent most of our automotive budget having our cars inspected and adjusted every week by Ph.D. car experts.  Obsessed by the fear of not finding a defect that might cause an accident, imagine we made sure inspections were heavily regulated and subsidized by government. To feed this obsession, imagine we skimped on spending to make safer roads, cars, and driving patterns, and our constant disassembling and reassembling of cars introduced nearly as many defects as it eliminated.  This is something like our relation to medicine today. …

King Solomon famously threatened to cut a disputed baby in half, to expose the fake mother who would permit such a thing.  The debate over medicine today is like that baby, but with disputants who won’t fall for Solomon’s trick.  The left says markets won’t ensure everyone gets enough of the precious medical baby. The right says governments produce a much inferior baby.  I say: cut the medical baby in half, dollar-wise, and throw half away! …

Our main problem in health policy is a huge overemphasis on medicine.  The U.S. spends one sixth of national income on medicine, more than on all manufacturing.  But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status. Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. …

Added:  Matt Yglesias mentions this great related essay by Phillip Longman.

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