Tag Archives: Medicine

Just A Flesh Wound

ARTHUR: You are indeed brave, Sir knight, but the fight is mine.
BLACK KNIGHT: Oh, had enough, eh?
ARTHUR: Look, you stupid bastard, you’ve got no arms left.
BLACK KNIGHT: Yes I have.
ARTHUR: Look!
BLACK KNIGHT: Just a flesh wound. (more)

In the US the top 5% of medical spenders spend an average of $40,682 a year each, and account for 49.5% of all spending. (The bottom half spend an average of $236.) Not too surprisingly, 60.3% of these people are age 55 or older. Perhaps more surprising, on their health self-rating, 28.9% of these folks say they are “good”, 19.9% “very good” and 7.5% “excellent”, for a total of 56.3% with self-rated health of “good” or better (source).

So, are these folks in serious denial, or is most of our medical spending on hardly sick folks?

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Doctors Dominate

We humans pretend to resist domination, but actually tend to submit, and are often consciously unaware of the contradiction. I recently posted on our relating this way to police. We also relate this way to doctors. For example, people are basically scared to post negative web reviews of doctors. No, they don’t consciously feel scared. They’ll talk about how busy they are or they don’t feel qualified to judge. Yet their usual arrogance lets them rate lots of other things they know little about. And they are scared for good reason: doctors do got out of their way to retaliate against negative reviews. Details:

The Web Is Awash in Reviews, but Not for Doctors. Here’s Why.

… It is puzzling that there is no such authoritative collection of reviews for physicians, the highest-stakes choice of service provider that most people make. Sure, various Web sites like HealthGrades and RateMDs have taken their shots, and Yelp and Angie’s List have made a go of it, too. But the listings are often sparse, with few contributors and little of substance. … Not enough people take the time to review their doctors. …

RateMDs now has reviews of more than 1,370,000 doctors in the United States and Canada. But getting in the faces of the previously untouchable professional class has inevitably led to legal threats. He says he gets about one each week over negative reviews and receives subpoenas every month or two for information that can help identify reviewers, who believe they are posting anonymously. …

Several years ago, a physician reputation management service called Medical Justice developed a sort of liability vaccine. Doctors would ask patients to sign an agreement promising not to post about the doctor online; in exchange, patients would get additional privacy protections…. Medical Justice has now turned 180 degrees and embraced the review sites. It helpfully supplies its client doctors with iPads that they can give to patients as they are leaving. Patients write a review, and Medical Justice makes sure that the comments are posted on a review site. Sound coercive? … p

Patients may be steering clear for a far more ordinary reason: if they live in a small town or are only one or two degrees of social separation from physicians or their family members, they may not want to create any awkwardness. … An Angie’s List customer who read my column about the service last week raised a related concern. She said she would never talk negatively about her doctors on the site because there were only two decent hospital systems where she lived and she didn’t want to end up blackballed by doctors at either. …

Others idolize their doctors … Insurance giant WellPoint, … has found that only roughly 20 percent of customers will switch to a generic drug or use a less expensive imaging center, even if there is no health risk. Why? Because their doctor told them so. It is exactly this sort of unquestioning mind-set that may cause such low participation (or disproportionately positive reviews) at many review sites. …

WellPoint tracks doctors’ communication skills, availability, office environment and trust, but it doesn’t yet provide information about medical outcomes. .. It pays many physicians more when they achieve better results. But it’s not ready to share all of its outcome data. .. “The unintended consequences would be if certain surgical specialists would not take on the most challenging, needy and difficult patients.” … the big health care law requires Medicare to share all sorts of such data about doctors starting Jan. 1, 2013, assuming legal challenges don’t get in the way. The A.M.A. has raised many concerns about “risk adjustments.” (more; HT Tyler)

Risk adjustment is an issue for most products, since most have variations in who uses them. Yet we let people rate other products and collect track records on experiences with them. But for docs, we allow risk adjustment as an excuse to avoid accountability. This is an old issue is health econ — the story has always been that of course giving consumers info is a good idea, but we’d have to wait to give patients info until we “solve” the risk adjustment problem, which never happens, and never will. Mark my words, we will long delay publication of doc track records.

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How Social Are Signals?

We are aware that do many things for show, and I often suggest that we do such “signaling” more often than we realize. But while I’m eager to see writings on signaling theories and their empirical support, I’ve come to suspect that most tend to be unrealistically asocial. Let me explain.

In the iconic signaling story, one person has a hidden feature, which they choose to show to one other person, via some visible action. For example, on Valentine’s day a man traditionally buys a gift, writes a poem, etc. to show a women the strength of his feelings for her. The bigger the gift, the bigger his feelings, supposedly.

In this iconic situation, only these two parties matters. And this allows for simple sharp predictions. For example, if the person watching can’t see the signal, or already knows about the feature, there is no point in signaling. And there is no point in taking an action A to show feature F if that feature is unrelated to willingness to do A.

In realistic signaling, however, third parties typically matter a lot more. For example, the man might want to signal that other women want him, or that he knows that other men want her. The woman might care less about what she infers from his signal, and more about being able to let slip details to her friends, to show them the kind of man she has. This inclusion of a wider social circle makes it harder to find simple sharp tests.

I’ve talked about how schooling could be such a more social signal, and how that could complicate empirical testing:

Firms want to impress customers, suppliers, investors, etc. with the quality of their employees, and hiring graduates from prestigious schools helps them signal such quality. Hiring such graduates can also help a manager to impress his bosses, potential employees, and sister divisions about the quality of his employees. … The fact that attending school seem to cause changes in students that employers are willing to pay for does not show that school isn’t all about signaling. (more)

Similarly, people often respond to my suggestion that medical care functions in large part to “show that you care” with the example of people buying medicine for themselves. “Surely that can’t be signaling,” they suggest. But consider that unattached women often buy themselves flowers or chocolates on Valentines day. As signals become more social, and involve wider circles, it gets harder to isolate situations where no signaling should happen.

By the way, one way to think about “status” is as the limit of very social signals. The more that an action or sign is generally seen as positive, without being very specific about what good features it indicates or who exactly cares about such features, the more that this action or sign looks like a signal of general social status.

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Don’t Torture Mom & Dad

A doc’s eloquent plea:

It’s typically the son or daughter who has been physically closest to an elderly parent’s pain who is the most willing to let go. Sometimes an estranged family member is “flying in next week to get all this straightened out.” This is usually the person who knows the least about her struggling parent’s health. … With unrealistic expectations of our ability to prolong life, with death as an unfamiliar and unnatural event, and without a realistic, tactile sense of how much a worn-out elderly patient is suffering, it’s easy for patients and families to keep insisting on more tests, more medications, more procedures. … When their loved one does die, family members can tell themselves, “We did everything we could for Mom.” … At a certain stage of life, aggressive medical treatment can become sanctioned torture. When a case such as this comes along, nurses, physicians and therapists sometimes feel conflicted and immoral. … A retired nurse once wrote to me: “I am so glad I don’t have to hurt old people any more.” (more; HT Amanda Budny)

Our urge to use medicine to show that we care costs more than just spending more for mostly useless treatment. It often literally tortures our loved ones.

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Me On Marketplace

I’m on today’s edition of the NPR radio show Marketplace Money (transcript; audio ~25:30 to 29:00):

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, close to how much our health care costs have risen by. And that’s a puzzle to economists, like Robin Hanson at George Mason University.

Robin Hanson: Everyone’s got a favorite villain or bugaboo about why human health care costs are increasing; it’s too much regulation, too much government involvement, too much third-party payment.

Too many malpractice lawsuits. None of these factors apply to pets. You can’t blame insurers for pushing up costs either. Pet insurance is rare; only 1 percent of pet owners in this country have it. The 99 percent are paying full freight.

Hanson: But in pet medicine, people put their money on the barrel head. And yet pet expenses are increasing nearly as fast as human expenses.

What gives? Hanson and other economists give two explanations. Explanation one: Love. We treat our pets like family. They eat our food, they sleep in our beds, they relax at the spa, they have Facebook accounts. Of course we’re going to pay for their health care. Take dogs.

Hanson: So we want to show loyalty to these dogs who are showing loyalty to us. One way to do that is to spend more on medicine for them.

Explanation two for the rising cost has nothing to do with your pets; it’s how we see ourselves.

Hanson: We compare ourselves to people around us. And we ask the doctor and they say well, lots of people do this, most people do this, and the bar has been raised on how much you need to spend on your pets to show you’re a caring pet owner.

In the interview I tried to pose the choice as supply vs. demand explanations, as I’ve done in my last two posts, but I guess they didn’t find as engaging.

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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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Paying For Med Quality

Some hope to cut US med spending, and raise med quality, by paying more for higher quality outcomes. But this doesn’t work so well if the people you pay are also in charge of telling you the outcomes. Or if you must prove that their care caused bad outcomes, instead of being due to especially weak/sick patients. I have high hopes for a system that paid for med outcomes determined by independent third parties, where price competition for specific patients could deal with patient selection issues. But I’m pretty skeptical that the US govt will allow that:

Medicare has begun publishing the rates of complications as a step toward using them to set payment rates for thousands of hospitals. But leaders of a number of the nation’s prestigious teaching hospitals are objecting …

A central tenet of the 2010 federal health-care law will tie Medicare reimbursement to a variety of measures, including how patients rate their stays, readmission, mortality rates and how closely hospitals adhere to basic guidelines for care. … Officials at many of the hospitals listed as having high rates of complications say the measures are fundamentally skewed in ways that exaggerate problems at hospitals that treat many complicated cases or very sick patients. …

Hospital officials examined the cases that led Medicare to rate her hospital as having a high rate of accidental cuts and lacerations. They found most of those cuts had been intended by the surgeon, but erroneously billed to Medicare under the code for an accidental cut. … “These patient safety indicators, they’re not real­ly well risk-adjusted.” …

Medicare identified 190 of 3,330 hospitals as having very high levels. Of those, 82 were major teaching hospitals, … Cleveland Clinic, said the clinic’s high rates of accidental tears and lacerations and serious blood clots were because “people are careful at documenting, almost to a fault, things that are incidental to the case.” … Gregg Meyer … predicted that many hospitals will react to the publication of the patient safety data by instructing those who fill out the billing records to change what they include, or by lavishing staff attention on the areas flagged by Medicare even if they aren’t a real problem. (more)

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Brin Says Cryonics Selfish

Like Tyler, sf author David Brin says cryonics is selfish:

A majority of citizens today perceive cryonics enthusiasts as kooky. … I share some of this skepticism. … Wouldn’t any reasonable person — one worthy of revival — dedicate a lifetime’s accumulated resources to helping their children and posterity, instead of splurging it all on a chancy, self-important gamble for personal immortality?

Consider:

“Median total [US Medicare] expenditures in the last 6 months of life [in ’00 to ’06] were $22,407.” (More)
“Out-of-pocket medical expenditures … for the years 1998-2006 … in the last year of life is estimated to be $11,618 on average.” (more)

Since US medical spending has more than doubled since then, we must now spend over $50K per person on the last six months of life. And this spending seems to, if anything, reduce lifespan. In contrast, a ~$40K (30 + 10) cryonics procedure gives a chance of a whole new life, and increases the chance of others gaining the same benefit at a lower cost. So why don’t Cowen or Brin first complain about selfish end-of-life care?

Brin continues:

Some people who sign up for storage believe their bank accounts alone — set up to earn dividends until some future era — will suffice to make them worthy of being thawed, repaired, and given full corporeal citizenship in a coming age of wonders. Somehow, I wouldn’t give that bet anything like sure odds, no matter how many technological barriers future people overcome.

Let me get this straight. People who suffer ridicule and fierce conformity pressures to pay to take a chance to avoid death and help others avoid death, who actually end up being right, and who in addition save money that gets invested in the world economy to help it to grow faster and larger, in order to generously pay future folks to revive them, do not deserve to be revived?! Even if they are quite willing to work to pay their way upon revival? Future folk should instead steal their money and refuse to revive them?! Why doesn’t Brin suggest that we today kill old folks a few weeks early to save thousands in medical costs? How exactly are they deserving yet cryonics patients not?

Btw, a second person has finally taken their cryonics hour. Any more takers?

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All In Their Heads

A randomized insurance experiment found that on average people who thought they had a higher health risk bought more insurance. But they didn’t actually have higher risk:

[In] a large-scale randomized field experiment in Mexico … [in ’04 on] a voluntary health insurance option [=SP] … ‘high risk’ agents are, ceteris paribus, more likely to opt into SP—although the insured are not more ‘risky’ on average. That is, despite the absence of a positive raw correlation between agents’ insurance status and proxies of risk, this paper presents evidence of the systematic selection predicted by theory. In particular, individuals who rated their health as “bad or very bad” before SP became available are 6.9 percentage points more likely to sign up for SP than those in “good or very good” health (compared to an overall treatment effect of 29 percentage points).

Curiously, however, agents in the experiment sort only on pre-period medical expenditures and subjective well-being. There appears to be no selection on objective measures of health—possibly because individuals are less aware of the latter. … [Regarding] preventive care decline with insurance coverage, the effect of SP on the utilization of these services is negative and non-trivial in size. Given the positive price effect, such a decline is likely due to ex ante moral hazard. (more)

This supports the idea that medicine is less about health than health-related feelings. If medicine were more about the reassurance that comes from being taken care of medically (because medicine is a standard way for others to show that they care about us), it makes sense that we want more insurance when we feel more vulnerable to illness, but that sense of vulnerability would  have a lot more to do with the social assurances we desire than our state of health.

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