How Many African Children is a Chilean Miner Worth?

The niche that I think is appropriate for this blog is that of utilitarian division of resources, focused primarily on US resources and the health and welfare of US citizens. Today I want to draw on the popular media circus of the day as an example of the question we should all ask all the time: how can we best spend our resources to maximize health and welfare?

I have yet to see the bill, but I read that it cost millions of dollars to rescue the 33 miners trapped in Chile, and much aid came from the US. I am going to make up numbers for the math I'm about to do to illustrate a point. Let's say that it cost $3.3 million to rescue the miners. That comes to $100,000 per person. These are Chilean men in the career of mining, so an expected lifespan of 70 would be optimistic. Let's say that the average age of the miners is 35. So, the rescue saved 35 years per person for $100,000 = $2,857.14 per life-year. That's pretty inexpensive in American terms. Heck, that's practically free compared to Avastin and mammograms. Based on the media, it seems that Americans are excited and happy about this rescue, so I doubt there are many who would begrudge the men this cost. What if the real cost of the rescue was $33 million? How would you feel then? There are over 40 million Americans who can't get any help paying for more life-years when they have problems.

Michael Moore, who I'm usually not impressed with, recently wrote a letter to President Obama pointing out that for two months of the cost of the war in Iraq we could dig wells that would provide Africans with clean drinking water. Many areas of Africa suffer from disease related to their water, and many people have to spend so much time getting water that is taken away from time they could be getting educated or working. I have not verified these claims, but they seem plausible, and I'm just trying to illustrate a concept. It seems that a well for 3000 people costs about $30,000. The Water Project says that $10 can give a person clean water for 10 years. Over 2 million children in the world die each year from a lack of clean water.

Let's say that giving these people clean water only lets them live 10 years longer on average because they then die from some other cause. We're looking at $1 per life year. It's almost unbelievably simple. So, a Chilean miner is worth thousands of African children.

Why isn't the US jumping up to save tens of thousands of Africans for the price of a handful of Chilean miners? Let's brainstorm.

1) The Africans are not as useful contributors to the American military-industrial complex.

2) Africans are black.

3) Africa is poorer than Chile.

4) A collapsed mine is an accident that happened to hard-working, blue-collar, Christian folk that Americans can relate to. Living in Africa is perceived as something an African can choose to stop doing. Nevermind that people with no money and no education really can't just up and move to a better place, and nevermind that the miners intentionally chose a dangerous job.

5) Let China do it.

6) There are only a handful of trapped miners, so we can save all of them and look like heroes. Even though we could save tens of thousands of Africans for the same price, there would be millions we did not save, so we wouldn't look as heroic.

7) Saving the miners was exciting and thrilling, with the constant danger of cave-in or other calamity, so it drew lots of attention and people who could capitalize on the attention. Building hundreds of wells is boring, so there would be no media circus out there to draw attention to participants.

This situation mimics the situation inside the US. We have poor, suffering people in America. We have the money to help millions of them easily and inexpensively. Instead, just enough of us are ignorant and hateful enough to say that these millions of people over here are less deserving of living healthy lives than that other handful of people over there. Just enough people lack compassion and humanity and intelligence that we as a country would rather waste billions of dollars on inefficiency and profits for the rich than give basic levels of care to our countrymen in need.

If you really care about life, maximize the life returns on resource investments. Let's spend our money where it will help the most.

Christian Health Collectives

This NPR article has been sitting in my browser so long that the newly passed reform bill may have made it obsolete, but I am finally motivated to discuss it. Only one collective is described. Members pay a modest annual fee to cover administrative expenses, then write monthly checks to other members as directed by the administrators. There is what appears to be a co-pay or per-need deductible of $300 (for lack of more specific terminology), and it is waived after a household pays it three times within 12 months for the remainder of the 12-month period. Members can voluntarily choose to help people whose needs exceed $100,000, or who have been injured in motor vehicle accidents.

This is an interesting experiment. It frighteningly mimics only basic catastrophic coverage, and payments are not assured. Pre-existing conditions are generally not covered, including most pregnancy costs. Is this a good idea?

Advantages:
It's easy to understand. There are about 30 pages of straightforward rules and instructions. There is one deductible rule. There is only one type of plan (not counting the two optional add-ons for motor vehicles and >$100,000 needs). The organization is compassionate. Membership in the collective is not exclusive of having other insurance, so the collective may end up being helpful to someone who is "underinsured".

Disadvantages:
With about 14,000 households spread across the United States, the collective lacks strong negotiating leverage to demand lower prices from care providers. Members who rely on the collective are self-pay patients, so they will be charged much more money than a large insurance company would be charged, increasing the burden to members via premiums (the premium to need ratio is less efficient for a small collective than a large insurance company, which is also why single-payer systems are so good at keeping costs low).

Payments are not assured, and would become less likely as needs increase. Small groups are more likely than larger groups to experience significant variance in needs from time to time. Large companies tend to have reserves that they can tap if there is a spike in health care consumption, but the collective is set up rigidly. The NPR article mentions that a vote of the membership is needed to increase premiums, reducing flexibility and security.

Health economics studies have consistently shown that people tend to gravitate towards plans with the lowest premiums, despite their risks or needs. Neuroeconomics has shown us that most people are terrible at making decisions when there is a lot of confusing information and a lot of choices, and they tend to focus on select pieces of information to the exclusion of other important factors. Keep that in mind: more choice is not necessarily better, and is often very bad, especially for the more ignorant and less intelligent who are also at higher risk for other problems in their lives. When shopping for health insurance, with all the many complicated plans, people tend to focus on premiums to make the decision easier. The collective has such a low premium (2/3 of what I pay for my bare bones plan) that it may attract people for whom joining is a terrible decision, and who are more likely to incur greater costs for the collective.

Finally, what are the effects of only including devout Christians? Very generally, when you ignore factors like church attendance, self-identified Christians are more likely to have health problems and engage in dangerous or criminal behaviors than atheists. Samaritan Ministries seems to have some decent safeguards up to protect itself, though. Members' pastors are involved in their membership, and the collective simply does not cover many things (substance abuse, STDs may be difficult) that are out of line with their stated values. I wonder if there are also impacts due to changes in the age composition of devout church-attenders. I wonder if the collective attracts a disproportionate number of elderly who use it to supplement Medicare, and how that affects the risks.

Summary:
I like experimentation and innovation. I am curious to see how a project like this works over time. I also think it is very risky, and may need additional safeguards. Ideally, risk would be shared in a national plan that assures some basic levels of coverage to everyone, and collectives like this or private companies would sell supplemental plans.

Grab Bag 2

Scorecards on state health care performance.
Not surprisingly, this shows that the south and Nevada are relatively bad at caring for their citizens. If the those states acted more like the best performing states, they would help a lot more of their people with better quality care at lower prices. They don't, though, because they have a predominant culture of blind belief in their superiority and refusal to engage in progressive change.

CT scans cause about 30,000 cancers per year, half of which will be fatal. This is not to say that we should never use CT scans. We do need to be more vigilant about the overprescription of tests and procedures, and this is a great example of that need. CT scans are typically overpriced and overprescribed because too many hospitals bought CT scanners by issuing debt and have to pay off those debts by increasing the prices to consumers and performing more tests than the population needs. Doctors with financial stakes in their clinics are especially prone to prescribing unnecessary tests and procedures because they profit from them. People will unnecessarily die early from expensively-treated cancer caused by unnecessary tests ordered for personal and hospital profit, as well as for the sake of defensive medicine. We need more oversight, more restrictions on the purchases of expensive equipment (some states restrict, but the outcomes are mixed because of the different standards used), and an absolute ban on doctors being in conflict-of-interest situations. "First, do no harm," right?

Speaking of defensive medicine, it is one component of the Congressional Budget Office's estimation that tort reform could effectively save America over $50,000,000,000 over ten years. The report suggests that the measures would also result in better health outcomes, perhaps due to a reduction in unnecessary tests and procedures that carry health consequences. Reform is of course heavily opposed by the deep, deep pockets of the lawyers who make piles of money no matter which side of the lawsuits they're on. Politicians are getting lobbied by the greedy lawyers who profit from the policies that hurt real people in our country.

Mammograms Revisited

Richard Thaler (coauthor of Nudge; I'll reference him often) wrote a piece for the NY Times about the current mammogram controversy. It's worth a read. He doesn't talk about "saving lives", he brings up the problems with prostate cancer treatment, and he provides some interesting numbers about the likelihood that breast cancer is not fatal and mammograms don't detect the types that are fatal, though not the expected life spans of women who are treated for breast cancer. I have a little commentary to add.

The stated false positive rate is 10% per test (which is huge for something with such serious consequences). For the math impaired, here's how that converts into the probability that women are likely to get a false positive over a decade. The simplest way to do this is to focus on the 90% chance that each test does not give a false positive. We use what is called the Multiplication Rule for Independent Events. For ten years, we multiply .9 (90%) by itself nine times: .9 * .9 * .9 * .9 * .9 * .9 * .9 * .9 * .9 * .9. This is more simply written as .9 ^ 10, and the product is about .35. So, there is a 35% over ten mammograms that a woman will not get a false positive, and a 65% chance that she will get a false positive. Of course, this assumes that there are no characteristics of a breast that would make it prone to false positives, which I imagine is unlikely. The 10% comes from aggregate data. I think it is more probable that women who produce false positives at age 40 are continuously more likely to do so each year than women who did not have false positives at age 40. Without the longitudinal data in front of me, I remain skeptical of the appropriateness of multiplying the false positive probabilities as though they are always independent events.

Thaler writes a little about the costs of all these mammograms in terms of unnecessary treatments that cause side effects, and the stress that women feel when diagnosed with breast cancer, but he avoids using dollar amounts to describe all the waste. What is missing is mention of opportunity costs. The cost of all the unnecessary procedures is not just the dollars exchanged for them, but also the other things we can not buy because our finite dollars were poorly allocated. I covered in my last post the idea that we could extend several times as many life years for Americans by taking the money spent on mammograms for women under 50 and spending on other endeavors, such as nutrition programs for children, or having nurses visit patients after operations to reduce treatment noncompliance complications. It is vital to consider opportunity costs. Mammograms for women under 50 don't just allocate $2 billion per year in exchange for a few thousand life years. They also cost us many thousands of other people's potential life years, and the unnecessary treatments and stress result in much lost work productivity. The practical net result, the way I see it, is that our system is effectively just killing other people early by insisting on giving mammograms to women under 50 who lack high risk indicators. Are women in their 40s more important than everyone else?

Many people have lost or almost lost loved ones to breast cancer. It is okay to feel empathy for them. If you are one of them, I feel empathy for you. That is not justification to ignore the data we have and allocate our limited resources on inferior practices. Emotions limit our perspectives and distract us from the ultimate goal of doing the most good we can with the resources we have. Please, let the cooler minds prevail and establish a system that gives America the greatest benefits it possibly can.

Autism Prevalence

A CDC report about autism has lead to some dramatic reactions. Here are some of my thoughts about this "1 in 100" "epidemic".

Summary, in case you want to skip the rest: Diagnosis got "better" for a while, but now I think we're overdiagnosing. There is really poor standardization in the medical field, and practically no oversight. Doctors refuse to let "bureaucrats" (epidemiologists, statisticians, and scientists, really) get in between them and their right to do whatever they feel like to their patients. New Jersey and Missouri have relatively high rates of ASD diagnoses because of nonstandard diagnosis practices. I expect the diagnosis rate to continue to increase, and that this is inefficient overall.

Firstly, remember that autism is not a disorder. There is a spectrum of severity of different features. To get an autism spectrum disorder (ASD) diagnosis, you don't need all the features, and they don't have to be severe. The primary feature involves impaired social interaction. Repetitive behaviors and sensory sensitivity are also common.

One big reason for the rise in the rate of autism diagnoses is that kids who would have otherwise been identified as mentally retarded are now being correctly classified. That is good because more helpful interventions can be assigned when diagnosis is accurate.

Unfortunately, another big reason for the rise is overdiagnosis. ASD is popular and famous. Neurotic parents whose kids aren't meeting expectations, who aren't the superstars the parents wanted, are looking for reasons and targets of blame and sources of hope. A lot of doctors just don't understand what they're doing, want to appease neurotic parents, practice defensive medicine, and benefit from making referrals to friends or businesses they have stakes in. The same nonsense that we see with ADHD and Bipolar diagnoses is happening with ASD. Little Billy likes to play by himself? ASD! Off to the occupational therapist! Little Billy has a slightly smaller vocabulary than his peers? ASD! Off to the speech therapist! Now, there are often cases in which some intervention would legitimately help a child, but interventions are expensive and different third-party payers have different diagnosis requirements for covering them. Well-meaning doctors commit a lot of insurance fraud, handing out inaccurate diagnoses in order to get a payer to pay for a useful intervention. This can be good for a client, but it is bad for our system. I generally see an enormous amount of money spent on small improvements.

The CDC report pertains to 8-year olds. There is generally a spike in diagnoses around age 8 because that is the transition to a developmental stage in which certain skills (reading and writing) are expected, as well as levels of self-regulation and interpersonal behavior. This is when school puts on more responsibility. Many learning disorders are suddenly noticed around this age. It makes sense for the CDC to use this age as it is likely to include cases caught late, though most autism should be recognized by age 3, when language is rapidly developing. A few teachers over the years increase the odds of recognizing problems.

What would be very interesting to look at is how many of these kids meet diagnostic criteria at age 12 or 18. There are a lot of reasons that kids develop skills and behaviors differently from each other, but a lot evens out the older they get. Many people carry around diagnoses like tattoos long after their natural developmental processes or interventions brought them into the normal range. All it takes is one doctor to use a label and a person who doesn't know better believes he's disabled for life, no matter what improvements are made. Anecdotally, I am familiar with a little girl who is almost three. She is quite a chatterbox now, but a doctor flagged her a year ago as having a low vocabulary. He offered the mother a referral to a therapist who would help the girl develop an average vocabulary for her age. Quite ridiculous and unnecessary and expensive. This was a doctor in New Jersey, by the way, which has the highest ASD rate in the country. Perhaps there is a medical culture in NJ that tends towards overdiagnosis. Perhaps their medical schools need to teach statistics better.

There is a lot of variance out there. People are different from each other. Every skill or characteristic of a person lies within a distribution. Half of people are below the average, and half above. There is a statistical term called "standard deviation" that describes how far from the average a person is relative to how widely people vary from each other in general. Most people are within 1 standard deviation of the average. There is precedent for saying that a person has a disorder when a characteristic of health or function is more than two standard deviations worse than average (a bit more than 2% of the population). Mental retardation is considered when a child's IQ is two standard deviations or more from the average. Many psychological tests flag problems when a person scores more than two standard deviations from the average on scales related to depression, anxiety, etc... But that alone should not be used to demark disorders or assign diagnoses. There has to be a convergence of information showing meaningful dysfunction.

Based on this precedent, we should not be surprised if the ASD diagnosis rate approaches 1 in 40. Kids who are socially awkward enough to rate as two standard deviations away from average on whatever metric someone makes up (there are a bunch of ASD symptom checklists out there, and they are not used well) would qualify for ASD. Asperger's and "high-functioning autism" are ballooning. We've gone past the point where formerly-mentally-retarded kids are being correctly identified with ASD, up to the point where formerly normal kids are being dragged into disorder land. They were probably called "weird" before, but is that something we need to fix? Is it really a problem?

I can't help but compare Asperger's to homosexuality. It was not long ago that homosexuality was considered a mental disorder. Now the legitimate medical community accepts homosexuals as healthy people who are just in a minority on a characteristic. We are surrounded by people who meet criteria for Asperger's, but they do well in academics, science, and technology. They are computer programmers and engineers and scientists and professors. Do we really need to say they are disordered because they're socially awkward and repetitive? Criteria C is redundant because criteria A necessarily involves social impairment. Are we really helping by imposing labels and interventions on these children?

Maybe. I don't know. I hope someone is recording a lot of data, and that there are enough "natural experiments" going on to eventually give us the answers. We definitely do need better standardization of diagnosis practices.

Prescription Information Availability

I got a little excited when I read that Congress might limit Big Pharma's ability to use doctors' prescription behaviors for their marketing. Of course, the proposed idea was quickly eliminated.

Pharmaceutical companies spend incredible amounts of money on marketing. Besides outright bribes to doctors with free food and paid speaking opportunities (averaging $3900 per targeted doctor), the marketers use information on which doctors are prescribing what and how often to custom-tailor their pitches. They can tell which of their sales techniques are most effective by looking at the spikes in prescriptions after each sales pitch. They know if a doctor was a waste of bribes, and they can focus their efforts on the ones who respond well to incentives.

The companies will claim that their behavior is to help keep doctors up to date on what works, but that is an outright lie. The marketers push the new, still under patent, expensive drugs over the cheaper drugs regardless of effects. Expensive drugs that do not work better are touted. There is no good reason that doctors should listen to the obviously biased salesmen of a drug instead of looking at peer-reviewed research articles in selective journals. There are problems even with those articles, but they are better.

I have attended drug rep presentations at medical facilities. They use anecdotes about outlier cases to hype up the drug, and lay out some lunch and branded office supplies. The MDs in the room didn't look at the fine print, which revealed to me the variance in the drugs effects (40% of participants for one drug got worse, and those who got "better" were still severely ill, so why use this expensive drug with lots of side effects?). A medical degree is no guarantee that a person is going to be careful or attentive, or even understands statistics, or keeps up to date with research. There is practically zero oversight of doctors in most settings because they run the show and they only listen to each other. Doctors are fallible and subject to manipulation. Smart hospitals have banned drug reps.

I am all for accurate and complete information about drugs being disseminated to prescribers. It should be done by unbiased parties, and be presented in a way that doctors can understand, comparing the risks and benefits of the drugs, and I would also include the costs. The PDR is obviously inadequate, and tends to just collect dust on a shelf. No drug marketing should be allowed, ever. Until that happens, let's keep prescription information from the marketers so they are less able to target unethical and mentally weak doctors.

Consumer Reports, an independent organization, may be a good resource. They have a free website about drugs. For example, recent 60-study analysis showed that $10/month Doxazosin is as effective as $246/month Flomax. Flomax is heavily advertised because it is new and expensive, not because it is more helpful.

Rationing is Ethical

This is what I'm talking about. Allocate our finite resources in such a way that they bring our whole country the greatest benefits. It is completely detrimental and unsustainable to keep spending huge amounts of our resources at the end of life. I want my tax dollars and insurance premiums to result in the greatest possible increase in quality-adjusted life-years, though I understand the inherent subjectivity in determining how to measure or weigh "quality". Even ignoring quality and focusing on life-years would be a vast improvement over our current system. $80,000 of Avastin for a few more months of life? That money could lead to dozens or scores of extra life-years if spent elsewhere. If we, as a country, invested more in childhood nutrition, health education, and smoking cessation instead of pharmaceutical and biotech companies, we would have greater national health and longer, happier lives.

Small Businesses

I want to start a small business. I'll start out with a few employees, and try to grow. How is my business affected by the various plans proposed for health insurance in America?

Status Quo (most states): Since I'm small, I don't have to give my employees an insurance plan. They pay for their insurance out of pocket, if at all. Some will likely not get insurance so they can spend their money on other things, like bigger houses. Those with insurance will overpay for their coverage because they can't negotiate, and will probably be underinsured. I may have to pay slightly higher salaries to make up for the lack of benefits in order to attract good workers, but since people generally don't understand the values of employer insurance packages, I won't have to pay much more. My costs are kept low, and I am better able to function as a small business. Republicans and Libertarians like this arrangement because it helps small business development and entrepreneurship, even though it exploits workers a bit and sets up people for hardship and bankruptcy if they develop health problems. Half of US bankruptcies, largely the cause of our economic collapse, are due to inability to pay medical bills.

Individual Mandate: My employees will be required by law to buy their own insurance. They are likely to buy catastrophic coverage with the lowest premium and least coverage. They will probably be underinsured. The minimum wage is the same, and my competition could consider ending employer-provided insurance, so I won't have to worry about paying much more in salaries, if any more at all, to make up for my employees' health insurance costs. Insurance companies love this arrangement because the government is forcing people to give these companies money, and the government will probably pitch in for people who need help paying. Free money for insurance companies, cheaper labor for businesses. Real Republicans and Libertarians don't like the government interference (most Rs are bought off by insurance lobbyists and have no values), and liberals don't like the poor quality of insurance and the burden on the working poor who may not qualify for enough subsidies.

Employer Mandate: This is my nightmare. The government would force me to pay for my employees' insurance. Since I have a small business, I don't have leverage to negotiate a good price. There are some small business collectives, though, that can negotiate together, depending on my state. I sure wish there was a national insurance market so the collectives could negotiate more freely. I have to deal with the local insurance monopoly. Combined with minimum wage laws and competition with larger businesses that can negotiate better, paying for health insurance plans for my employees may inhibit my small business's growth, or even make it unsustainable. My business may not last long, or even get started. It's a shame because consumers would really benefit from my business's existence, but not enough to justify paying the prices I would have to charge to stay in business if I have to pay for health plans. This plan also leaves unemployed people in the lurch, and when my business fails my employees will have nothing. Maybe my business can survive if I fire some people and work the others harder. Big businesses like the employer mandate because they already give their employees well-negotiated health plans, and this would make it harder for new competition to sprout up.

Public Plan: Ah, I could relax. Everyone has basic health coverage. They can buy fancier private plans if they want, but the basics are covered, and are better than the old private catastrophic plans. I am more likely to be able to pay competitive salaries or reinvest profits. My employees are secure. Real Liberals (not the bought-off ones), unions, health economists, and the poor favor this idea because it provides security and needed health care to all Americans, and improves the stability of our nation's economy while setting a stage that fosters small business innovation. Republicans and Libertarians hate the plan because it is government control (they blindly hold on to a belief and a value despite all the harm their decisions cause), and insurance companies hate it because they love the profits they get from our current horrible system.

Mammograms

The current mammogram controversy is yet another example of ignorant, unthinking people going crazy about something they don't understand. Most critics of the new U.S. Preventive Services Task Force guideline do not understand that our system has finite resources. They also don't understand that there is no such thing as saving a life. There is only delaying death. Also not mentioned in any of the articles I am reading is that breast cancer mortality rates are usually only measured for five years.

The new guideline says that the recommendation for mammograms should be once every two years starting at age 50. This replaces the recommendation for annual mammograms starting at 40. They found that only 1 in 1900 mammograms for women in their 40s delayed death. This may save $2 billion per year and result in maybe 600 undelayed deaths. That means the old guideline resulted in spending about $3.3 million dollars per delayed death. I don't know the life expectancy of breast cancer survivors, but for the sake of more math, let's say that all of these deaths were delayed by 40 years. That's over $83,000 dollars per year of life, just spent on mammograms! Keep in mind that these women will continue to incur more health care costs over those 40 hypothetical years, too, and I am not considering quality of life.

The British system refuses to pay for drugs that cost more than $45,000 per quality-adjusted life year (QALY). Medicare limits hospice spending to about $22,000 per year (if I read that right). These measures are necessary to protect the whole system from going bankrupt, as our system is destined to by 2017 unless we make drastic changes. These measures also help ensure that the system's finite resources are being used where they can do the most good.

Think about how much good could be done with that $2 billion per year. I guarantee that we could save far more than the breast cancer's 24,000 (my certainly too-high hypothetical estimation) life-years by spending it somewhere else. I bet that $2 billion could be easily spent to save 100,000 life-years or more. Critics of the new guidelines are selfish and short-sighted, and would rather hang on to their anecdotes of women whose deaths were delayed while sentencing thousands of other people to a lack of care due to insufficient resources. These costs also keep insurance premiums high, pricing working poor out of comprehensive insurance.

Women considered high risk due would still be recommended for mammograms before 50. There is some talk about how black women would be disadvantaged by the new guideline because they tend to have earlier and more aggressive cancers, and of course that would be taken into account by informed doctors making recommendations. The task force guideline is based on aggregate information for the national population.

Mammograms have been oversold, and our country as a whole would be better off following the new guidelines. We need to make our entire system more efficient and cost effective (not the same as cutting the total cost, just demanding better results for our money) for it to be sustainable and good for the people of our country.

Stupak Inconsistency

I recognize that my ideas on health care, coming from my educational and work background, would have been far more interesting and useful to readers two years ago. Now we are deluged with health care information, and Congress is churning out thousands of pages of bills and amendments, which is too much for me to process and evaluate. There are great resources out there, such as Ezra Klein's blog, NPR, and so forth. I am trying to find my utility.

Anyhow, for today, a hot topic is that the Republicans just realized that they've been paying premiums to Cigna for 18 years that cover abortions, and they're going to stop. They say that abortion is evil. Enough Americans agree with that that some Democrats jumped on board and we got the Stupak amendment. Here's a quote from the site I linked to above:

"The Stupak amendment, named for sponsor Bart Stupak (D-Mich.), was adopted by the House before it passed the health care bill on Saturday night. It prohibits a government-backed health care plan from offering abortion services and bans the use of federal subsidies for individuals to buy into health care plans that provide abortion coverage. "

The ridiculousness of this, as was pointed out by Ezra Klein (I don't know that I would have caught this), is that the government heavily subsidizes health insurance plans that cover abortions. It does this by not taxing employer-provided insurance. People who get insurance from work are getting cheap insurance in part because of the government's decision not to tax the insurance costs as income (and also because of negotiating leverage depending on the employer's size).

I pay for my insurance individually. This means that I pay taxes on my income, then spend my income on insurance. I can still afford insurance because I have a very basic plan and I am not "poor". Many people who do not get insurance from work are poor and need more comprehensive insurance plans. Many of these people need government subsidies in order to have insurance. We already know that it is important to insure everyone to keep costs down because the uninsured get expensive ER care instead of cheaper basic care and prevention. The Stupak amendment is only hurting poor people's ability to choose insurance plans that cover abortion. This group is easily the most important group to provide that choice to.

Obviously, deontologists who think abortion is evil will try to make abortions impossible, even though unwanted pregnancies lead to all kinds of personal and societal problems such as child abuse, neglect, mental illness, delinquency, and crime, which all cost the people involved and our whole country billions of dollars, happiness, and function. So why aren't these same Stupak supporters clamoring to end the tax exemption on employer-provided insurance that covers abortions?

Uwe Reinhardt Highlights

NPR interviewed Princeton health economist Uwe Reinhardt. Reinhardt does a good job clearly and concisely explaining concepts. There is a lot more than gets covered in the interview, but this is good. Here is a summary:

* People are generally individually selfish, and need active leadership to coordinate for the good of the group.

* The current health system hides too much information (costs and quality), so we can't make good decisions about what care to get or how much to pay for it, which leads to high prices for mediocre outcomes.

* Prices are different for people based on what can be negotiated, not costs or benefit.

* Government-imposed standardized prices work well in Maryland and Europe.

* Care providers are paid way too much for giving treatment and tests. This is a huge incentive to perform unnecessary procedures and prescribe unnecessary drugs. They are generally not paid based on outcomes (hidden from consumers).

* A public health insurance option would be able to negotiate good prices.

* The free market screws over poor people by relocating care providers (in addition to pricing out insurance for those who don't qualify for Medicaid).

* The private insurance system requires a ridiculous amount of nonstandardized paperwork that raises costs and takes resources away from treating patients.

So, what are some ways we can use this information to make our system better? I think it's clear that we need a way to track outcomes by doctor and clinic, and make costs transparent. Outcomes can easily be tracked if we had a unified system (single payer), which would lead to paying providers for outcomes instead of for giving unnecessary treatments. A single payer would also negotiate good prices that make the system more sustainable, and vastly reduce costs and wasted time due to paperwork. Government intervention is necessary in order to make care accessible to the poor, since the free market only provides incentives to abandon them. Unselfish, compassionate changes that are good for the whole country will have to be made by the government because individual actors are selfish.

Insurance Monopolies/Oligopolies

I feel sometimes that I fell asleep and woke up in an alternate universe. The Republicans are trying to protect Medicare Advantage, which is wasteful of taxpayers' money. The Republicans are blocking efforts to establish a public health insurance marketplace that would foster free competition. It is the Democrats that are trying to facilitate free market competition by de-exempting insurance companies from anti-trust laws.

The Republicans violently oppose a public health insurance option on the grounds that it would unfairly compete with private companies. If they care so much about fair competition, will they follow the Democrats' lead and fight the unfair private insurance monopolies? I doubt it. The Republicans have abandoned their values and all reason, and act now only to cripple the current administration and regain power. They don't care about the citizens or economy of this country. They care about themselves.

Competition among insurance providers will reduce the prices of insurance. Let us see that competition. Start by stripping insurance companies of protection from anti-trust laws. A public marketplace would be another great step towards increasing competition and providing the American citizens more insurance options at lower prices.

Unsustainable Resource Allocation

Yesterday I wrote that our elderly are getting 2-4 times the money out of social services as they put in, as hard working taxpayers and their children are deprived of valuable services that would strengthen our country now and for the future. This recent MSNBC interview with crazy Betsy McCaughey gives the CBO citation and shows how the approximately 3:1 ratio was found.

There are two valid drivers for how we allocate money. The more deontological driver is to spend money to give people what they deserve. Benefits to soldiers, for example, or temporary unemployment benefits, or funds to support poor children. People who have a raw deal through no fault of their own, or who made sacrifices for the rest of us, deserve care. The more utilitarian driver is spend money on whatever will net the greatest good. What sets us up to have the best future? Military benefits are driven by this, also, as they are often calculated incentives to attract needed recruits so that we can even have a military. Public works projects that improve our infrastructure so we can continue trade and growth. Investing in research. Paying such vast amounts of money on social services to the elderly is more than they deserve and is not an investment in the future. At least McCaughey wants to raise the Medicare age to 70, even if she opposes making the system more efficient.

The major invalid driver of money allocation is greed. Special interests want their money. Politicians want votes and campaign contributions. Politicians make allocations (corn subsidies, no-bid contracts, F-22s, bridges to nowhere, etc...) that will get them votes and contributions, even though it hurts most people. Old people vote. Old people vote more often than young people. Politicians make policies that benefit old people at everyone else's (and the country's overall) expense. We are in a death spiral of increasing social security and Medicare expenses because politicians pacify the elderly now for votes instead of looking at the big picture and our country's needs for the future.

The interview also helpfully shows that a public option, or the public marketplace option that Obama talked about, would greatly reduce health care costs by eliminating the widespread occurance of localized insurance monopolies. I have two real choices for insurance provision in my area, and that is not competition that benefits consumers. When did Republicans start hating competition? Was it when insurance lobbyists handed them goodies, or are they just stubbornly trying to shoot down at any cost everything Obama tries to do?

Also, tort reform, which I've strongly advocated, seems to be a very low priority as far as cost controls go. It's still a good idea, and the special interest most opposed is the lawyers who take half the money, but it can go on the back burner.

Prevention - Is It Worth It?

I've already mentioned my skepticism of the cost-effectiveness of prostate cancer tests as a preventative measure, since they have notoriously high false positive rates and lead to much unnecessary cancer treatment that results in many side-effects and iatrogenic consequences. I have a vague memory of an issue in California a while back in which gonorrhea tests or treatments were mandatory at birth because gonorrhea can lead to blindness, but the processes were very expensive and only found such a tiny incidence that the requirement was not worth while. Remember, we have finite resources, and they have to be used where they do the most good. If we had infinite resources, we could test and treat everyone for everything.

Many preventative measures are easily worth their costs. Vaccines, obviously. How much has the US had to spend on polio over the last few decades? This CBO letter describes a few other good preventions, but points out that about 20% are not worth doing. Again, very obviously, don't smoke and don't be fat. Get even a modest amount of exercise.

There are some issues with how cost-effectiveness is evaluated. Different projective models come up with different results. (The Health Affairs article linked to by that blog costs money)

One of the most controversial issues in determining the cost-effectiveness of preventative measures is that they can result in increasing people's life spans so that they end up using more health care than they would have if they died earlier. There is also the argument that the elderly worked hard to pay into the system during their lives and deserve to be kept alive as long as technologically possible. Well, they're actually sucking out 2-4 times as much money from social security and Medicare as they ever put in, so that argument is junk. They should definitely get what they deserve, but not more than that at everyone else's expense. This is the reason those social services are unsustainable and threatening to bankrupt our country in less than ten years. We spend great amounts of money to keep people alive past the point of function. To state that we should reduce what we spend on that outcome incites revolt from hillbillies who throw around accusations of trying to kill their grandmothers. Remember, we have finite resources. Keeping someone alive in a bed at great cost takes away money that could help children and workers be more productive and contribute to our whole system. It is not heartless of me to deprive an aged person of expensive care. It is selfish to demand that expensive care at everyone else's expense. The utilitarian ethic is the most compassionate. England realizes this. If we stop spending great amounts of resources on end-of-life care, we change the models that calculate the cost-effectiveness of preventative measures, making more preventative measures worth using that will increase the overall health and productivity of the population of the United States. It is good for the whole country.

Health care is an investment. We pay up front so that we have better outcomes for the future. Make sure that we get the best outcomes we can for our investment. Pay to maximize function for us overall. This will help the system grow strong and be sustainable.

No Public Option

The Senate Finance Committee excludes a public option. This really is no surprise. We know that Baucus is in the pockets of insurance companies instead of his constituents, as are many other politicians. It is also blatently apparent that the entire Republican party is united to prevent the Obama administration from accomplishing anything good for America. The Republicans want the Obama administration to fail at improving our country and serving its citizens, just so the Republicans can cite the failure while campaigning for the next elections.

What can we do?
Well, we obviously need some campaign finance reform, for starters. There is an organization working to accomplish this goal. Change-Congress.org, organized by the illustrious Lawrence Lessig, fights against the sway that special interest groups (insurance companies) have over our government. When there is more of an incentive for politicians to work for their constituents, and less of an incentive for them to pander to money-grubbing companies, we will see policy decisions that are better for this country.

Did we need a public option?
Well, the CBO says that various plans proposed would cut the US deficit by tens of billions of dollars over the next ten years, while providing health care to tens of millions of American citizens who currently have no insurance. I've seen other organizations estimate that the deficit would drop by even more, since the CBO did not look at every related variable. There are different plans, though, and different ideas of what the public option would look like. So, there are proposals that include public options that would help many Americans and save our country money, which are both outcomes we need. There are other ways to get these outcomes, such as a single-payer system (HR676, Medicare for All, has hardly been mentioned) or extremely tight regulation on insurance companies, but a public option was the most likely to make it through congress. It just isn't likely enough.

I am confident saying that any politician currently opposing/stalling efforts to increase the government's involvement in health care, either through a public option, marketplace, expanding Medicare, or more strictly controlling private insurance companies, is motivated only by the drive for personal power. These politicians enjoy their campaign contributions and visits from lobbyists, and the Republicans know that sticking with the party line ensures they will keep getting support in future elections. The politicians who are fighting for the health of our citizens are the ones who care about their constituents.

Listen to the Experts

It is terrible that so many politicians make policy decisions to pacify ignorant and misled mobs instead of using the accurate information available to make the best decisions for our country. I cringe when I catch what passes for television news these days, a bunch of polls and tweets from random people presented as if they should be used to guide our government's policies. Those people don't know what they're talking about!

Here's a neat table comparing the opinions of the informed to those of the random. The average person is selfish and ignorant, and wants unlimited care for herself, not understanding the costs, consequences, or relative quality. They care about anecdotes instead of real data on the quality of a doctor or treatment. They don't understand what variance is, let alone its relevance in health care. They trust their heavily biased and marginally informed doctors.

It is hard to explain the details of health care economics to the average person. It is hard to explain why we should have fewer treatments and more tracking of patients and doctors. It is hard to explain why hospitals should have fewer high-tech machines. It is easier to explain why drug companies are evil and doctors shouldn't be so free to refer patients to clinics the doctors own stake in. Overall, the complexity and scope of health care is overwhelming and confusing to the average person who just wants some security.

The convergence of the expert opinions is good for the country. Trust the experts (in aggregate, not just the few who talk on Fox News). We want everyone to have security, just like you want for yourself. We want costs to be low, and quality to be high. We don't want people bankrupted by an illness. We don't want patients exploited. We don't want the nation's deficit to grow. Not only do we have these goals, we have the knowledge and skills to see how to achieve them. We just need everyone else to stop holding us back.

Obama's Marketplace Plan

Even the famous Ewe Reinhardt agrees with me. Obama's proposed marketplace, where private insurers would compete with a public plan to provide customer-friendly health insurance, is going to be costly. If you're going to give so much care to people, ban rescission, allow pre-existing conditions, and put a low cap on out-of-pocket expenses, then you're going to have an expensive insurance plan.

To keep costs practical, one thing you have to be aggressive about is the chronic diseases that make up the bulk of costs. Encourage and demand more personal responsibility, and be able to cut people off from expensive care caused by their irresponsibility. For example: diabetes is widespread and totally manageable. It is far cheaper to help diabetics follow their treatment regimen than to pay for all the ER visits resulting from improper self-management. Many hospitals offer services that help slower diabetics keep track of their medication, plan their diets, get regular check-ups, and so forth. Not everyone uses those services, though. Some people insist on doing whatever they feel like, and make six trips to the ER each year. That hurts the rest of us. When New York City began a program to call every diabetic regularly to remind them to get check-ups, there was a big outcry about violating their privacy. Well, they violate everyone else each time they avoidably use expensive health care resources. Should everyone pay for a smoker's expensive lung cancer treatment? For a head injury of a motorcyclist who refused to wear a helmet?

We are all part of a system. If a person is going to renounce their responsibility to the system, their responsibility to take care of themselves so costs to the rest of us are manageable, then they renounce their membership in the system. The system should help those who make good faith efforts to support the system in return, but should not be obligated to help those who selfishly and irresponsibly hurt the system. An arrangement like England's that refuses to pay more than a set amount to keep a person alive for a short time would also be appropriate. We have finite resources to be spread out among everyone in the system. If we focus on an individual at the expense of the group, we cause far more damage that we prevent. In health care matters, we need a teleological utilitarian ethic. Even some modern deontologists allow for a 'Principle of Permissible Harm'. Spend our finite resources first where they will cause the greatest increase in quality-adjusted life-years working. That will make the system much stronger and sustainable for the future. Our current system is not sustainable, and is killing more future life-years than it saves now.

Obama's Health Care Reform Speech

I'll just try to comment on his speech briefly.

It is a bit overreaching for Obama to be determined to be the last president to try to reform health care. We have no idea what the needs of America will be in fifty years. We will need constant monitoring, evaluation, and reform in order to adapt to future needs.

Over half of US personal bankruptcies are due to medical bills. Employer-provided health insurance (subsidized by the government) has been and is a bad idea. It is hard for US companies to compete internationally, and good American citizens get screwed if they are laid off or self-employed. Small businesses are over-burdened if forced to provide insurance, and the employees suffer either way. Trying to buy insurance individually strips away negotiating leverage and further hurts people.

America takes less care of its citizens than any other major nation. Not only has the government dropped the ball on taking care of everyone, but it lets insurance companies use techniques like rescission to exploit citizens. Obama is calling out our nation, an arrogant nation that likes to believe it is the best, on its cruelty and heartlessness towards its own members.

Obama correctly points out that we all pay more when the uninsured and underinsured end up in the emergency rooms for trivial problems, or major problems that could have been prevented by cheaper basic care. We pay more money as a country for pathetic health outcomes. What he doesn't go into are the details about that: our high payments for cancer treatments and whatnot to extend people's lives just a little instead of focusing on paying for basic and preventative care that would extend more people's lives by a lot. That would raise more "grandma-killing" nonsense, but it really is a great waste that hurts our whole nation. Is baby-killing better? Or worker-killing? Medicare and Medicaid costs are so bad because we provide expensive treatments to people who are going to die anyway, and we enable people with chronic illnesses like diabetes to not minimize their problems. When we can accept the fact of death for the elderly (the private insurance companies actually do have Death Panels, and they're effective at denying care to anyone), and get people to take the barest responsibility for themselves, costs will drastically drop. We also need to cut down on drugs as a whole culture. Pharmaceutical pill-pushing is costly, damaging, and out of control.

Single-payer systems are great, but not the only good solution. Making individuals buy private insurance is a terrible idea. The insurance companies would love that windfall.

The Republican party is united. That is their great strength. Unfortunately, they unite behind terrible ideas. The Democrats, instead of being blind sheep and puppets, like to think for themselves. This strength allows for creativity and progress. This unfortunately leads to many different ideas, such that even when these ideas are good, they split the votes and lead to conflicts that ultimately allow the Party of No to succeed.

THE PLAN
Finally, the meat and potatoes.
1) Enrollment in the public plan is optional if you have other insurance.
This is good. It will be healthy for private insurers to have to compete. Right now they have virtual monopolies in most of the country. People get to choose what they like (this is not always good because insurance plans can be hard to understand, and people are manipulated by advertisements). It is great to make health insurance mandatory. This will reduce waste due to ER visits, and reduce financial hardships for those who have sudden medical needs but didn't have insurance. Unfortunately, there is a hardship waiver for people who still can't afford the premiums. This is where the feds should just pay the premium, but later Obama says that he won't allow that. Hopefully Medicaid will take up anyone who can't afford the public plan premium.

2) Rescission is illegal for everyone.
This is good. People can have more security.

3) Federally mandated cap on out-of-pocket expenses.
This is interesting. I assume that the cap will depend on a person's income, and not be the same for everyone. This will raise premiums for everyone.

4) Federally mandated coverage for routine check-ups and preventative care.
This is probably very good. He mentions tests for cancer, and that worries me. Some cancer tests are very expensive and/or have high false-positive rates, leading to much dangerous, expensive, and unnecessary treatment. I'm especially thinking of prostate cancer. Overall, though, it will be good to regularly tell more people that they need to lose weight, eat better, stop smoking, etc... I hope this doesn't just give doctors more opportunities to prescribe unnecessary drugs.

5) Public plan for anyone.
This is great, if it is affordable. COBRA is absurdly expensive, especially since it's offered to people who just became unemployed! This will definitely help small businesses and self-employed persons, too. No one can be denied for existing conditions.

6) Here Obama talks about an insurance marketplace. It seems like items 2-4 above would only apply to insurance companies who want to participate in the marketplace. Earlier, it sounded like those rules would apply to everyone, but now it seems like they only apply to private insurers who compete for the customers in the public plan pool. That's good incentive for working people to quit their company plan and join the public plan, but maybe only if company plans lose their tax breaks so the true costs are apparent.

7) No coverage for illegal immigrants.
If you want American services, become an American.

8) No federal money for abortions.
Someone said to me that the public plan can still cover abortions because it will be fully funded by premiums, and not federal money. I am not sure about that. It still sounds like the government would pay 900 billion dollars over a decade for the plan, but expects to get that money back from premiums. Obama didn't say he wouldn't spend federal money on the plan. He only said it wouldn't increase the deficit. It is important for the plan to not spend federal money on abortions because the plan would get shot down.

9) Conscience laws still apply.
These are terrible laws that protect health professionals who refuse to do their jobs.

It is not clear to me what incentive insurance companies have to participate in the exchange. This plan says it will have low premiums, but also provide far more services to a group of people likely to have more health problems. Though there is a lot of waste and inefficiency and advertising in other insurance companies, I still do not see how this plan will work. What is offers is going to be expensive. New customers would only be profitable if they pay in more than they cost, and I am skeptical.

If it really would work, I'll sign up. I would love to have the health plan Obama describes. If I felt a need for additional coverage, I am sure a private insurer will have options available to supplement me.

Obama also proposes experimenting (hooray!) in several areas to see if malpractice reform would be helpful. This is something that I already think would be helpful, for the same reasons that Obama wants to try it, and the experimentation would help prove whether it is or not. I am very happy about that.

So, there are some good ideas there, and I am excited about some of them, but I am also skeptical that it will work out as described. We definitely do need reform. Our current system is terrible. Almost any implementation of this plan would be an improvement over what we have, but I think it is likely that it will not meet expectations, and that failure will be used in the future to oppose more needed reform, and against good politicians.

The Best Plan for America - Part 3

When we've reformed campaign financing, letting us end corn subsidies, we can get to the task of reforming tort laws and malpractice resolution processes.

3) Stop frivolous lawsuits against hospitals and doctors.
Why can suing doctors and hospitals be bad? It leads to doctors running unnecessary tests and performing unnecessary procedures and prescribing unnecessary drugs so that they can't be accused of not trying everything. These unnecessary tests and treatments can cause problems for a patient (side-effects, infections), and increase health costs. When costs go up, people with less money are rationed out of health care. Also, over use of these services creates delays, making people who need them wait, perhaps too long. Where lawsuits are common (Pennsylvania), malpractice insurance rates go up, which also increases the cost of proving care, and drives doctors away, which reduces the availability of good care. Hospitals need to hold larger amounts of money in reserve in case they get sued, which is money that could otherwise be used to improve care for patients.

But what if something bad happens because of a doctor's decision? Well, that's not exactly what malpractice is. We live in a very complex system, and have complex bodies with complex problems. There are hardly any treatments that work 100%, and sometimes bad things happen even when all the correct decisions were made given the available information. Doctors and hospitals should absolutely be protected from lawsuits if they can demonstrate that they followed known best practices. Rogue doctors who make decisions based on their feelings or personal experience instead of the collected empirical data of their fields can go hang.

Even when a doctor does do something wrong, the money involved should be more reasonable. Payouts are sometimes so ridiculously large (which hurts the entire system, remember, and not just the one doctor) that malpractice insurance companies often choose to settle for smaller amounts instead of going to court. This happens even when the doctor is innocent. So, we end up with a bunch of doctors being denied the opportunities to prove their innocence because an insurance company doesn't want to risk a big payout. These settlements are strikes against innocent doctors, and affect their abilities to get jobs, and can even result in licensure problems. If payouts were limited to reasonable amounts, the system would be more conducive to actually determining whether a doctor did something wrong, instead of settling with opportunists who sue at the drop of a hat.

By making it more difficult and less profitable to sue, we improve the entire system. Treatment becomes more accessible to those who need it, costs go down, overall outcomes improve, we can more often actually learn which doctors did something wrong and which were frivolously accused, and we encourage evidence-based medicine instead of defensive medicine. The only people who would really suffer are lawyers.

The Best Plan for America - Part 2

So, the first step was campaign finance reform, taking away some of the incentive for politicians to pander to big companies instead of the health of our nation. Once that's out of the way, we can target another big systemic issue.

2) Stop subsidizing corn.
A big reason that America has such bad health outcomes compared to all those other industrialized countries that pay less for health care is that Americans are fat. Fat, lazy Americans eating lots of meat and drinking soda get those really expensive chronic illnesses like diabetes and hypertension. This raises costs for everyone, since we're in this system together. A major reason that so many people eat meat and sweets is that those foods are so cheap. An apple costs more than a candy bar. Juice costs more than soda (juice is also high in calories, but fructose is easier on your pancreas than dextrose). Also, impulsive and ignorant people would rather get fast food or some other form of processed junk than take half an hour to cook. Cooking healthy food can actually be very inexpensive, but it takes a little time, and most Americans would rather do something else.

So, how would ending corn subsidies lead to healthier eating? American corn is produced in far greater quantities than needed because the feds pay the big farm conglomerates to do it. There is so much unnecessary corn that the price is very low to buy it. Since it's so cheap, it gets fed to chickens, pigs, and cows to get them big and fat at a low cost. It also gets turned into corn syrup to keep our sodas and candy cheap (the price of sugar is artificially increased in America by federal tariffs on sugar imports, keeping down competition with corn). So, heavily because of this one crop subsidy, meat and sweets are very cheap and plentiful in the US.

There are other consequences. Since so many fields get devoted to corn (which does not require crop rotation like some other crops), less of other crops are grown that are not subsidized. More corn for animals and sweets (and fuel) results in fewer carrots and spinach and peas for humans. A smaller supply of those healthy foods for people means that they cost more.

So, ending the corn subsidy would make meat and sweets more expensive, and probably other healthy foods cheaper and more prevalent. There would be an economic incentive for people to eat food that is better for them, and restaurants would serve smaller portions of meat to keep costs low. Diabetes and heart disease rates, etc..., would fall, and life spans would increase again.

Animals might get switched to a different food, which would then be taken from humans, but I don't know what that would be. There would be other effects of the change, as well.

If the price of corn went up to the same level as that of other countries that do not subsidize (Mexico), those countries would stop importing the poor-tasting, standardized, potentially dangerous American corn that is wiping out their indigenous corn strains and making them slaves to the entirely unethical Monsanto. More expensive American corn would lead to more preservation of genetically diverse corn, which would protect our global supply from disease or insect. It would also let "heirloom" corn strains compete, which taste better and are safer to eat.