Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

Health Care Reform Blogging

From As Good as It Gets:*

Carol Connelly: F------ H.M.O. bastard pieces of shit!

Beverly Connelly: Carol!

Carol Connelly: Sorry.

Dr. Martin Bettes: It's okay. Actually, I think that's their technical name...

Anesthesiology...

Peter Orszag:

http://www.cbo.gov/ftpdocs/95xx/doc9563/07-16-HealthReform.pdf: Anesthesiology provides one example of a great success story in putting evidence- based standards into practice. In the mid-1980s, after analyzing the most common sources of errors, the American Society of Anesthesiologists promulgated standards of optimal practice (both in procedures and equipment).⁶ Providers had an incentive to follow the standards because deviations from them made the imposition of malpractice liability more likely. After the standards were adopted, mortality rates fell to about 5 per million encounters, as compared with averages above 100 per million during earlier periods.⁷ Thus, aggressively promulgated standards backed by some incentives can alter a long-standing and suboptimal status quo.

Research suggests, however, that the merely providing information to physicians results in an “exceedingly modest behavioral response.”⁸ The current financial incentives for both providers and patients tend to encourage or at least facilitate the adoption of expensive treatments and procedures, even if evidence about their effectiveness relative to existing therapies is limited. Costly services that are known to be highly effective for some patients are sometimes provided to others for whom the clinical benefits have not been rigorously demonstrated. Therefore, to alter providers’ behavior, it is probably necessary to combine comparative effectiveness research with aggressive promulgation of standards and changes in financial and other incentives.⁹

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⁶ See Jeffrey B. Cooper, “Getting Into Patient Safety: A Personal Story,” AHRQ WebM&M: Morbidity and Mortality Rounds on the Web (Agency for Healthcare Research and Quality, August 2006), available at http://www.webmm.ahrq.gov/perspective.aspx?perspectiveID=29.

⁷ See David Hyman and Charles Silver, “You Get What You Pay For: Result-Based Compensation for Health Care,” Washington and Lee Law Review (Fall 2001).

⁸ David E. Kanouse, Joel Kallich, and James P. Kahan. “Dissemination of Effectiveness and Outcomes Research,” Health Policy, vol. 34, no. 3 (1995), pp. 167–192.

⁹ See Congressional Budget Office, Research on the Comparative Effectiveness of Medical Treatments: Issues and Options for an Expanded Federal Role (December 2007).

Barack Obama Health Reform Position

There are three documents:

• http://www.barackobama.com/2007/05/29/cutting_costs_and_covering_ame.php
• http://www.barackobama.com/issues/pdf/HealthCareFullPlan.pdf
• http://www.barackobama.com/pdf/Obama08_HealthcareFAQ.pdf

Curses, Foiled Again!

My clever plan to get lots of work done this summer--by losing my cell phone, seizing Laura D'Andrea Tyson's unused office Room 203 at BRIE's 2234 Piedmont Avenue, and hiding out there so that nobody could find me--has gone badly awry.

Yes, it is true that very few people from the Economics Department know where I am.

But my time is being absorbed by a large number of very smart and interesting people I haven't heard from in a while: people like Derek Bok, Richard Layard, Louis Gerstner, Michael Lind, Ray Kurzweil, George Soros, Gordon Brown, Frances Cairncross, John Seely Brown, Bill Emmott, and Amartya Sen.

They are all across the room clamoring for my attention, encased as they are in rows and rows of these small virtual-reality boxes.

You see, when Professor Tyson moved her base of operations back to her Business School office, she left too many of her books behind. So I am now distracted not just by my books, but by hers as well.

This is very dangerous. This is very distracting. I try to resist by repeating over and over again Rudi Dornbusch's mantra: "They don't pay me to read the literature; they pay me to write the literature."

But it is not working--not very well, at least.

Ah. Here is Sherry Gleid's Chronic Condition...

I am doomed.

Tyler Cowen May Travel Less--or May Just Buy a Rapid Medevac Insurance Policy

Tyler writes:

Marginal Revolution: "What's Wrong With You?": Don't get sick anywhere but at home:

...doctors in Tanzania complete less than a quarter of the essential checklist for patients with classic symptoms of malaria, a disease that kills 63,000-96,000 Tanzanians each year.  The public-sector doctor in India asks one (and only one) question in the average interaction: "What's wrong with you?".  In Paraguay, the amount of time a doctor spends with a patient has nothing to do with the severity of the patient's illness...these isolated facts represent common patterns...three years of medical school in Tanzania result in only a 1 percentage point increase in the probability of a correct diagnosis...One concern with measuring doctor effort through direct observation is that the doctor may work harder in the presence of the research team.

That is from "The Quality of Medical Advice in Low-Income Countries," by Jishnu Das, Jeffrey Hammer, and Kenneth Leonard, in the Spring 2008 issue of the Journal of Economic Perspectives...

Peter Orszag's Slides on Long-Term Health-Care Cost Growth

Peter Orszag's presentation slides on long-term health-care cost growth: http://www.cbo.gov/ftpdocs/90xx/doc9016/03-03-2008-NABE.pdf

Source: Congressional Budget Office.

Growing Working Markets Is Hard

Megan McArdle knows a very valuable thing about economic institution design:

Megan McArdle: Markets are hard: After a little thought, I'm not sure that I made what I was thinking quite clear on my earlier post on McCain's healthcare plan: markets are hard. We used to think that, like Topsy, they "just growed". The experience of Russian shock therapy belies this. Once bad government regulation has screwed things up, fixing them is not always just a matter of removing the original bad law. Nor of simply willing, via legislative fiat, that a better one shall grow in its place.

Economics of the Transhuman Condition

This was on Chad Jones's desk this morning:

Yes, the horizontal axis scale is in years...

CBO's Long-Term Spending Outlook

Improvements in medical technology + deficiencies in the medical-care financing system + the aging of America with increasing life expectancy + a belief that health care ought to be distributed according to need rather than wallet thickness:

Department of "Huh"?

Shannon Brownlee writes:

Let's Stop Running Scared: I have no plans to monitor my cholesterol, undoubtedly to my doctor's consternation. Why bother? I'm already watching my weight, exercising regularly and eating a healthful diet, and I don't want to take medications that offer little if any protection against heart attacks for people whose only risk factor is elevated cholesterol...

Ummm.... As I understand it, if a woman in her 50s has cholesterol of 250-40 as opposed to 150-60 (total-HDL) and no other risk factors, her ten-year risk of heart attack is higher by one percentage point.

Avoiding a heart attack seems to me to be worth at least $100K. Reducing the chance of a heart attack by one percentage point seems to me to be worth $1K over ten years--or worth spending $100 a year.

Thus it seems to me that including a cholesterol test in your every-two-years blood screening and adding a pill to your morning vitamins if the cholesterol numbers are going south in a serious way--even with no other cardiac risk factors--is a good idea.

What am I missing?

Reading for This Afternoon

Tyler Cowen says:

Marginal Revolution: Sherry Glied's new health care paper: It is one of the best health care papers in recent times, it is here...

The Benefits of Publicly-Funded Clinical Trials of Prescription Drugs

Yet another very good idea from Dean Baker:

CEPR - The Benefits and Savings of Publicly-Funded Clinical Trials of Prescription Drugs: This paper proposes publicly funding prescription drug trials as an alternative to the present system, wherein pharmaceutical companies often finance and conduct tests of their drugs themselves. The report posits that in addition to substantial savings for the government, independent companies working under long-term federal contracts would result in full and accurate disclosure of the results of drug testing.

Robert Waldmann Has a Big Problem with the Anti-Prozac Meta-Analysis Study

Robert Waldmann has a big problem with and talks back to the anti-Prozac meta-analysis study of Hirsch et al.*.

Mark Liberman summarizes the meta-analysis data in a nice picture:

The x's are studies. The vertical axis shows the improvement in mood for people being given the placebo--the sugar pill. The horizontal axis shows the improvement in mood for people being given the antidepressant, both according to the Hamilton Scale of Depression.

People being given the placebo improved their mood a lot--by 7.8 points, which is a relatively big deal on the Hamilton Scale: feeling that you are taking control over your Depression by getting involved in a cutting-edge medical study, the fact that a group of research scientists are paying attention to you, and the passage of time together do a lot of good. But the people being given the actual anti-depressants improved their mood by even more. Let's turn the mike over to Hirsch et al.:

[W]eighted mean improvement was 9.60 points on the HRSD in the drug groups and 7.80 in the placebo groups, yielding a mean drug-placebo difference of 1.80 on [Hamilton] improvement scores.... [which] easily attained statistical significance [at the 0.001 level, in fact--much better than the 0.05 level]...

Subjects given Prozac improved their mood by an extra 1.8 points on the Hamilton scale. This difference is not due to chance sampling error--it is, statistically, very significant. The pills are really cheap to make. There is an upside. Better Living Through Chemistry.

So what's the problem with Prozac? The problem, according to Hirsch et al., is that the difference of 1.8 points on the Hamilton Scale:

does not meet the three-point drug–placebo criterion for clinical significance used by NICE [Britain's National Institute for Health and Clinical Excellence]...

Where does this requirement that no therapy for Depression is worthwhile unless it improves the Hamilton Scale score by three points come from? The weblog "Pyjamas in Bananas" finds a quote:

Pyjamas in Bananas: No research evidence or consensus is available about what constitutes a clinically meaningful difference in Hamilton scores, but it seems unlikely that a difference of less than 2 points could be considered meaningful. NICE required a difference of at least 3 points as the criterion for clinical importance but gave no justification for this figure...

Who wrote this? Irving Kirsch, lead author on the anti-Prozac study.

And it is at this point that the economist in me wants to reach for his revolver. A declaration that a real-world solid statistically-significant improvement in people's quality of life is not "clinically significant" is inadmissable unless it is motivated by a proper analysis of opportunity costs: a conclusion that the resources devoted to this therapy would have a higher value and a better alternative use in some other therapy. It cannot rest on an arbitary number that some organization pulls out of its a--.

Even worse, Robert Waldmann points out, is that the Guardian's health editor Sarah Boseley doesn't understand the article she is reporting on:

Prozac, used by 40m people, does not work say scientists: Analysis of unseen trials and other data concludes it is no better than placebo: Prozac, the bestselling antidepressant taken by 40 million people worldwide, does not work and nor do similar drugs in the same class, according to a major review released today.... When all the data was pulled together, it appeared that patients had improved - but those on placebo improved just as much as those on the drugs...

Waldmann comments that Boseley is:

totally dishonest, totally innumerate or both. 1.8 > 0. Patients on Placebo did not improve just as much as patients on SSRI's... this isn't even a case of treating a statistically insignificant difference... as... proof that the true value is zero.... "Irving Kirsch, Brett J. Deacon, Tania B. Huedo-Medina, Alan Scoboria, Thomas J. Moore & Blair T. Johnson" find a significant additional benefit of taking a SSRI rejecting the null of no benefit with a p value of "<0.001"... overwhelmingly strong evidence that SSRI's cause improvement in depression.... Oddly big Pharma, which spends huge amounts of money on advertising, doesn't seem to have managed to hire anyone intelligent enough to point out that 1.8 > 0...

"Commitment" to Health Care Reform

I think Paul Krugman simply has this completely wrong. Paul writes:

Paul Krugman: Bad health care omens: This is disturbing:

Mike Lux, a veteran of the Clinton health care wars, pointed out today that Obama is using as a surrogate on health care Bush Dog Democrat Jim Cooper. Cooper spent a good amount of time in 1993-1994 working to undermine Clinton's health care plan by offering more insurance friendly proposals with former Senator and current lobbyist John Breaux.

This fits in with my sense, based on everything we've seen in this campaign, that Obama just isn't all that committed to health care reform. If he does make it to the White House, I hope he proves me wrong. But as I've written before, from my perspective it looks as if a dream is dying.

What Mike Lux, "veteran of the Clinton health care wars," knows--but is very careful not to tell you--is that in 1993-1994 health care reform needed 60 votes in the Senate in order to defeat a Dole-led filibuster, and that Sen. John Breaux (D-LA) was vote 55. "undermin[ing] Clinton's health care plan by... [working] with former Senator and current lobbyist John Breaux" translates as "working on bills that might actually pass the senate."

Mike Lux knows this. He just hopes that his readers don't.

Night Thoughts While Baking Oatcakes

Source: Jan de Vries lecture, 2/13/2008

Here we have a graph covering the period from the War of the Pragmatic Sanction to World War I, showing for six global cities the male day-laborer wage divided by the cost of 2000 cheap calories--rice in China, polenta in Milan, rye in Leipzig, and oats in Amsterdam and London. It suggests that in 1740 day laborers in Leipzig, Beijing, Suzhou, and Milan could barely keep body and soul together--if their work was not too strenuous, and if they did not have too many non-working dependents.

By contrast, male day laborers in London and Amsterdam appear to be living the life of Riley: only a quarter of their wages needed to be set aside for the basic caloric requirements, leaving the rest for dietary variety and fortification, clothing, shelter, dependents, entertainment, and so forth.

But this is if people in London ate oats. And people in London did not eat oats. Oats were for Scotsmen--and horses. Englishmen ate wheat bread. And calories from wheat-based bread were two to three times the cost of calories from oats.

So were workers in London in 1740 as miserably poor as workers in Milan, Leipzig, and Beijing, spending most if not all on their income on bare caloric maintenance in the form of the grain typical of their time and place? Or were the workers of London relatively rich--and deciding to spend their relative wealth on the superior taste and mouth feel of yeasty wheat bread rather than leaden oatcakes and on the associated symbolic declaration that they were proud and free Englishmen, not benighted barbarous Scots (or horses)?

Robert Kuttner on Health Care Costs

He writes:

NEJM -- Market-Based Failure -- A Second Opinion on U.S. Health Care Costs: Changing demographics and medical technology pose a cost challenge for every nation's system, but ours is the outlier. The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization.... Profits, billing, marketing, and the gratuitous costs of private bureaucracies siphon off $400 billion to $500 billion of the $2.1 trillion spent, but the more serious and less appreciated syndrome is the set of perverse incentives produced by commercial dominance of the system... medicine... does not lend itself to market discipline. Why not?

The private insurance system's main techniques for holding down costs are practicing risk selection, limiting the services covered, constraining payments to providers, and shifting costs to patients. But given the system's fragmentation and perverse incentives, much cost-effective care is squeezed out... unnecessary medical care is provided for profit, administrative expenses are high, and enormous sums are squandered in efforts to game the system. The result is a blend of overtreatment and undertreatment....

Great health improvements can be achieved through basic public health measures and a population-based approach to wellness and medical care. But entrepreneurs do not prosper by providing these services.... [C]onsistent application of standard protocols for conditions such as diabetes, asthma, and elevated cholesterol levels, use of clinically proven screenings... and changes to diet and exercise can improve health and prevent larger outlays later on. Comprehensive, government-organized, universal health insurance systems are far better equipped to realize these efficiencies....

Many U.S. insurers do reward physicians for following standard clinical practices, but these incentives do not aggregate to an efficient national system of care....

A second cost-containment tactic is to hike deductibles and copayments, whose frank purpose is to dissuade people from going to the doctor. But sometimes seeing the doctor is medically indicated, and waiting until conditions are dire costs the system far more money than it saves...

Richard Eskow Talks to David Cutler

Eskow writes:

Richard Eskow: Hillary Clinton, John Edwards, and Barack Obama have each presented detailed proposals for health reform. The Clinton and Edwards plans include health mandates, which require Americans to obtain health care coverage or face (unspecified) sanctions. The Obama plan does not include mandates.

Health mandates are popular among many Democratic-leaning health policy analysts. The Clinton campaign has been going after Obama aggressively on this issue. They've said that the absence of mandates is a basic flaw in Obama's plan; suggested a cynical political calculus behind Obama's position said that his position feeds a Republican narrative; and took the position that Obama's plan is politically vulnerable while theirs (and Edwards') is a political plus in the general election.

(The preceding positions were echoed today by Paul Krugman - see my response, "Why Paul Krugman Is Wrong...)

I don't support any Democratic candidate, but I do have strong opinions about health mandates. As a long-time healthcare policy analyst and health manager in the private sector, I disagree with Paul Krugman, Ezra Klein, Jacob Hacker, and others who support mandates. My differences are based on policy effectiveness, issues of fairness, and Democratic political strategy. I think mandates pose more problems than they solve, and that they could be a political loser for Democrats in the general election.

I've been engaged in a collegial debate with Klein, blogger/consultant Joe Paduda and others on this topic for some time (see, for example, here, here, here, and here). During an exchange with Klein over the last week it became apparent that, while I had reasons to support Obama's policy, it was unclear to me what his team's current thinking was on the topic.

The team published a rebuttal to Clinton's campaign late today. Earlier I spoke with David Cutler about mandates. Cutler is Professor of Applied Economics at Harvard, Obama's senior health advisor, and the principal architect of the Obama plan.

---

David Cutler: I'd like to start with a general comment.... Two possible reasons why people don't have health coverage are usually given. One is that the uninsured are gaming the system. The other is that they can't afford it and don't know where to get it. Most of the literature suggests that the explanation is mostly the latter. That means the single biggest thing we can do to help the uninsured is to make coverage affordable and accessible.

That's why all the Democratic plans focus on removing excessive profits where they exist, improving information technology, and so forth. All the plans do those things, although I think the Obama plan does the most.

The mandate argument is: You must buy something %u2013 but I'm not going to tell you what it is, how much it will cost, or where you're going to get it.

It comes down to this. You'll never get someone to buy something if it's not affordable and not accessible. People just don't do it.

Richard Eskow: That's an area where the Edwards campaign has taken the lead. They suggest automatic enrollment whenever an American intersects with the health care system or government services.

David Cutler: You can enroll them and then forcibly collect the premiums. That's one way to solve the problem. But it's not necessary to do that. A better approach is to do everything possible to make it affordable and available. When it is, almost everyone will have it."

Richard Eskow: There are a couple of concerns about that approach. One is the problem of "adverse selection." Sicker people %u2013 or people with a greater likelihood of becoming sick %u2013 will enroll. That will drive plan costs up, making it prohibitively expensive.

David Cutler: Let's look at the level of coverage you can get without a mandate. Our estimates, based on studies in the literature, is that we can get 98% or 99% coverage without a mandate for adults. There may be some small pockets of people who choose not to buy it.

Richard Eskow: What about those people?

David Cutler: If there are free riders, Obama is open to mandates. But what he is saying is %u2018Look, mandates seem like a panacea, but that's not where the hard work needs to be done.' Auto insurance is a mandate, too, and not everyone has that. You've got to prove to the public that you're willing to do the hard work.'

Richard Eskow: Would mandates be considered at that point?

David Cutler: He hasn't ruled anything out. It's a matter of priorities. The fact is, the policy differences on the mandate issue aren't that large at all. Sen. Obama believes they're an option down the road, if other approaches don't work.

Richard Eskow: And yet Sen. Clinton made another speech about mandates and universal coverage yesterday. And the Clinton had ( Clinton Campaign Manager) Patti Solis Doyle and (Policy Director) Neera Tanden talk about health care differences with reporters this morning. And Paul Krugman weighed in on the pro-mandate side of the debate, too.

David Cutler: I know the arguments, but look at the evidence. What really matters is: Can they afford the coverage?

Richard Eskow: Part of the debate involves political communications: Is the mandate issue a winner for Democrats in the general election, or a liability?

David Cutler: I don't get involved in the politics of it.

Richard Eskow: What about the concern %u2013 which I and others share %u2013 that insurance premiums are an inherently regressive form of 'taxation.' The state of Massachusetts has had to waive the mandate for 20% of the uninsured as a result. All the campaigns have been forced to create fairly complex subsidy structures in an attempt to offset that regressivity, but paying for some portion of health insurance out of general tax revenues %u2013 either for a public system or some type of voucher %u2013 would be less regressive. What about taxation as a funding mechanism?

David Cutler: That doesn't seem to be on the table now for any of the candidates.

Richard Eskow: Then the devil is in the details, isn't it? What would premiums costs? Who would get a subsidy, and for how much? Nobody is debating these issues with any specificity, and yet that's where %u2013 arguably %u2013 the real debate should take place.

David Cutler: That's why we're suggesting that we lower costs first. Otherwise, you're saying you want to force people to buy something, but we don't know how much it will cost or what you'll get in return.

Richard Eskow: There's been talk that a consensus is forming among policy analysts that 10% of income is the right number for total out-of-pocket health costs, including premiums, copays, and deductibles. But that's a very high number for lots of people.

David Cutler: Well, healthcare is 16% of the GDP now. Some of that cost is being borne through taxes already. So it depends what you want to count.

Richard Eskow: But 10% for whom? $4,000 for a family of four with income of $40,000 is a devastating figure. Whereas there are probably very few people in the top 2% of income who spend 10% on healthcare.

David Cutler: That's where the subsidy debate comes in, and is another reason to address the cost issue first.

---

Richard Eskow: Overall, Prof. Cutler had a clear and well-articulated response to many of the objections raised to the plan. Since he is not part of the campaign's communication strategy, I did not ask him about the Clinton campaign's accusation that Obama had been misleading in suggesting he had a universal coverage plan. He did make it clear that he feels a 98% enrollment level is possible without mandates, and that if that fails Obama will consider their use.

In my opinion, both the Clinton and Obama campaigns could have communicated their points more clearly - and with less heat. It was for this reason that I contacted Prof. Cutler. I have asked him for more background on that 98%-99% enrollment estimate. He says its an "internal calculation," and it seems quite high to me. I'll provide any further information as I receive it.

Why Oh Why Can't We Have a Better Press Corps? (New Republic Edition)

Ezra Klein writes:

EzraKlein Archive | The American Prospect: I think it's fascinating that Marty Peretz doesn't understand why people don't like him after his magazine lies about them. [Hilary Rodham Clinton] didn't snub you, Marty. She treated you with precisely the lack of respect you deserved after that shameful debacle.

---

Some context:

EzraKlein Archive | The American Prospect: The lies [of the Clintons] were not as bad as Bush's - WMDs and torture," writes Andrew Sullivan. "But the stakes were much lower. The arrogance and condescension of the healthcare debacle were revealing of a classically bad left-liberal mindset on Senator Clinton's part. She knows best; she always has; everyone else is part of the VRWC." Check that passivity! As if the "healthcare debacle" was simply a result of the Clintons' "arrogance and condescension," and had nothing to do with a broad, coordinated attempt to smear, misrepresent, and, in Sullivan's own words, "torpedo" their health care plan. I'm genuinely curious if this recitation of Clinton's personal failings is some sort of barely submerged explanation for why Sullivan published and championed a dishonest, fearmongering article meant to sink the Clinton health care plan -- and it was recognized as such even at the time. Thanks to The Atlantic's open archives, you can read the fairest man in journalism, James Fallows, take it apart in a feature article called "A Triumph of Misinformation." McCaughey's article, which Sullivan commissioned, published, and praised, was, Fallows said, "simply false." Yet Sullivan still touts it in his biography...

And:

Marty Peretz: When Hillary Snubbed Me: Poor Hillary was snubbed by Barack Obama.  I suppose she thinks he should have snubbed Senator Claire McCaskill of Missouri instead.  He was closer to McCaskill then he was to Hillary who was, in any case, already engaged in false pleasantries with Senator Kennedy.  What's more, Hillary is known to snub people all the time. In fact, she even snubbed me once at a reception at the White House.  I was talking to someone in the Rose Garden, and she came over to greet the someone with whom I was already chatting.  That someone, in turn, introduced me, saying, "Of course, you know Marty Peretz," which actually she did not.  I had never been in a room with Hillary that didn't also contain a thousand other people.  That didn't phase her at all.  And she responded, "Indeed, I do," and turned on her heel and left. I don't have an explanation.  Except that The New Republic was not especially enamored of her health plan which, in retrospect, has impeded health reform for a decade and a half.  As it happens, we had published a devastating analysis of the proposal by Elizabeth McCaughey; and somehow, in the mysteries of Washington, this became the vivid center of the debate.  The White House actually put out what I recall as a nine page rebuttal to the TNR critique, another tactical mistake in the genius presidency.  Anyway, it is to this article that her snub to me may be attributed. But it could be something even more petty.

John Gruber: Covering the Uninsured in the U.S.

John Gruber (2008), "Covering the Uninsured in the U.S.:.. He writes:

One of the major social policy issues facing the U.S. in the first decade of the 21st century is the large number of Americans lacking health insurance. This article surveys the major economic issues around covering the uninsured. I review the facts on insurance coverage and the nature of the uninsured; focus on explanations for why the U.S. has such a large, and growing, uninsured population; and discuss why we should care if individuals are uninsured. I then focus on policy options to address the problem of the uninsured, beginning with a discussion of the key issues and available evidence, and then turning to estimates from a micro-simulation model of the impact of alternative interventions to increase insurance coverage

Tyler Cowen says:

Marginal Revolution: What would it cost to cover the uninsured?: Jonathan Gruber has just written a very useful and comprehensive paper on health insurance (I don't yet see ungated versions).  He estimates that without a universal mandate, but using subsidies, a typical plan for covering the uninsured would cost $4500-$5000 a year per person, and that is cost in the narrow budgetary sense.  With a mandate the fiscal cost of the government (again, not social cost, which includes the cost of paternalistically forcing people to buy health insurance) is estimated at $2732 per person per year.  Of course it is cheaper to tell people what to do, comparing to paying them to do it.  That cost estimate is assuming that the mandate is effectively enforced, which I do not expect. I would have preferred the primary estimates to be in terms of social cost.  And I would have liked a discussion of how mandates and minimum benefit requirements distort the price of health insurance and limit competition.  Read Shikha Dalmia.  Nonetheless this remains is one of the best papers on health care economics to be had. Gruber also poses an interesting philosophical question for the paternalists: would you rather be uninsured in today's America or obese?  And if you, like I, answer "uninsured," why not first direct paternalistic interventions toward obesity?  And I'm not talking about subsidies to olive oil, I mean real mandates.  After all, they will lower health care costs, no?

Diseases Are Infectious!

Ezra Klein observes:

EzraKlein Archive | The American Prospect: MIKE HUCKABEE'S PLAN TO GIVE US ALL FLUS: Via Matt comes this exchange between Mike Huckabee adviser Jim Pinkerton and David Corn in which Pinkerton trots out an argument we're likely to see a lot of in the coming year, which is, Democrats are gonna give health care to immigrants!

Ugly stuff. As it happens, it's hard for me to imagine any Democrat proposing a health care plan that covers illegal immigrants, not because doing so would be bad policy from a public health perspective, but because they would be demagogued by Jim Pinkerton. So, instead, we'll continue to eat food handled by ill immigrants, ride buses with sick children, take change from sniffling cashiers, and generally cut off our stuffed noses to spite our angry faces. It's charming stuff. Meanwhile, it's a useful insight into the assumed contours of contemporary politics that Pinkerton thinks the fact that Huckabee won't give health care to illegal immigrants is more electorally powerful than the fact that he also won't give health care to Americans.

Yet another sign of the feckless corruption of centrist politics is that Jim Pinkerton's name is one of the two that "centrists" typically bring up as a "reasonable" conservative (the other is Ramesh Ponnuru).

Better Living Through Organic Chemistry

Robert Waldmann watches Washington Post staff writer Michael S. Rosenwald be foolish:

Robert's Stochastic thoughts: This is an interesting article on an important topic, but it has one gross flaw. Michael Rosenwald discusses the economics of firms providing workers incentives to lose weight:

Tangerine, based in Boston, designs weight-loss programs that employ economic incentives. The company is modeled on recent economic research showing that paying people to lose weight causes their pounds to fall off faster. Eric Finkelstein, an economist with RTI International who has spoken with Tangerine executives, recently conducted a study in which people were paid either $7 or $14 per percentage point of body weight they lost.

After three months, people with no incentives lost about two pounds. The $7 group lost about three pounds. The $14 group: five pounds. Members of the more expensive group were also five times more likely than members of the no-money group to lose 5 percent of their body weight. One person netted $140. Were they more excited about losing weight or about the money? "I think they were most excited by the $140," Finkelstein said.

[snip]

An average of 140 employees at Wesley Willows participate in the program, which started eight months ago. They get $3 per percentage point of weight lost. Together, they have lost 806 pounds. Holmgaard said the company has spent $11,500 on the Tangerine program, including rewards. The company's health-care costs have tumbled more than $146,000. "Certainly paying them gets their attention," Holmgaard said.

Sounds great. This is important news. However Rosenwald has some trouble deciding if he is interested in health or the new morality in which the wages of sin are fat. He writes:

My insurance company requires no co-payments for generic drugs, so I can theoretically mask the problem for free. And it just became cheaper for millions of Americans to get low-cost generics through Wal-Mart, which is charging $4 for a 30-day supply of drugs that treat common ailments such as high blood pressure.

"If you reduce the cost of maintaining unhealthy behaviors or lifestyles, what incentive do you have to change?" said Ross DeVol, a Milken Institute economist who studies health care issues.

So taking pills is masking the problem? Rosenwald says this, because taking pills is easy and therefore not virtuous. It is also true that obesity causes problems which can not be treated with pills, but he's decided that taking a pill a day is not a healthy behavior because ... ? Well for no reason. His use of "mask" for a approach which resolves a very serious but invisible problem and leaves him as visibly fat as ever is bizarre.

He goes on:

I chose the drugs and am thusly always on the prowl for beef. So, apparently, are millions of other Americans. Seventy-five percent of the nation's $1.4 trillion in annual medical costs can be blamed on chronic diseases, many of which are lifestyle induced, according to the Centers for Disease Control and Prevention. The effect of blood pressure and cholesterol medicine is startling: A study in the Journal of the American Medical Association showed that earlier this decade, obese people had a 21 percent lower prevalence of high cholesterol and an 18 percent lower prevalence of high blood pressure than obese people did in the early 1960s. We seem to be healthier fat people, but we're not cheap for the health-care system -- or our employers.

This is getting weird. The pills don't cause the chronic diseases. They prevent them. The major cost to the USA is not paying for statins and high blood pressure medications, but paying for, among other things, the consequences of high blood pressure and cholesterol. Furthermore the social cost of the pills is very low. Most of the cost is a transfer to pharmaceutical companies which can be cut by congress anytime it wants to (that is when hell freezes over).

I think that an incentive program which paid people to lower their blood cholesterol and blood pressure and control their blood glucose would be even more profitable than one that paid them to lower their weight. It would be paying them to take a pill a day. People don't need much money to do that (writes the guy who hasn't taken his statin for 2 weeks). The best program would pay for for improvements in weight, blood pressure and blood cholesterol.

The idea that pills for blood pressure, blood glucose and blood cholesterol are part of the problem not part of the solution is based on puritanism not biology or economics.

MY doctors tell me: eat your oatmeal. Nobody developed myositis or myopathy or (horrors) rhabdomyolysis and myoglobinuria from eating their oatmeal.

Jonathan Gruber on Health Care Mandates and the New York Times

If you want an informed opinion about health care matters, you could not do better than to borrow one from Jonathan Gruber:

Ezra Klein: Ask The Expert: I was surprised and somewhat offended by the lack of balance in the article by Katharine Q. Seelye in today’s Times (“Clinton Attack on Obama Overlooks Some Realities”). The health plans of Hilary Clinton and Barack Obama differ in a number of respects, but most important is the fact that Clinton includes a requirement that individuals purchase insurance. Virtually every health expert in the nation would agree that such a requirement is necessary for universal insurance coverage within our private insurance-based system. As a result, Clinton correctly pointed out that Obama’s plan would leave the nation far short of universal coverage. The 15 million estimate that she used was validated by myself and other experts, as detailed in Jonathan Cohn’s recent post on the New Republic’s web site. In recent days advisors to the Obama campaign have made a series of incorrect attacks on the claim that Clinton’s and John Edwards’ plans would cover more Americans than theirs. Ms. Seelye’s article simply parrots these incorrect attacks.

She first points to the figure from the Insurance Research Council that states that 15% of drivers are uninsured. As detailed in research by J. Daniel Khazzom (paper available at here), this figure clearly overstates the rate of uninsured drivers by computing this rate as the share of accidents in which the driver did not have insurance. But since uninsured drivers are typically from groups that are more accident-prone, the share of accidents involving the uninsured will clearly overstate the share of drivers that are uninsured. Moreover, state reforms to improve compliance with auto insurance requirements have been very successful, with the rate of uninsured drivers (measured appropriately) in Georgia recently falling to 2%.

She then cites the experience of Massachusetts, where I serve on the Connector Board that is implementing our ambitious health reform passed in 2006. She correctly points out that, as part of a compromise last year, we exempted almost 20% of uninsured adults from mandated coverage. But half of these are low income individuals offered employer insurance who can be covered as part of the law, but for whom we have not yet had time to design an appropriate subsidy program. The other half are individuals above three times the poverty line who are excluded from subsidies through a compromise between then Governor Romney and our legislature. If subsidies were extended further, exemptions would have been unnecessary. Candidates Clinton and Edwards have said that under their plans all individuals would be subsidized so that no one has to pay an unaffordable amount for insurance. She has laid out no specific plans for mandate exemptions, and there is no reason why she should be tarred by what we have done under the constraints of our Massachusetts law.

As Ms. Seelye highlights, the 15 million figure is not a precise estimate. But the general point should not be lost in the debate over the numbers: a plan with an individual mandate will cover millions more individuals than a plan without an individual mandate. There can be legitimate debates over whether a mandate is necessary or not. I personally feel that it is necessary to prevent free riding in our health care system, to ensure fluid functioning of insurance markets, and to ensure that all citizens are protected against health risk. At the same time, I can also respect, while disagreeing with, Candidate Obama’s decision to exclude a mandate. But there can be no debate over the fact that a mandate is required to bring us to universal health insurance coverage in the United States, and that a plan without a mandate will leave us far shorter of that goal than any plan with a mandate, proper subsidies, market reforms, and sensible enforcement rules.

Ezra Klein Is Shrill!

He calls his post "Why Oh Why Can't We Have A Better Press Corps?" My work here is done:

Ezra Klein: Why Oh Why Can't We Have A Better Press Corps?: By the way, lets be really clear about what's going on in this Kit Seelye piece: In evaluating a policy debate between two Democratic candidates for president, Seelye went to a right wing think tank (AEI) and asked them to adjudicate. They picked the more conservative plan. Proof!

And the actual reasoning of the piece is, and excuse my intemperance, absolutely idiotic. It's so bad, that I'm betting Seelye misquoted the AEI guy, because think tank employees at least know how to sound rigorous. Here's how Seelye comes to the conclusion that Clinton's plan may cover more people than Obama's: First she says, "Mandates have not worked with auto insurance. While all drivers are required to have it, 15 percent of the nation’s drivers have none, according to the Insurance Research Council."

Then she wanders over to AEI where she hears, "Mr. Obama’s health plan could actually have a better compliance rate. The 15 million who would supposedly be left out equal about 5 percent of the population — a smaller portion than are going without auto insurance, said Joseph Antos, a health policy expert at the American Enterprise Institute, a nonpartisan[!] group."

So start with a fallacious comparison -- health mandates to auto insurance -- and assume perfect equivalency. Then, take the number without auto insurance, so a number from data set X. Then, take the number who'll possibly lack health coverage in Obama's plan, from data set Y. Then compare the two. I almost can't express how ridiculously innumerate the logic is. Suffice to say, Seelye could have called a fucking health care expert and asked what the modeling on the two plans showed. That she instead looked at auto insurance for one number and then health care for another is bad enough. But in evaluating Clinton's plan, she also pretended that the only relevant policy was the mandate -- subsidies, access, employer mandates, etc are all ignored. Probably because she's never read the policy and doesn't know how it works. She is, after all, a campaign reporter, not a policy expert of any type. But as an educated person, working with editors and fact checkers, somebody should have noticed that this would be like me comparing car crashes to bed wetting simply because both are called "accidents."

If I'd read her article on a blog, I'd assume the author a fool and never read it again. Instead, this is in The New York Times.

Paul Krugman points out:

Nonpartisan AEI - Paul Krugman - Op-Ed Columnist - New York Times Blog: I have a lot of problems with this Kit Seelye piece... this takes the cake:

Joseph Antos, a health policy expert at the American Enterprise Institute, a nonpartisan group.

Is it really possible for a veteran reporter to believe that AEI is nonpartisan? Not even a qualifier, like “right-leaning” or “free-market-oriented”?

I have swung around to the view that in the minds of people like Kit Seelye, "what I believe" or "what would inform the public" are simply not things that they think about; it's all "how can I please my editors?" and "how can I please my sources?"

Which is why intelligent and informed people increasingly rely on intelligent webloggers who have and care about their reputations, rather than on the Kit Seelyes, Tom Friedmans, and Peter Bakers of the world.

Hoisted from Comments: Bonnie on Vioxx

Hoisted from Comments: Bonnie on Vioxx:

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: I took Vioxx for 3 and half years and had no heart problems; but, I did have major pain relief. While I was switched to Celebrex, I still have not had the pain relief I had from Vioxx. I took Paxil and had some serious adverse affects long before I took Vioxx. I was outraged and wanted Paxil taken off the market. Yet, since then, I have found some friends and relatives who have benefited greatly by Paxil. Now, with both experiences under my belt, I believe if the people are provided good information about the product and they choose to take it, it should be available.

The thing about all these drugs is that they ALL will help some people miraculaously and hurt some people terribly. However, I resent that I am not able to choose to use Vioxx because of the dishonesty of the drug company and the fear created by the way this issue has been handled. Of course, the other reality is that if there is only a small portion of the public who can use a drug, the companies will not offer them, such as the case of orphan drugs. However, the real problem seems to be the ignorance of doctors and the public about these drugs.

Most of the doctors and the public do no research to find out if what the drug salesman has provided good information beyond the "selling" propaganda. If that occurred the drug company would have more reason to be forthcoming with the studies.

Maybe.

Vioxx...

As background, Dr. David Graham, Associate Director for Science and Medicine in the FDA's Office of Drug Safety, in 2004:

Dr. Graham's Testimony to Senate Committee on Vioxx, FDA Failures: Prior to approval of Vioxx, a study was performed by Merck named 090. This study found nearly a 7-fold increase in heart attack risk with low dose Vioxx.... In November 2000, another Merck clinical trial named VIGOR found a 5-fold increase in heart attack risk with high-dose Vioxx.... In 2002, a large epidemiologic study reported a 2-fold increase in heart attack risk with high-dose Vioxx.... About 18 months after the VIGOR results were published, FDA made a labeling change about heart attack risk with high-dose Vioxx, but did not place this in the Warnings section. Also, it did not ban the high-dose formulation and its use..... In March of 2004, another epidemiologic study reported that both high-dose and low-dose Vioxx increased the risk of heart attacks compared to Vioxx's leading competitor, Celebrex....

If you apply the risk-levels seen in the 2 Merck trials, VIGOR and APPROVe, you obtain a more realistic and likely range of estimates for the number of excess cases in the US. This estimate ranges from 88,000 to 139,000 Americans. Of these, 30-40% probably died. For the survivors, their lives were changed forever...

If you believe Dr. Graham--which I am not sure that I do--we have 30,000 excess deaths from Vioxx. A $5 billion settlement amounts to $170,000 per extra death caused, which does not seem to me to be grossly out of line on the high side as a sanction on a company whose marketing department did not want warning labels.

The usually-reliable Joseph Nocera has a different view:

Forget Fair; It’s Litigation as Usual: They had the kits ready to go. The “trial package,” they called it... the plaintiffs’ bar always develops a trial kit when a mass tort gets to a certain point; it’s one of the weapons trial lawyers use to put pressure on the company they are attacking. The big-time lawyers who bring the early cases... wind up spending $1 million to $1.5 million developing their case... expert witnesses... discovery... depositions... jury consultants.... And then they put their collective knowledge in a neat little package of documents and videotaped depositions and suggested lines of attack, so that all the other lawyers who have sued the same company can partake of their acquired scholarship, and bring their own trials — for a lot less money. “Ours would have allowed a lawyer to try a legitimate case for under $200,000,” said Mr. Herman, with no small touch of pride. He was talking, of course, about the Vioxx litigation, which the drug’s manufacturer, Merck, settled late last week for the tidy sum of $4.85 billion.

Mr. Herman has 120 of the 27,000 cases — that’s right, 27,000 — that were brought against Merck, which took Vioxx off the market three years ago after a study made it clear that the medication increased the risk of a heart attack or stroke. He was also one of the key architects of last week’s settlement. When I spoke to him a few days ago, he defended the settlement as a fair one, which, as he put it, “balances the scales between two competing parties.” He made it sound like standard business negotiation. Which it was.

But he also said something plaintiffs’ lawyers don’t often say out loud — at least not when a reporter is within hearing distance. “A corporate defendant cannot afford to defend thousands of cases where there is an alleged mass disaster at one time,” Mr. Herman said.... [A]s mass torts have evolved over the last decade, it is that it scarcely matters anymore whether the facts are on the plaintiffs’ side — not when a thousand lawyers are armed with those kits.... Is a mass tort really the right mechanism to settle disputes about product safety, or to punish corporate wrongdoing?

Vioxx was hardly Merck’s finest hour. I’ll readily concede that point. The company did things it shouldn’t have.... Vioxx... was a painkiller that was originally aimed at a pretty small group... people who suffered serious stomach problems as a result of taking aspirin regularly. But Merck spent hundreds of millions of dollars marketing Vioxx... as some kind of miracle pain reliever.... [T]here were rumblings... that Vioxx might increase the risk of heart attacks or strokes. It’s not quite right to say that Merck completely ignored those potential problems — but the company certainly tried to avert its eyes....

There are many problems with viewing product liability lawsuits as a means to right wrongs, which is how we see them in this country. They often make lawyers rich while the people who say they were hurt wind up with very little. The legal system gives corporations zero incentive to step forward if there is evidence that a drug might have a harmful side effect — because, after all, they’ll get sued as soon as they make such an admission. Third, even the smartest lawyers aren’t the Food and Drug Administration, which is charged with making decisions about which drugs should be allowed on the market and how their risks should be disclosed. Mass torts have become a rogue form of regulation, and not necessarily in the public interest. And finally, when you get right down to it, litigation is a crapshoot, and it can be cruelly unfair.

That was certainly true of Vioxx, whose potential side effect is one of the most common serious conditions known to mankind: a heart attack. It is impossible to know what causes someone to have a heart attack, just as it is impossible to know why someone develops cancer. In the Vioxx litigation, the plaintiffs’ lawyers were arguing, in effect, that the way to punish the company’s bad behavior was to make it hand their clients large sums of money, even though they couldn’t prove that the clients’ heart attack had been induced by Vioxx. Meanwhile, the company argued that it was just as likely, if not more likely, that some other risk factor was involved, like smoking or obesity — even though it had put a product on the market that increased heart attack risk.

As a result, a handful of lucky people who may well have been victims of their own bad habits — and not of Vioxx — won large sums of money. (Although they haven’t seen a penny yet: every case the plaintiffs won is on appeal.) And some people who may well have suffered because of Vioxx lost their cases and didn’t get a penny. How does such a system even approximate “justice”?...

[W]hy, then, did Merck settle? Because it had no choice. The four judges managing most of the cases had decided that the time had come to settle the litigation, and Merck was not in a position to say no to the judges.... Besides, Merck had won enough cases that it felt it could devise a settlement that it could live with. Which it did.... [T]he stock jumped when the $4.85 billion deal was announced....

As for the plaintiffs’ lawyers, they are likely to pocket around $1.5 billion of the settlement money, which means that Merck will wind up feeding the beast, just like every other company that finds itself embroiled in a mass tort. That money will go to funding the next mass tort...

A good newspaper story on this would answer three questions about these cases:

1. Is the settlement too large or too small as a sanction on Merck--as a two-by-four to the head of the CEO to make sure that he understands that his job is to curb the enthusiasm of his marketing product when he has a new product with dangerous side effects?
2. Are the lawyers' fees too large or too small--does it give lawyers too much of an incentive to crank up this mass-tort machine as a way of providing drug companies with an incentive to do the right thing?
3. Does the settlement money get to the people who were harmed--to the victims?

My answers in this case to these three questions right now are: (1) probably about right, (2) I don't know but I fear too large, and (3) somewhat but not largely.

My first beef with Joseph Nocera is that his story does nothing to help me get better answers to any of these questions. My second beef is that his story pushes a less-informed reader towards answers--too large, too large, and no--that are largely wrong. My third beef is that Joseph Nocera doesn't set out any ideas about how one might create a better system. My fourth beef is that Joseph Nocera pushes readers wrong answers by playing intellectual three-card monte--if he's going to make a big deal about how large the 27,000 case number is, he has a moral obligation to set it alongside the 30,000 net excess heart attack death number.

And my fifth beef is that Nocera knows damned well that he has a moral obligation to raise the level of the debate, and that he is ducking that obligation.

Why oh why can't we have a better press corps?

The Massachusetts Individual Mandate Health Plan

Michael Tanner says he told us so:

Cato-at-liberty » Not to Say We Told You So, But...: The latest reports from Massachusetts warn that with just seven weeks left until the state’s mandate for individual health insurance goes into effect, more than 100,000 residents have failed to buy the required insurance. That represents nearly 20 percent of the state’s uninsured population and more than half of the uninsured with incomes too high to qualify for subsidies. According to insurance industry insiders, the plans are too costly for the target market and the potential customers — largely younger, healthy men — have resisted buying them. How could anyone know that an individual mandate for health insurance would be unenforceable? Oh yeah, we told them.

http://www.cato.org/pubs/pas/pa565.pdf

Robert Waldmann Makes a Catch on Health Care Financing...

Robert writes:

Robert's Stochastic thoughts: Jonathan Cohn puts a baseball on a tee and Jonathan Cohn hits it out of the park

The treatment Mike [Kinsley] received is called Deep Brain Stimulation, or DBS for short. [snip] It is also very costly. Medtronic, a company that makes the electrodes, says the whole procedure costs between $50,000 and $60,000. And, because the treatment's main effect is to suppress and delay the onset of symptoms, rather than cure the disease, Mike started wondering whether a system of universal health insurance would pay for it--and, if so, in which cases....

[snip]

And that prompted another thought--not from Mike but from me. All of this was assuming DBS even existed. The United States is famously the world leader in medical innovation--in part, it would seem, because we spend like a drunken sailor when it comes to medical care...

it would seem that Cohn is setting up a straw man (the kind who mixes metaphors with baseballs on tees). So it is. DBS was discovered in the French public sector in the University of Grenoble. More generally, while the US is the leader in medical innovation, this is largely due to the huge immense gigantic public sector effort called the NIH.

I made the same point at Brad's blog 2 years ago (and I didn't set up the straw man myself) http://delong.typepad.com/sdj/2005/10/delong_smackdow.html.

---

update: Not only is Brad DeLong a hero of intellectual honesty for his "DeLong Smackdown Watch" posts, but this post http://delong.typepad.com/sdj/2007/11/flu-shots.html is awesome. Brad scores a goal for universal health care (with an assist from Alex Tabbarok).

Alex Tabbarok notes http://www.marginalrevolution.com/marginalrevolution/2007/11/kiss-me-im-va-1.html:

People who have the flu spread the virus so getting a flu shot not only reduces the probability that I will get the flu it reduces the probability that you will get the flu. In the language of economics the flu shot creates an external benefit, a benefit to other people not captured by the person who paid the costs of getting the shot.

Brad recalls:

The person ... said that she was on Medi-Cal and didn't have to pay the $25 for the [flu] shot--and didn't have the money to pay the $25 in any case. But the Sutter Visiting Nurse Association apparently does not take Medi-Cal.... Note that people covered by Medi-Cal are NOT counted as among the 47 million uninsured.

Flu Shots

Alex Tabarrok gets his flu shot, and opines:

Marginal Revolution: Kiss me, I'm vaccinated: I just had my flu shot.  Please send your checks to my George Mason address. People who have the flu spread the virus so getting a flu shot not only reduces the probability that I will get the flu it reduces the probability that you will get the flu.  In the language of economics the flu shot creates an external benefit, a benefit to other people not captured by the person who paid the costs of getting the shot.  The external benefits of a flu shot can be quite large.  Under some conditions each person who is vaccinated reduces the expected number of other people who get the flu by 1.5.

Since a large fraction of the benefits of the flu shot, perhaps even a majority of the benefits, go to other people and not to the person paying the costs, the number of people who get a flu shot in the United States is well below the efficient level.  I only got the shot because, as you well know, I'm altruistic.  I care about you.  But do send your checks, that will help. In lieu of a check I'm thinking of having some buttons made up to encourage people to get their shot.  Here are some possible slogans:

• Kiss me, I'm vaccinated.
• Take one for the herd!
• Get a flu shot.  The life you save may not be your own.
• Madison Avenue here I come!

Of course, we know from the Coase Theorem that there is an alternative approach.  We could charge people who do not get their flu shots. (Thus, if you haven't had a shot you must still must send me a check.)  Or to reduce transaction costs we could fine people who get the flu.  I kind of like that last one.  (But what to do about the 36,000 a year who die from the flu - charge their estates?) What do you think?  Leave your suggestions/slogans for how to encourage getting a flu shot in the comments.

Yesterday we went to a church in Concord--Nuestra Señora Reina de Todos los Santos--where a visiting nurse was giving out flu shots in order to get my wife her flu shot. The person in line after her said that she was on Medical and didn't have to pay the $25 for the shot--and didn't have the money to pay the $25 in any case. But the Sutter Visiting Nurse Association apparently does not take Medi-Cal:

Flu Shot: Each year, Sutter Visiting Nurse Association (VNA) & Hospice offers flu shots and pneumonia shots at convenient local sites, in September, October, November, and December.

• Flu shot cost - $25.00
• With proof of Medicare Part B, we will bill Medicare for the cost of the vaccine

• Find a flu shot clinic near you

• Pneumonia vaccine - cost $35.00

• With proof of Medicare Part B, we will bill Medicare for the cost of the vaccine...

Note that people covered by Medi-Cal are NOT counted as among the 47 million uninsured.

Teen Sex, Health Insurance Mandates, and Poutine

Hoisted from Comments: Robert Waldmann writes in from sunny Italy:

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: I think teen age pregnancy has a small effect on infant mortality.... [T]he raw correlation... is... that infants of teenagers are more likely to die, but teenage mothers are poorer and less likely to get prenatal care than older mothers. When controls for race, income and medical care... [are added] the teenage effect becomes small (on the order of 10% of the baseline risk). See: Arlene Geronimus (1987), "On teenage childbearing and neonatal mortality in the United States," Population & Development Review 13(2):323-334.... [T]he factor stressed by Mankiw turns out to be less important than the ones he claims are not critical when they go head to head in a regression.

You are, of course, correct that difference across developed countries in teenage fertility are not explained by differences in sexual activity (which are small: median age of first intercourse is around 16 everywhere) but rather in contraceptive use.

Of course you are much more expert than Mankiw on the first topic you discuss (sorry I really really couldn't resist). More generally, Mankiw seems to be blaming the uninsured for their lack of insurance. Odd that he is opposed to mandating insurance given that view.

With respect to Canada's ability to deliver extremely calorie-dense foods incredibly cheaply, all I can say is: Poutine!

With respect to mandates: yes. If the principal market failure in health care is indeed (as Mankiw seems to say) that people can freeload off of others and still get treated when they get sick, then mandated insurance purchase is the efficiency-maximizing road to take.

Mark Thoma Is Unhappy with Greg Mankiw...

Mark Thoma http://economistsview.typepad.com/economistsview/2007/11/mankiw-beyond-t.html tells us that Mankiw's latest on health care might raise an eyebrow or two... http://www.iht.com/articles/2007/11/02/business/wbcolumn03.php:

"Beyond those health care numbers." By N. Gregory Mankiw. Saturday, November 3, 2007: Here are three true but misleading facts about health care that politicians and pundits in the United States love to use to frighten the public. The United States has lower life expectancy and higher infant mortality than Canada, which has national health insurance.

The differences are indeed significant. Life expectancy at birth is 2.6 years greater for Canadian men than for American men. Among women, Canadians outlive Americans by 2.3 years. Infant mortality in the United States is 6.8 per 1,000 live births, compared with only 5.3 in Canada. These facts are often taken as evidence for the inadequacy of the U.S. health system. But a recent study by June and Dave O'Neill, economists at Baruch College, from whom these numbers come, shows that the difference in health outcomes has more to do with broader social forces....

Americans are more likely than Canadians to die by accident or by homicide... these differences... teach nothing about the U.S. system of health care. Americans are also more likely to be obese, leading to heart disease and other medical problems... attributable to its ability to supply high-calorie foods inexpensively. Infant mortality rates also reflect... the prevalence of infants with low birth weight... correlated with teenage motherhood. Whatever its merits, a Canadian-style system of national health insurance is unlikely to change the sexual mores of American youths....

[T]he 47 million includes about 10 million residents... illegal immigrants.... The number also fails to take full account of Medicaid... millions of the poor who are eligible for Medicaid but have not yet applied. These... are uninsured in name only. The 47 million also includes many who could buy insurance... 18 million of the uninsured have an annual [family] income of more than $50,000....

In 1950, Americans spent about 5 percent of their income on health care. Today the share is about 16 percent. Many pundits take the increasing cost as evidence that the system is too expensive. But increasing expenditures could just as well be a symptom of success.... [I]ncomes are growing, and it makes sense to spend this growing prosperity on better health.... Those looking at reform plans should be careful not to be fooled by statistics into thinking that problems are worse than they really are...

Mark understates things.

Does Canada lack an ability to supply high-calorie foods inexpensively?

Low-birthweight babies are due to the failure to push prenatal care as well as to teenage motherhood, which is itself more the result of a failure to push birth control information and technologies than the "sexual mores of American youths."

The millions of the poor who are eligible but not enrolled in Medicaid will be signed up when they show up at the emergency room, but they are not getting the care that might keep them from winding up at the emergency room.

But the thing that should have led the article to be sent back for a rewrite is a very relevant fact that is somehow omitted. In 2003 the U.S. spent $5711 per capita on health care, while Canada spent $2998 http://www.oecd.org/health/healthdata; it's not just that the U.S. has worth health status outcomes than Canada; it's that we proportionally spend $800 billion a year more than Canada does, and yet in aggregate and overall have less than nothing to show from it.

Readers should not be fooled by the omission of relevant statistics into thinking that problems are not as serious as they really are.

Somebody in the New York Times editorial staff should have questioned this before they ran it. Shame on them.

Clive Crook on Health Care Reform

He writes:

WEALTH OF NATIONS: Democrats Are Winning On Health Care (11/02/2007): Republican plans are cheaper... only because they are so much less ambitious.... None of these ideas -- not even McCain's, the best of the bunch -- frontally addresses the belief that the system is broken and, as a high national priority, needs far-reaching reform.

Do Americans really believe that reform is needed? They do, I think -- and if they do not, they should.... Lack of insurance is no longer partly a matter of choice (as in the case of the young and fit...), or else a problem only for the poor. Economic insecurity is on the rise for most Americans, not just for a static minority of poor people. People change jobs more often than they used to, whether they like it or not. And in the United States, when you change jobs you worry about your health insurance.

What if your next employer offers no coverage? What if a pre-existing condition makes an individual policy too expensive or altogether unavailable? The guarantee of universal coverage is something that almost all Americans, including those covered at present, would value and be willing to pay something for. And they know that every other rich country in the world provides it. As long as reform does not put them at an immediate disadvantage -- either by forcing them off plans they are happy with, or by pushing up their own taxes -- it is something they will vote for. The Democrats are offering reassurance on both points (more plausibly on the first than the second). They are on to something.

Hoisted from the Archives: Review of Johnson and Broder, The System

Now that health care reform is heating up again, I want to be reminded of what I thought back in another decade far, far away. It's also worth noting that there are two different critiques of the Higher Broderism:

• The first is that David Broder