Our Health Care Problems Are More Vivid When Presented in Colorful Graphical Video Form

By Sean Carroll | September 7, 2009 10:05 am

Talking about health care provides a great opportunity to link to this video by Peter Aldhous, Jim Giles and MacGregor Campbell — the last of whom was once Tom Levenson’s advisee. (Also via Bioephemera, who at least was kind enough to embed the video.)

The video, also at New Scientist, takes data from studies by Dartmouth and the OECD, and uses Gapminder to make the graphs come alive. It helps explain one of the paradoxes behind health care in the U.S.: we spend more than most other developed countries, and we get less for it. The explanation — you’ll be unsurprised to hear — lies in our screwy incentive system. By making health care a matter of profit for various sets of people — doctors, hospitals, insurance companies, pharmaceutical companies — we push into the background the incentive that we’d really like the system to have, namely keeping people healthy. Changing those incentives doesn’t mean that Barack Obama decides what treatment you get from your doctor; it just means that we can focus human ingenuity on the task of making people healthier, rather than just making other people wealthier.

CATEGORIZED UNDER: Health
  • http://wintershaven.net Jacob Wintersmith

    By making health care a matter of profit… we push into the background the incentive that we’d really like the system to have, namely keeping people healthy.

    That is a very odd argument. What’s strange is that it can be used to argue in favor of socializing pretty much any industry. Do we suffer from yucky, overpriced bread because bakers are motivated by crass profit rather than pure devotion to taste? The answer, of course, is no. Profit-motivated bakers do their jobs quite well, and socialized bakeries would not be an improvement.

    The problem with doctors isn’t that profit-seeking is some sort of generic evil. The problem is that much medical care is a credence good. People buy useless echocardiograms from doctors because they have to rely on the doctor’s word that it will help them. (Whereas you can taste bread for yourself, and don’t need to rely on the baker to tell you whether it tastes good.)

    Solving the problem of asymmetric information in credence goods is hard. Comparative effectiveness research is certainly part of the solution, and to the extent that medicine is already socialized (Medicare, etc.) the government absolutely should use that research to decide what tests and procedures it’s willing to pay for.

    The rest of the proposed health care reforms (individual mandate, community rating, subsidies) are completely irrelevant to the credence goods problem, and nothing in the video provides any argument in favor of those reforms.

  • http://blogs.discovermagazine.com/cosmicvariance/sean/ Sean

    I might not have been clear: I certainly don’t see profit-making as a generic evil. The reason why capitalism works when it does is that the profit incentive aligns with other incentives: if a baker wants to make money, they need to make good bread, and everyone wins. In the case of health care, the incentives are not aligned: insurance companies make money by denying people care, not providing them with the best. The video gives the example of doctors who have incentives to use expensive equipment even when it’s irrelevant to the health of the patient. The problem that patients don’t understand the procedures very well is part of what prevents these goals from being aligned in the case of health care.

  • http://wintershaven.net Jacob Wintersmith

    Yeah, that was a less-than-charitable interpretation of what you said. Sorry. I think we pretty much agree on the credence good problem and comparative effectiveness research. But I’m not at all happy about the other parts of the health care reform package.

  • chuko

    The video makes it sound like the perverse incentives for doctors are the primary factor in increasing health costs in the US versus other countries. It seems clear to me that the US health insurance system is at least as important – when the overhead for medicare is 4% and that for private insurance is around 30%, there’s clearly fat to be cut there.

  • http://lablemming.blogspot.com/ Lab Lemming

    What would happen to the price of bread if employed people were provided free, tax-deductible bread at work, while the jobless had to purchase it at rates designed for huge companies?

  • Raymond

    After few years of reading this site and a blog by steve hsu, i’ve started really wonder why the political/social/economical world views are so amazingly well described by only one dimensional line i.e. left vs. right. In other word, why people are so politically dull and predictable(for the record, this is NOT sarcasm)? Opinions on health care, krugman, guns, war on something.. Yearning to reach even 1.618th dimension.

  • caklen

    There are many issues with this simple treatment of healthcare and frankly it strikes me as a very poor one. First, the presentation completely ignored hidden variables which may be highly influential such as demographic makeups, sources of death and immigration rates and instead uses a correlation-causation model for life expectancy or time and cost. This is particularly true in the three cities that the fellow chooses. Miami for example is about 10% non hispanic white, is 22% african american and has a significant number of undocumented immigrants. It’s violent crime rate is over 3 times greater than the national average. Salem, Oregon’s crime rate has fluctuated between 1 and 1 1/2 times the national average and is much more uniformly white. San Francisco has a crime rate about 1 1/4 the national average and is nearly 75-80% white+asian, who consistently score some of the highest numbers in terms of life expectancy in America. I can’t imagine three more bizarre choices of cities to compare considering all these lurking issues. The same is true of the regions that go by spending. The relatively homogenous low minority west is characterized as some of the lowest spending while the southeast is characterized as the highest. Clearly there may be significant hidden variables there.

    I’m not sure the treatment of incentives here is completely fair or accurate either. A doctor may have an incentive to use an expensive machine for a patient on an elective procedure because it may increase that patient’s health in some marginal way. However, such a marginal increase in ‘healthiness’ may not align with the concurrent increase in cost. This is particularly true because you’re viewing the healthcare system as a whole and treating such marginal effectiveness versus the overall increase in cost. While it may be true at such a macro level we’re seeing some pretty significant inefficiencies at the micro level it strikes me that many patients would be willing to accept a marginal increase in healthiness even if it isn’t well conditioned with respect to cost.

    If you ask a grandma down in Georgia whether she’s willing to have an extra 1000 spent on a echocardiogram that’s likely to only make a marginal 10% increase in her chances of spotting potential blockage I bet you the individual versus some efficiency wonk will have differing perspectives in terms of its utility.

    Statements like “insurance companies make money by denying people care, not providing them with the best” are also not helpful in this comparison. Insurance companies make money buy having people buy plans which correspond to the risk associated with their preconditions. This also means there’s a central problem in this chaps incentive scenario. If a doctor has an incentive to use expensive machinery because he’s getting paid more by the insurance company then that means that the insurance company is also assuming some of those costs. And considering that plans typically have a limited deductible and copay that means that those increased incentives also mean an increase in costs for the insurance company—all of which they can’t just recover by upping premiums in the future. If such a scenario was the only mechanism driving up costs (the greed of doctors) then there would be a profit motivated feedback for insurance companies once they found some maximal profit point.

  • caklen

    “Changing those incentives doesn’t mean that Barack Obama decides what treatment you get from your doctor; it just means that we can focus human ingenuity on the task of making people healthier, rather than just making other people wealthier.”

    This really isn’t true—under a universal healthcare system rationing is going to be a necessity unless we want runaway costs. This isn’t the fault of President Obama or the current plan though—rationing is inevitable and has an analogue in the current private treatment of healthcare whereby one is limited to procedures and coverage that they want by how much they are willing to spend on healthcare.

  • jpd

    rationing happens now.
    switching plans unasked for by the patient happens now.
    (my wife employer has switched plans on her twice in the last ten years)
    those arguments are meritless.

  • anon

    Sean,

    Insurance is a risk based contract. Denying people care who’s expected loss is greater than their premium is how you make a risk based contract work. If you don’t deny people care based on risk analysis, it is no longer insurance, it is welfare.

    If you didn’t take game theory the actual formula is premium > p(claim).

  • anon

    denying people = more profits.

  • http://none anonymous

    “one of the paradoxes behind health care in the U.S.: we spend more than most other developed countries, and we get less for it.”

    I’m not sure what your source is for this, but I encourage you to look very closely at whatever source material seems to show this and ask yourself you honestly believe this is really the case. Beware of people with agendas.

    You might be surprised to learn that the US has the best cancer survival rates in the entire world, with cure rates significantly higher than many European countries.

    “By making health care a matter of profit for various sets of people — doctors, hospitals, insurance companies, pharmaceutical companies — we push into the background the incentive that we’d really like the system to have, namely keeping people healthy. ”

    Perhaps we just see things differently, but I am very skeptical that you will find large numbers of people that will endure 11-15 years or more of higher education and training while typically going deeply into debt in order to become doctors if they are not allowed to make some money. The job and training are just too demanding. You can shame people all you want for not being more altruistic, but I doubt it will work…

    “insurance companies make money by denying people care, not providing them with the best. The video gives the example of doctors who have incentives to use expensive equipment even when it’s irrelevant to the health of the patient. ”

    How is it possible that the insurance company who is denying care to patients in order to make money is at the same time agreeing to pay for all these unnecessary procedures that doctors are doing? I guess maybe this particular insurance company is not trying to make a profit? I am confused…

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  • Brian

    I’m not surprised that people are still mixing up the details with the big picture. One of the big movements in medicine in recent years has been outcomes based medicine. You’d think with a science based background that this would be a given, but that would be confusing the academic world with the treatment world. They are supposed to connect, and do somewhat, but it would be a mistake to think that the linkage is ideal.

    This methodology can be applied to the system as a whole as well. The video is fairly representative of the situation as I understand it. The American system is paying a premium for care, which would be worth it if the outcomes were correspondingly better.

    All the arguments that I hear refuting this are not sound. The argumenters often try to use the old “I know someone” story. Well, good for them.

    However the video presents population based studies. Statistical studies, well done and with adequate data, tell the real story. Listen, or not. It’s your choice.

  • incognegro

    @ anonymous # 12

    “You might be surprised to learn that the US has the best cancer survival rates in the entire world, with cure rates significantly higher than many European countries.”

    Check your data. US shares the highest cure rates for very specific types of cancers with France and Japan. Also, the cure rates for other types of cancers were lower depending on race, socioeconomic status and gender and this necessarily skewed the data.

    Rudy Giuliani made a similar claim that has since been shown to be inaccurate:
    http://blog.washingtonpost.com/fact-checker/2007/10/rudy_miscalculates_cancer_surv.html

    Statistics of cancer survival rates by country:
    http://www.webmd.com/cancer/news/20080716/cancer-survival-rates-vary-by-country

    I keep hearing people say that our health care system is so much better than everybody else’s and it’s just not true no matter how you try to slice it.

  • db

    There are other fields with credence goods, such as car repair, that work fine. You just use reputable insurers and repairers and the problem is pretty much solved. Not perfectly but good enough. I don’t know much about U.S. medicine but asymmetric information can’t be the core problem.

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  • Arrow

    The whole problem comes down to cost/benefit ratio of medical procedures. This is why qualitative arguments are meaningless.

    I believe technology should be able to help us here. What is needed is a centralized open registry of cost/benefit information for all treatments. Each time a doctor orders a specific procedure it should be entered into the registry accompanied by information on disease/symptoms, relevant anonymous patient information and results.

    Such data could then be used to develop a function which would assign the abstract benefit value to each treatment which could be compared with it’s cost. It will of course be very challenging to come up with a good and fair model but it needs to be done and even if imperfect at first it would be gradually revised and improved as more data and better algorithms become available. This would be the task for academics to come up with best possible models.

    A single federal agency should be assigned the task of keeping the registry, choosing a best model each year and computing the values. Once the benefit and cost of each treatment is available doctors could simply follow uniform guidelines when prescribing procedures. The more expensive the health care plan the lower the benefit/cost ratio of procedures would be included in it, with patients always having the option to pay for those procedures not covered of course.

    I believe this is how a rational and science based solution to health care can be developed.

  • Fred

    “By making health care a matter of profit for various sets of people — doctors, hospitals, insurance companies, pharmaceutical companies”

    You left out the lawyers.

  • John Branch

    Though one might wonder how well-founded are the conclusions presented in the New Scientist video, considering that they’re based on only a few metrics such as life expectancy and survival rates for a particular condition, a more thorough report on the situation (drawing partly on the same Dartmouth analysis) comes to the same conclusions: one written by Atul Gawande, published in the 6/01/09 issue of _The New Yorker_, and cited shortly thereafter by President Obama. It’s available online at http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande.

    At the risk of exceeding the bounds of an allowable quote, here’s Gawande’s summary of his article, taken from a later roundup of responses to it: “In my June 1st article, ‘The Cost Conundrum,’ I explored the question of why two border towns in Texas of similar size, location, and circumstances—McAllen and El Paso—should cost Medicare such enormously different amounts of money. In 2006, McAllen cost $14,946 per enrollee, which is the second-highest in the United States and essentially double El Paso’s cost of $7,504 per enrollee. Analysis of Medicare data by the Dartmouth Atlas project shows the difference is due to marked differences in the amount of care ordered for patients—patients in McAllen receive vastly more diagnostic tests, hospital admissions, operations, specialist visits, and home nursing care than in El Paso. But quality of care in McAllen is not appreciably better, and by some measures, it is worse. Indeed, studies have shown that the care for patients in the highest-cost regions of the country tends to go this way—with more high-cost care across the board, but less low-cost preventive services and primary care, and equal or worse survival, functional ability, and satisfaction with care. The cause that I found locally was a system of care that was highly fragmented for patients and often driven to maximize revenues over patient needs. And I pointed to positive outliers across the country, including Grand Junction, Colorado, and the Mayo Clinic that deliver markedly lower-cost, higher-quality care.” (Source: http://www.newyorker.com/online/blogs/newsdesk/2009/06/atul-gawande-the-cost-conundrum-redux.html)

  • The Real Deal

    Health care business in America works, and works very well.

    Everybody is making money! High revenue, fat profits. Health care biz, and related biz such as drug and equipment makers, malpractice lawyers, all meet Wall Street expectations. While the economy tanks, not one of these biz requires government bailout.

    Like just about all biz in America, the sole purpose of enterprise is to produce a profit. At the expense of human beings and humanity.

    Which is why health care reform generates so much debate. The reform threaten to reduce profit and increase human value. Wow, what a scary idea.

    Here’s an equation of equilibrium for health care in the USA:

    reform = social turmoil (100 million without insurance) – biz turmoil (profit reduction)

  • jr

    maybe Insurance is the wrong model
    it is meant to spread rare risks around
    but trying to apply that to everybody is obviously
    not within that idea. It becomes a bottomless pit.
    It seems things worked better in the fifties.

  • http://vacua.blogspot.com Jim Harrison

    Every industrialized nation on earth has a better health care system than we do. It’s not that they have some magic secret, though. They all have different systems, but everybody manages to provide quality care for half of what we pay. For years I resisted drawing the obvious conclusion from these facts and thought we could catch up with the others by commonsense reforms. I was wrong and the Republicans have convinced me of my error. Thing is, America is hopelessly inept and corrupt. We are quite incapable of managing our own affairs. Our worldwide power and influence was not the consequence of any particular virtue–far from it. We prevailed for a long time because of our geographical isolation, our natural resources, and our mere dumb luck. In fact, we are a bunch of losers. The health care debacle simply underlines this increasingly obvious fact.

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  • Cynthia

    Even though healthcare is very beneficial to society, it’s more of a cost than a benefit to the economy. This is why healthcare will always be, at most, a mere handmaiden to our economy — it’ll never be the workhorse, much less the engine, of our economy. So if we keep letting healthcare gobble up bigger and bigger chunks of our GDP, as we are now letting it do, our economy is destined for the poor house.

    And I must say that it would’ve been far less painful for all of us had we enacted national healthcare for everyone, not just for the old and the poor, back when healthcare made up only a small sliver of our GDP. But now that healthcare, as it now stands, has grown to the point where it’s eating our GDP out of house and home, it’s gonna be very hard to tame this beast without killing it.

    Let me also say that there are three things that we should’ve never let happen. First, we should’ve never let banking overtake manufacturing, as the leader of our economy. Second, we should’ve never let healthcare sap the strength out of manufacturing, causing it to become a mere ghost of its former self. Last, but not least, we should’ve never let such a huge chunk of our Federal budget go towards arming our war machine. It sickens me to no end that we’ve become so damn barbaric that we’d rather spend our tax dollars on killing others than caring for them!

  • Joe Roser

    I think that we can all agree that a successful reform of our health care system should accomplish two things: increase the amount of care that is available to the public and decrease the cost of care.

    The ratio of health care ouput to dollars input is the productivity of the health care system. More health care output for less dollar input means greater productivity in the health care sector. The best, most successful reforms will therefore correspond to maximal increases in productivity.

    The question is how to produce maximal gains in productivity and the answer is competition and profit motives and all of that other capitalistic-type stuff. Just look at the lesson of 20th century history: the socialist economies all collapsed and the capitalist countries ended up ruling the world. Do you really think it is an accident that capitalist countries dominate the top of the life expectancy charts?

    What we desperately need in the health care sector are free market reforms, not more central socialization and bureaucratization of the system.

  • http://vacua.blogspot.com Jim Harrison

    Congratulations Joe Roser! You’ve risen above mere evidence to the sunny realms of ideological certainty! Who cares that the experience of the entire world shows that you are talking out of your ass? You went to a chamber of commerce lunch all those years ago and actually believed the inspirational speaker. Idiot.

    Total spending on health care, per person, 2007:

    United States: $7290
    Great Britain: $2992

    Life expectancy, 2007:

    United States 78.0
    Great Britain: 78.8

  • http://telescoper.wordpress.com Peter Coles

    Jim,

    I’m not quibbling with your numbers, but the correct name for the country with the superb healthcare system that’s the envy of the civilised world is the United Kingdom (of Great Britain and Northern Ireland).

    Peter

  • jr

    the obvious solution is for the 47 million to move to the UK.

  • http://vacua.blogspot.com Jim Harrison

    Dear Peter,

    I know about the U.K., but I’ve found that many Americans do not: hence the willful inaccuracy. In fact I would expect readers of this blog to know some geography–I copied the above text from a card I hand out.

  • caklen

    Brian, you are what is wrong with the political system right now. I specifically cited fact based criticism of this presentation and made points which Sean still hasn’t addressed. You did not address a single one of them and instead drew up strawmen of what ‘critics’ were saying.

    You had zero substance in your post. Unfortunately, considering Daniel’s post above that’s not something that anybody should be surprised by on this blog. Frankly, the quality of this blog is next to nil when Julianne and others besides Sean and Daniel reduce their posting. And it isn’t because of the particular policy positions–its because of the complete lack of a scientific skepticism shown by those such as Daniel who are convinced of their righteousness.

  • caklen

    @jpd

    perhaps you don’t understand what rationing is

    rationing is the controlled distributed of limited/scarce goods/services

    in a monopsonistic system that itself is limited in its budget true rationing will exist whereas what you see under the current system is one where options are structured by cost–and which is guided by forms of consumer theory

    if you don’t understand what rationing means in its strict sense (which is entirely what is at stake here because you would eventually be looking at a monopsony w/a restricted budget) then don’t make such outlandish claims

  • caklen

    I appreciate the response to my comment John Branch. I guarantee anyone who has followed healthcare and related legislation seriously has read the new yorker articles and hopefully has read some of Gawande’s other works. His book Better and other similar works make far more interesting points than those new yorker articles as they are riddled with many problems and inaccuracies (besides the iffy characterization of ‘St. Louis county’s’ numbers) there are a whole host of issues with the Texas comparison given here http://www.thehealthcareblog.com/the_health_care_blog/2009/06/mcallen-is-now-a-tale-of-three-counties.html which again shows the difficulty in plucking anecdotes to find one silver bullet in this issue (which often conveniently aligns with ones political positions)..

    With that in mind I think many of my specific critiques of this particular presentation and some of the ideas advanced in this post still stand.

  • Joe Roser

    I think the life expectancy statistic might be a little more convincing if there were some breakdown on demographic factors that aren’t related to the efficiency of the health care system per se. For example, the United Kingdom presumably has much less gun crime than the United States. How much of the gap of life expectancy at birth between the United States and the United Kingdom can be attributed to that? Will further socializing medicine do anything to fix that problem?

    On the other side of the equation, one way to reduce health care costs is to encourage greater competition among health care providers. President Obama himself has pointed to competition as a tool for reducing costs as one of the selling points for the “public option”.

  • http://blog.bbbeard.com bbbeard

    Hey, Sean. Great to see you are prospering in the brave new world of blogging. I still remember the talk you gave at the CTP on torsion in GR.

    I was completely unimpressed by the video. However, it did do one thing for me — it prompted me to go look up the correlation in time between the sharp rise in medical costs and the costs of the medical tort system. Funny, isn’t it, that the author of the video noted that medical spending in the U.S. started to rise sharply around 1980 but never bothered to provide a correlate for that rise. The one historical review I was able to find (http://www.towersperrin.com/tp/getwebcachedoc?webc=TILL/USA/2006/200603/2005_Tort.pdf) provides year-by-year medical tort costs as a percentage of GDP. The rate rose sharply in the 1950’s but leveled off at 1.04% in 1958, was pretty stable until 1974 (1.1%) — and then started rising precipitously until it more than doubled in a little more than a decade (2.33% in 1987). It has fluctuated some since then but stayed in that range (2.22% in 2004).

    Doesn’t this suggest to you at least the rationality of the assertion that one of the major reasons for the rising cost of medical care is defensive medicine due to the threat of lawsuits? Why does our helpful shill for government health care never mention this? Perhaps because it doesn’t support his socialist agenda?

    Our friend the shill slyly implies that echocardiograms are useless. Speaking of government health care, this would come as a surprise to the folks at the NIH (see http://www.nlm.nih.gov/medlineplus/ency/article/003869.htm).

    Our friend the shill also implies that a single metric — life expectancy — can allow us to conclude we’re not getting our money’s worth from our health care dollar. My advice: don’t trust anyone who proffers a single “health care dollar value” metric. Single metrics are no better than anecdotal evidence — they are cherry-picked post hoc to support a prior viewpoint. Just as an example not to be trusted: consider, instead of life expectancy, the total death rate. Now, I would argue that life expectancy at birth is a meaningless metric unless you are a new arrival to this planet. By definition, the overall death rate is a more meaningful parameter.

    Now, what are the death rates for our favorite developed countries? Using 2002 data from the World Health Organization (go find the link yourself; I dl’d the xls recently) (annual rate per 100,000 population):

    US: 831.7
    UK: 1014.7
    Sweden: 1027.2
    Germany: 989.4
    Belgium: 999.9
    France: 833.8
    Italy: 992.8
    Spain: 868.0

    All of these countries have a higher death rate than the U.S., though France is close. And sure, you can find many countries with a lower death rate, including Japan, Israel, and Canada. But the question you should be asking is: why the focus on life expectancy? Could this data be cherry-picked?

    And to folks who tear their hair out about the large percentage of GDP we spend on health care, I have to ask why it’s unreasonable for the wealthiest major country on earth to spend our wealth this way? I would also bet we spend more on individual transportation than any other country on earth — even while some people are too poor to own their own cars. Is that an excuse to take away the cars of the other 90% that can afford it? I would bet we also spend a larger percentage of GDP on quite a variety of things that many people would consider “rights, not privileges”, like housing — and weapons(!). Of course, it’s a rhetorical question, because the utopian socialists who push this government takeover can think of many fine things that we should be spending our money on instead of health care. The point is that nobody asked them to decide how we should spend our money.

    Notwithstanding the critique above, there is a fundamental economic problem with health care. My managerial economics professor liked to say regarding health care economics: “There are two kinds of health care economists: vertical and horizontal. The vertical ones think that health care is a commodity that should be provided using the price mechanisms of the free market, which match supply and demand efficiently. But the ones who are flat on their back with a kidney stone or a slipped disk want all the medical care that they can get, regardless of price.” And doctors, even without the burden of defensive medicine, are trained to treat, not sell. They are motivated to provide whatever care is required to heal the patient, regardless of what the insurance company (or government death panel) says. But for some reason some folks are persuaded that changing medicine to a “cost-effective” (i.e. government rationed) system is a shift in the right direction. Oh, well, à chacun ses goûts.

    Full disclosure — my wife is an M.D., her best friend is an M.D., and her best friend’s husband is an M.D. I’m just a dang Ph.D.

    BBB

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  • Matt S.

    bbbeard wrote: “Our friend the shill also implies that a single metric — life expectancy — can allow us to conclude we’re not getting our money’s worth from our health care dollar. My advice: don’t trust anyone who proffers a single “health care dollar value” metric. Single metrics are no better than anecdotal evidence — they are cherry-picked post hoc to support a prior viewpoint. Just as an example not to be trusted: consider, instead of life expectancy, the total death rate.”

    Calculating life expectancy takes age-adjusted death rates into account, in fact, it’s the starting point of the calculation. How bad an indicator the death rate is as a measure for public health is demonstrated by the fact that China has a lower death rate than the United State. Would you argue that health care in China is better? Countries like Albania and Uzbekistan fare even better than China, apparently that the place to live if you want a long life! Not. (http://en.wikipedia.org/wiki/List_of_countries_by_death_rate)

    bbbeard wrote: “But the question you should be asking is: why the focus on life expectancy? Could this data be cherry-picked? ”

    It’s best measurement of the general health of a population that we have. If you want to provide an alternative that is better suited, instead of cherry picking numbers the appear to superficially support your claim, please do!

    bbbeard wrote: “And to folks who tear their hair out about the large percentage of GDP we spend on health care, I have to ask why it’s unreasonable for the wealthiest major country on earth to spend our wealth this way?”

    Frankly, that sounds like a poor excuse for being lazy. With that mentality (“why not waste money, we sure have a lot of it!”) you won’t stay the “wealthiest major country on earth” for long. GDP spend on health care does nothing to boost the economy. Other countries with more efficient cost/benefit ratios obviously have a competitive advantage.

    bbbeard wrote: “I would also bet we spend more on individual transportation than any other country on earth — even while some people are too poor to own their own cars. Is that an excuse to take away the cars of the other 90% that can afford it?”

    I think you have the wrong impression of what these reforms are about. The “cars of the 90% that can afford it” will not be taken away. Likewise the government won’t take away your private health insurance, if you can afford private health insurance, well, keep it. It’s called public “option” for a reason.

    bbbeard wrote: “But for some reason some folks are persuaded that changing medicine to a “cost-effective” (i.e. government rationed) system is a shift in the right direction. Oh, well, à chacun ses goûts. ”

    Riddle me this. I happen to live in a country (Germany) with a “cost-effective” system and somehow the medical coverage is… wider than in the United States? How’d that happen? Did our socialist regime with their marxist agenda fake the statistics? That’s got to be it. Just the other day I saw people draped in black robes heading toward the local meeting of The Death Panel, it’s got to be true.

  • http://blog.bbbeard.com bbbeard

    Matt:

    Raw death rates are a problematic comparison — that why I said they are “not to be trusted”. I repeat: don’t trust any single metric. And don’t expect me to proffer one. Health care economics is complicated.

    No, life expectancy at birth is not age-adjusted, although it represents an integral over time. It is life expectancy at birth. Life expectancy will vary with age and will have different profiles for different countries.

    Life expectancy is the average number of years of life remaining for a person at a given age, and is computed using a table of age-specific death rates. This is a very different calculation from “age-adjustment”, which takes a set of age-specific death rates and adjusts them based on the age profile of the population, i.e. it applies weighting factors to each age bracket that represent the percentage of the population in that bracket.

    Doing age-adjustment for death rates is only worthwhile when two populations have similar age profiles. For example, the CDC puts out age-adjusted death rates for various causes of death in the U.S., and they use a standard U.S. population to do the adjustment — and they don’t use separate populations for different races, for example. But even the US and UK have different age profiles. For example, the UK has an inversion in their profile — there are more 50-54 year olds in the UK than 45-49 year olds. The US population has relatively more people under 30 and fewer people over 50 than the UK. So age adjustment to compare these two countries is problematic.

    And no, life expectancy at birth is not the best measure of the general health of a population that we have. Just as another point, consider that accidents, suicide, and homicide are three of the top fifteen causes of death in this country. Why are those rates a measure of general health? Even if you look at other years, say, life expectancy at age 65 (to cherry-pick yet another metric) — where the US has an advantage over the UK — life expectancy doesn’t tell you how many of those years will spent waiting for a hip transplant to take you out of your wheelchair. Again: don’t trust any single metric of health.

    I would like to add that our friend the shill actually recommends that someone showing up in the ER with chests pains should be told to go home (!) and come back for regular checkups(!) [doesn’t this sound like a conservative made this up??? Who is this guy?]. At least he implies that — the only two choices he gives for the doctor are (1) send the patient home and (2) “run a bunch of expensive tests”(!), and then he proceeds to try to make the case that regional variation in the standard of care for cardiac diagnostic tests is a reason to send the patients home — or something. This is one of the principal concerns that people have about Obamacare. He is on record saying that it would be more cost-effective to prescribe pain-killers than to supply a pacemaker to someone (an elderly someone). Now, I don’t know about the UK, but prescribing painkillers for arrhythmia is not the standard of care in this country — and at this point you can’t say Obama, Tom Daschle, or Ezekiel Emanuel don’t want it to be. Yes, it’s more cost-effective to send people home to die, as our friend the shill is recommending. But in the wealthiest country in the world, we don’t want that standard of care and we don’t want the American equivalent of the UK NICE panel telling us it’s not cost-effective to replace our hip at age 85 or to give us chemo-therapy at 65 if we’re smokers with lung cancer.

    I don’t think you understand what GDP measures. For better or worse, health care spending is most certainly part of the GDP. If you’re asserting that growth in health care does not contribute to the growth in GDP, again, you’re wrong. If you’re asserting that health care productivity changes are not reflected in overall productivity numbers, again, you’re wrong. Are you really asserting that because health care is maintenance, not manufacturing, that it “does nothing to boost GDP”? Why don’t you go dig up real GDP growth for the US and European countries over the last 30 years, the period over which health care is claimed to be such a drag?

    And as I’ve pointed out, the single most effective thing you could do to reduce the growth rate of medical care is to put a halt to the lawsuits that are driving the practice of defensive medicine. John Edwards, who made his fortune getting OB/GYNs to pay for birth defects, has done more single-handedly to raise the frequency of Caesarian sections in this country than any other person.

    And talk about a poor excuse for being lazy — don’t you think “let the Democrats fix it” is lazy? Every day millions of doctors, nurses, techs, pharmaceutical companies, and, yes, insurance companies try to find more efficient ways of doing business. That’s how a free market works (well, granted, a heavily-regulated market). You want to replace that with a set of unelected commissars. That seems pretty lazy to me.

    The point of the government option is to undermine the private insurance market. Most Americans, for better or worse, get their insurance through their employers. It’s not up to them to keep the insurance they like (for the record, my family has Blue Cross /Blue Shield, a non-profit, through my wife’s work, and we’re very happy with it.) The Democrats want to create the “public option” to incentivize employers away from existing coverage. Our politicians have said as much. Why? If I have health insurance, why is it necessary to lure my employer to switch coverage to a government option? Again: I won’t have a choice to keep my coverage if my employer decides to opt for the government option. To say that I will have that choice, as our Dear Leader keeps saying, is a lie.

    BBB

  • http://vacua.blogspot.com Jim Harrison

    Defenders of the current health care system endlessly recycle the tactics pioneered by the Tobacco Institute. Indeed, it isn’t just the methodology that derives from the campaigns to fend off regulation and control of tobacco. In many cases the same people are still involved; and, of course, the immorality of these efforts is also perennial.

    You can spin numbers till you drop, but you can’t evade the obvious fact that we pay an enormous amount of money for mediocre results and we don’t even cover everybody.

  • Pingback: Dwindling options | Cosmic Variance | Discover Magazine()

  • Brian

    Anyone notice that certain participants in this debate (*cough* caklin *cough* bbbeard) are vigorously against everything?

    First they claim that pro-reform people are ideologically motivated and insist that facts be presented. Once facts are presented they claim that those are the “wrong” facts, or they’ve been “cherry-picked”. When they are called out and asked to present their own facts, presumably the “right” ones not cherry-picked, they refuse to do so.

    Where I come from, these people are known as ‘aginers. They don’t know what they’re for, but they sure do know what they’re ‘agin. And its those darn Commun- oops, Socialists! Well congratulations on noticing that Communism is so completely discredited that you can’t seriously even use that in a debate anymore. But you still can scare people with talk about fictitious Death Panels, can’t you?

    The takeaway I get from this is that blatant obstructionism is in play here. Whether it’s due to the blockers being well insulated from the daily realities of the healthcare system, or full-on religious devotion to an ideology, or being major beneficiaries of the current system, or something else, I don’t know. It doesn’t matter. No facts, no argument, no reasoning will be enough. I’d ask for a positive suggestion from that camp, but I know that none will be forthcoming. There has been none since the Clinton healthcare attempt 15+ years ago and there will be none in the foreseeable future.

    Tort reform! That’s all the opposition camp has. Most citizens don’t even know or care what a tort is. In medicine this is known as addressing symptoms rather than treating the illness. You could develop the most sophisticated, enlightened, magically great tort reform legislation in history and maybe you’ve dealt with 10% of the healthcare issue.

  • http://blog.bbbeard.com bbbeard

    Brian:

    Well, thanks for the well-reasoned, specific, non-partisan advice.

    What exactly do you think the explosion of medical malpractice suits is a symptom of? You seem to be arguing that the high cost of medical torts is symptom, not a cause, of the high cost of medical care. Or something. Your thought process is wonderfully opaque.

    You seem to think I’m being evasive by not proposing a single metric for “health”. I think you’re being simplistic.

    Even at the individual level, do you have a single metric for your health? Do you get on the scales every morning and say, hmm, 160 pounds, therefore I’m healthy? Good for you — I’m not in that boat. I have about a dozen numbers I have to monitor, everything from blood glucose to liver enzyme levels. Sometimes my cholesterol is perfect but my liver enzymes are high — other times my triglycerides are off the high end but my hemoglobin A1C is fine. But whatever my medical problems are, I don’t blame the lack of universal health care.

    At the national level, there is no universally agreed metric for health. The problem is compounded by the variety of genetics, age profiles, diets, wealth, work and play habits, and so forth. Someone in this thread mentioned the firearms risk in the U.S. Actually, that’s a relatively small contributor to the difference between the U.S. and the UK (5.4 vs 1.1). A more sizable contribution is that Americans are far more likely to die in an auto accident than Britons are (15.5 vs 6.5). [2002 raw rates per 100k population per year]. Are either of these risks related to the lack of nationalized health care?

    But set all that aside. Obviously you are a person not well suited by temperament to complexity. Even the time-ordering of events is a bit tricky for you. For the record, Sean posted the video, which proffered life expectancy at birth as a good metric for general health. I objected and I gave what I think are fairly specific, verifiable technical reasons for my objection. Now you claim I insisted “facts be presented” and that the video was a response to that. And that I was not satisfied by the video, and therefore, obviously, never will be satisfied. In fact you assert “It doesn’t matter. No facts, no argument, no reasoning will be enough.” I find the evidence for your polemic insufficient to provide the basis for further response. In fact, I find the content of this video so jejune that I fail to see why you expect anyone to provide a positive response.

    You see, we don’t even agree there’s a problem. You see a crisis!!! I see a power grab by people who should know better. You see utopia within your grasp!!! I see an unelected, ineluctable bureaucracy invading everyone’s privacy and making decisions about everyone’s health care. You see obstructionists!!! I see ordinary people who have seen this movie before.

    BBB

  • Randy

    Tort reform will help lower medical costs a bit, but it’s foolish to expect it to reduce costs by more than a few percentage points (of course, in a $2 trillion dollar health care economy that still represents a lot of savings).

    The most important reason that health care costs are so much higher in the United States than other developed countries is that reimbursements to providers are much higher here than abroad. Almost everybody in the medical system, including the doctors, the hospitals, the pharmaceuticals, the medical suppliers, simply make more money here. Other countries with universal coverage, either single or multi-payer, are able to exert market pressure to keep costs down. And of course those countries with not-for-profit insurance plans don’t have the corporate bureaucracies so common here, with demand for high returns to shareholders and high administrative costs.

    Cost-effective quality of care does not mean sending people home to die, and it can indeed mean sending a patient home with chest pain if, for example, the pain comes from gastric reflux disease. One interesting feature about the British system and their use of a NICE panel is that they have established best practices for assessing patients with various problems like our fellow with chest pain. If a physician follows those guidelines, he is immune from a lawsuit arising from any missed injury as long has he followed the best practices. (The patient will of course receive whatever care is needed at no cost). Many physicians in the US would be enthusiastic for that type of protection, but it would be hard to implement without a single-payer system.

    Randy, MD, FACS

  • http://blog.bbbeard.com bbbeard

    Thanks, Randy. Do you have a link to cross-national comparisons of reimbursements for doctors, nurses, techs, pharmaceuticals, etc.? I love data. What is needed is a consistent database that tracks these expenditures on an annual basis for a period going back to around 1960.

    Although, for the record, in a single-payer system, it’s not “market pressure”, it’s monopoly pressure.

    Well, let’s talk about tort reform — and evidence-based policy. The video (by our friend the shill) says that medical costs in the U.S., as a percentage of GDP, tracked very well with other developed countries until around 1980. Then they took off and grew at a rate much higher than costs in other developed countries. Our friend the shill provides no explanation for this shift.

    In a comment above, I posted a link to annual data that shows that over a period slightly more than a decade (1974-1987) , the costs of medical torts as a fraction of GDP more than doubled. The hypothesis I am asking you to consider is that the rise of medical torts as a business sector for trial lawyers blossomed in that period [and I’m still trying to find out why — was there a particular set of court cases, or a tort law, that came into effect around 1974?], and that as a reaction, doctors responded with the practice that has come to be known as “defensive medicine” — that is, routinely ordering more exhaustive tests and procedures than medically necessary in order to provide a legal defense against a charge of negligent malpractice. This hypothesis at least fits the facts that are currently in evidence, though I’m always glad to look at more data.

    I would challenge you to provide data that shows that the growth in compensation for individual doctors took a sharp upturn around 1980. You see, in order to fit the growth curve, it’s not sufficient to show that there was a jump in compensation for doctors around 1980, you have to show that something fundamentally changed the rate of increase of doctors’ pay. Personally, I will be amazed if you can find such data, because my anecdotal experience with the many doctors I know (including my wife, who is also “MD, FACS”) is that the compensation for doctors at the same point in their careers has not kept up with inflation, much less grown at twice the rate. In addition, you need to provide an explanation for what changed around 1980. At least my data, which shows that medical malpractice awards took a sharp upturn before the sudden rise in the cost of medicine, provides an explanation for the change.

    Having said all that, I am worried that the genie is out of the bottle, so to speak. Defensive medicine is arguably the new “standard of care”. Eliminating doctors’ liability completely would not suddenly change the way that doctors practice medicine — in fact I’ve read some studies that looked at state-level medical tort reform and concluded the resulting changes were small. My opinion is that the desirable way to back down from a defensive medicine posture is for Congress to provide tort immunity to doctors, and for the medical professional associations to provide (and to update continuously) doctrines for standard of care. What is the difference between this strategy and what the UK NICE panels do? In my vision, the medical professional associations would be chartered to consider only what was in the best interests of patients, not what is in the interests of the government. There is a conflict of interest when the payer decides what procedures are in the best interests of the patient, regardless of whether the payer is the government or a private insurance company. (Though at least with a private insurance company, a purchaser — typically an employer — can switch if the care is substandard!)

    And though you are suggesting that doctors “would be enthusiastic” for a system like UK NICE, let us analyze that statement. It seems to me that the part they would be enthusiastic about is the exemption from liability, not the part where you tell a cancer patient that a $600 procedure that has a 10% chance to extend their life by a year is not cost-effective, will not be provided, and is not purchasable.

    I think the controversy over the NICE panels is not that they encode a standard of care. The controversy is that they deny progressively more care as the age or need of the patient increases, and that is not the standard of care in this country. They use a naive model of cost-effectiveness, based on the QALY. They bluntly state that if you are already in degraded health, the QALY guidelines may forbid you getting care that would be given a healthy person. Do you really think this is a system we want to emulate? Do you really think many physicians would be enthusiastic about being forced into this model of care?

    I’ve taught professional ethics before (engineering ethics). Cost-benefit analysis is only one tool that you may use to decide ethical issues. The British system does not, as far as I can tell, even acknowledge these other paradigms for medical ethics, paradigms that underlie the American system of care. I think we should be cautious in abandoning the American standard of care in order to adopt the standards of poorer countries.

    And I suppose I should point out that the change you are suggesting is not in any of the bills before Congress, as far as anyone is able to tell. Single-payer is not on the table (although people fear that is the Democrats’ ultimate goal). Tort reform and, in particular, exempting or limiting doctors’ liability, is not on the table.

    BBB, Ph.D. ;-)

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Cosmic Variance

Random samplings from a universe of ideas.

About Sean Carroll

Sean Carroll is a Senior Research Associate in the Department of Physics at the California Institute of Technology. His research interests include theoretical aspects of cosmology, field theory, and gravitation. His most recent book is The Particle at the End of the Universe, about the Large Hadron Collider and the search for the Higgs boson. Here are some of his favorite blog posts, home page, and email: carroll [at] cosmicvariance.com .

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