Monday assorted links

by on March 27, 2017 at 1:09 pm in Uncategorized | Permalink

We fight over health care policy because we focus on demand and redistribution. We could reach greater agreement if we focused on supply and innovation. What are the key areas where agreement is likely?

1) Cancer kills both Republicans and Democrats so more spending on medical research is likely to reach broad agreement.  As I said in Launching:

Looking at the future, if medical research could reduce cancer mortality by just 10 percent, that would be worth $5 trillion to U.S. citizens (and even more taking into account the rest of the world). The net gain would be especially large if we could reduce cancer mortality with new drugs, which are typically cheap to make once discovered. A reduction in cancer mortality of this size does not seem beyond reach, and the value of such a reduction in mortality far exceeds that of spending more on medical care today. Yet because the innovation vision is not central to our thinking, we overlook potentially huge improvements in human welfare.

By greater spending on medical research, I mean not only greater spending through the NIH but also a commitment to innovation policy more broadly. We know, for example, that price controls kill medical research so no price controls. We can also improve the FDA. I would favor less regulation but there are other methods to speed up the approval process which could command bipartisan support such as greater funding of the FDA. The FDA is also not monolithic, some departments are better than others, so we can reform the FDA by making it more like the better parts of itself.

In thinking about pharmaceutical regulation we also need to remember that 80-90% of prescriptions are for generic drugs and due to intense competition, generic drug prices are low and falling–so lets build on the parts of the US health care system that work well by keeping the entry barriers to entry in the generics market low.

2) Increase the supply of physicians. Despite an aging population and greater demand, the number of MDs per person has been trending downwards! Increasing physician supply could involve a combination of increased immigration of foreign physicians (skilled immigration is really a non-brainer that receives widespread support), increased slots at medical schools and in residency programs (via Medicaid), increased support for allowing nurse practitioners, dental hygienists and so forth and making occupational licenses portable across states. (In addition to making it easier for foreign physicians to come to US patients we should also make it easier for US patients to travel to foreign physicians–patients without borders). None of these things are easy to do, of course, but neither are they riven by ideological differences.

3) Demand price transparency from hospitals and other health care providers. In real markets, a price is a signal wrapped up in an incentive. With few exceptions, we don’t have real markets in health care and so “prices” neither signal nor incentivize. Thus, I don’t expect miracles from “price” transparency and this is a policy that could go wrong but transparency would still allow for some standardization, comparison, and computation of tradeoffs. Price transparency would also limit some of the worst forms of bill abuse. Even the Soviets found prices to be useful for these purposes.

Other supply side reforms that could find bipartisan support?

I don’t usually “go after” news stories and headlines but this one is such a bad mistake, and it so affected my Twitter feed (I was swindled too), that it deserves comment (the pointer by the way comes from Alex, our Alex).  Stephanie Saul wrote in The New York Times:

Nearly 40 percent of colleges are reporting overall declines in applications from international students, according to a survey

Here is what the opening of the survey itself said:

39% of responding institutions reported a decline in international applications, 35% reported an increase, and 26% reported no change in applicant numbers.

The NYT article does not reproduce the more positive pieces of information, from its own cited study, which may be suggesting international applications are not down at all, or perhaps down by only a small amount.  If you look at all the data, they probably are down, but by no conceivable stretch of the imagination should the 40% figure be reported without the other numbers.  The headline of the piece?:

Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants

I look forward to not only a correction but in fact a retraction of the entire article and its headline.

Hint: Trump is not working with Paul Ryan to disassemble Medicare as we know it.

Those of us who predicted gridlock, stasis, and an excessively weak Trump presidency are so far right.  Hardly anything has gotten through, though we have managed to scare off 40% of the potential foreign applicants for higher education, one of America’s most successful export industries.  Tax reform, which is not an ideological touchstone, won’t be easy, and the Republicans have not reached prior agreement on many of the (numerous) details.  Russia will continue in the headlines.  The weakness of political parties remains an underlying theme.  Overall, it is good that health care reform is off the table for now, because superior alternatives were not likely to result.

Is it good or bad, all things considered, that foreign governments are seeing increasing latitude to ignore Trump’s threats?  And why exactly does Trump dislike Germany so much?

By the way, the end of global QE is rapidly approaching, with U.S., European, and possibly Chinese central banks all tightening at about the same time; maybe that’s the real news!

Addendum: Alex writes to me:

39% of responding institutions reported a decline in international applications, 35% reported an increase, and 26% reported no change in applicant numbers.

Christina, an apparent MR reader, asked me whether it is really true that AI helps military defense more than military offense, as was previously argued by Eric Schmidt.  I can think of a few parallel cases:

1. In chess, AI clearly has helped the defense.  Top computer programs never play 32-move brilliant sacrifice victories against each other, a’ la Mikhail Tal.  Most games are drawn, and a victory tends to be long and protracted.  (Do note it is sometimes better to get the war over with and lose right away.)

2. In the NBA, analytics have helped offense more, for instance by showing that more attempted shots should be three-pointers.  Analytics of course is not AI, but you can consider it a more primitive form of using information technology to improve decisions.

3. It is interesting to ponder the differences between chess and the NBA as potential analogies.  In chess, the attack often “plays itself,” as the player with the initiative may be following fairly standard strategies of bringing the Queen and some lesser pieces in the neighborhood of the opposing King, or maybe just capturing material.  Finding the correct defense is often a more complex matter, and the higher quality of the chess-playing programs thus boosts defense more than offense.  Besides, under perfect information chess is almost certainly a draw, and the use of AI asymptotically approaches that outcome.

In professional basketball, the offense typically has more options and permutations, and given any offensive decisions, the defense often respond in fairly typical fashion, such as lunging at the player attempting a shot, or doubling Stephen Curry as he crosses the half-court line.  In those cases where the defense has more options, however, analytics conceivably could help basketball defense more than offense.  A (hypothetical) example of this would be using game tape and AI to see which kinds of tugs on the jersey best disrupt the shot or rhythm of the team’s leading scorer.  That said, most of the action seems to be in honing the options for the offense.

4. Is warfare more like chess or more like the NBA?

I believe the USA has more options in most of its conflicts, and thus AI will help the United States, at least at first.

In the Second World War the Nazis had more options than their opponents.  In the Civil War and American Revolution, however, the available offense was more static and predictable, and AI for those fighting forces might have helped the defense more.  In the Iran-Iraq war I suspect the defense had more options too.  Terror groups have more meaningful options than the forces defending against terror, and thus AI might help terror groups more than the defense, at least provided they had equal access to the data and to the technology (which is doubtful at this point, still as part of the exercise this is useful).

5. One important qualifier is that the chess and NBA examples already assume a game is on to be played.  A war, in contrast, is started as a matter of volition on at least one side.  If AI creates a new arms race of sorts, where one side at times opens up a decisive lead, that may provoke more decisions to engage and thus attack.  The mere fact that AI increases the variance in the power gap between the two sides may increase the number of attacks and thus wars.

So there is more to this question than meets the eye at first, and I have only begun to engage with it.

Addendum: AI is also spreading in the legal world, will this help defendants or plaintiffs more?

Sunday assorted links

by on March 26, 2017 at 2:41 pm in Uncategorized | Permalink

According to a report by Nikhil Gangadhar in the Deccan Herald, Bengaluru may be the first city in the world that stopped at least one terrorist attack using just bad traffic.

That’s right, you heard correctly…a terrorist attack may have been averted with just a traffic jam. Nikhil reports that a man named Habib Mia, arrested in Tripura and brought to Bengaluru last week, told police that terrorists who attacked IISc on December 28, 2005, also planned to attack other seminar events in parallel to tarnish India’s reputation.

However, an attacker who was travelling to the Indian Institute of Management on Bannerghatta Road apparently got caught in a traffic jam, and the seminar he was supposed to attack ended before he could get there.

What’s more, the terrorists also reportedly dropped a plan to attack an event at PES Institute of Technology because there was no easy escape route available.

Here is the full story, via Ashish Kulkarni.

The new George Steiner book

by on March 26, 2017 at 1:51 am in Uncategorized | Permalink

George Steiner, with Laure Adler, A Long Saturday: Conversations.  Steiner is one of the most knowledgeable people, even into his 90s.  From these conversations I learned that he started working for The Economist as an economics reporter after WWII, computers drive us to a notion of “minimal language,” “God is Kafka’s uncle,” he recommends North, by Louis-Ferdinand Céline, and Ben-Gurion once told him “Only one thing matters: send me your children.”  By the way, “Malraux predicted that the religious wars of the twenty-first century would be the greatest in history.”

Definitely recommended.

Mostly yes, that is a result for cosmetic surgeons, and that may be one reason why online evaluation of medical services has been relatively slow to evolve in an effective manner.  Here is part of the abstract of a new paper:

I argue that surgeons see reviews overwhelmingly as a threat to their reputation, even as actual review content often positively reinforces physician expertise and enhances physician reputation. I show that most online reviews linked to interview participants are positive, according considerable deference to surgeons. Reviews add patients’ embodied and consumer expertise as a circumscribed supplement to surgeons’ technical expertise. Moreover, reviews change the doctor-patient relationship by putting it on display for a larger audience of prospective patients, enabling patients and review platforms to affect physician reputation. Surgeons report changing how they practice to establish and maintain their reputations. This research demonstrates how physician authority in medical consumerist contexts is a product of reputation as well as expertise. Consumerism changes the doctor-patient relationship and makes surgeons feel diminished authority by dint of their reputational vulnerability to online reviews.

Here is the paper, by Alka V. Menon, and the pointer is from the excellent Kevin Lewis.

Saturday assorted links

by on March 25, 2017 at 11:20 am in Uncategorized | Permalink

*Ties*, by Domenico Starnone

by on March 25, 2017 at 2:45 am in Uncategorized | Permalink

This is one of the better Italian novels of the last few decades, and this year’s first fiction must-read.  It is short, easy to comprehend, utterly compelling, and the basic story line is that of a married couple and their children, to say more would spoil the plot.  The introduction and translation are by Jhumpa Lahiri, also first-rate (by the way, here is my conversation with Jhumpa, toward the end she discusses this project).

Here is the Amazon link.   This Rachel Donadio NYT review provides some very useful background knowledge.

Growers who can afford it have already begun raising worker pay well beyond minimum wage. Wages for crop production in California increased by 13% from 2010 to 2015, twice as fast as average pay in the state, according to a Los Angeles Times analysis of data from the Bureau of Labor Statistics.

Today, farmworkers in the state earn about $30,000 a year if they work full time — about half the overall average pay in California. Most work fewer hours.

Some farmers are even giving laborers benefits normally reserved for white-collar professionals, like 401(k) plans, health insurance, subsidized housing and profit-sharing bonuses. Full-timers at Silverado Farming, for example, get most of those sweeteners, plus 10 paid vacation days, eight paid holidays, and can earn their hourly rate to take English classes.

But the raises and new perks have not tempted native-born Americans to leave their day jobs for the fields. Nine in 10 agriculture workers in California are still foreign born, and more than half are undocumented, according to a federal survey.

Here is the link, including further points of interest, via Anecdotal.

But it is also a question of history and, more specifically, of how welfare states in the rest of the world developed alongside warfare. European welfare states began in Prussia at the end of the 19th century, when war with France required the mobilisation of a large number of civilians. Britain’s welfare state has its origins in the discovery that many of the men who presented themselves to recruiting offices during the Boer war were not healthy enough to fight. Before the second world war, British liberals would have seen the creation of a government-run national health service as an unwarranted intrusion of government into private life. After 1945 it seemed a just reward for a population that had suffered.

In America this relationship between warfare and health care has evolved differently. The moment when the highest proportion of men of fighting age were at war, during the civil war (when 13% of the population was mobilised), came too early to spur the creation of a national health system. Instead, the federal government broke the putative link between war and universal health care by treating ex-servicemen differently from everyone else. In 1930 the Veterans Administration was set up to care for those who had served in the first world war. It has since become a single-payer system of government-run hospitals of the kind that many Americans associate with socialised medicine in Europe. America did come close to introducing something like universal health care during the Vietnam war, when once again large numbers of men were being drafted. Richard Nixon proposed a comprehensive health-insurance plan to Congress in 1974. But for Watergate, he might have succeeded.

That is from The Economist.

Friday assorted links

by on March 24, 2017 at 11:42 am in Uncategorized | Permalink

Let’s say you believe that a flood of forthcoming warrior-entrepreneurs will create exciting new products and earn high rates of return on their capital; associated venture capitalists will benefit too.

That might sound quite optimistic, and in one regard it is.  But the high returns also indicate that the status quo ex ante is in some way deficient.  Had the earlier entrepreneurs done better, the opportunities for these new creators might have been less.  In a sense, the prediction is also an (implied) pessimistic take on the current world as it stands.  The overall state of affairs may be less positive than many others believe.

The mood states of “optimism” and “pessimism” are often misleading ways of classifying or thinking about people’s views on the economy, or indeed about other matters too.  Those descriptors do not distinguish between attitudes toward likely final outcomes, as opposed to attitudes about benchmarks and constraints.