More than 8.5 million workers are now collecting disability insurance, in other words almost 6% of the labor force is officially disabled. Perhaps not surprisingly, disability applications shot up just as unemployment benefits started to exhaust.
Applications are often denied so disability beneficiaries do not follow applications immediately. Denied applicants, however, often contest and apply again so eventually 50-60% of those who apply will typically enter the disability rolls and start to collect. Far fewer will ever exit the rolls, at least not by way of a job.
Since 1995 the number of disabled workers has doubled and expenditures have increased even faster than disabled workers, tripling since 1995. The increase in workers receiving disability insurance has come at the same time as the US working age population has become healthier. A large fraction of the increase in disability has come from increases in hard-to-verify back pain and mental problems (see Autor and Duggan and more recently Autor).
After the 2001 recession, disability applications also shot up and they never fell back to their old levels. We may be reaching a new, permanently higher, plateau.
Disabled workers do not count as unemployed, they have been bought out of the labor force.
The conservative critique of unemployment insurance used to be that it discouraged people from looking for work. The modern conservative response may be that it encourages people to not become disabled.
…his German counterpart [finance minister] suggested postponing Greek elections and installing [sic] a new government without political parties.
I do understand the financial motive here, but this is not a good idea! It is even less of a good idea to say so in public. Is the goal simply to irritate the Greeks so much that they leave the Eurozone on their own? Twitter rumors are suggesting that Finland and the Netherlands are raising similar ideas, namely postponing elections and, it seems, simply ruling the country through its budget? I am not sure how this is supposed to work, or to be received in Greece, or why it should be a good precedent for the European Union. The FT story is here.
I don’t know which is scarier the height of the curve around age 50 or the slope of the curve (fyi, my guess is cohort effects are small). The slide is from David Laibson who has much more on aging and dementia; also raises issues of the value of medical care that maintains the body but not the mind.
It took a tall ladder and weeks of training, but an elephant at Amsterdam’s Artis Zoo has become the first of her species in Europe to be fitted with a contact lens.
Win Thida, a 45-year-old Asian elephant, suffered a scratched cornea during a tussle with another elephant. Her eye started watering and she had trouble keeping it open, so the zoo called in veterinarian Anne-Marie Verbruggen.
Verbruggen had experience fitting horses with contacts, but it was her first attempt on an elephant.
“The main difficulty was her height,” Verbruggen told the Irish Times. “Elephants can’t lie down for long before their immense weight impairs their breathing, so I used a ladder to get close enough. It wasn’t ideal, but it worked. She seemed happier straight away.”
The elephant had to be anaesthetized in a standing position, and she and Verbruggen trained daily for weeks to prepare her for the operation. The procedure took less than an hour. Protected by the lens, the elephant’s cornea should now be able to heal.
Here is (not much) more.
Kevin Outterson writes of “Hand Sanitizers as Agent Orange”:
Over at CommonHealth, Aayesha rounds up the literature on the limits of hand sanitizers, but fails to mention the collateral damage to the skin microbiome. Alcohol-based hand sanitizers kill many bacteria, viruses and fungi, but they don’t selectively target pathogens. They kill a wide swath of the microbial life on your hands, including little-understood non-pathogenic species. For an ecological analogy, think of using Agent Orange to kill a couple weeds.
A good introduction to the skin microbiome is a recent article in Nature Reviews Microbiology by Elizabeth A. Grice and Julia A. Segre (9, 244-253 (Apr. 2011)). From the abstract:
“The skin is the human body’s largest organ, colonized by a diverse milieu of microorganisms, most of which are harmless or even beneficial to their host. Colonization is driven by the ecology of the skin surface, which is highly variable depending on topographical location, endogenous host factors and exogenous environmental factors. The cutaneous innate and adaptive immune responses can modulate the skin microbiota, but the microbiota also functions in educating the immune system.”
As I’ve said before, our relationship with microbes should also be evaluated as an ecological issue. Completely germ-free environments are not necessarily the goal.
The newly approved €20m (£17m) housing project is to be built next to the Swiss village of Wiedlisbach near Bern and will provide sheltered accommodation and care for 150 elderly dementia patients in 23 purpose-built 1950s-style houses. The homes will be deliberately designed to recreate the atmosphere of times past.
The scheme’s promoters said there will be no closed doors and residents will be free to move about. To reinforce an atmosphere of normality, the carers will dress as gardeners, hairdressers and shop assistants. The only catch is that Wiedlisbach’s inhabitants will not be allowed to leave the village.
There is more here, and the pointer is from @laurenzcollins.
WP…the Obama administration last week asked a San Francisco appeals court to overturn a recent decision that said bone marrow donors can be paid for what their bodies produce.
I wrote about this case here.
Hat tip: Al Roth who has more links.
This neglected gem of a book was written by Harriet Martineau, best known for her 19th century tracts on political economy. Now I learn she was a forerunner of behavioral economics, occupying a space somewhere between Burton’s Anatomy of Melancholy and the pain meditations of Dan Ariely, excerpt:
I have spoken of the relief afforded by visitations of severe pain. These really the vital forces, and dismiss the temptation, by substituting torture for weariness — at times a welcome change. The healthy are astonished at the good spirits of sufferers under tormenting complaints; and the most strait-laced preachers of fortitude and patience admit an occasional wonder that there is no suicide among that class of sufferers. The truth is, however, that the influence of acute pain, when only occasional, and not extremely protracted, is vivifying and cheering on the whole. The immediate anguish causes a temporary despair: but the reaction, when the pain departs, causes a relish of life such as the healthy and the gay hardly enjoy. Though a slow death by a torturing disease is a lot unspeakably awful to meet, and even to contemplate, there can be no question to the experience, that illness in which severe pain sometimes occurs is less trying than some in which a different kind of suffering is not relieved by such a stimulus and its consequent sensations.
The Wikipedia page on Martineau is especially good.
From an article at Governing.com:
…dental care is hard to come by in underserved areas of the country. Try finding a dentist in the remotest rural or deepest urban pockets of the land, and for blatantly economic reasons, they just aren’t there. That’s why states are looking to fix the problem by creating a so-called mid-level dental provider. Much like a nurse practitioner (NP) or physician assistant (PA) is to a doctor, this provider would be educated and licensed to perform basic dental services — routine checkups, cleanings, filling cavities and extracting teeth — under the supervision of a fully trained dentist.
…Yet in much the same way that the American Medical Association fought against the creation of NPs and PAs, the American Dental Association (ADA) and its state chapters are lobbying hard to thwart state legislatures as they work to create this new level of dental care providers, who are common and well liked in other parts of the world.
…“Publicly their main objection is safety issues,” Oswald says. “They tried to discredit the model, saying the therapists were not trained to the same level as dentists. In reality, all the research around the world shows that [mid-level providers] provide as good, if not better, care. Every time they stated safety as a factor, we asked for research, which they didn’t have.”
By the way, states with tougher licensing of dentists do not have better dentistry, but they do have higher prices. Almost thirty percent of the US workforce is now required to hold a license including shampoo specialists.
Hat tip: Carpe Diem
Had health care costs tracked the rise in the Consumer Price Index, rather than outpacing it, an average American family would have had an additional $450 per month—more than $5,000 per year—to spend on other priorities.
That covers 1999-2009, and is from Rand Research, via Timothy Taylor.
The U.S. median wage for 2010 was $26,363.
The average health care insurance premium today is over $15,000 and by 2021 it may be headed to $32,000 or so (admittedly that estimate is based on extrapolation).
Therein lies the problem.
To oversimplify a bit, treat the wage as the economic value produced by the median individual. This will be most on target for individuals who do not receive health care benefits through their current jobs.
Again to oversimplify, treat the health care costs as the economic value needed to produce or maintain the modern individual. (Or rather as part of those costs.) Of course not everyone requires health care in a given year, but societal norms for health care treat these expenditures as if they were necessary, if only morally necessary.
Another relevant comparison is “median income for those who do not have employer-supplied coverage” vs. “future insurance costs for those same individuals.” I have not seen such numbers, but the median income of this group is lower, though the stipulation probably is selecting for younger individuals with lower potential insurance premia.
In any case, we will have increasing numbers of individuals for whom the economic value needed to maintain them exceeds the economic value they produce. I don’t mean elderly people on life support, I mean able-bodied, working-age individuals. This will make it increasingly hard to implement “health care egalitarianism.”
Here is how health care premia rose 63% over the last seven years. In the very last year, however, health care as a percentage of gdp did not rise at all, mostly because a weak economy and higher co-pays cut back on utilitzation. That is the most obvious way our health care cost crisis could end up being solved, though of course it is probably not the best way. We cannot expect it to last whenever substantial economic growth picks up again.
In 2004 I wrote In Praise of Impersonal Medicine arguing:
I have nothing against my physician but I would prefer to be diagnosed by a computer. A typical physician spends most of the day playing twenty questions. Where does it hurt? Do you have a cough? How high is the patient’s blood pressure? But an expert system can play twenty questions better than most people. An expert system can use the best knowledge in the field, it can stay current with the journals, and it never forgets.
and in 2006 I noted:
The practice of modern medicine is surprisingly primitive…My credit card company knows far more about my shopping history than my physician knows about my medical history.
I now believe that we are on the cusp of major changes to medicine. The thousand dollar genome sequence is less than a year away, Ford has just developed a car seat that can monitor your health, many people are already using wrist monitors to measure heart and sleep patterns. All of this data will soon be combined with massive databases to offer predictive and prescriptive health diagnosis.
In Do We Need Doctors or Algorithms the venture capitalist Vinod Khosla expands:
IBM’s Watson computer… is now being applied to medical diagnosis after handling imprecise and vague tasks like winning at Jeopardy, which experts a few years ago would have said could not be done. “Computers cannot match the judgment of humans on these kinds of tasks!” And with enough data, medical diagnosis or 90% of it is an easier task than Jeopardy.
Already Kaiser Permanent already has 10 million real-time medical records with details of 30,000,000 e-visits last year with caregivers and computer modeling of key diseases per individual that data scientists would love to get their hand on. Already, according to IDC 14% of the US population is using their phones for medical help and 200 million health and fitness related mobile applications have been downloaded according to pyramid research. Fun stuff, though early. They are probably two generations away from systems that are actually useful.
…But I doubt very much if within 10-15 years (given continued investment and innovation and keeping the AMA from quashing such efforts politically) I won’t be able to ask Siri’s great great grandchild (Version 9.0?) for an opinion far more accurate than the one I get today from the average physician. Instead of asking Siri 9.0, “I feel like sushi” or “where can I dispose a body” (try it…it’s fairly accurate!) and with your iPhone X or Android Y with all the power of IBM’s current Watson computer in the mobile phone and an even more powerful “Nvidia times 10-100” server which will cost far less than med school with terabytes or petabytes of data on hundreds of millions (billions?) of patients, including their complete genomics and proteomics (each sample costing about the same as a typical blood test).
In Entrepreneurial Economics I argued for a “no give, no take” system for organ donation–people who signed their organ donor cards would be given priority over non-signers should they one day need an organ. The idea has an element of justice to it but the primary goal is to increase the incentive to sign one’s organ donor card.
Israel recently adopted this policy by giving extra points on the allocation system to people who previously signed the organ donor card. In the case of kidneys, for example, two points (on a 0-18 point scale) are given if the candidate had three or more years previous to being listed signed their organ card. One point is given if a first-degree relative had signed and 3.5 points if a first-degree relative had previously donated.
It’s early but so far the policy appears to be very successful:
Due to the population’s surge of interest in obtaining an organ donor card, the Adi-National Israel Transplant Center has extended through March 31 the deadline to register as a donor and receive special benefits.
…During the past few weeks, Adi’s phone system has collapsed several times due to the high demand.
Since Adi decided to give preferential treatment to those registering as a potential organ donor, tens of thousands of people have registered, raising the number of potential donors to over 600,000. Until last year, the rate of registration was among the lowest in the Western world.
Hat tip to David Undis whose excellent group Lifesharers (I am an adviser) is implementing a private version of no-give, no take in the United States.
Here is my piece on Life Saving Incentives and here are previous MR posts on organ donation.
This is from an article about the transmissibility of bird flu:
But there have also been some anomalous cases, including a group of diners in Vietnam who apparently were infected by raw duck blood pudding, and the handlers of fighting cocks who were stricken after sucking blood and mucus out of their birds’ beaks.
So if the real problem with U.S. health spending is that the U.S. diverged from its peer countries for a decade-long stretch, solving that problem isn’t quite as simple as mimicking the institutions and strategies of our peer countries, whether it’s Canada’s single-payer system or the hybrid models of France or Germany. Our peer countries are facing the same challenges we are, albeit with slightly more breathing room.
This raises the question of what exactly changed in the 1980s. Daeho Kim, a graduate student at Brown University, offers a provocative hypothesis in a new working paper. As Kim explains, a 1983 Medicare reform created the prospective payment system, or PPS, which offered fixed reimbursements for the use of a medical technology. If a physician decides to use bypass surgery as a cardiac treatment, she won’t be paid on the basis of what it cost her to perform the surgery. Instead, she’ll be paid the national average cost. This way, there is a strong incentive to beat the national average cost of performing bypass surgeries, thus lowering, in theory, systemwide costs.
But something quite different seems to have happened. A big part of the story is that providers can choose from a number of different cardiac treatments, some of which are more expensive than others. PPS encouraged them to focus on the treatments where the marginal cost — the cost of providing one more treatment, in this case — fell below the average cost, even if there are more cost-effective treatments available. Kim suggests that PPS may account for one of the most distinctive aspects of the U.S. health system — our extraordinarily overreliance on costly treatments. If Kim is right, it is the failure of bureaucratic price-setting, not the failure of market competition, that may have supercharged health inflation in the 1980s and beyond.
That is from Reiham Salam. I will read through the Kim paper carefully and perhaps report back on it. This is an important topic.
