…the greatest winners in 2026 would be Mississippi and Kansas, where federal health-care funding would more than triple and double, respectively. On the other hand, Connecticut’s aid would be cut by just over half.


…the Kaiser Family Foundation…concluded that 35 states would lose $160 billion under the bill. The Kaiser study, like two earlier this week, looked at the cumulative effect from 2020 to 2026.

Here is the Amy Goldstein and Juliet Eilperin piece at WaPo.

Japan (America) fact of the day

by on September 20, 2017 at 2:21 am in Law, Medicine | Permalink

So consider the amount of standard daily doses of opioids consumed in Japan. And then double it. And then double it again. And then double it again. And then double it again. And then double it a fifth time. That would make Japan No. 2 in the world, behind the United States.

That is from German Lopez at Vox.

The economics of Graham-Cassidy

by on September 19, 2017 at 1:20 am in Economics, Law, Medicine | Permalink

It is good for forcing some fiscal discipline on health care, but state governments are fiscally too weak to take over America’s public sector health care finance.  That is the message of my latest Bloomberg column.  Here is one excerpt:

There is another problem with state experimentation in this context. So many health-care problems are on the supply side, namely weak incentives for quality care, barriers to entry and innovation, and regulations that raise costs but don’t improve safety. Ideally policy experimentation could cover all of these dimensions, but almost all of the debate is on the side of financing and insurance coverage. With a more or less fixed set of supply-side institutions, simply pushing more financing decisions into state governments may not produce much, if any, improvement.

So overall the reform doesn’t seem to be feasible.  But here is the part to bug you:

It is a legitimate worry that Graham-Cassidy might cut health-care benefits in an unequal fashion, but the bill may be more egalitarian than it at first appears. Due to the embedded formulas, the bill redistributes resources to red states, in particular states that have not already accepted the Medicaid expansion from Obamacare. Often those are rural states, some of them in economic decline. Favoring such states does have an egalitarian aspect, even if the Republican Party isn’t very effective in explaining the policy in those terms.

The biggest losers from Graham-Cassidy are likely New York and California, two states with very costly Medicaid rolls. That might appear anti-egalitarian, but is it really? The beneficiaries in those states tend to be relatively young, and thus their human capital endowments, in the form of future life enjoyment, are usually quite high. All things considered, a 28-year old lower middle-class immigrant in Los Angeles is arguably better off than a 61-year-old in Nebraska with $100,000 in the bank. Giving a benefit to the red state individual actually may reflect the more egalitarian sentiment, although that’s not usually how health-care policy discussions are framed by either Democrats or Republicans.

Like it or not, the forward-looking perspective is probably the correct one here.  One not altogether illogical response is to treat this as a reductio ad absurdum on egalitarian ideas.  Another response is to base health care policy more on efficiency, and again to discard the egalitarian ideal, which in turn would resurrect some chance of being able to defend redistribution toward the young.  What doesn’t make sense is to invoke egalitarian ideals only selectively, as people are fond of doing.

In 2004 Canada prohibited paying Canadian sperm donors, leading to a tremendous shortage as I had predicted in 2003 (see also my post, The Great Canadian Sperm Shortage). Canadian Peter Jaworski has an update (oddly enough published in USA Today):

Canada used to have a sufficient supply of domestic sperm donors. But in 2004, we passed the Assisted Human Reproduction Act, which made it illegal to compensate donors for their sperm. Shortly thereafter, the number of willing donors plummeted, and sperm donor clinics were shuttered. Now, there is basically just one sperm donor clinic in Canada, and 30-70 Canadian men who donate sperm. Since demand far outstrips supply, we turn to you. We import sperm from for-profit companies in the U.S., where compensating sperm donors is both legal and normal.

Note, by the way, that contrary to what you might expect from Titmuss et al. US sperm is considered to be of high quality because it comes with information about the donor.

And sperm isn’t the only precious bodily fluid that Canada imports.

Canada has never had enough domestic blood plasma for plasma-protein products, such as immune globulin. Our demand for those products, however, is increasing. Last year, we collected only enough blood plasma from unremunerated donors to manufacture 17% of the immune globulin demanded. The rest we imported from you, in exchange for $623 million, or $512 million U.S.

Reliance on your blood plasma looked like it might change a little bit when, in 2012, a company called Canadian Plasma Resources announced plans to open clinics in Ontario dedicated to collecting blood plasma. The trouble is that its business model included compensating donors. Almost immediately, groups such as the Canadian Union of Public Employees and the Canadian Health Coalition began to lobby the Ontario government to pass a law to stop CPR from opening clinics. Ontario obliged in 2014, passing the Safeguarding Health Care Integrity Act, which among other things made compensation illegal.

…As for safety, the fact that we import products made with remunerated donors should tell you that it is emphatically not an issue. Health Canada has said that there is no health concern. The CEO of Canadian Blood Services, Graham Sher, took to YouTube to explain that “it is categorically untrue to say, in 2015 or 2016, that plasma-protein products from paid donors are less safe or unsafe. They are not. They are as safe as the products that are manufactured from our non-remunerated or unpaid donors.”

As Jaworski writes:

What Canada should do is legalize compensation for renewable bodily fluids in our own country. It would be the morally right thing to do. It would help make and save more lives, without harming anybody.

I say no, in my latest Bloomberg column.  For some of the arguments here, I am indebted to earlier work by Megan McArdle.


by on September 8, 2017 at 12:19 pm in Economics, History, Medicine, Science | Permalink

Long ago, in the ancient city of Cyrene, there was a herb called silphium. It didn’t look like much – with stout roots, stumpy leaves and bunches of small yellow flowers – but it oozed with an odiferous sap that was so delicious and useful, the plant was eventually worth its weight in gold.

Image result for silphiumThat’s the opening to an excellent story about silphium, a herb widely-used and loved by the Romans but that hasn’t been seen for nearly two thousand years. Part of the problem was biological, the plant grew only in a tiny region of modern day Libya:

Its entire range consisted of a narrow strip of land about 125 miles (201km) by 35 miles (40km).

Try as they might, neither the Greeks or the Romans could work out how to farm it in captivity. Instead silphium was collected from the wild, and though there were strict rules about how much could be harvested, there was a thriving black market.

Even today there are plants, like huckleberry which resist all efforts to farm them. (Ala Jared Diamond’s Guns, Germs and Steel). Part of the problem was also economic–a tragedy of the commons–as prices shot up and property rights weren’t strong enough to prevent over-farming.

And might silphium still be found somewhere in remote regions of Libya? Read the whole thing.

I haven’t had a chance to look at this one, but here is the headline summary from Brookings:

The new paper, published in the Fall 2017 edition of the Brookings Papers on Economic Activity, makes a strong case for looking at the opioid epidemic as one driver of declining labor force participation rates.

In fact, Krueger suggests that the increase in opioid prescriptions from 1999 to 2015 could account for about 20 percent of the observed decline in men’s labor force participation during that same period, and 25 percent of the observed decline in women’s labor force participation.

Here is the Brookings link.

…competitive conduct changes quickly as the number of incumbents increases.  In markets with five or fewer incumbents, almost all variation in competitive conduct occurs with the entry of the second or third firm…once the market has between three and five firms, the next entrant has little effect on competitive conduct.

That is from Bresnahan and Reiss, “Entry and Competition in Concentrated Markets.

Part of their method is to compare doctor and dentist pricing practices across towns of different size, and thus across different numbers of providers.  Then they see where bigger numbers makes a difference in terms of pricing.  Plumbers and tire dealers are considered too.  One lesson seems to be that market concentration has to rise to very high levels to make a big difference in outcomes.

If you are wondering, the “sweet spot” for a town to have a single dentist or doctor is population between 700 and 900, at least circa the early 1990s.

Where India Goes

by on August 28, 2017 at 7:25 am in Economics, Medicine | Permalink

Where India Goes, a book about the problem of open defecation in India, is the best social science book I have read in years. Written by Diane Coffey and Dean Spears, Where India Goes, examines an important issue and it does so with a superb combination of human interest storytelling and top-notch empirical research made accessible.

Drawing on the academic literature, Coffey and Spears show that open defecation sickens and kills children, stunts their growth, and lowers their IQ all of which shows up in reduced productivity and wages in adulthood.

The dangers of open defecation are clear. Moreover, Gandhi said that “Sanitation is more important than independence” and Modi said “toilets before temples,” yet in India some half a billion people still do not use latrines. Why not? Jean Dreze and Amartya Sen (2013), offer a typical explanation:

In 2011 half of all Indian households did not have access to toilets, forcing them to resort to open defecation on a daily basis…

The phrasing presents the problem as a lack of access that forces people to resort to open defecation. From this perspective the solution seems obvious, provide access. After all, if you or I had access to latrines we would use them so if someone else isn’t using latrines it must be because they don’t have access. A bit of thought, however, dispels this notion.

Latrines are not expensive. Many people in countries poorer than India build their own latrines. If access is not the problem then building latrines may not be the solution. Indeed, India’s campaign(s) to build latrines have been far less successful than one might imagine based on the access theory. Quite often latrines are built and not used. Sometimes this is due to poor construction or location but often perfectly serviceable latrines are simply not used as latrines. In fact, surveys indicate that 40 per cent of households that have a working latrine also have at least one person who regularly defecates in the open (Coffey and Spears 2017).

For many people in India, open defecation is preferred to latrine use. The reasons relate to issues of ritual purity and caste. Latrines in or near homes are considered polluting, not in a physical so much as a spiritual or ritual sense. Latrine cleaning is also associated with the Dalit (out)-caste, in itself a polluting category (hence untouchable). That is, the impurity of defecation and caste are mutually reinforcing. As a result, using or, even worse, cleaning latrines is considered a ritual impurity. The problem of open defecation is thus intimately tied up with Hindu notions of purity and caste which many do not want to discuss, let alone condemn.

In the villages the idea of open defecation is also associated with clean air, exercise, and health. Thus, in surveys “both men and women speak openly about the benefits of open defecation and even associate it with health and longevity.” Even many women prefer open defecation if only because it gives them a chance to get out of the house and have some freedom of movement.

Eventually, flush toilets and sewage will eliminate the problem of open defecation, but many people will die before sewage comes to rural India. Building latrines is not enough but is there an opportunity for an Indian entrepreneur? If standardized latrines were bundled with service contracts and provided by professional, uniformed workers who emptied the latrines mechanically (and thus had dignity), demand could well be high. A Walmart for latrine construction and management.

Coffey and Spears, however, offer no silver bullets. Problems brought about by belief and behavior are usually more difficult to solve than material problems. Nevertheless, by demonstrating the importance of the problem and by facing the causes squarely, Coffey and Spears have done India a tremendous service.

The health care polity that is Texas

by on August 27, 2017 at 12:30 am in Law, Medicine | Permalink

The Texas Legislature just enacted landmark health care reforms by opening the state to telemedicine. This success shows that states have great power to improve health care without waiting on Washington. This is especially important as the Affordable Care Act (ACA, or “Obamacare”) grows more unstable and neither party in Congress seems capable of responding.

Telemedicine can improve health and lives—especially in a sprawling state with vast, thinly populated areas. As high-quality video conferencing and remote telemetry become more sophisticated and less expensive, telemedicine offers high-quality care without the need for face-to-face contact in many (not all) situations.

Since an episode of cardiac arrhythmia, I’ve carried a $99 device ( that conducts clinical-quality electrocardiograms, analyzes them, and gives one-touch, low-cost access to professional help. My then-92-year-old mother’s life was probably saved by an iPad FaceTime conversation with her grandson (an M.D.), who sensed the onset of sepsis. Low-cost digital stethoscopes, blood pressure cuffs, and other devices can plug into smartphones or tablets, transmitting information directly to teledoctors.

…Senate Bill 1107 allows patients to receive prescriptions from doctors whom they meet for the first time via electronic means.

Here is more from Robert Graboyes.

Three articles on medical breakthroughs, or not, caught my eye. The Wall Street Journal discusses a breakthrough in cancer therapy using HIV to target cancer cells. The news is mostly good but the lead researcher worries that it was only luck which prevented the FDA from ending the research prematurely:

Cytokine-release syndrome almost ended the therapy in its infancy. In 2012, Dr. June’s first pediatric patient, 6-year-old Emma Whitehead, developed a 106-degree fever and experienced multiple organ failure. “We thought she was going to die,” he recalls.

A blood analysis showed high levels of the cytokine interleukin-6, or IL-6. “I happened to know because of my daughter’s arthritis that there was a drug that could target IL-6—that had never been used in oncology,” Dr. June recalls. Fortunately, the children’s hospital where Emma was being treated had the medication, Tocilizumab, on hand. “We wouldn’t have had it at the adult hospital because it wasn’t approved at that point for adult conditions.”

Within hours of receiving the drug, Emma awoke from her coma. “It was literally one of those Lazarus conditions,” Dr. June says. Eight days after receiving the CAR T-Cell injection, she went into remission. Two weeks later, she was cancer-free. She’s now 12 and thriving.

Tocilizumab “saved the field” as well as the girl, Dr. June says. “If the first patient dies on a protocol and nobody’s been cured, you’re over.” Regulators, he adds, always “err on the side of caution.” That irks him, since most of his patients would die without the experimental treatments: “Our FDA regulations are made so that you can never have more than about 30% of people get sick with serious side effects. I think we don’t have enough leeway for side effects when you have a potentially curative therapy.”

In my TED talk I argued that the richer China and India are the better it will be for US cancer patients because the bigger the market the greater the incentive to research and develop new drugs. US patients may also get a second benefit. China is big enough to move world R&D which previously was true only for the US and to a lesser extent (because of price controls) the EU. Since the US has by far the largest pharmaceutical market the FDA is a regulatory hegemon. With China we may get to see for the first time a serious alternative to the FDA. And according to some observers, China’s approval process is less-risk averse.

Some of those [new trials] are in the U.S., but more are taking place in China. “There’s a lot more people there, so you can do a lot more trials,” Dr. June says. “But they also put more of their GDP into medical therapy, particularly CAR T-cells.” Beijing’s drug-approval process is easier, too.

I don’t know whether that is true, but it’s a hopeful sign.

In another story, Lawrence Reed has the inspiring story of Bill Halford who has developed a not-yet-approved vaccine for Herpes. Herpes can be incredibly painful and it infects over one million people a year but the route to a vaccine has not been easy:

Impatient with Washington, Halford injected himself, his family and a group of ten herpes patients. None of his family exhibited any ill effects, evidence that the vaccines were safe. All the sufferers enjoyed dramatic pain relief, suggesting effectiveness. The early success of his research led him to co-found, along with film-maker and entrepreneur Agustin Fernandez, a company known as Rational Vaccines, Inc. (RVx)). Its mission is to fight the herpes epidemic worldwide, using the live, attenuated strains that Halford created.

Peter Thiel is a lead investor in Rational Vaccines. Sadly, Bill Halford contracted cancer and died this year at just age 48. I hope his company will carry the ball over the goal line.

Should we all be taking Metformin? Metformin is a diabetes drug but researchers have found that the people taking the drug also get dramatically fewer cancers. Here is Wired:

What they discovered was striking: The metformin-takers tended to be healthier in all sorts of ways. They lived longer and had fewer cardiovascular events, and in at least some studies they were less likely to suffer from dementia and Alzheimer’s. Most surprising of all, they seemed to get cancer far less frequently—as much as 25 to 40 percent less than diabetics taking two other popular medications. When they did get cancer, they tended to outlive diabetics with cancer who were taking other medications.

As Lewis Cantley, the director of the Cancer Center at Weill Cornell Medicine, once put it, “Metformin may have already saved more people from cancer deaths than any drug in history.” Nobel laureate James Watson (of DNA-structure fame), who takes metformin off-label for cancer prevention, once suggested that the drug appeared to be “our only real clue into the business” of fighting the disease.

It’s not just Wired. Here is the title of a recent meta-analysis:

Metformin reduces all-cause mortality and diseases of ageing independent of its effect on diabetes control: a systematic review and meta-analysis.

Metformin is already approved so it could quickly be used off-label  but there is a big problem with anti-aging drugs–there is currently no way any anti-aging drug can get approved.

The assembled scientists and academics focused on one obstacle above all: the Food and Drug Administration. The agency does not recognize aging as a medical condition, meaning a drug cannot be approved to treat it. And even if the FDA were to acknowledge that aging is a condition worthy of targeting, there would still be the question of how to demonstrate that aging had, in fact, been slowed—a particularly difficult question considering that there are no universally agreed-on markers.

The FDA should provide a path to approve anti-aging drugs but if not maybe the CFDA will.

I will be doing a Conversation with Tyler with her.  On the off chance you don’t already know, here is a brief Wikipedia summary of her work:

Mary Roach is an American author, specializing in popular science and humor.[1] As of 2016, she has published seven books,: Stiff: The Curious Lives of Human Cadavers (2003), Spook: Science Tackles the Afterlife (2005) (published in some markets as Six Feet Over: Adventures in the Afterlife), Bonk: The Curious Coupling of Science and Sex (2008), Packing for Mars: The Curious Science of Life in the Void (2010), My Planet: Finding Humor in the Oddest Places, Gulp: Adventures on the Alimentary Canal (2013), and Grunt: The Curious Science of Humans at War (2016).

But there is much more to her than that.  Here is the full Wikipedia page.  Here is her own home page.

So what should I ask?  I thank you in advance for your inspiration.

President Donald Trump named Tomas Philipson, an economist at the University of Chicago who has specialized in health-care policy, to the three-member Council of Economic Advisers on Monday.

Mr. Philipson briefly served as an adviser to the Trump transition team last fall on health-care matters and was a senior economic adviser to the head of the Food and Drug Administration and the Centers for Medicare and Medicaid Services during the George W. Bush administration. Mr. Philipson is the co-founder of Precision Health Economics, a consultancy. He is professor of public policy at the University of Chicago’s Harris School of Public Policy and a director of the Health Economics Program at the university’s Becker Friedman Institute for economic research.

Mr. Trump’s nominee to lead the CEA, Kevin Hassett, hasn’t been confirmed by the Senate. His nomination cleared the Senate Banking Committee with only one lawmaker, Sen. Elizabeth Warren (D., Mass.), voting against him in June.

The two other members of the CEA aren’t subject to Senate confirmation and typically serve for around two years. Mr. Trump hasn’t announced the third member of the council, which has advised presidents for over seven decades on the economic impact of their policies.

That is from the WSJ.

According to a study recently published in The Review of Economic Studies, access to legal marijuana may significantly reduce academic performance.

The study took advantage of a natural experiment in the Dutch city of Maastricht. In 2011, the city sought to pull back some of the marijuana tourism going to its coffee shops, where marijuana sales are legally tolerated. So through the local association of cannabis shop owners, it banned some foreigners of certain nationalities from buying pot at these venues.

This let researchers Olivier Marie and Ulf Zölitz, in the cleverly titled “‘High’ Achievers? Cannabis Access and Academic Performance,” compare the academic outcomes of Maastricht University students with varying levels of access to legal pot.

What they found: The students who weren’t allowed to legally access marijuana saw their grades significantly improve, especially in classes that require numerical and mathematical skills.

Here is the full Vox story.  I strongly believe it is morally wrong to throw people in jail for smoking such substances, but still policy decisions have real consequences, we should know what those are, and I am not convinced that full availability of marijuana is the optimal approach.

Here are ungated copies, noting there have been significant revisions in the paper along the way.

My health care question

by on July 31, 2017 at 1:41 am in Data Source, Medicine | Permalink

In the United States, Medicare starts at age 65.  So to the extent health care improves health outcomes, we should see a noticeable uptick in results as people reach 65, at least relative to the trajectory of aging they otherwise would experience.  Of course many other national health care systems treat 64 and 65-year olds as the same, so we can compare the American case to those alternatives.  That would give us a better sense of the relative performance of single-payer coverage, no?

Has such a study been done, and if so what did it yield?