Results for “dear doctor”
6 found

Keith Richards’s *Life*

I very much enjoyed this book, which also gave me an excuse to dig out old Rolling Stones albums and listen to them again (“Dear Doctor” is perhaps my favorite Stones song, an odd choice).  If it were a 2013 publication this memoir would make my best books of the year list.  Here is p.167:

“The only reason we got a record deal with Decca was because Dick Rowe turned down the Beatles.  EMI got them, and he could not afford to make the same mistake twice.  Decca was desperate…they thought, it’s just a fad, it’s a matter of a few haircuts and we’ll tame them anyway.  But basically we only got a record deal because they could just not afford to fuck up twice.”

Are Health Administrators To Blame?

The graph at right made the twitter rounds a few days ago (1.3k RTs and 2.7k likes for Noah). The graph looked off to me immediately. Between approximately 1992 and 1994 the number of administrators went up by a factor of 4? (Or, if something goes from a 500% growth since 1970 to a 2000% growth rate since 1970, is that a factor of 3? Confusing! Anyway, a big jump.) Big jumps are often a sign that definitions, not reality, have changed. Indeed, what is an administrator?

There’s another problem with this type of graph which shows not absolute numbers but percent growth since 1970. Everything in this graph depends on getting one number, the number of administrators in 1970, exactly correct! But the first number is the one that is the farthest in the past, often the hardest to find and the most suspect. But if that first number is underestimated then every other number in the chart is overestimated.

People send me this kind of thing all the time. “See,” they say, “Why are the Prices So D*mn High is wrong! It isn’t Baumol!”–and I am always reluctant to follow-up because tracking down the underlying data, figuring out what it means, if there are mistakes etc. is a huge time sink. It was the excellent Conversable Economist who go the ball rolling on the latest iteration of this graph, however, and he cites the graph to noted health economist Uwe Reinhardt’s last book, Priced Out so I thought it could be worthwhile to go deeper.

Unfortunately, Reinhardt simply calls this a “famous graph” and it’s clear that he just found it on the internet like everyone else! Oh dear. Following up further, I did find the original Woolhandler-Himmelstein analysis written in 1991 and taking the data up to 1987. WH cite the Statistical Abstract of the United States  (Table 64-2, 109th edition). You can find the SA 109th edition here but it doesn’t have the data. At least, I couldn’t find it. Ok, several hours wasted.

Finally, however, I did find a number for health administrators in an earlier edition of the SA. In the 1980 edition in Table 165, Employed Persons in Selected Health Occupations, there is a number for “Health administrators,” which says 118 thousand in 1972. Aha! Now things are beginning to make sense because from that same table there were at least 3.5 million workers (physicians, nurses, technicians and others) in health occupations and 118 thousand administrators is clearly far too low. Indeed, in a later paper Woolhandler, Campbell and Himmelstein estimate that in 1969, 18.2% of health care workers were in administration which would imply a figure of 639 thousand health administrators circa 1970, a much more plausible number.

The Woolhandler, Campbell and Himmelstein piece also finds that between 1989 and 1994 the share of health care administrators as a percent of the health care workforce increased from 25.5% to….wait for it….25.7%. In other words, no big jump and inconsistent with the huge jump seen in the graph.

It was at this point that I found Kevin Drum’s excellent analysis. Drum was also suspicious of the graph and after a lot of work he concludes that the graph exaggerates by at least a factor of 3 and probably more. Drum estimates an increase in administrators of 831%; using my initial number and Drum’s end number, I estimate an increase of 682%. All numbers to be taken with a grain of salt. Is that a big increase? Compared to what? Drum gives his best takeaway of the data as this graph, administration costs as a percent of health care costs :

I agree with Drum–this way of presenting the data looks plausible, sensible and much less sensationalist than the original graph. Note that there has been an increase in administrative costs. Why? Here’s Drum’s bottom line:

Bottom line: the health care system has grown tremendously over the past 50 years, but that’s mostly not because we have a lot more doctors. It’s because we have MRI techs and ultrasound specialists and more kinds of nurses and more kinds of pills and enormous proton beams to cure cancer. (Those proton beams are massively expensive and require large staffs, but that doesn’t mean you need any more oncologists per patient.) To manage all this new stuff, we need bigger admin and support staffs. As a result, admin and support have grown about 50-100 percent on a relative basis. That’s the real number.

I believe the original graph uses a number for administrators that is too low in 1970 and includes what I suspect was a change in definitions around 1992 (project the 1970 to 1990 line forward or the 1994 to 2009 line backward and you will get a more accurate graph.) More generally, the graph is misleading because it suggests that “administrators” are to blame for high health care costs and if only we could focus on the “real producers” of medicine, the physicians, costs would be much lower. Blaming administrators for high prices is a lot like blaming “the middlemen.” It’s easy to say and easy to tweet but blaming the middlemen reflects a naive perspective on how goods and services are actually produced in a modern economy.

Administrative costs in the United States are high compared to other countries like Canada. (Helland and I discuss this in Why are the Prices So D*mn High.) We might even be able to lower administrative costs by moving to a single-payer, universal system. But there is no free lunch and there is no returning to an administrative free Eden.

The Oocyte Cartel

The Society for Assisted Reproductive Technology (SART) represents more than 85 percent of the assisted reproduction industry. SART requires that its members work only with agencies that limit compensation to egg-donors to around $5000 or a maximum of $10,000 (figures decided upon by the ethics committee of an affiliated organization, The American Society for Reproductive Medicine (ASRM)). In other words, ASRM-SART acts as a buyer’s cartel.

In 2011, Lindsay Kamakahi launched a class action suit against ASRM-SART challenging  their horizontal price-fixing agreement as per se illegal under the Sherman Antitrust Act. ASRM-SART tried to have the case dismissed but a judge recently denied the dismissal in the process making it clear that the plaintiffs have a good case.

ASRM-SART argue that their maximum price is really about protecting women and that compensation “should not be so excessive as to constitute undue inducement.” Egg donation does involve extensive screening, time and some health risks. One would think, however, that the proper response for those interested in protecting women would be to ensure that the women are fully informed and that they are paid high wages not low wages.

The paternalistic policy of the ASRM-SART especially rankles because it applies only to women, sperm donations are not regulated. Of course, sperm donation isn’t risky but we also don’t see laws limiting the wages of miners to protect miners (mostly men) from “undue inducement.” The societal expectation seems to be that men are appropriately motivated by self-interest but women may be appropriately motivated only by altruism.

I am in agreement with Kimberly D. Krawiec who writes in her excellent paper Sunny Samaritans and Egomaniacs: Price-Fixing in the Gamete Market:

It is ASRM’s paternalistic and misguided attempts to control oocyte donor compensation through the same type of professional guidelines that courts have rejected when employed by engineers, lawyers, dentists, and doctors that should raise an ethical red flag.

pricecontrolsrentsASRM-SART surely believe that they are doing good but I think it no accident that they also do well from a policy that reduces the price of their inputs. A price controlled below the market price generates rents. In the traditional analysis, the rents are dissipated away by long-lines, a form of rent seeking (see Modern Principles–first edition now a bargain!). It’s also possible, however, for suppliers to grab up the rents, especially suppliers of complementary goods.

For example, it’s often been pointed out that in the organ donor market the hospitals, surgeons and executives all get paid and paid well; the only person not getting paid is the person who provides the transplant organ. But we can say more–one of the reasons the hospitals, surgeons and executives get paid well is precisely that the donor is not paid. The shortage created by the price control drives the demander’s willingness to pay upward and some of the difference between the willingness to pay and the maximum legal price is captured by the suppliers of complementary inputs. How do we know? In the 1990s, entry into the transplant business grew much faster than did the supply of transplant organs. In fact, transplants were so profitable there was a rush to transplant that increased the number of centers but drove down center volume thereby reducing patient survival rates.

Similarly, by limiting egg-supply the suppliers of assisted reproductive services may be able to increase their share of the total gains from trade.

Although ASRM-SART may profit from restricting donor compensation there is another issue at large, the repugnance constraint. The repugnance and disgust centers of the brain are old and deep and often revolve around issues of body integrity, body products, hygiene, sex and death. Birth treads uneasily in many of these waters already and egg donation adds to this volatile mix issues of gender, personhood, identity and genetics all of which prime for a repugnance storm. The plaintiff’s case is sound but if the antitrust laws prevent ASRM-SART from limiting prices–or saying that they limit prices–and if egg donation were to become even more of a market in everything might there not be a backlash and an outright ban on compensated donors, as is the case in many other countries and for transplant organs in this country? I hope not but it is a real possibility.

The ban on compensated transplant organ donation has led to hundreds of thousands of excess deaths. A ban on compensated sperm and egg donation would lead to a dearth of lives.

My all-time favorite things Ontario

1. Short story author: Alice Munro I consider one of the very best writers ever, from anywhere or any period.  Read them all, and there is a new collection coming this November.  Here is one place to start.

2. Movie, set in: Dead Ringers, by David Cronenberg, one of my favorite films period.

3. Director: After Cronenberg there is James Cameron, hate me if you want but I find his movies splendid.  Sarah Polley remains underrated in the United States, start with Away From Her, another of my all-time favorites.

4. Novelist: Margaret Atwood, especially Cat’s Eye.  I used to like Robertson Davies, but somehow his novels have not stuck with me.

5. Pianist: I used to think that only half of Glenn Gould’s recordings were tolerable, but in the last five years I have come to see his Haydn and Brahms recordings as masterpieces.  Now it’s only the Mozart and Beethoven I can’t stand.  Don’t forget the Berg Sonata and of course the Bach and also his writings.

6. Architect: Frank Gehry comes to mind, though I do not like the new rendition of the Art Gallery of Ontario.

7. Alanis Morissette song: “Head Over Feet.”

8. Comedian: I love Mike Myers in “Wayne’s World” and Jim Carrey in “Ace Ventura” and “The Cable Guy.”

9. Favorite Neil Young album: Everybody Knows this is Nowhere.

10. Blogger: AhemCory Doctorow deserves mention too.

We haven’t even touched the painters.

What strikes me is not only how strong this list is, but how little thought was required to compile it.

Letter to the NEJM

The issue of off-label prescribing is heating up again.  A recent article in the New England Journal of Medicine by Randall Stafford made the case for greater regulation.  I am concerned that the benefits of off-label prescribing are not fully appreciated.  Dan Klein and I wrote a letter to the NEJM – which they declined to publish – in response.  Here’s the letter:

Dear NEJM,

R.S. Stafford writes that off-label prescribing “permits innovation in clinical practice … offers patients and physicians earlier access to potentially valuable medications and allows physicians to adopt new practices based on emerging evidence.”  Nevertheless, he calls for greater FDA regulation.

In contrast, we argue that the efficacy of off-label usage suggests that less FDA regulation of first or on-label usage would increase innovation and offer patients earlier access to new medications. 

Off-label prescribing is regulated by the judgments of doctors, medical researchers, industry, the patient community, and patients.  This system offers patients a more nuanced approach to care than a top-down approach.  We should extend this approach to new drugs as well as to new uses for old drugs.

Our perspective is bolstered by a large survey of physicians which demonstrates strong support for off-label prescribing and considerable support for reducing FDA regulations on new drugs.

Daniel Klein
Alexander Tabarrok
George Mason University

Smart people live longer

Earlier I discussed the evidence from Oscar winners that higher status leads to better health. Steve Sailer alerts me to a good article from Forbes challenging the status explanation in favor of an effect of IQ on health.

Why is it that, all around the world, those with more income, education and high-status jobs score higher on various measures of health? ….The traditional answer to these questions has been that greater wealth and social status mean greater access to medical care. But even ten years ago, when this magazine last delved into the topic (FORBES, Jan. 31, 1994), the available answers seemed inadequate. If access was the key, then one would have expected the health gap between upper and lower classes to shrink or disappear with the advent of programs like Britain’s National Health Service and America’s Medicare and Medicaid, not to mention employer-sponsored health insurance. In fact, the gap widened in both Britain and America as these programs took effect. The 1994 article cited a study of British civil servants–all with equal access to medical care and other social services, and all working in similar physical environments–showing that even within this homogeneous group the higher-status employees were healthier: “Each civil service rank outlived the one immediately below.” How could this be?

Today the standard answer–or, at least, the answer you are guaranteed to get from the WHO and other large health bureaucracies–is that inequality itself is the killer. …

[But a new theory has been put forward by] Linda Gottfredson, a sociologist based at the University of Delaware, and psychologist Ian Deary of the University of Edinburgh. Their solution to the age-old mystery of health and status is at once utterly original and supremely obvious. The rich live longer, they write, mainly because the rich are smarter. The argument rests on several different propositions, all well documented. The crucial points are that (a) social status correlates strongly and positively with IQ and other measures of intelligence;(b) intelligence correlates strongly with “health literacy,” the ability to understand and follow a prescription for disease prevention and treatment; and (c) intelligence is also correlated with forward planning–which means avoidance of health risks (including smoking) as they are identified.

The first leg of that argument has been established for many decades. In modern developed countries IQ correlates about 0.5 with measures of income and social status–a figure telling us that IQ is not everything but also making plain that it powerfully influences where people end up in life. The mean IQ of Americans in the Census Bureau’s “professional and technical” category is 111. The mean for unskilled laborers is 89. An American whose IQ is in the range between 76 and 90 (i.e., well below average) is eight times as likely to be living in poverty as someone whose IQ is over 125.

Second leg: Intelligent people tend to be the most knowledgeable about health-related issues. Health literacy matters more than it used to. In the past big gains in health and longevity were associated with improvements in public sanitation, immunization and other initiatives not requiring decisions by ordinary citizens. But today the major threats to health are chronic diseases–which, inescapably, require patients to participate in the treatment, which means in turn that they need to understand what’s going on….

Deary was coauthor of a 2003 study in which childhood IQs in Scotland were related to adult health outcomes. A central finding: Mortality rates were 17% higher for each 15-point falloff in IQ. One reason for the failure of broad-based access to reduce the health gap is that low-IQ patients use their access inefficiently. A Gottfredson paper in the January 2004 issue of the Journal of Personality & Social Psychology cites a 1993 study indicating that more than half of the 1.8 billion prescriptions issued annually in the U.S. are taken incorrectly. The same study reported that 10% of all hospitalizations resulted from patients’ inability to manage their drug therapy. A 1998 study reported that almost 30% of patients were taking medications in ways that seriously threatened their health. Noncompliance with doctors’ orders is demonstrably rampant in low-income clinics, reaching 60% in one cited s tudy. Noncompliance is often taken to signify a lack of patient motivation, but it often clearly reflects a simple failure to understand directions.

Although I doubt that IQ explains the longevity of Oscar winners relative to nominees I think it does explain a great deal – indeed, it would be astonishing if IQ didn’t impact health. By the way, I recommend Deary’s Intelligence: A Very Short Introduction and here is an even shorter introduction.