Category: Medicine

Speeding up Inhaled Vaccines

After Operation Warp Speed was disbanded by the Biden administration, vaccine development slowed from warp speed to impulse power. The rest of the world now has some innovative vaccines not yet available in the United States. China, for example, has an inhaled vaccine. We don’t yet know how good the vaccine is and China, of course, has its own problems. In my view, however, the Chinese vaccines have been incorrectly discounted, due in part to chauvinism and propaganda as well as the initial impression that mRNA vaccines had higher efficacy. That advantage, however, his diminished over time. There is something to be said for a tried and true inactivated vaccine that delivers the whole virus and not just the spike protein which is one reason I advocated in 2020 for including an inactivated vaccine in the Operation Warp Speed portfolio. It’s not just China either, as the NYTimes reports Russia, India and Iran all have a nasal vaccine. But in the United States it’s back to business as usual.

NYTimes: In the United States, nasal sprays have been held back by the same funding constraints and logistical hassles that, before the pandemic, often made developing vaccines a decade-long ordeal. The delay could not only weaken the country’s defenses against a more lethal coronavirus variant but also hurt preparations for a future pandemic, depriving the world of an oven-ready nasal vaccine platform that could be adapted to a new pathogen.

“It went back to the prepandemic speed of vaccine development,” said Florian Krammer, a virologist at the Icahn School of Medicine at Mount Sinai. His team’s nasal vaccine has undergone its most advanced testing in Mexico; collaborating with a pharmaceutical company there offered the fastest path to clinical trial funding. In the United States, he said, “The funding situation is pretty dire.”

See also my post on an Operation Warp Speed for Nasal Vaccines.

FDA Deregulation Increases Safety and Innovation and Reduces Prices

In an important and impressive new paper, Parker Rogers looks at what happens when the FDA deregulates or “down-classifies” a medical device type from a more stringent to a less stringent category. He finds that deregulated device types show increases in entry, innovation, as measured by patents and patent quality, and decreases in  prices. Safety is either negligibly affected or, in the case of products that come under potential litigation,  increased.

After moving from Class III (high regulation) to II (moderate), device types exhibited a 200% increase in patenting and FDA submission rates relative to control groups. Patents filed after these events were also of significantly higher quality, as measured by a 200% increase in received citations and market valuations. These effects do not spill over into similar device types.1 For Class II to I deregulations, the rate of patent filings increased by 50%, though insignificantly, and the quality of patent filings exhibited a significant 10-fold improvement, suggesting that litigation better promotes innovation.

…Down-classification yields considerable benefits, as the proponents of deregulation would predict, but what of product safety? Perhaps counterintuitively, I find that deregulation can improve product safety by exposing firms to more litigation. Despite some adverse event rates increasing after Class III to II events (albeit insignificantly), Class II to I events are associated with significantly lower adverse event rates.3 My analysis of patent texts also reveals that inventors focus more on product safety after deregulation. These results suggest that litigation encourages product safety more than regulation…

Some background. Medical devices are regulated under three categories. New types of devices (new, not necessarily high risk) are highly regulated Class III devices which must go through a pre-market approval process to prove safety and efficacy (like new drugs). The pre-market approval process is time-consuming and expensive but it comes with one significant benefit, federal preemption of state tort action, i.e. these devices are shielded from product liability. Class II devices are devices that are judged to be substantially equivalent to an already approved device–proving equivalence also takes time and money but it’s less onerous than proving safety and efficacy de novo. Note that device manufacturers often make their devices less innovative so they can be approved as Class II devices rather than as Class III devices. Class II devices are mostly also protected against tort litigation. Class I devices are not FDA-approved and are subject to tort litigation.

As experience develops with new devices such that new devices turn out to be not especially risky, the FDA sometimes deregulates or down-classifies these devices from Class III to Class II or from Class II to Class I. Rogers studies these down-classifications by comparing what happens to the down-classified device category to a control group of similar devices that were not down-classified. The control group is critical and Rogers shows that his results are robust to defining the control group in a variety of plausible ways. Some of the key results are shown in the following figure:

Nicely we see that device submissions and new entry occur very quickly once a device is down-regulated which indicates that firms have ideas and products on-the-shelf but they are dissuaded from entering the market by the onerous pre-market approval process. Most likely, these are products and firms which produce devices for the European market which tends to be less regulated and they enter the US market only when costs are reduced. Patenting also increases in the down-regulated device category and–exactly as one would expect–this takes more time.

Safety declines non-significantly if at all from Class III to Class II deregulations and increases for Class II to Class I deregulations. That makes the welfare comparisons easy because deregulation appears to be all benefit and no cost. Note, however, that I have always argued that drugs and devices are actually too safe–that, is we could save more lives on net by approving more drugs and devices even if safety went down. That’s a hard sell, however, but it’s clearly true that given the results here we should deregulate or down-classify many more products even if safety declined on the margin. Too much safety is risky. That’s also the upshot of my paper on off-label prescribing which shows that it’s often the FDA-unapproved off-label use which is the gold-standard treatment in fast moving fields of medicine.

Rogers argues that safety increases for Class II to Class I deregulations because liability is a stronger deterrent on the margin than regulation (and he provides some evidence for this view in that safety increases more among larger firms that are less judgment proof than small firms). Without denying that mechanism my view is that innovation itself increases safety. As I noted above, medical device manufactures often do not use the latest technology in their products because this would threaten the “substantial equivalence” test so you get devices that are actually less safe and also more costly to manufacture than necessary. In essence, substantial equivalence anchors new technologies to old technologies thus preventing movement, even movement towards safety and lower prices.

Rogers also has an excellent and unusual paper (with Jeffrey Clemens) on directed innovation in artificial limbs due to the civil war! That paper and this one show a real focus on digging deep into the data to unearth important and unusual sources of insight. N.B.! Parker Rogers is on the job market.

Addendum: See my many previous posts for more useful references on the FDA, especially Is the FDA Too Conservative or Too Aggressive.

*Risky Business*

The subtitle is Why Insurance Markets Fail and What To Do About It, and the authors are the highly regarded Liran Einav, Amy Finkelstein, Ray Fisman.  The level is a bit above what could make this book a bestseller, but I consider that a good thing.  The book in fact is a classic example of how to present economic research in readable, digestible form and should be regarded as such.

I do have a few qualms, but please note these are outweighed by the very high quality of the core material:

1. I think the authors underestimate how rapidly “Big Data” is shifting the information asymmetries away from consumers/policyholders.  This is related to my recent remarks on AI.

1b. For reasons stemming from #1, insurance/surveillance/control, including from employers, will rise in importance as an issue, and soon.  I don’t get a sense of that from reading this book.  We might alleviate selection problems, while creating other difficulties including ethical dilemmas.

2. I would like to see more on moral hazard.

3. I also would want to see more — much more — on the public choice reasons why government insurance markets so often fail — the authors should consider their own title!  Should the Florida government really be propping up insurance contracts and insurance markets to protect homeowners against climate change-related losses?  No matter what your view, this kind of issue is under-discussed.  How about the FDIC?  Bailout-related moral hazard issues?  Those are hardly “small potatoes.”  I get that isn’t “the book they set out to write,” but still I worry that the final picture they present is misleading when it comes to market failure vs. government failure.  Adverse selection is really just one part of insurance markets, but this book doesn’t teach you that.

3b. Isn’t excess liability through our court system another major reason why insurance markets fail?  We needed a Price-Anderson Act, where government assumes a lot of the liability, to support our nuclear power sector, even though coal alternatives were riskier and more harmful, both short run and long run.  In terms of actual importance, hasn’t this been a major, major factor?

3c. Are restrictions on “boil in oil” contracts (no matter what you think of them ethically) another factor in institutional failure here?  Maybe that is one way of making America safe for bungee jumping.  Or we can follow New Zealand, and limit liability here altogether.  The interaction of insurance and liability law is a major issue, and we have not been getting it right.

4. The authors absolutely do consider “positive selection” (e.g., it is the responsible people who buy life insurance, thus leading to a favorable customer pool), but I would give it more emphasis.  If you believe that income inequality, “deaths of despair,” and educational polarization are growing problems, this phenomenon likely is becoming more important.

4b. How about more concessions in the Obamacare analysis?  For years I read that a weaker mandate would cause the system to collapse.  Yet the Republicans significantly cut back on mandate enforcement and the system seems to be getting along OK, at least from that point of view.  (In fact, politically speaking Trump arguably saved Obamacare.)  What did everyone miss?  Did they overrate adverse selection arguments and underrate positive selection?  It seems that was a major failing of the economics profession, which if anything was more insistent on “the three legs of the stool” than policymakers were.  The authors do cover this all at length, but they can’t bring themselves to note “we got down to 7-8 percent uninsured, the whole thing actually worked out OK, and the economists didn’t quite get it right.”

5. There are plenty of cases when expected “insurance” markets do not exist, and we cannot boil those down to adverse selection.  Why don’t all those Bob Shiller proposals happen?  (Is it really inside information about gdp?  That seems doubtful.)  Why aren’t there more prediction markets?  Why have so many proposed futures contracts on exchanges failed?  These all would seem to serve insurance-like purposes, among their other functions.  Yet their supply seems skimpy, at least relative to an economist’s expectations.  Why?  Perhaps there is more to failed insurance markets than meets the eye.

I know authors can fit only so much into a book, but if I can fit this much into a blog post…I would like to see more!  And I think that would result in a more realistic policy balance as well, and draw attention to major issues other than adverse selection.

A “Safety Emergency” Happened at the Wuhan Institute of Virology in November of 2019

Pro-Publica (with Vanity Fair) is putting their reputation on the line with a very damning report suggesting COVID emerged from a lab leak at the Wuhan Institute of Virology. The new information isn’t about the virus but about political reports that indicate that there was some kind of emergency at the lab in November of 2019, an emergency that was so serious Xi himself got involved.

… we sent key documents to experts on CCP communications. They told us that the WIV dispatches did indeed signal that the institute faced an acute safety emergency in November 2019; that officials at the highest levels of the Chinese government weighed in; and that urgent action was taken in an effort to address ongoing safety issues. The documents do not make clear who was responsible for the crisis, which laboratory it affected specifically or what the exact nature of the biosafety emergency was.

…[we] separately got three experts on CCP communications to review the WIV meeting summary. All agreed that it appeared to be urgent, nonroutine and related to some sort of biosafety emergency. Two also agreed that it appeared Xi himself had issued a pishi.

A former senior U.S. intelligence official said that, while the pishi [link, AT] in the dispatch is not necessarily a smoking gun, he reads it as saying that “there is some issue related to lab security, which doesn’t come up very often, that needed to be seen by Xi Jinping.” He added, “Something signed off on by the General Secretary (Xi) and Premier (Li) is high priority.”

there is also this, which I have long found surprising:

The interim report also raises questions about how quickly vaccines were developed in China by some teams, including one led by a military virologist named Zhou Yusen. The report called it “unusual” that two military COVID-19 vaccine development teams were able to reach early milestones even faster than the major drug companies who were part of the U.S. government’s Operation Warp Speed program.

Vanity Fair and ProPublica spoke to experts who said that the timeline of Zhou’s vaccine development seemed unrealistic, if not impossible. Two of the three experts said it strongly suggested that his team must have had access to the genomic sequence of the virus no later than in November 2019, weeks before China’s official recognition that the virus was circulating.

In other news, the authors of the wet-market “orgins” preprint that received a lot of positive mainstream press have substantially moderated their conclusions in the published (peer-reviewed) article which now only pinpoints the seafood market as an epicenter, which everyone already knew.

Pollution and Macro Inequality

Combining 36 years of satellite derived PM2.5 concentrations with individual-level administrative data provided by the U.S. Census Bureau and Internal Revenue Service (IRS), we provide new evidence on the important role that disparities in air pollution exposure play in shaping broader patterns of economic opportunity and inequality in the United States. We first document that early-life exposure to particulate matter is one of the top five predictors of upward mobility in the United States. Second, we exploit regulation-induced reductions in pollution exposure from the 1990 Clean Air Act Amendments to produce new age-specific estimates of pollution-earnings relationship. Combined with individual-level measures of pollution exposure during early childhood, we calculate that disparities in air pollution can account for 17-26 percent of the Black-White earnings gap, 5-27 percent of the Hispanic-White earnings gap, and 6-20 percent of the average neighborhood-earnings effect (Chetty and Hendren, 2018; Chetty, Hendren, and Katz, 2016). Collectively, our findings indicate that environmental inequality is an important contributor to observed patterns of racial economic disparities, income inequality and economic opportunity in the United States.

That’s Colmer, Voorheis and Williams summarizing Air Pollution and Economic Opportunity in the United States. The authors also estimate that

…a 1 μg/m3reduction in prenatal PM2.5 exposure is associated with a $1,105 increase in later-life W-2 earnings and…a 1 μg/m3 reduction in prenatal PM2.5 exposure is associated with a 1.29 percentile rank point increase in upward mobility…We estimate pollution-earnings relationships for each age of exposure from birth to age 12 and show that the relationship between pollution exposure and earnings is stable up to age 4 and then diminishes quickly. We do not estimate a meaningful relationship between particulate matter exposure and later-life earnings from age 8 onward.

These estimate are big but given the substantial number of micro-estimates of the effect of pollution on IQ and cognition that Tyler and I have discussed before (see also this video) substantial effects at the macro level are almost inevitable.

OTC Prescriptions Save on Medical Costs

The excellent Joel Selanikio writes on medical disruption from the rise of self-care:

I’ve been asked many times whether I think that AI will replace doctors. Never once have I been asked if I thought that OTC drugs could replace doctors. But that’s exactly what they have done: every time a drug switches from prescription to OTC, the total number of doctor visits drops.

In fact, a 2012 study by Booz concluded that

“if OTC medicines did not exist, an additional 56,000 medical practitioners would need to work full-time to accommodate the increase in office visits by consumers seeking prescriptions for self-treatable conditions.”

Fifty-six thousand doctors that we don’t need because of OTC drugs; that’s almost 6% of the practicing doctors in America. Think of the effect on healthcare costs.

Selanikio gives more examples of how AI plus super-computers, i.e. cell phones, can lead to better, at-home diagnosis and fewer physician hours (and more here). More generally, due to the Baumol effect the only way to save on medical care costs is by using less labor and more capital–this is rarely recognized.

Irresponsible Gain of Function Research

Scientists at Boston University have grafted the new Omicron spike protein onto the old SARS-Cov-2 virus creating a new and deadlier version of Omicron.

bioRXiv: The recently identified, globally predominant SARS-CoV-2 Omicron variant (BA.1) is highly transmissible, even in fully vaccinated individuals, and causes attenuated disease compared with other major viral variants recognized to date1-7. The Omicron spike (S) protein, with an unusually large number of mutations, is considered the major driver of these phenotypes3,8. We generated chimeric recombinant SARS-CoV-2 encoding the S gene of Omicron in the backbone of an ancestral SARS-CoV-2 isolate and compared this virus with the naturally circulating Omicron variant. The Omicron S-bearing virus robustly escapes vaccine-induced humoral immunity, mainly due to mutations in the receptor49 binding motif (RBM), yet unlike naturally occurring Omicron, efficiently replicates in cell lines and primary-like distal lung cells. In K18-hACE2 mice, while Omicron causes mild, non-fatal infection, the Omicron S-carrying virus inflicts severe disease with a mortality rate of 80%. This indicates that while the vaccine escape of Omicron is defined by mutations in S, major determinants of viral pathogenicity reside outside of S.

Some of the headlines (here, here, here and here) aren’t making clear that the newly created chimeric virus is deadlier than Omicron (in mice) but less deadly than the ancestral strain. Nevertheless, in my view, this is gain of function research that should have come under extra scrutiny. The authors, however, did not go through P3CO review, a rule requiring agencies under HHS to review grant applications for any research on “a credible source of a potential future human pandemic.” More specifically:

The HHS Framework for Guiding Funding Decisions about Proposed Research Involving Enhanced Potential Pandemic Pathogens (HHS P3CO Framework)(link is external) was established in 2017 to guide funding decisions on proposed research that is reasonably anticipated to create, transfer or use potential pandemic pathogens resulting from the enhancement of a pathogen’s transmissibility and/or virulence in humans, called ePPP research.

I think this research qualifies. Frankly, the authors of the study were irresponsible. Boston University also failed terribly in its oversight. I also put some blame on Anthony Fauci for evading and obfuscating earlier gain of function research in a way that suggested very little falls under this category. (Rand Paul was right about this). Note, I am not taking a position on whether this research should have passed P3CO review but it should have been subject to review. I am also well aware that BSL-3 labs are heavily regulated, greatly increasing the cost of useful research. Overregulation is a real cost than can make us less safe and secure.

Nevertheless, if there is even a 5% chance that the SARS-CoV-II pandemic started with a lab leak–and don’t trust anyone who tells you the probability is less than 5%–then we need more care and scrutiny of research on potential pandemic pathogens. Furthermore, the United States must lead if we are to have any influence at all on what happens elsewhere in the world.

Why so much drug use in the United States?

That is a question from a loyal reader, and he does not mean pharmaceuticals rather illegal drugs.  I can see a few hypotheses:

1. Americans consume more of almost everything.  Including health care.  We are simply a nation of consumption, for longstanding cultural reasons and supported by our higher wealth and our ability to save through human capital and rising asset prices, thus enabling more spending.  So we are going to spend more on illegal drugs too.  In fact illegal behavior with the prescription drugs themselves is one of the fastest-growing drug problems in the United States.

1b. Americans also take way more legal prescription drugs than their counterparts in other countries.  Under one estimate, Americans consume 80 percent of the world’s painkillers.

2. Corporate interests, including Big Pharma, are in America relatively strong, including politically strong, and relatively prominent in advertising.  Some of those companies have worked hard to accustom you to the idea that you ought to “take something.”

3.  America has borders with Mexico and the Caribbean, which makes it harder to keep out illegal drugs.

4. Price! (Duh)  Somewhere recently I saw price estimates for cocaine in various countries (might anyone recall the link?).  It was cheaper in the United States than elsewhere.  We are a large market, have economies of scale, and are great at retail and marketing.  Many other things are cheaper here to, which in turn brings us back to #1.

5. Compared to say Germany or Denmark, there are fewer people “looking out for you.”  Americans are more likely to move away from family and friends, and more likely to live “in the middle of nowhere.”  We are lonelier, maybe not at the median but on the left hand side of the distribution.  Our demand for therapists is pretty high too.

6. Student life can be more competitive in the United States than in Canada or Europe, and that may induce many Americans teens to use amphetamines, which are more popular in America.

7. America is in general a high-variance country, due to large market size, ethnic diversity, relatively open and competitive markets, and the looseness of many of its social norms.  A higher-variance country will have many more people clustered in the unsatisfactory behavior patterns.

7b. Along related lines, American teens are more frequent users of illegal drugs than are European teens.  But American teens also have amongst the lowest rates of smoking and drinking.  So some of us are very disciplined, others much less so, again reflecting the high variance of both inputs and outcomes.

8. Americans are keener to try new products, relative to most of the rest of the world.  Along these lines, we have relatively big problems with the newer opioids and synthetic drugs.  Heroin historically has often been a bigger problem in Europe, and that is hardly a new drug.  In era of new drugs, as we currently are living in, this will nudge the balance toward Americans doing drugs more.

9. American teens have more disposal income to spend, compared say to European teens.  This may come from either jobs or from parental allowances.  Furthermore, the European youth, especially in Italy, are more likely to live at home for many more years.  That probably limits illegal drug use.  Americans are more likely to go away for college to “a campus,” and “a dorm,” a horrible institution if you think about it for too long.

What else?

Telemedicine is Dying

Bloomberg: Prior to the Covid era, telehealth accounted for less than 1% of outpatient care, according to the Kaiser Family Foundation. Telehealth services have since surged, at their peak accounting for 40% of outpatient visits for mental health and substance use.

Unfortunately, as I warned last year telemedicine is being wound back as regulations which were lifted for the pandemic emergency are put back into place.

Telemedicine exploded in popularity after COVID-19 hit, but limits are returning for care delivered across state lines.

…Over the past year, nearly 40 states and Washington, D.C., have ended emergency declarations that made it easier for doctors to use video visits to see patients in another state, according to the Alliance for Connected Care, which advocates for telemedicine use.

…To state medical boards, the patient’s location during a telemedicine visit is where the appointment takes place. One of MacDonald’s hospitals, Massachusetts General, requires doctors to be licensed in the patient’s state for virtual visits.

I know people who have had to travel over the Virginia/Maryland border just to find a wifi spot to have a telemedicine appointment with their MD physician. Ridiculous.

As I wrote earlier:

….telemedicine innovations pioneered during the pandemic should remain as options. No one doubts that some medical services are better performed in-person nor that requiring in-person visits limits some types of fraud and abuse. Nevertheless, the goal should be to ensure quality by regulating the provider of medical services not regulating how they perform their services. Communications technology is improving at a record pace. We have moved from telephones to Facetime and soon will have even more sophisticated virtual presence technology that can be integrated with next generation Apple watches and Fitbits that gather medical information. We want medical care to build on the progress in other industries and not be bound to 19th and 20th century technology.

USA (Sweden) fact of the day

Middle-age mortality increases among non-Hispanic Whites from 1992 to 2018 are driven almost entirely by the bottom 10 percent of the education distribution.

Here is the newly published paper, by Paul Novosad, Charlie Rafkin and Sam Asher (AEA gate).  In another new paper, by Randi Hjalmarsson and Matthew J. Lindquist, being sentence to extra time in a Swedish prison is good for your health.

From the comments, more on health care

Again this comment is from Sure:

The US does not have a healthcare system. It has several. Medicare is single payer option with overwhelmingly private provision and some alternative administrative choices with a thick skim of secondary overlays of private health insurance. The Indian Health Service is full Beveridge. Kaiser is a single private system with nearly full vertical integration. Tricare is a social insurance model with limited private provision. Employer based healthcare is privately funded (with a generous tax break on said provision), privately administered (subject to millions of pages of regulation), and privately provisioned (with minor exceptions for state funded hospitals and the like). Then we have health sharing which are explicitly not health insurance, but involve “voluntary” assumption of costs by members, often linked by religious belief.

Then you have the growing cash healthcare option where providers take all comers, but only those who can put cash on the barrel because the paperwork is too expensive. And of all the ways healthcare is administered in this country, this and the VA are the only ones that do not run the full gamut of provision (at least not yet).

I have worked for most of these. All of them are larger systems than multiple small European countries. All of them are wildly more expensive than similar mechanisms of provision overseas. All of them suffer from intrusive, expensive meddling by politicians and bureaucrats that result in active degrading of patient care in my experience.

There is no good way to pay for healthcare in the US. Chances are, if you name an option somebody has at least failed to get the necessary buy-in at the state level. If you have some essential feature list, there is almost certainly an option that has already tried it.

Changing who signs the checks seems to make very minimal difference. We chase after crumbs by focusing on if the overall model should be more Kaiser or more IHS or more Medicaid.

The far bigger impact are the patients. We need 500 dollar chairs in the waiting room, to ensure that those with BMIs >50 will not have them collapse underneath their weight. We had to order a larger CT scanner a few years back when it was deemed unacceptable to send patients to the zoo for imaging. Opioid use means that I have to detail a lot of warm bodies to manage patients in withdrawal. I need an order of magnitude more warm bodies for suicide watch that my predecessors required back in the day according to the records (and for “low risk” suicide watches I can use telesitters to monitor multiple patients). I need huge numbers of social work hours because once patients hit the ED I need to deal with the complete lack of social service contact they had while homeless. The psychiatric population is an ever revolving door where I can make them basically normal (albeit low functioning) again with the aid of emergency required antipsychotic medications but will see them relapse once they hit the streets and discontinue care (and will have their best shot at long term recovery only once they victimize enough “good” people to get jailed). And, of course, I need an order of magnitude more expensive home health because everyone is single and estranged from the rest of humanity (most unmarried 30+ patients report having no one who can learn how to change dressings for example).

And, in spite of all this, survival rates for health matched controls are great. You get diagnosed with lung cancer? You survive longer and better in the states than your doppleganger in Britain or France. You need a liver transplant from Hep C? Get it here if you want lower rejection odds.

American healthcare starts with sicker patients and no amount of crafty planning about signing checks or shuffling patients is going to change that.

From the comments, on single payer

Single payer’s magic has historically worked via just a few channels:
1. Some amount of monopsony allows the government to bid down medical services below market rates.
2. Political imperatives lead to lower training burdens, lower staffing ratios, and lower certainty in diagnosis and treatment.
3. Obfuscation of possible alternatives diminishes demand for costlier care.

Option 1 means that you pay health professionals worse. There is some utility in this even. But it has some long run consequences that are only now being discovered. First, you see the exit of the most skilled people from medical careers. Second, the physicians unionize (or equivalent) and become political actors. Third, with everyone trying this and some semblance of open borders, it becomes ever harder to keep people in the places you need them (which rarely match the places where the sort of folks who can become Western physicians want to live). At some point you can no longer suppress wages below their natural clearing rate and it becomes ever harder to import foreign talent when other places (e.g. the US) offer a more lucrative immigration option.

US physicians are overtrained. But it also means that as things need ever more understanding to manage, we can deal better with things like CAR-T therapy and the like. And it is not like foreign docs are unaware of these things. As status is the important thing for most educated professionals, there will be continuous pressure towards increasing the prestige of the job at that comes with more training. As much as the government wants to have the minimally trained folks doing as much as possible, single payer countries are starting to see ever more pressure for their physicians, nurses, and the rest to match educational qualifications of the rest of the world.

Tying into all of this is the fact that the alternatives are quite visible. Everyone in the US these days can see an alternative where the masses do not have to pay out of pocket and theoretically fund health care by taxing someone else. But the flip side is also true. Wealthy Britons know that their American friends need not live with chronic pain for years for surgeries the NHS eventually will perform. They know that their American friends get screened more frequently and actually get treatment that cures diseases which are merely managed in Britain. They may still support the tradeoffs that come from single payer, but the days when these sorts of comparisons are no longer discussed are long gone.

Frankly I am always amazed at how much gets attributed to single payer. We know that, at most, only 25% of life expectancy outcomes are due to healthcare. We know that all of the correlates of single payer (e.g. percent of health expenditures paid by government) and health correlates (e.g. life expectancy) get vastly less favorable when you drop the US from the analysis as an outlier. We know that the UK has habitually adopted US practices a decade or so later, once the cost falls into the range where the UK can afford it.

But going forward, I think the old metrics that showed large advantages for single payer are going to continue to slide. Unions (formal or otherwise) are going to militate for higher pay. Governments are going to have to deal with one side of the political spectrum going into hoc to the health employees and the other polarizing to the folks in the disfavored region(s) who are lower priority for healthcare and pay more in taxes for the “giveaways”. And all of it is going to run into the trouble that the developing world is going to have fewer kids and hence fewer physicians while the relative advantage of immigrating is going to continue to fall.

Single payer was overwhelmingly built on the post-World Wars consensus and environment. It operates as a monopsony. What on earth would make us think that it would be stable into the future?

That is from “Sure.”

TC again: There is a natural tendency on the internet to think that all universal coverage systems are single payer, but they are not.  There is also a natural tendency to contrast single payer systems with freer market alternatives, but that is also an option not a necessity.  You also can contrast single payer systems with mixed systems where both the government and the private sector have a major role, such as in Switzerland.

I’ll say it again: single payer systems just don’t have the resources or the capitalization to do well in the future, or for that matter the present. Populations are aging, Covid-related costs (including burdens on labor supply) have been a problem, income inequality pulls away medical personnel from government jobs, and health care costs have been rising around the world.  Citizens will tolerate only so much taxation, plus mobility issues may bite.  So the single payer systems just don’t have enough money to get the job done.  That stance is conceptually distinct from thinking health care should be put on a much bigger market footing.  But at the very least it will require a larger private sector role for the financing.

The evolution of single payer health insurance

This is one of the big underreported stories these days, namely that single payer systems are working far less well than they used to, including during the pandemic but not only.  Eventually the blame will shift and will be put on something like “austerity,” whereas the deeper understanding was that those systems were bound to end up understaffed and undercapitalized all along.  In any case, here is the latest from Sweden, circa summer 2022:

In 2000, around 100,000 Swedes had private health insurance. Today, there are seven times as many, in a country of 10 million people. In 60% of cases, the insurance is paid for by the employer. According to the Swedish insurers’ organization Svensk Försäkring, the rate can vary from 300 to 600 crowns on average per month. For those dealing with health problems, the advantages are quicker consultations and avoiding long waiting lines.

And that is from Le Monde, not the Heritage Foundation.  The Canadian, British, and New Zealand systems are all in crisis too.  But that narrative is not exactly tailor-made for today’s media environment…

Markets in everything

That John is on his feet at all is impressive—and probably foolish—considering that only eight months prior, he was five feet eight and a half. Back in September, he paid $75,000 for the agonizing privilege of having his legs surgically lengthened. That entailed having both his femurs broken, and adjustable metal nails inserted down their centers. Each nail is made of titanium, which is both flexible and sturdy, like bone, and about the size of a piccolo. The nails were extended one millimeter every day for about 90 days via a magnetic remote control. Once the broken bones heal, ta-da: a newer, taller John.

Here is the full story.  Oh and this:

With a procedure like this, there are, of course, some caveats. All the height gain obviously comes from your legs, so your proportions can look a little weird, especially when you’re naked. Also, the recovery can be long and taxing. When we meet, the bones in John’s legs are not yet fully healed, and a small section of his right femur is still a little soft, like al dente spaghetti; the smallest stumble could snap a bone in two. And it’s especially dangerous since he’s a big guy, over 200 pounds.

Then there’s the pain, which is relentless, ambient. The extension of the nails in his legs stretched the nerves and tissue around the bones—especially the thick, meaty muscles like the hamstrings—to an almost excruciating degree. He couldn’t walk for months. “They fill you with enough painkillers that it’s bearable,” John explains, but his biggest fear was becoming addicted to the drugs, so he weaned himself off the regimen earlier than he should have.

File under: “The costs of lookism.”  The technique is originally a Soviet one.  Via Anecdotal.