Category: Medicine

Dr. Joel Selanikio also advances economics

EpiSurveyor is free, open-source software used to collect
data–primarily medical survey data right now, although there’s no
reason other types of data couldn’t be gathered–in areas where medical
data is often out-of-date or incomplete, when it’s even collected at

Because EpiSurveyor is aimed primarily at developing economies, it’s
designed to run on PDAs and mobile phones…and to transmit
collected data back to a central repository via SMS.

In other words, you can put people out into the field and get (almost) real time data on the evolution of a village economy.  The data are converted into useful forms right away, and gathering the data is easier in the first place, so the assistants are less likely to shirk.  Here is more, here is the associated non-profit, here is a YouTube video.  Data gathering is one of the most backward features of the social sciences, so development economists, take note.  But should businessmen care as well?

I asked Selanikio what EpiSurveyor could use most right now–besides money, which is always welcome.

"We really need people who could help us develop a sustainable
business model for EpiSurveyor. Ad-supported? Subscription fees? Two
tiers of features? That sort of advice, from people who are truly
qualified to give it, would be very helpful."

A Gut Feeling

The title, Campylobacter jejuni infection increases anxiety-like behavior
in the holeboard: Possible anatomical substrates for viscerosensory
modulation of exploratory behavior
, is unpromising but the paper is fascinating.  The authors show that infection with certain bacteria can cause more anxious or cautious like behavior in mice, perhaps causing the infected agent to avoid predators.

The presence of certain bacteria in the gastrointestinal tract
influences behavior and brain function. For example, challenge with
live Campylobacter jejuni (C. jejuni), a common
food-born pathogen, reduces exploration of open arms of the plus maze,
consistent with anxiety-like behavior, and activates brain regions
associated with autonomic function, likely via a vagal pathway.

Could bacteria also influence our emotional state?  If verified in humans this could offer insights into conditions like Crohn’s disease, irritable bowel syndrome and perhaps into fears such as agoraphobia.  Long time readers will know that this study is not alone in suggesting that parasites can influence our emotions.  Ever wonder why you like cats?

Hat tip to Monique van Hoek and Faculty of 1000.

The Allocation of Talent

Talent flows to where it is highly rewarded so if price and wage control limit rewards in one sector of the economy, talent will flow to the uncontrolled sector.  Mark Ramseyer looks at one implication:

The Japanese national health insurance
provides universal coverage. Necessarily, this entails a subsidy that
dramatically raises the demand for medical services. In the face of the
increased demand, the government suppresses costs by suppressing
prices. By combining extensive biographical (including income) data on
all 449 Tokyo cosmetic surgeons and a random sample of 499 other Tokyo
physicians, I explore the effect of this price suppression on the
allocation of talent and the development of expertise. Crucially, the
national health insurance does not cover services – like elective
cosmetic surgery – deemed medically superfluous. Facing price caps in
the covered sector but competitive prices in these superfluous sectors,
the most talented doctors should tend to shift into the superfluous
sectors and there to invest heavily in their expertise. I find evidence
consistent with this: cosmetic surgeons earn higher incomes than other
doctors; are more likely to have attended a national (generally more
selective) medical school; are more likely to have served on the
faculty of a medical school; and are more likely to be board-certified.
I speculate on the broader implications this phenomenon poses for the
allocation of talent in medicine.

Hat tip to Larry Ribstein at Ideoblog.

Medicare for everyone?

Medicare spends billions of dollars each year on products and
services that are available at far lower prices from retail pharmacies
and online stores, according to an analysis of federal data by The New
York Times. A comparison of Medicare figures with retail catalogs
reveals dozens of instances of the program’s paying above-market costs.

For example, last year Medicare spent more than $21 million on
pumps to help older and disabled men attain erections, paying about
$450 for the same device that is available online for as little as
$108. Even for something as simple as a walking cane, which can be
purchased online for about $11, the government pays $20, according to
government data.

These widespread price discrepancies, including those for oxygen services, have been noted in dozens of regulatory reports.

when officials and politicians have tried to cut these costs, they have
often encountered a powerful foe: the companies that sell these
devices, who ask their elderly customers to serve, in effect, as unpaid
lobbyists, calling and writing to their representatives in Congress,
protesting at rallies, and even participating in political attacks
against individual lawmakers who take on the issue.

Here is the full story.  You are correct to think that not all versions of a single-payer system need discourage innovation.  You are also correct to think this is what they look like.

Data revision of the day — good news this time

The United Nations’ top AIDS scientists plan to acknowledge this week that they have long
overestimated both the size and the course of the epidemic, which they
now believe has been slowing for nearly a decade, according to U.N.
documents prepared for the announcement…the latest estimates, due to be released publicly Tuesday, put the
number of annual new HIV infections at 2.5 million, a cut of more than
40 percent from last year’s estimate, documents show. The worldwide
total of people infected with HIV — estimated a year ago at nearly 40
million and rising — now will be reported as 33 million.

Here is the full story, which also explains the sampling errors behind the earlier estimates.

Dutch Treat

THE Dutch health minister, Ab Klink, is considering a recommendation to offer
free health insurance for life to anyone who donates a kidney for transplant.

The award would be quite valuable, worth about $1500 a year or $24,000 in present discounted value (30 yrs, 5% discount rate, no increase in health care costs).  Becker and Elias predict a large increase in organ supply at $15,000 so the Dutch are in the ballpark for a good test.  More here.

Thanks to Dave Undis of LifeSharers for the pointer.

Surgery vs. Drugs

Levitt and Dubner discuss bariatric surgery in their most recent NYTimes column.  Writing on their blog (they or their publicist) say this:

Bariatric surgery is often the most effective treatment for the morbidly obese,
and with a mortality rate of around one percent, it isn’t terribly risky…

Not terribly risky!!!  I consider a 1% chance of death to be very risky, perhaps worthwhile for some morbidly obese people but when 1 in every 100 patients doesn’t make it off the table that is not good odds.

What I find most interesting, however, is that I don’t think that any drug, even one with net benefits, could pass FDA trials with a mortality risk of 1%.  Recall that Rezulin was pulled from the market when 63 out of 750,000 people developed liver problems (the actual number may have been higher of course but the numbers aren’t even close.)   

It doesn’t make sense to regulate one source of risk at much higher rates than another source, given equal benefits.  It’s quite possible, for example, that patients denied risky weight loss drugs turn to even riskier bariatric surgery.   (I am not arguing this point here, I am explaining why efficiency requires that equal risks be regulated equally).

So if it doesn’t make sense to regulate one source of risk at much higher rates than another source, should surgery be regulated more or drugs less? 

Practice makes perfect?

Technological innovations, especially the use of laparoscopic
procedures [for stomach surgery], have made for considerable gains in safety and efficacy.
While the operation is still dangerous in some circumstances – one
study found that for a surgeon’s first 19 bariatric operations,
patients were nearly five times as likely to die than patients that the
surgeon later operated on – the overall mortality rate is now in the
neighborhood of 1 percent.

That is from Dubner and Levitt, the full story offers much more, mostly about weight loss, and here is further discussion.

Repugnance is Repugnant

Many people find the idea of selling human organs for transplant to be repugnant which is why Roth argues that we should focus more on improving efficiency through kidney swaps.  I’m all in favor of swaps and have also suggested that one argument in favor of no-give, no-take rules is that they are ethically acceptable to more people than organ sales.

Nevertheless, I think Roth assumes too quickly that repugnance is a constraint to be respected rather than an outrage to be denounced and quashed.  People’s repugnance at inter-racial dating or homosexual sex is no reason to prevent free exchange – the same is true for organ donations.  Repugnance itself can be repugnant.

Is it not repugnant that some people are willing to let others die so that their stomachs won’t become queasy at the thought that someone, somewhere is selling a kidney?

What people think repugnant can change rather quickly with changes in the status-quo.  Adam Smith said that in his time there were "some very agreeable and
beautiful talents of which the possession commands a certain sort of
admiration; but of which the exercise for the sake of gain is
considered, whether from reason or prejudice, as a sort of public
prostitution."  What were these talents that people in Smith’s time thought akin to prostitution?  Acting, opera singing and dancing.  How primitive, how peculiar.

In the not to distance future I think people will look back
on the present and think us
primitive and peculiar.  Letting thousands of people die while organs that could have saved their lives were buried and
burned.  So much unnecessary pain; all for fear of a little exchange.  How primitive, how peculiar.  How repugnant.

The roots of medical innovation

In a much-praised piece, Jon Cohn argues that the NIH, not commercial incentives, is the key to American medical innovation.  He writes:

The great breakthroughs in the history of medicine, from the development of the polio vaccine to the identification of cancer-killing agents, did not take place because a for-profit company saw an opportunity and invested heavily in research. They happened because of scientists toiling in academic settings. "The nice thing about people like me in universities is that the great majority are not motivated by profit," says Cynthia Kenyon, a renowned cancer researcher at the University of California at San Francisco. "If we were, we wouldn’t be here." And, while the United States may be the world leader in this sort of research, that’s probably not–as critics of universal coverage frequently claim–because of our private insurance system. If anything, it’s because of the federal government.

The single biggest source of medical research funding, not just in the United States but in the entire world, is the National Institutes of Health (NIH): Last year, it spent more than $28 billion on research, accounting for about one-third of the total dollars spent on medical research and development in this country (and half the money spent at universities).

A few points should be made:

1. The strength of American medical innovation stems from the combination between the NIH, private philanthropy, and commercial incentives.  Cohn has lots of (just) praise for the NIH, as basic research is often a public good.  But he doesn’t say enough about philanthropy, and he confuses pro-NIH evidence with showing the superfluity of commercial incentives.

2. Send some flowers to Cynthia Kenyon, whom I could not personally quote in this manner with a straight face.  You would never know that universities are profiting from drugs, and patenting them, at an unprecedented rate.  Universities are also forming partnerships with drug companies at an unprecedented rate. 

3. Companies must work very hard to translate basic research into usable applied form and the U.S. is a clear world leader in this regard.  A drug idea is not the same as a drug.  Cohn at times admits this, but is he really denying that the supply curve here slopes upward with regard to expected profits?  You can cite all kind of "mixed" factors about commercial incentives but at the end of the day that is the basic question.

4. Statins, Prozac, and anti-AIDS drugs are notable examples of #1.  Or try this list of Merck products.  Merck and Pfizer are much more than simply marketing or doctor bribery machines, although admittedly they are that too. 

5. The standard arguments against commercial "me-too" drugs are considerably overrated.

6. FDA restrictions are at least partly responsible for the costly, overly concentrated, and blockbuster-oriented nature of U.S. and other pharmaceutical companies.  Tight regulations discriminate against the small company and the small idea.  Even if you think tight regulations are a good idea, don’t blame these tendencies on the big bad corporations.

7. It is odd for Cohn to cite me as his libertarian foil, since the referenced piece very clearly cites the NIH as a critical factor behind American medical innovation.  This odd citation again represents the desire to replace "anti-commercial" arguments with an easier-to-make "pro-NIH" case.

9. The NIH works as well as it does because the money is mostly protected from Congress.  It is not a success which can easily be replicated.  The more money is at stake, the more Congress wants to influence allocation.  We should guard this feature of the system jealously and try to learn from it.  If we can.

The bottom line: Arguments for the NIH are not arguments against the importance of commercial incentives for medical innovation.

Addendum: Read Clive Crook too.

The Shortage of Transplant Organs

The Wall Street Journal has a front-page article and a debate between Julio Elias and Alvin Roth on alleviating the shortage of transplant organs.  This interactive graphic was good at explaining the idea of kidney swaps.  Elias and Roth should have discussed no-give, no-take rules and Lifesharers

I will be speaking to Congressional and agency staff about the organ shortage this Thursday at noon (this event is not open to the public.)

Addendum: Transplant surgeon Arthur Matas, mentioned in the WSJ article, is no
libertarian but argues for live kidney sales in a new Cato Policy

Kiss me, I’m vaccinated

I just had my flu shot.  Please send your checks to my George Mason address.

People who have the flu spread the virus so getting a flu shot not only reduces the probability that I will get the flu it reduces the probability that you will get the flu.  In the language of economics the flu shot creates an external benefit, a benefit to other people not captured by the person who paid the costs of getting the shot.  The external benefits of a flu shot can be quite large.  Under some conditions each person who is vaccinated reduces the expected number of other people who get the flu by 1.5.

Since a large fraction of the benefits of the flu shot, perhaps even a majority of the benefits, go to other people and not to the person paying the costs, the number of people who get a flu shot in the United States is well below the efficient level.  I only got the shot because, as you well know, I’m altruistic.  I care about you.  But do send your checks, that will help.

In lieu of a check I’m thinking of having some buttons made up to encourage people to get their shot.  Here are some possible slogans:

  • Kiss me, I’m vaccinated.
  • Take one for the herd!
  • Get a flu shot.  The life you save may not be your own.

Madison Avenue here I come!

Of course, we know from the Coase Theorem that there is an alternative approach.  We could charge people who do not get their flu shots. (Thus, if you haven’t had a shot you must still must send me a check.)  Or to reduce transaction costs we could fine people who get the flu.  I kind of like that last one.  (But what to do about the 36,000 a year who die from the flu – charge their estates?)

What do you think?  Leave your suggestions/slogans for how to encourage getting a flu shot in the comments.

Is uncompensated care for the uninsured driving up medical costs?

No, say Jonathan Gruber and David Rodriguez:

We measure uncompensated care as the net amount that physicians lose by
lower payments from the uninsured than from the insured. Our best
estimate is that physicians provide negative uncompensated care to the
uninsured, earning more on uninsured patients than on insured patients
with comparable treatments. Even our most conservative estimates
suggest that uncompensated care amounts to only 0.8% of revenues, or at
most $3.2 billion nationally.

Can any of you find an ungated copy of this paper?