Category: Medicine
Green Wednesday: Colorado pot shops are opening today
Meanwhile, back in the so-called real world, Colorado is pursuing its legalization experiment to a logical conclusion:
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1. Officials at Denver International Airport installed new signs warning visitors their weed can’t legally go home with them.
And at a handful of shops, owners were scrambling to plan celebrations, set up coffee stations, arrange food giveaways and hire extra security to prepare for potential crowds and overnight campers ready to buy up to an ounce of legal weed.
While smoking pot has been legal in Colorado for the past year, so-called Green Wednesday represents another historic milestone for the decades-old legalization movement: the unveiling of the nation’s first legal pot industry.
Here are further details on Green Wednesday., including this: “Federal law says the drug’s possession, manufacture, and sale is illegal, punishable by up to life in prison…” I wonder if this experiment in federalism will survive our next Republican President. My prediction has long been that this kind of legalization will not persist, but the chance I am wrong has been rising.
Out-of-staters, by the way, can purchase only a quarter ounce at a time and are not supposed to carry the pot outside Colorado borders. There is also this:
Colorado projects $578.1 million a year in combined wholesale and retail marijuana sales to yield $67 million in tax revenue, according to the Legislative Council of the Colorado General Assembly. Wholesale transactions taxed at 15 percent will finance school construction, while the retail levy of 10 percent will fund regulation of the industry.
John Cochrane on portable health insurance
The entire Op-Ed is interesting and noteworthy, but the part on health insurance is perhaps the cutting edge of the piece analytically:
Health insurance should be individual, portable across jobs, states and providers; lifelong and guaranteed-renewable, meaning you have the right to continue with no unexpected increase in premiums if you get sick. Insurance should protect wealth against large, unforeseen, necessary expenses, rather than be a wildly inefficient payment plan for routine expenses.
People want to buy this insurance, and companies want to sell it. It would be far cheaper, and would solve the pre-existing conditions problem. We do not have such health insurance only because it was regulated out of existence. Businesses cannot establish or contribute to portable individual policies, or employees would have to pay taxes. So businesses only offer group plans. Knowing they will abandon individual insurance when they get a job, and without cross-state portability, there is little reason for young people to invest in lifelong, portable health insurance. Mandated coverage, pressure against full risk rating, and a dysfunctional cash market did the rest.
Rather than a mandate for employer-based groups, we should transition to fully individual-based health insurance. Allow national individual insurance offered and sold to anyone, anywhere, without the tangled mess of state mandates and regulations. Allow employers to contribute to individual insurance at least on an even basis with group plans. Current group plans can convert to individual plans, at once or as people leave. Since all members in a group convert, there is no adverse selection of sicker people.
I suppose my worry is this. As individuals age, they will become greater health risks and that will hold even if Cochrane keeps Medicare going. That means a higher price for their individual portable insurance. It is not clear to me under what conditions premia can be raised legally (what does “unexpected increase” mean?), but it seems the result is much higher premia for sick people, or legally-mandated low premia, but then providers will restrict access and lower the quality of care, as another means of raising the price of course. Contractually speaking, price is verifiable but quality of care is not. The overall problem is not one of “adverse selection” but rather simply that the good information of the suppliers means that insurance is hard to sell at all for many conditions.
I do understand the option of letting the premia rise, and selling insurance against that event too, and maybe that could work. Still, it is surprising how many insurance markets don’t really blossom even if it seems they would make economic sense. Just ask Robert Shiller or look at the earlier history of failed CPI futures. I’d like to experiment with Cochrane’s idea, which I think has real promise, but on a trial basis first. The question is what such a trial might actually mean, and who would be willing to give up their current arrangements to make such an experiment possible. If the recent Obamacare reactions show anything, it is that status quo bias is getting stronger all the time in matters of health care.
Another Obamacare glitch
Stella Paul reports:
Millions are losing their health insurance policies and being forced onto the ObamaCare exchanges, where most plans only provide local medical coverage. As Americans realize they must pay for all non-emergency medical care when they leave their home county.
The pointer is from Arnold Kling.
Who disapproves of Obamacare?
I was somewhat surprised by these numbers:
Fifty-three percent of the uninsured disapprove of the law, the poll found, compared with 51 percent of those who have health coverage. A third of the uninsured say the law will help them personally, but about the same number think it will hurt them, with cost a leading concern.
I wonder if any of this poll was conducted in Spanish, and if not whether that would have changed the results. I found this interesting too:
Of the uninsured who said they were not likely to sign up by the deadline, fully half said it was because of the high cost. Twenty-nine percent said they planned to go without coverage because they object to the government’s requiring it, and 11 percent said they did not need health insurance.
And this:
Seventy-seven percent of the uninsured said they disapproved of the mandate, compared with 65 percent of those who already have health insurance.
Guns, Suicides and Natural Experiments
Slate has a number of articles today on guns and violence including It’s Simple: Fewer Guns, Fewer Suicides by Justin Briggs and myself. The Slate article is based on our paper that I covered in an earlier post but here is some new material including one stunning fact that got cut from the Slate piece:
Suicide kills more people than all of the world’s armed conflicts combined.
and the results of two important natural experiments:
..our findings appear robust and are consistent with a series of “natural experiments” from around the world. For example, following the 1996 killing of 35 people in Port Arthur, Australia, a strong movement for gun control developed in Australia. States and territories made uniform and more stringent regulations for the possession of firearms, and instituted a buy-back of the newly illegal guns, most of which were rifles and shotguns. As Andrew Leigh and Christine Neill determined in a paper published in the American Law and Economics Review, these changes resulted in a reduction of the country’s firearm stock by 20 percent, or more than 650,000 firearms, and evidence suggests that it nearly halved the share of Australian households with one or more firearms. The effect of this reduction was an 80 percent fall in suicides by firearm, concentrated in regions with the biggest drop in firearms. Meanwhile there was little sign of any lasting rise in non-firearm suicides.
Suicide is a leading cause of death among adolescents and young adults, and limiting access to guns during those formative, sometimes unsteady years can have a real effect on suicides. In Israel most 18- to 21-year-olds are drafted into the Israeli Defense Forces and provided with military training—and weapons. Suicide among young IDF members is a serious problem. In an attempt to reduce suicides, the IDF tried a new policy in 2005, prohibiting most soldiers from bringing their weapons home over the weekends. Dr. Gad Lubin, the chief mental health officer for the IDF, and his co-authors estimate that this simple change reduced the total suicide rate among young IDF members by a stunning 40 percent. It’s worth noting that even though you might think that soldiers home for the weekend could easily delay suicide by a day or two, the authors did not find an increase in suicide rates during the weekdays. These results are consistent with interviews with near-fatal suicide survivors, who often say their decision was spontaneous and who typically go on to live long lives.
Our Slate article also includes a cost-benefit calculation that will probably upset many people.
Addendum: By popular demand Elsevier has given us a link to our research article, Firearms and Suicides in US states (pdf), that should work for everyone until late January.
*Addiction by Design*
The author is Natasha Dow Schüll and the subtitle is Machine Gambling in Las Vegas. I read this on the flight back home and it is a good choice for one of the very best books of the year, as well as one of the best books on “behavioral economics” and “nudge.”
Almost every page in this book is instructive. Here is one good passage of many:
…his department noticed nearly three times as many deaths by heart attack occurring in Clark County as in other counties. A closer look revealed that two-thirds of the cardiac arrests took place in casinos and realized that the high rate of death had to do with the delays encountered by paramedic teams negotiating their complicated interiors. Although they arrived at casino properties within four and a half to five minutes of a call, it took them an average of eleven minutes to reach victims inside.
The casinos, by the way, very often do not let the rescue teams come in through the main front door, for fear of putting off their customers.
The very best parts of the book are about the elaborate private sector strategies to milk the clientele for greater yield, and how those desires interact with the very competitive nature of the market:
…the industry has since attempted to strategically steer players…toward the cherry-dribbling, slow-bleeding pole of play, a profit-from-volume formula that one industry member has referred to as the “Costco model of gambling.”
And:
While in the past the typical gambling addict had been an older male who bet on sports or cards for ten years before seeking help, now it was a thirty-five-year-old female with two children who had played video for less than two years before seeking help.
And:
“In my life before gambling, she tells me, “money was almost like a God, I had to have it. But with gambling, money had no value, no significant, it was just this thing — just get me in the zone, that’s all…You lose value, until there’s no value at all. Except the zone — the zone is your God.”
The book’s home page is here, and the author’s home page is here. This is an impressive book. It is also a brilliant study of man-machine interaction and I found it to be a complete page turner.
While we are on the topic, I very recently received a review copy of The Oxford Handbook of the Economics of Gambling, edited by Leighton Vaughan Williams and Donald S. Siegel, which appears to be excellent.
Trudge rather than Nudge?
A Chinese factory worker says walking in huge iron shoes weighing more than 200kg each can cure back pain, but faces hefty competition in his bid to build the country’s heaviest footwear.
“I’ve been walking with iron shoes for seven years,” said Zhang Fuxing, before strapping two crudely welded iron blocks to his feet.
“After they reached 400kg, I felt very proud. Next spring I plan to add 50kg.”
Zhang took a deep breath before each wrenching step in the towering footwear, with every impact leaving him struggling for balance.
It took him more than a minute to take 10 paces, but he claims to walk up to 15 metres each day in the shoes, which he has gradually increased in weight, and touts them as a cure for back pain and hemorrhoids.
There is more here, including a photo, via the excellent Mark Thorson. But wait, there is more:
Zhang believes his shoes to be the heaviest in China, but admits that competition from a number of other eccentrics renders his claim uncertain.
One of two Chinese iron shoe wearers to share a Guinness World Record for walking 10 metres backwards in heavyweight iron boots is Zhang Zhenghui from Changsha. According to a 2010 report by Xinhua news agency, he has gold-painted shoes weighing more than 200kg.
Lai Yingying, an entertainer from Fujian in the east, was shown by state broadcaster CCTV wearing shoes tipping the scales at a total of 300kg.
A runner, Liu Mei, took to exercising in metal footwear after growing bored of tying sandbags onto his trainers, the state-run China News Service reported, and challenged other exponents to compete for the title of “Iron Shoe King”.
The nature of the Medicaid cost problem
Harold Pollack writes:
The bottom 72 percent of Illinois Medicaid recipients account for 10 percent of total program spending. Average annual expenditures in this group were about $564, virtually invisible on the chart. We can’t save much money through any incentive system aimed at the typical Medicaid recipient. We spend too little on the bottom 80 percent to get much back from that. We probably spend too little on most of these people, anyway. For the bulk of Medicaid beneficiaries, cost control is less important than improved prevention, health maintenance and access to basic medical and dental services.
The real financial action unfolds on the right side of the graph, where expenditures are concentrated within a small and incredibly complicated patient group. The top 3.2 percent of recipients account for half of total Medicaid spending, with average expenditures exceeding $30,000 annually.
Many of these men and women face life-ending or life-threatening illnesses, as well as cognitive or psychiatric limitations. These patients cannot cover co-payments or assume financial risk. In theory, one might impose patient cost-sharing with some complicated risk-adjustment system. In practice, that is far beyond current technologies and administrative capabilities. Even if such a system were available, we couldn’t push the burden of medical case management onto these patients or their families.
Very much worth a ponder, and there is more in the post.
Health care loses jobs (not)
Man bites dog, but this time it is good news, sort of:
For just over 10 years—121 straight months—there was one constant in the monthly jobs report: Health care jobs would go up.
Not anymore.
Health care lost 2,500 jobs in September, the Bureau of Labor Statistics concluded in estimates released last month. And if that number stands, it would be the first net loss for the sector since July 2003.
That is from Dan Diamond.
Addendum: Revising the revision, the BLS now tells us that health care did not lose jobs after all. Dog bites man, once again, though this time with duller teeth.
Are narrow networks a bad idea for health care?
“Narrow networks may seem like a bad idea,” David Dranove and Craig Garthwaite blogged last month. The two Northwestern University professors acknowledged that excluding some providers from health plans offered through the exchanges runs the risk of disrupting care patterns.
But the model is “not some cruel attempt to limit patient choice foisted upon us by the insurance industry,” the professors added. “Instead, these plans may provide our best opportunity for harnessing market forces to lower prices.”
The simple equation: Insurers say that limiting the size of the network allows them to steer patients to high-quality facilities and doctors; participating providers, meanwhile, may agree to price cuts in exchange for new volumes. (A previous edition of “Road to Reform” took a closer look at the narrow network model.)
And narrow networks aren’t necessarily a new idea, Darius Tahir points out at National Journal. In some ways, it’s the same concept behind payers’ attempts in the 1980s and 1990s to limit their network size, which met with criticism and helped create Any Willing Provider laws.
Could narrow networks be better perceived — and received — with better phrasing? Industry consultant Vince Kuraitis thinks so.
That is from Dan Diamond, via Ezra Klein and Evan Soltas.
Why I didn’t do 23andMe
I had a free voucher from the summer, but decided not to go ahead with a saliva test. Here are my reasons:
1. I thought there is option value and I can always do a test later, for a better and more accurate service. (I hadn’t thought of the FDA shutting the whole thing down, but still I expect the service will return in some manner, if only under another corporate banner or from overseas.)
2. I thought the “worry cost” of negative information would exceed the benefit of whatever specific preventive measures I might take. Most useful ex ante preventive measures, such as diet and exercise, are fairly general in their application and I didn’t think there was likely much to be learned about specific measures for specific potential maladies. And here is an interesting short piece on the likelihood of false negatives.
3. One might take more preventive measures with one’s ex ante and more uncertain knowledge than with one’s ex post and more certain knowledge. For instance an absence of negative information might have encouraged me to slack on exercise, to the detriment of my eventual health outcomes.
4. I wouldn’t describe privacy concerns as my major worry, but at the margin still they counted for something. I felt eventually this service would prove equivalent to making my genome public information, via something called GenomeLeaks or the like. Why do that without having a better sense of its longer-run implications?
I’m glad I didn’t do it, glad I had the choice to decline to do it, and I am still feeling no temptation to do it in the future. I do feel a slight amount of guilt for not contributing to a future “Big Data” project, but so be it. I also am glad I am not contributing to some of the inevitably unethical uses to which eugenics will be put, and that is more than a counterbalance, given that I expect no practical benefit from reading my own test results.
Our DNA, Our Selves
At the same time that the NSA is secretly and illegally obtaining information about Americans the FDA is making it illegal for Americans to obtain information about themselves.
In a warning letter the FDA has told Anne Wojcicki, The Most Daring CEO In America, that she “must immediately discontinue” selling 23andMe’s Personal Genome Service, more affectionately known as the spit kit.
As I wrote when this issue first surfaced in 2010:
The ability of genetic tests to predict diseases is currently limited; if the FDA were simply to require firms to acknowledge this point, say with a clear statement of probabilities, that would be one thing (although this task is better met by the FTC under advertising regulation). But the FDA is brazenly overreaching in trying to regulate genetic tests as medical devices. First, there is no question that these tests are safe–safer than brushing your teeth!–and also effective in identifying genetic markers. Thus,
there is no medical reason whatsoever for regulation.
Moreover, genetic tests provide information, personal information about our bodies and our selves. The FDA has no standing to interfere with the provision of such information.
Consider, I swab the inside of my cheek and send the sample to a firm. The idea that the FDA can rule on what the firm can and cannot tell me about my own genes is absurd–it’s no different than the FDA trying to regulate what my doctor can tell me after a physical examination or what my optometrist can tell me after an eye examination (Please read the first line. “G T A C C A…”).
The idea that the FDA can regulate and control what individuals may learn about their own bodies is deeply offensive and, in my view, plainly unconstitutional.
Let me be clear, I am not offended by all regulation of genetic tests. Indeed, genetic tests are already regulated. To be precise, the labs that perform genetic tests are regulated by the Clinical Laboratory Improvement Amendments (CLIA) as overseen by the CMS (here is an excellent primer). The CLIA requires all labs, including the labs used by 23andMe, to be inspected for quality control, record keeping and the qualifications of their personnel. The goal is to ensure that the tests are accurate, reliable, timely, confidential and not risky to patients. I am not offended when the goal of regulation is to help consumers buy the product that they have contracted to buy.
What the FDA wants to do is categorically different. The FDA wants to regulate genetic tests as a high-risk medical device that cannot be sold until and unless the FDA permits it be sold.
Moreover, the FDA wants to judge not the analytic validity of the tests, whether the tests accurately read the genetic code as the firms promise (already regulated under the CLIA) but the clinical validity, whether particular identified alleles are causal for conditions or disease. The latter requirement is the death-knell for the products because of the expense and time it takes to prove specific genes are causal for diseases. Moreover, it means that firms like 23andMe will not be able to tell consumers about their own DNA but instead will only be allowed to offer a peek at the sections of code that the FDA has deemed it ok for consumers to see.
Alternatively, firms may be allowed to sequence a consumer’s genetic code and even report it to them but they will not be allowed to tell consumers what the letters mean. Here is why I think the FDA’s actions are unconstitutional. Reading an individual’s code is safe and effective. Interpreting the code and communicating opinions about it may or may not be safe–just like all communication–but it falls squarely under the First Amendment.
The FDA also has the relationship between testing and clinical validity ass-backward. The FDA wants to say no to testing until clinical validity is established but we are never going to discover clinical validity until we have mass testing. 23andMe is attempting to leverage individuals thirst for knowledge about themselves into a big data project that will discover entirely new connections between genotype and phenotype. But personalized medicine, just like personalized movie recommendations, only works with databases of millions. In the 20th century we took on many of our common diseases but it is now time to take on the uncommon diseases. There are some 7,000 known diseases and only about 500 have a treatment. Individual and disease heterogeneity is so large that even the diseases that we can treat are often not treated well. New approaches are necessary for progress. The collection of large amounts of DNA data is not the last step of personalized medicine but the first and by pushing back against the first steps the FDA is delaying the promise and progress of personalized medicine.
Full Disclosure: The FDA’s threat to regulate genetic tests in 2010 made me spitting mad so I put that spit to good use and became a 23andMe customer. Well worth it, if only to point out to my wife that contrary to all evidence I am in fact only 2.2% Neanderthal.
The FDA and International Reciprocity
Bacterial meningitis causes swelling of the membranes covering the brain and spinal cord. In the United States the disease kills approximately 500 people a year, often within days of infection. Survivors can have permanent disabilities including paralysis and mental disabilities. Since March seven cases of the type B strain have been diagnosed at Princeton University, with one case just last week. A vaccine exists and is available in Europe and Australia but the FDA has not permitted the type B vaccine for use in the United States.
The Centers for Disease Control and Prevention, however, has lobbied the FDA and they have now received special and unusual permission to import the type B vaccine. Following the CDCs recommendation, Princeton University has agreed to administer and pay for the vaccine for any student that wants it.
It’s good that the FDA has lifted the ban on the type B vaccine but why should Americans have to wait for the FDA? Americans living in Europe or Australia can be prescribed the vaccine so why not here? I believe that Americans should have the right to be prescribed any drug that has been approved in Europe, Australia, Canada, Japan or other developed nation.
Indeed, as Dan Klein and I wrote at FDAReview.org, international reciprocity of drug approvals is simple common sense:
If the United States and, say, Great Britain had drug-approval reciprocity, then drugs approved in Britain would gain immediate approval in the United States, and drugs approved in the United States would gain immediate approval in Great Britain. Some countries such as Australia and New Zealand already take into account U.S. approvals when making their own approval decisions. The U.S. government should establish reciprocity with countries that have a proven record of approving safe drugs—including most west European countries, Canada, Japan, and Australia. Such an arrangement would reduce delay and eliminate duplication and wasted resources. By relieving itself of having to review drugs already approved in partner countries, the FDA could review and investigate NDAs more quickly and thoroughly.
As has now become clear, international reciprocity is not just about choice it can also save lives.
Will hospitals buy ACA insurance for their uncovered patients?
I had not thought of this angle before:
US hospitals are exploring ways to buy “Obamacare” insurance plans for their sickest and poorest patients as they strain under the weight of tens of billions of dollars in uncompensated costs from the uninsured.
But the move is opposed by the Obama administration and insurers, who fear it could add to the turmoil surrounding the new healthcare marketplace.
…Both the White House and insurers are concerned that if hospitals started paying for insurance for certain chronically ill patients, it will skew the insurance risk pool for the new healthcare exchanges, created under the Affordable Care Act. The exchanges need to attract at least 2.7m healthy and young people, out of 7m that were estimated to join the exchanges by March 2014, in order to keep monthly premiums low.
Ms Hatton said the prospect of buying health insurance for patients has become especially important in Republican-controlled states that have decided not to expand the federal insurance programme for the poor, known as Medicaid.
From the FT, here is more.
Sentences to ponder
Prescription painkillers now kill more Americans than heroin and cocaine combined, according to the CDC.
That is from Andrew Sullivan.