Category: Medicine
The need for hospital price transparency
Greater price transparency doesn’t have to cost much money upfront, as most of what is required is attention. A critical majority of Americans — including doctors, patients, politicians, media and hospital board members — needs to insist on this outcome.
And I do mean insist. Just as, at some point, a critical mass of Americans demanded that the US end the Vietnam War. Otherwise, change is very unlikely to happen.
Some parts of the Affordable Care Act provided for transparent hospital pricing of individual services, and further regulations took effect in 2021. These were steps forward, yet the law has not turned the tide. It does not price packages of services, and it does not make it easy to compare one provider to another.
Recent research shows it is hard to even get a single consistent answer from a single provider. For instance, prices posted online and prices quoted over the telephone do not correlate very closely. For 41% of hospitals, the price difference was 50% or more. Clearly, suppliers aren’t really trying.
And:
What if there were regular news coverage of the comparative transparency and standardization of hospital prices? Or more explicit and accessible quality ratings? Or a prominent non-profit, run by medical professionals, devoted solely to making price and quality more transparent? Employers also could evaluate health insurance companies based on their performance by these criteria, much as they currently use ESG analysis. There could be an index of progress, like those national debt clocks one sometimes sees.
Is it absurd to hope that this topic might regularly trend on social media? What if there were public marches in front of hospitals (they can chant, “How much cash for a heart bypass”)? Who will be the Greta Thunberg of price transparency?
That is all from my latest Bloomberg column.
What should I ask Patrick McKenzie?
I will be doing a Conversation with him. Patrick is a phenomenon of the modern age. He writes the excellent Bits About Money, which focuses on money, banking, payments, and more.
His blog is Kalzumeus. He has lived most of his adult life in Japan, and has many excellent posts about Japan. Here are his greatest hits on the blog. He has run national shadow vaccine location information infrastructure. On Twitter he is @patio11.
So what should I ask him?
States with high (low) rates of reported mental illness
For youth below the age of eighteen:
High:
District of Columbia
Alaska
Arkansas
Idaho
Maine
Montana
New Hampshire (the highest)
Low:
Florida (least)
Alabama
Mississippi
South Carolina
New Jersey
That is from Liu, Zhou, Cheng, and Vengeepuram, discussed earlier here. Extra hat tip goes to Sean Geraghty.
Pharmaceutical Externalities
In my view, pharmaceuticals are undervalued and underinvested in because, despite high prices, pharmaceutical innovations earn only a fraction of the value that they create (Nordhaus finds that in general that innovations reap only a small share of the gains that they create). In 2014, for example, we got Harvoni a new treatment that offered a complete cure for hepatitis C (HCV) infection. In 2014, Harvoni cost over $1000 a pill and between $60,000 and $100,000 for a full treatment. In 2015 Medicaid spent more on Harvoni than on any other drug and there were calls for regulation and price controls. Studies showed, however, that even at that high price, Harvoni was value/cost-effective. Today, with more competition, there are equivalent versions of Harvoni available from Amazon for $12,869 (and 64 cents) which is still expensive but cheap for a cure for an often debilitating and sometimes life-threatening disease (and the price is less for a private insurance buyer or Medicare/Medicaid). In 2030, Harvoni will go generic and prices will fall much more.
Writing at their new substack, Random Acts of Medicine (based on their book of the same name which I reviewed at the WSJ), Chris Worsham and Bapu Jena point us to another side-benefit of Harvoni and similar hep-C drugs. By curing hep-C these drugs results in fewer liver transplants but that means more livers are available for transplant to other people on the waiting list.
One simple statistic suggests that indeed, treatment of HCV is freeing up donor livers for patients with other diseases: in 2022, patients with chronic HCV infection represented only 11% of liver transplants (1,029 of 9,528)—down from the 38% in 2013 when the new HCV drugs were approved.
Beyond this simple figure, a new working paper by economists Kevin Callison, Michael Darden, and Keith Teltser has taken a new, rigorous look at data from 2014 to 2019 to understand how these new drugs for HCV have impacted liver transplants after their first 5 years of broad use. There were a number of encouraging findings:
- Waiting lists for liver transplants were being occupied by fewer HCV-positive patients and more HCV-negative patients; this shift can be explained by an estimated 45% reduction in the addition of new HCV-positive patients to waiting lists
- Patients on the waiting list were healthier, likely because waiting times for livers have decreased with less demand from HCV-positive patients
- Compared to what would have been expected without the introduction of new HCV treatments, the researchers estimated a 39% decrease in transplants to HCV-positive patients coupled with a 36% increase in transplants to HCV-negative patients.
- Over the five year period, researchers estimated 5,682 livers were transplanted to HCV-negative patients as a result of the new HCV drugs, corresponding to an economic value of $7.5 billion.
These kinds of external benefits from pharmaceuticals are often undercounted and they are one reason why I think the pharmaceutical price controls in the Inflation Reduction Act are a very bad idea.
EU May Ban Payments for Milk, Sperm and Blood
BrusselsSignal: The European Parliament has approved a draft regulation banning payments for breast milk, sperm, blood and other “substances of human origin” (SoHO).
Billed as an attempt to increase safety across the bloc, the ban allegedly aims to ensure that those who are financially disadvantaged within the bloc are not subject to undue pressure to donate their cells and bodily fluids.
Hmmm. Why not ban the sale of labor to protect financially disadvantaged labor donors from undue pressure? Indeed, why not require that dangerous jobs like mining pay low wages so we can be sure that no one is induced to do these jobs by financial pressure?
More prosaically, the European Union falls short of producing all the blood plasma it needs to meet its demand for life-saving medicine. Consequently, the European Union depends on imports—primarily from compensated donors in the United States—to address its plasma deficit. Should the proposed EU legislation be enacted, the deficit is likely to get worse because Germany, Austria, Hungary, and the Czech Republic, currently permit financial compensation. Indeed the U.S. and these EU countries together account for 90% of the global plasma supply. A ban on paid donations within the EU will thus decrease the quantity of plasma supplied from Germany, Austria, Hungary, and the Czech Republic and force the EU to rely even more on imports from the US.
The US is also the world’s biggest exporter of human sperm because US sperm donors can be compensated and remain anonymous (depending on the state). US donors are also carefully screened for quality, in part due to US regulations and in part due to market demand for information about the donors. Denmark is also a major exporter of sperm, in part because it, too, allows financial incentives to donors. Reduced donations from Denmark will make the European Union increasingly dependent on U.S. sperm supplies. Indeed, after Canada banned paid sperm donors in 2004, the supply of Canadian donors plummeted to just 35 (!) and US sperm exports to Canada increased. Unintended consequences, eh?
Creating EU wide standards for testing of blood, sperm and breast milk to allow greater flows across borders is a good idea. Shortages of baby formula in the US, for example, led to a valuable increase in breast milk donations and sales but it would probably be better if more breast milk donations went through a qualified milk bank rather than through Facebook (and the same is also true for sperm banks and sperm donations). But there is no call for banning paid donation.
Paying donors of blood, sperm and breast milk is an ethical way to increase the quantity supplied and it can be done while ensuring that the donations are high-quality and safe.
Claims about food allergies
I find it is very difficult to trust written material on this topic, nonetheless here is a hypothesis I had not heard before:
So why have our immune systems suddenly gone haywire? One theory notes that we (mostly) eradicated hookworms by the 1980s in the United States. And roundworms. And tapeworms. All the classic parasites are mostly kaput. Without those actual threats, our immune system downshifts to tackle the biggest possible threat on the horizon. Which, these days, might be cashew butter or Camembert.
“It’s looking for stuff to do and it’s staying busy,” Warren said. “But it’s busy doing stupid stuff like reacting to walnuts and birch pollen.”
Some support for this theory comes from anecdotes offered by experts who infected themselves with hookworms to distract their overactive immune systems. While this method achieved some success in curbing stubborn allergies and other conditions, it seems unlikely we’ll see a massive experiment anytime soon that randomly infects healthy Americans with hookworms. Still, this so-called hygiene hypothesis helps explain why allergies may be on the march: Back when they were more widespread, hookworms and their friends may actually have reined in our immune systems’ most aggressive tendencies.
Here is more from Andrew Van Dam.
They Got the Lead Out of Turmeric!
Last year in Get the Lead Out of Turmeric! I reported that adulteration of turmeric was a major source of lead exposure among residents of rural Bangladesh. Well there is good news: the lead is gone! 
Wudan Yan at UnDark reports the remarkable story of academic research quickly being translated into political action that improves lives.
The story begins (more or less) with PhD student Jenna Forsyth:
Jenna Forsyth knew nothing about the practice of adding lead chromate to turmeric in 2014, when she started her Ph.D. in environment and resources at Stanford University. Excited to continue her masters research on water and sanitation, she sought out working with Stephen Luby, a world expert on the subject. When she arrived, Luby instead pointed Forsyth to a conundrum he was encountering in his work in Bangladesh: In a rural part of the country, pregnant women and children had high levels of lead in their blood. There were none of the usual suspects of lead exposure. There were no nearby battery recycling plants and families didn’t paint their homes. How could this be?
After eliminating dozens of explanations, Forsyth eventually hit on turmeric contamination. But Forsyth and the team didn’t just analyze turmeric in the lab, they hit the ground in Bangladesh:
They visited mills, and sometimes found sacks of the pigment on-site. They sampled dust from the polishing machine and from the floors of the mill. If there was about one part of lead to chromium, it was a dead giveaway that the adulterant was being used. From interviews, they also understood the motive: Brighter roots led to more profit, and adulterating with a consistently bright paint agent could disguise poorer-quality roots. The findings from this study were published in 2019.
Then they took their results to the Bangladesh Food Safety Authority:
The team held a meeting with the Bangladesh Food Safety Authority. The agency’s chairman at the time, Syeda Sarwar Jahan, was immediately concerned. She decided to spearhead a massive public information campaign.
…Local and international news outlets disseminated the findings from Forsyth’s new studies to create public awareness. The researchers met with businesses to make them aware of the risks of lead in turmeric. BFSA posted notices in the nation’s largest wholesale spice market, Shyambazar. The flyers warned people of the dangers of lead and that anyone caught selling turmeric adulterated with lead would be subject to legal action.
Authorities also raided Shyambazar using a machine called an X-ray fluorescence analyzer which can quickly detect lead in spices. Nearly 2,000 pounds of turmeric was seized in the raid and two wholesalers were fined 800,000 taka, more than $9,000 USD.
…In late 2019, as part of the intervention against lead chromate use in turmeric, the Bangladesh Food Safety Authority printed and distributed an estimated 50,000 copies of green flyers, that they shared with traders and plastered around the market. Be skeptical of fingers that appear too bright and yellow, it advised, and if the yellow dusting from turmeric doesn’t come off easily, it’s likely you’ve been played.
Getting rid of the lead isn’t just a cosmetic change. Lead can be so bad, especially for children, that removing it from spices improves lives at very low cost. Kate Porterfield writing at the EA Forum reports:
Despite being a preliminary assessment, this cost-effectiveness analysis (CEA) of this intervention in Bangladesh presents an exceptionally encouraging outlook, with a cost per DALY-equivalent averted estimated at just under US$1. It is crucial not to overlook the profound significance of this outcome: US$1 represents a small investment for the equivalent of an additional year of life in optimal health.
Early results from Pure Earth’s Rapid Market Assessment project find that between 6 and 12 countries may have similar problems with contaminated spices. Large parts of northern India (also highly populated) are similarly affected. Other lead salts are also highly colored, in reds and oranges, and found in other products. Programs to halt intentional contamination of spices and other foodstuffs are enormously impactful, and ought to be a first response in the fight against lead poisoning globally.
Finally, other significant sources of lead exposure (including leaded pottery and aluminum cookware, paint, medicines etc) require a similar regulatory response, and are likely to show cost benefit ratios that are also very strong.
Bangladesh has done it. It is time for Northern India to also eliminate lead from spices.
Big congratulations to Forsyth and the other Stanford researchers who documented the problem and who cared enough to follow up with a plan to work with charities and governments in Bangladesh to solve the problem. Big congratulations also to Givewell who supported the project.
The impacts of Covid-19 absences on workers
In the Journal of Public Economics, by Gopi Shah Goda and Evan J. Soltas:
We show that Covid-19 illnesses and related work absences persistently reduce labor supply. Using an event study, we estimate that workers with week-long Covid-19 absences are 7 percentage points less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons. Our estimates suggest Covid-19 absences have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average labor supply loss per Covid-19 absence equivalent to $9,000 in forgone earnings, about 90 percent of which reflects losses beyond the initial absence week.
Here is the full article.
Excess All-Cause Mortality in China After Ending the Zero COVID Policy
In this cohort study across all regions in mainland China, an estimated 1.87 million excess deaths occurred among individuals 30 years and older during the first 2 months after the end of China’s zero COVID policy. Excess deaths predominantly occurred among older individuals and were observed across all provinces in mainland China, with the exception of Tibet.
So what is the proper sarcastic headline here? “I guess that flu was worse than we thought!”? Or “How is it that China ran out of ivermectin?” Here is the new JAMA piece, via Rich Dewey.
To be clear, I never thought Zero Covid was a sustainable policy for China. The real criminal negligence lies with CCP leadership, which turned down opportunities to pursue joint mRNA vaccine production — with the West of course — earlier on.
Compensating Kidney Donors
LA Times: Never in the field of public legislation has so much been lost by so many to one law, as Churchill might’ve put it. The National Organ Transplant Act of 1984 created the framework for the organ transplant system in the United States, and nearly 40 years later, the law is responsible for millions of needless deaths and trillions of wasted dollars. The Transplant Act requires modification, immediately.
We’ve got skin in this game. We both donated our kidneys to strangers. Ned donated to someone who turned out to be a young mother of two children in 2015, which started a chain that helped an additional two recipients. And Matt donated at Walter Reed in 2021, after which his kidney went to a Seattleite, kicking off a chain that helped seven more recipients, the last of whom was back at Walter Reed.
…The National Organ Transplant Act prohibits compensating kidney donors, which is strange in that in American society, it’s common to pay for plasma, bone marrow, hair, sperm, eggs and even surrogate pregnancies. We already pay to create and sustain life.
…Compensation models have been proposed in the past. A National Institutes of Health study listed some of the possibilities, including direct payment, indirect payment, “in kind” payment (free health insurance, for example) or expanded reimbursements. After much review, we come down strongly in support of indirect payment, specifically, a $100,000 refundable federal tax credit. The tax credit would be uniformly applied over a period of 10 years, in the amount of $10,000 a year for those who qualify and then become donors.
This kind of compensation is certainly not a quick-cash scheme that would incentivize an act of desperation. Nor does it commoditize human body parts. Going forward, kidney donation might become partly opportunistic rather than mostly altruistic, as it is now. But would it be exploitative? Not at all.
Long-time readers will know that I have argued for the greater use of incentives in organ donation both for live donors and cadaveric donors. Pecuniary compensation is one possibility but so are no-give, no-take laws that give those who previously signed their organ donor cards priority should they one day need an organ.
Market depletion and the income of doctors
Rural regions rule the doctor rankings: Alaska, Wyoming and Nebraska join the Dakotas in the top five states for physician pay, confounding the intuition hammered into our souls by more than a decade of covering economics. None of those are high-earning states overall, with the evergreen exception of Alaska. They’re also not high-cost: North and South Dakota rank 41st and 45th, respectively, in cost of living among the states and D.C.; only Alaska costs more than average, according to the Bureau of Economic Analysis.
Of course the highest-paid lawyers do not live in the Dakotas. Do note this:
Rural America has about 20 percent of the U.S. population but about 10 percent of its doctors, according to our analysis of Census Bureau data. So the talented young physicians willing to hang their shingles in North Dakota don’t have to worry about rivals undercutting their prices. They can charge more for everything, from appendectomies to vasectomies.
Here is more from Andrew Van Dam.
Diego on gas station drugs
From my email:
The average gas station is now packed to the brim with drugs. This place had a Whip-it stand near the checkout, that I imagine is for recreational nitrous oxide users rather than whipped cream enjoyers, as well as a massive selection of kratom. ‘Whippets’ can cause irreversible brain damage and kratom has opiate-like effects, binding to the same receptors as morphine. There were also 3 stands near the checkout dedicated to weed-adjacent things including a mix of gummies, vapes, and flower bud containers. Unsure exactly what the weed-adjacent stuff was, some of it was Delta-8. Seems like a lot of these weed derivatives stemmed from the 2018 farm bill. The kratom proliferation has been insane. One of the main kratom brands, Botanic Tonics, sells super-popular small blue vials under the name ‘Feel Free’ that merely say ‘Plant-based herbal supplement’ on the front. Despite the FDA recently seizing $3M of kratom from Botanic Tonics as well as endless stories of addiction on the subreddit r/Quittingfeelfree, Botanic Tonics is an official sponsor of UT Austin and Florida State University and gives out free vials to students.
I do not personally have data on this question, but I thought this content was worth passing along.
AOC Gets on the Anti-FDA Bandwagon
At least when it comes to suncreen. As long-time readers will know, I have been complaining about FDA over-regulation of sunscreen for a decade! Maybe now that AOC is on the case things will change.
AOC’s sunscreen video is pretty good. One point she doesn’t stress is that requiring Americans to use more oily, less natural-feeling sunscreen can cause less use and thus more skin cancer. Even more important is the general issue of reciprocity or polycentric authority:
My rule is very simple. I don’t think the FDA is better than the EMA so if any drug or device is approved in Europe it ought to be available for purchase in the United States with a label saying “Approved by the EMA. Not approved by the FDA.” (By the way, we do have reciprocity type agreements with Canada and New Zealand for food so this would not be unprecedented.)
US sunscreens are far behind the rest of the world and our regulations aren’t necessarily making our sunscreens better or safer — but it doesn’t have to be this way! pic.twitter.com/vaZXpZ2a7S
— Rep. Alexandria Ocasio-Cortez (@RepAOC) August 11, 2023
The Impact of Vaccines and Behavior on U.S. Cumulative Deaths from COVID-19
It is hard to think of a topic area where the Republican Party, the right-wing, and (many by no means all) MR commentators are so far off base. Here are some new results from Andrew Atkeson:
…I find that vaccines saved 748,600 lives through June 2023. That is, without vaccines, cumulative mortality from COVID-19 would have been closer to 1.91 million over this time period. In answering the second question, I find that behavioral efforts to slow the transmission of the virus before vaccines became widely administered were critical to this positive impact of vaccines on cumulative mortality. For example, with a complete relaxation of these mitigation efforts, vaccines would have come too late to have saved a significant number of lives. Earlier deployment of vaccines would have saved many lives. I find that marginal changes in the strength of the behavioral response to COVID-19 deaths within the range of those responses estimated with the model have a significantly impact on cumulative COVID-19 mortality over this time period.
Here is the full paper. By the way, in case you are wondering I did write some columns arguing we should reopen the schools (and I strongly encouraged my own institution, GMU, to reopen in the fall of 2020, when asked for advice. Mercatus reopened once our landlord allowed us to.). But I am glad that for instance normal NBA games with full crowds were not up and running in the usual manner in November of 2020.
Health Alert: Your Survival Odds May Increase When Surgeons Take a Break!
Another bit from my review in the WSJ of Random Acts of Medicine by Jena and Worsham:
The authors do not always endear themselves to their colleagues. In one intriguing study spanning a decade and involving 200,000 patients, a surprising revelation emerged. Patients who happened to have a heart attack during a week when hot-shot cardiac surgeons were away at national conferences were found more likely to survive. It sounds like a joke—stay away from hospitals because that’s where lots of people die—but the statistics are solid. The heart surgeons most likely to attend the national meetings also tend to be the go-getters, eager to cut and demonstrate their prowess in the operating theater. When these surgeons are away, mortality rates decrease by about 12.5%, a decrease “similar in magnitude to some of the best treatments we have available for heart attacks.” (Emphasis in the original). The president of the American Heart Association breezily dismissed the study’s findings, saying, “there’s nothing in this study that we see that would lead us to recommend a change in clinical practice.” Such dismissal in the face of significant evidence feels akin to malpractice.
There is now widespread recognition that too much medical care can be wasteful, but less recognition that it can also be harmful. Unfortunately, nearly all stakeholders, including patients, doctors, pharmaceutical firms and hospitals, are incentivized to spend and do more. Only insurance companies bear the burden of saying no. Given the inherent bias in our information sources toward positivity, it’s crucial to remain vigilant about instances where medical care has exceeded reasonable boundaries.