Category: Medicine
From the comments, on single payer
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.
Covid-19 and labor supply
We show that Covid-19 illnesses persistently reduce labor supply. Using an event study, we estimate that workers with week-long Covid-19 work 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 illnesses have reduced the U.S. labor force by approximately 500,000 people (0.2 percent of adults) and imply an average forgone earnings per Covid-19 absence of at least $9,000, about 90 percent of which reflects lost labor supply beyond the initial absence week.
That is from a new NBER working paper, by Gopi Shah Goda and Evan J. Soltas, of relevance both to Long Covid and our current human capital crisis.
Plastic Might Be Making You Fat
WashPost: An emerging view among scientists is that one major overlooked component in obesity is almost certainly our environment — in particular, the pervasive presence within it of chemicals which, even at very low doses, act to disturb the normal functioning of human metabolism, upsetting the body’s ability to regulate its intake and expenditure of energy.
Some of these chemicals, known as “obesogens,” directly boost the production of specific cell types and fatty tissues associated with obesity. Unfortunately, these chemicals are used in many of the most basic products of modern life including plastic packaging, clothes and furniture, cosmetics, food additives, herbicides and pesticides.
Ten years ago the idea of chemically induced obesity was something of a fringe hypothesis, but not anymore.
“Obesogens are certainly a contributing factor to the obesity epidemic,” is what Bruce Blumberg, an expert on obesity and endocrine-disrupting chemicals from the University of California, Irvine, told me by email. “The difficulty is determining what fraction of obesity is related to chemical exposure.”
An important piece of evidence is something I pointed to in my post The Animals are Also Getting Fat namely, cats and dogs are getting fatter and so are rats and so (very importantly) are control mice fed a very standard diet. I hadn’t realized there is also some experimental evidence.
In particular, consequences of chemical exposure may not appear during the lifetime of an exposed organism but can be passed down through so-called epigenetic mechanisms to offspring even several generations away. A typical example is tributyltin or TBT, a chemical used in wood preservatives, among other things. In experiments exposing mice to low and supposedly safe levels of TBT, Blumberg and his colleagues found significantly increased fat accumulation in the next three generations.
Overall, I find the chemical story plausible–people in the past, even rich people, just didn’t get fat so easily–but my skepticism rises whenever I hear the word epigenetics.
An Update on Nasal Vaccines
Nasal vaccines are more likely to stop infection than vaccines injected into muscle because they stimulate mucosal immunity in the nose and respiratory system, the first line of attack, and they are likely to increase uptake especially among people with trypanophobia. Hence my longstanding call for an Operation Warp Speed for nasal vaccines. We haven’t got OWS 2.0 in the United States but nasal vaccines have recently been approved in China and India.
The Chinese vaccine is developed by CanSino and is the same as its injected vaccine but packaged in an aerosol taken with a nebulizer. It has been approved in China as a booster. Another advantage is that the Chinese nasal vaccine it’s one-fifth the dose of the injected version. India has also just approved a nasal vaccine on an emergency use basis. The Indian vaccine was developed by Bharat Biotech in a partnership with Washington University St. Louis.
Nasal vaccines as boosters seem like an especially promising approach as administration is much easier.
Mandated vaccine boosters for the AEA meetings?
Yes, the new AEA regulations will mandate vaccine boosters for attendance at the New Orleans meetings. Not just two jabs but yes boosters, at least one of them.
Like the N-95 (or stronger) mask mandate, this seems off base and possibly harmful to public health as well. Here are a few points:
1. The regulations valorize “booster with an older strain,” and count “infection with a recent strain” for nothing. In fact, the latter is considerably more valuable, most of all to estimate a person’s public safety impact on others. So the regulations simply target the wrong variable.
1b. People who are boosted might even be less likely to have caught the newer strains (presumably the boosters are at least somewhat useful). Thus they are potentially more dangerous to others, not less, being on average immunologically more naive. Ideally you want a batch of attendees who just had Covid two or three months ago.
2. More than three-quarters of Americans have not had a booster to date. Very likely the percentage of potential AEA attendees with boosters stands at a considerably higher level. Still, this is a fairly exclusionary policy, and pretty far from what most Americans consider to be an acceptable regulation.
2b. To be clear, I had my booster right away, even though I expected it would make me sick for two days (it did). I am far from being anti-booster. I am glad I had my booster, but I also understand full well the distinction between “getting a booster at the time was the right decision,” and “we should mandate booster shots today.” They are very different! Don’t just positively mood affiliate with boosters. Think through the actual policies.
3. Blacks are a relatively undervaccinated group, and probably they are less boosted as well. The same may or may not be true for black potential AEA attendees, but it is certainly possible. After all the talk of DEI, and I for one would like to see more inclusion, why are we making inclusion harder? And for no good medical reason.
3b. How about potential attendees from Africa, Latin America, and other regions where boosters are harder to come by? What are their rates of being boosted? Do they all have to fly to America a few days earlier, line up boosters, and hope the ill effects wear off by the time of the meetings? Why are we doing this to them?
3c. Will the same booster requirements be applied to hotel staff and contractors? Somehow I think not. Maybe that is a sign the boosters are not so important for conference well-being after all?
4. Many people are in a position, right now, where they should not boost. Let’s say you had Covid a few months ago, and are wondering if you should get a booster now or soon. I looked into this recently, and found the weight of opinion was that you should wait at least six months for your immune system to process the recent infection. That did not seem to be “settled science,” but rather a series of judgments, admittedly with uncertainty. So now let’s take those people who were not boosted, had a new strain of Covid recently, and want to go to the AEA meetings. (The first two of three there cover a lot of people.) They have to get boosted. And in expected value terms, boosting is bad for them. Did this argument even occur to the decision-makers at the AEA?
5. The AEA mentions nothing about religious or other exceptions to the policy. Maybe there are “under the table” exceptions, but really? Why not spell out the actual policy here, and if there are no exceptions come right out and tell us. And explain why so few other institutions have chosen the “no exceptions” path, and why the AEA should be different. (As a side note, it is not so easy to process exceptions for the subset of the 13,000 possible attendees who want them. Does the AEA have this capacity?)
Again, this is simply a poorly thought out policy, whether for N-95 masks or for boosters. I hope the AEA will discard it as soon as possible. Or how about a simple, open poll of membership, simple yes or not on the current proposal?
U.S.A. facts of the day
In 2021, the average American could expect to live until the age of 76, federal health researchers reported on Wednesday. The figure represents a loss of almost three years since 2019, when Americans could expect to live, on average, nearly 79 years.
The reduction has been particularly steep among Native Americans and Alaska Natives, the National Center for Health Statistics reported. Average life expectancy in those groups was shortened by four years in 2020 alone.
The cumulative decline since the pandemic started, more than six and a half years on average, has brought life expectancy to 65 among Native Americans and Alaska Natives — on par with the figure for all Americans in 1944.
Here is more from the NYT. Do note that Native Americans are generally considered to have done OK in terms of their vaccination rates.
America is now pulling away from Western Europe
That is the topic of my latest Bloomberg column, the energy discussion is obvious so here is the segment on health care systems:
The pandemic revealed years of capital underinvestment in many of European health-care systems. Many Americans used to admire the UK’s National Health Service, but right now the whole system is ailing. There has been a labor and capital shortage, and a collapse of emergency health care services, which may be costing up to 500 excess (non-Covid) deaths a week. Similar problems exist throughout Europe, though they seem to be worst in the UK.
The American hospital and health care system long has been good — too good — at making expensive, long-term investments in care and technology. Often this meant excess prices and not much of an improvement in basic care. But in the pandemic and post-pandemic environment, that feature of the system has kept US health care up and running. All that capital investment turns out to have been pretty useful in a major crisis.
The longstanding charge that the US does not have universal health care now is less relevant. Obamacare is highly imperfect along a variety of dimensions, but US health care coverage has never been higher — the percentage of the uninsured population is now 8%. Keep in mind that many of those uninsured may have decided not to purchase health insurance, instead preferring to spend their money in other ways. That might be a personal mistake, but that is not the same thing as a systemic failure of the entire US health care regime.
America actually has something pretty close to universal coverage, at least as an option. And remember that some of the European systems, most notably in Switzerland, also require significant out-of-pocket expenditures. Other parts of those systems are paid through relatively regressive systems of a value-added tax, so they are not as “free” as they might seem.
Recommended.
Caleb Watney and Heidi Williams on drug pricing reforms
Because patents are filed before the start of clinical trials, rather than when a drug actually hits the market, drugs that require long clinical trials effectively receive shorter patent terms. This reduces incentives to develop drugs that require long clinical trials, including many preventive medicines.
A simple way to correct this is for the Food and Drug Administration to guarantee a minimum baseline of 12 years of market exclusivity for branded drugs. Importantly, this would not change or lengthen protection for drugs that would be developed anyway; most already receive 12 to 16 years of market protection, and the United States already provides this for particular categories, such as biologic drugs. For drugs with short periods of market exclusivity, this policy could make the difference between the drug being developed or not.
Here is the full Op-Ed, likely correct throughout.
Post-Covid excess deaths in Britain
For 14 of the past 15 weeks, England and Wales have averaged around 1,000 extra deaths each week, none of which are due to Covid.
If the current trajectory continues, the number of non-Covid excess deaths will soon outstrip deaths from the virus this year – and be even more deadly than the omicron wave.
So what is going on? Experts believe decisions taken by the Government in the earliest stages of the pandemic may now be coming back to bite.
Policies that kept people indoors, scared them away from hospitals and deprived them of treatment and primary care are finally taking their toll.
Here is the full story, via B.
From my email, on the new health care provisions
I saw your post on the new bill, and I actually think the healthcare components of it might be worse than the rest of it.The bill has a provision that allows the government to “negotiate” prices for drugs that are among the top 10-20 by spend in Medicare Part B (physician administered, usually IV infusions) and Part D. Since drugs that are selected in one year are not eligible for inclusion in subsequent years, this will capture more and more drugs over time. The negotiation of course happens with a gun to the head—the bill sets statutory minimum discounts of anywhere between 25-60%, depending how long the drug in question has been on market.The biggest issue with the bill is that it makes small molecule drugs eligible 9 years after approval, while biologic drugs are eligible after 13 years. This is based on some silly misconception that small molecule drugs are quicker and cheaper to develop and therefore have shorter payback periods. That may have been true when we were tackling relatively low-hanging fruit like high cholesterol, but small molecule drugs that tackle unmet needs today are nothing less than miracles. An oral pill that treats cystic fibrosis, like Vertex’s Trikafta, or sickle-cell disease, like Global Blood Therapeutics’ Oxbryta, is incredibly challenging to develop.This is going to hurt returns for small molecule drugs and skew R&D efforts away from them to biologics. Biologics like monoclonal antibodies are great, but many of them carry substantial administration costs or suffer from worse compliance/adherence because they are IV infusions that require patients to go into a care setting periodically to receive their next dose. But the real issue is they do not go generic the way small-molecule drugs do. Generics for small-molecule drugs are relatively cheap to develop, benefit from a streamlined approval process, and can be substituted for the branded drug at the pharmacy counter even if the doctor prescribes the brand, and as a result, drive 90% discounts to the brand price. Biologics, as the name suggests, are derived from living cells and thus cannot be easily proven to be equivalent to the brand—clinical trials are required and the overall expense of developing a biosimilar is 10x that of a small-molecule generic ($20M vs $200M). Between the higher development cost, lack of automatic substitution, and doctor and patient reluctance to believe these biosimilars are identical to the brand, biosimilars discount the brand price less and take a smaller share of the market, resulting in smaller savings to the system.It gets worse—many drugs these days are a “pipeline in a product,” targeting a biological mechanism that is implicated in many diseases. The most famous example might be Humira, which began as a rheumatoid arthritis drug and added psoriasis, psoriatic arthritis, ulcerative colitis, Crohn’s disease, ankylosing spondylitis, and hidradenitis suppurative over time, running trials to prove efficacy in each. Humira is a complex example—patent evergreening extended its lifetime and justified the investment in expanding its approved indications, and on a societal basis, it’s hard to know whether that’s good or bad, but hopefully we can agree that the solution to an IP issue is not to create an artificial time of expiry that discourages investment in science.The bill also includes an exemption through 2028 for orphan drugs that are approved in only one indication—these are drugs that target very rare diseases and generally charge extremely high prices to be financially viable. Some of these drugs are eventually tested in and expand to other smaller indications—but this exemption would discourage that and create an incentive to only try the drug in the largest indication and not expand the label to maintain the exemption and maximize its lifespan.Moreover, small companies that derive at least 80% of their revenue from one drug get a partial exemption from this, rendering them unacquirable by a larger drug company, since the drug is worth more as a standalone asset. This is again a failure of incentive design—it forces replication of corporate and commercial infrastructure that would otherwise have been a source of cost synergies for an acquirer.An example of the orphan disease issue is a drug called mavacamten, that Bristol-Myers acquired for $13.1B (it was the main asset of a company called Myokardia). The development plan was to first test the drug in an orphan indication, obstructive hypertrophic cardiomyopathy (oHCM), then expand to non-obstructive HCM, and eventually to a broader non-orphan heart failure market. This is a small-molecule drug, so negotiation eligibility is 9 years after launch in oHCM, or 2031–this would leave only 5-6 years for commercial launch in the heart failure market. While it probably makes sense for BMS to go ahead and test this molecule in heart failure at this point, the NPV of the molecule would be materially lower assuming a 25% discount to Medicare prices at year 9. The investment bank Jefferies estimates it at a 19% haircut—$10.6B from $13.1B. If the discount is deeper and/or spills over to commercial reimbursement, the haircut gets steeper and steeper—this overhang will reduce the number of drugs developed and/or force ever-higher launch prices since more of the value of the molecule has to be generated from the first indication.Lastly, this encourages even more gaming of the system. In theory, authorizing a generic competitor at a small discount at 9 or 13 years would protect the branded drug, as drugs with generic/biosimilar competition are exempt from negotiation. Handing the rights to produce a 10% cheaper version of your drug to Teva or Sandoz could therefore be less costly than the government’s proposed price cuts.This is sadly the story of our entire HC system—poor incentive structures layered on top of each other in an increasingly wobbly manner rendering the whole system unfit for purpose and on the verge of collapse. I should note here that this also targets one of the few industries where the US is still the undisputed global leader—can we really afford to do that? Especially when pharmaceuticals are less than a fifth of US HC spend, and the real drivers of out-of-control healthcare spending are guilds like the AMA and local monopolies (hospital systems that have consolidated heavily and are the largest employers in many congressional districts and even states, giving them both outsize negotiating power against insurers and lobbying clout in Congress).
That is from Anonymous!
Pharmaceutical drugs redux
In 2019 I presented this excerpt:
Humans are living longer, better lives thanks to innovations in prescription drugs over the past three decades, according to several new studies by Frank Lichtenberg, the Courtney C. Brown Professor of Business.
Every year, according to Lichtenberg’s research, drugs launched since 1982 are adding 150 million life-years to the lifespans of people in 22 countries that he analyzed. He calculated the average pharmaceutical expenditure per life-year saved at $2,837 — a bargain, he says.
“According to most health economists and policymakers, if you could extend someone’s life by a year for less than $3,000, that is highly cost effective,” says Lichtenberg, who gathered new data for these studies to cast a never-before seen view of the econometrics of prescription drugs. “People might be surprised by how cost-effective drugs appear to be in general.”
…To tease out the answer, the professor gathered data on drug launches and the age-standardized premature mortality rate by country, disease, and year. Drawing on data from the World Health Organization, the United Nations, consulting company IQVIA, and French database Theriaque, Lichtenberg was able to identify the role that pharmaceutical innovation played in reducing the number of years of life lost due to 66 diseases in 27 countries. (“Years of life lost” is an estimate of the average years a person would have lived if he or she had not died prematurely.)
OK, now a simple economics question: given such numbers, should we be spending more on pharmaceutical drugs, or less? I might add that biomedicine has made some spectacular advances as of late, so the notion that these are average costs, and the marginal cost slants sharply upward, probably is not true.
Here are further MR posts on this line of research. Here are Lichtenberg’s NBER working papers.
How many of you got the simple economics question right?
Covid in Cuba
Covid in Cuba
"The country’s once-famed health system is in tatters"https://t.co/BPPnY3ARPA @TheEconomist pic.twitter.com/hJHKSsD3rf— Eric Topol (@EricTopol) August 4, 2022
Dose Stretching for the Monkeypox Vaccine
We are making all the same errors with monkeypox policy that we made with Covid but we are correcting the errors more rapidly. (It remains to be seen whether we are correcting rapidly enough.) I’ve already mentioned the rapid movement of some organizations to first doses first for the monkeypox vaccine. Another example is dose stretching. I argued on the basis of immunological evidence that A Half Dose of Moderna is More Effective Than a Full Dose of AstraZeneca and with Witold Wiecek, Michael Kremer, Chris Snyder and others wrote a paper simulating the effect of dose stretching for COVID in an SIER model. We even worked with a number of groups to accelerate clinical trials on dose stretching. Yet, the idea was slow to take off. On the other hand, the NIH has already announced a dose stretching trial for monkeypox.
Scientists at the National Institutes of Health are getting ready to explore a possible work-around. They are putting the finishing touches on the design of a clinical trial to assess two methods of stretching available doses of Jynneos, the only vaccine in the United States approved for vaccination against monkeypox.
They plan to test whether fractional dosing — using one-fifth of the regular amount of vaccine per person — would provide as much protection as the current regimen of two full doses of the vaccine given 28 days apart. They will also test whether using a single dose might be enough to protect against infection.
The first approach would allow roughly five times as many people to be vaccinated as the current licensed approach, and the latter would mean twice as many people could be vaccinated with existing vaccine supplies.
…The answers the study will generate, hopefully by late November or early December, could significantly aid efforts to bring this unprecedented monkeypox outbreak under control.
Another interesting aspect of the dose stretching protocol is that the vaccine will be applied to the skin, i.e. intradermally, which is known to often create a stronger immune response. Again, the idea isn’t new, I mentioned it in passing a couple of times on MR. But we just weren’t prepared to take these step for COVID. Nevertheless, COVID got these ideas into the public square and now that the pump has been primed we appear to be moving more rapidly on monkeypox.
Addendum: Jonathan Nankivell asked on the prediction market, Manifold Markets, ‘whether a 1/5 dose of the monkey pox vaccine would provide at least 50% the protection of the full dose?’ which is now running at a 67% chance. Well worth doing the clinical trial! Especially if we think that the supply of the vaccine will not expand soon.
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.