Category: Medicine

How good is the Oregon Medicaid study?

Michael Cannon writes:

On subjective measures of health, the likelihood of screening positive for depression fell from 33 percent to 25 percent, and the share reporting their health to be good or better rose from 55 percent to 68 percent. However, two-thirds of the improvement in self-reported health occurred almost immediately after enrollment, before any increases in medical consumption. The authors posit that much of this improvement could reflect “an improved overall sense of well-being” rather than “changes in objective physical health.”

For the pointer I thank Robin Hanson.

Paul Starr’s *Remedy and Reaction*

Here is Austin Frakt’s review.  I thought the book was beautifully written, crystal clear, well-informed, and the single best introduction to the history of American health care policy.  That said, I am not sure specialist readers will learn much from it.  I did not find it conceptually very deep.

The book’s home page is here.  You can pre-order it here.

How the FDA Impedes Innovation

Mike Mandel  has a good piece, significantly published by the Progressive Policy Institute, on the FDA and innovation. MelaFind is a handheld computer vision system, database and expert system that helps dermatologists to identify which skin lesions should be biopsied for melanoma. The device works quite well but the FDA has deemed the device “not approvable” because (quoting Mandel):

  • The device did not do better than the experienced dermatologists in the study (“the FDA review team does not believe this is a clinically significant difference between MelaFind and the examining dermatologist”)
  • The device was tested on lesions identified by experienced dermatologists, not on the broader set of lesions that might be identified by “physicians less experienced than these dermatologists.”
  • The device did not find every melanoma in the sample (“Since the device is not 100% sensitive, if use based on the device’s diagnostic performance reduces the number of biopsies taken, harm could ensue in the form of missed melanomas.”)
  • The device was not demonstrated to make inexperienced physicians the equal of experienced dermatologists (“Currently, formal training is offered to physicians to become board certified dermatologist and thus be able to diagnose clinically atypical lesions. The FDA review team would have to compare this board certification training to that offered by the sponsor to those physicians operating MelaFind to determine if it is found adequate.”

Some of these complaints are legitimate, others not so much. But even if MelaFind is not perfect today nor appropriate in all circumstances it’s exactly the type of innovation that we should encourage. Devices such as MelaFind could not only improve medical care they can reduce costs and make good quality medical care more widely available in developing countries, for example, where experienced dermatologists are in short supply.

Most importantly, innovations get better over time. But if you impede the first generation the second generation may never come into existence and, as Mandel notes, no first-generation device could satisfy the FDA’s conditions. It’s like refusing to give the Wright Brothers a license to fly because their first airplane only flew for 59 seconds.

The signal that is being sent by the FDA impedes all medical innovation.

For more on the FDA see FDAReview.org.

Health care queuing: this will get worse

The study used a “secret shopper” technique in which researchers posed as the parent of a sick or injured child and called 273 specialty practices in Cook County, Ill., to schedule appointments. The callers, working from January to May 2010, described problems that were urgent but not emergencies, like diabetes, seizures, uncontrolled asthma, a broken bone or severe depression. If they were asked, they said that primary care doctors or emergency departments had referred them.

Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.

Here is more.  Once again, health care policy needs to be about the supply side.

Addendum: Ezra Klein reports that the budget deal may involve significant Medicaid cuts.

Drug Shortages

WP: Doctors, hospitals and federal regulators are struggling to cope with an unprecedented surge in drug shortages in the United States that is endangering cancer patients, heart attack victims, accident survivors and a host of other ill people.

Currently there are about 246 drugs that are in short supply, a record high. These shortages are not just a result of accident, error or unusual circumstance, the number of drugs in short supply has risen steadily since 2006. The shortages arise from a combination of systematic factors, among them the policies of the FDA. The FDA has inadvertently caused drugs long-used in the United States to be withdrawn from the market and its “Good Manufacturing Practice” rules have gummed up the drug production process and raised costs.

Here, for example, is an analysis from the summary report on drug shortages by the American Society of Health-System Pharmacists (ASHP), the American Society of Anesthesiologists (ASA), the American Society of Clinical Oncology (ASCO), and the Institute for Safe Medication Practices (ISMP).

Several drug shortages (e.g., concentrated morphine sulfate solution, levothyroxine injection) have been precipitated by actual or anticipated action by the FDA as part of the Unapproved Drugs Initiative, which is designed to increase enforcement against drugs that lack FDA approval to be marketed in the United States. (These drugs are commonly called pre-1938 drugs, referring to their availability prior to passage of the Food, Drug, and Cosmetic Act of that year.) Some participants noted that the cost and complexity of completing a New Drug Application (NDA) for those unapproved drugs is a disincentive for entering or maintaining a market presence. Other regulatory barriers include the time for FDA review of Abbreviated New Drug Applications (ANDA) and supplemental applications, which are required for changes to FDA-approved drug products (e.g., change in source for active pharmaceutical ingredients API, change in manufacturer). Manufacturers described this approval process as lengthy and unpredictable, which limits their ability to develop reliable production schedules.

and on GMP:

Manufacturing-related causes that contribute to drug shortages are multifactorial. Inability to fully comply with GMP, which results in production stoppages or recalls, was considered a major cause.

John Goodman at the Health Affairs Blog explains the details:

The Federal Food and Drug Administration (FDA) has been stepping up its quality enforcement efforts — levying fines and forcing manufacturers to retool their facilities both here and abroad. Not only has this more rigorous regulatory oversight slowed down production, the FDA’s “zero tolerance” regime is forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving. For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.

Thus, it’s not any one thing that is causing the shortages but an accumulation of rules and regulations. The system plods along when all is normal, but when a novel situation develops the market can no longer adapt quickly and efficiently.  As Michael Mandel puts it:

No single regulation or regulatory activity is going to deter innovation by itself, just like no single pebble is going to affect a stream. But if you throw in enough small pebbles, you can dam up the stream. Similarly, add enough rules, regulations, and requirements, and suddenly innovation begins to look a lot less attractive.

Add to all these pebbles the fact that various price controls have become more binding over time and thus have reduced the profits from being in the business at all and you have a recipe for deadly shortages.

How to cut government spending

Paul Krugman, among many others, raises the Keynesian argument against cutting government spending in a downturn.  Yet cutting spending  is easier to do than these accounts make it seem.  Cut the rate of growth of government spending on health care:

1. It is one sector where supply constraints often bind.  Releasing some of those resources from pursuing government subsidies will lead to their relatively rapid redeployment elsewhere.  For instance if you cut the rate of growth of Medicare spending, some more doctors are likely to start accepting Medicaid patients.  And job growth in the sector is robust, even these days.

2. The policy is cutting a rate of growth, rather than cutting current spending in absolute terms.  This may lead to sectoral readjustment problems for some people who are planning careers in health care, but it leaves current revenue streams intact and indeed it is still likely to grow them by some amount. Fairly often I see Keynesian opponents of “spending cuts” confuse absolute cuts with cuts in the rate of spending growth; the latter involve much smaller Keynesian problems.

3. There is a nice cushion of rents in the medical sector, and that makes it easier to cut spending there too.

4. Spending too much time with aggregate AD and AS curves causes one to overlook some of these cross-sectoral distinctions.

5. We also could and should cut farm subsidies, which go largely to agribusiness.  It’s part of the Keynesian argument today that wealthy corporations are just sitting on their cash.  I don’t buy that as stated, but if it will convince Keynesians to call for an immediate end to farm subsidies, so much the better.  We now can cut farm subsidies altogether and the rate of growth of government spending on health care; that’s two areas right there.

6. Let’s not forget defense spending.  Not all of those cuts need be a Keynesian disaster.

7. It is the so-called “discretionary spending” where Keynesian arguments are most likely to hold.  Not surprisingly, that seems to be the area where we are most determined to cut spending.  Silly Americans!  Given that, is our government an institution you should trust to enact good Keynesian policy more generally?

Not all government spending is created equal, for Keynesian purposes or otherwise.  There is plenty of spending we could cut without creating a Keynesian disaster, even if you accept the Keynesian framework straight up.

Antibiotic resistance

The E coli strain that is killing people in Europe is both new and resistant to at least a dozen antibiotics in eight classes. It’s clear, therefore, that this strain picked up resistance via gene transfer from previous strains that evolved resistance over a longer time frame. Thus, antibiotic resistance can spread very quickly, probably more quickly than we can develop new antibiotics. One of the places that resistance develops is in farm animals where antibiotics are used as growth promoters, not just as therapeutics.  Since there is a significant externality from antibiotic use, there is a good case to be made for regulating antibiotic use. As Glenn Reynolds once put it:

I think you can make a better case for regulating antibiotics than heroin: Misusing antibiotics can endanger countless others, while misusing heroin mostly endangers oneself.

(FYI, Tyler and I use antibiotic use as an important example of externalities in Modern Principles).

Denmark progressively regulated and reduced antibiotics for sub-therapeutic use in pigs, poultry and other livestock beginning around 1995. After some experimentation, pig production was not adversely affected and resistance in the wild declined. It’s less clear whether human health increased due to the regulation of antibiotics in farm animals (although there is less resistance in countries that use fewer antibiotics). It may be that Denmark is simply too small and connected with the rest of the world to see a large effect. Nevertheless, Denmark shows us that the costs of reducing antibiotic use in farm animals is not excessive, especially if phased-in, and the benefits of maintaining the effectiveness of our stock of antibiotics is so high that I see more intelligent but reduced use as an important goal.

See also Megan McArdle’s very good talk on this topic.

David Henderson on Medicare price controls

It is often debated whether a cut in Medicare reimbursement rates should be counted as a “price control.”  David Henderson adds a valuable point:

…a year or two after I left the Council, the Reagan administration took the next step of imposing price controls on doctors under Medicare. Doctors were no longer allowed to do what was variously called “extra bill” or “balance bill.” They couldn’t charge even a penny more than Medicare paid. That’s what made it a system of price controls. Moreover, under later regulations, if a doctor takes even one Medicare patient, then he has to charge Medicare rates to all his Medicare patients even if those patients would rather ensure access by paying the whole bill (Medicare plus a doctor’s additional charge) out of their own pocket. It is this system of price controls that is causing many doctors to take no Medicare patients.

Here is more.  Bryan Caplan comments, and Greg Mankiw’s recent post is relevant too.

China at the frontier

Following previous efforts (http://www.genomics.cn/en/news_show.php?type=show&id=644 and http://www.genomics.cn/en/news_show.php?type=show&id=647), BGI, based in Shenzhen, China, and its collaborators at the University Medical Centre Hamburg-Eppendorf, as well as a growing number of researchers around the world “crowdsourcing” this data, are exploring in-depth the European disease outbreak helping trace the origin and spread of the lethal E. coli strain. Different sources have reported that two strains, 01-09591 from Germany isolated in 2001 and 55989 from Central Africa in 2002, are highly similar to the 2011 outbreak strain. Based on the most recently curated assembly publically released by BGI yesterday (ftp://ftp.genomics.org.cn/pub/Ecoli_TY-2482), these strains have an identical Multi Locus Sequence Typing (ST678) based on analysis of seven important “housekeeping” genes*.

BGI (formerly known as Beijing Genomics Institute) was founded in 1999 and has become the largest genomic organization in the world. With a focus on research and applications in the healthcare, agriculture, conservation and bio-energy fields, BGI has a proven track record of innovative, high-profile research which has generated over 178 publications in top-tier journals such as Nature and Science.

Bravo.

The Global War on Drugs has Failed

The global war on drugs has failed, with devastating consequences for individuals and societies around the world.

…End the criminalization, marginalization and stigmatization of people who use drugs but who do no harm to others. Challenge rather than reinforce common misconceptions about drug markets, drug use and drug dependence.

…This recommendation applies especially to cannabis, but we also encourage other experiments in decriminalization and legal regulation that can accomplish these objectives and provide models for others.

…Break the taboo on debate and reform. The time for action is now.

  • Asma Jahangir, human rights activist, former UN Special Rapporteur on Arbitrary, Extrajudicial and Summary Executions, Pakistan
  • Carlos Fuentes, writer and public intellectual, Mexico
  • César Gaviria, former President of Colombia
  • Ernesto Zedillo, former President of Mexico
  • Fernando Henrique Cardoso, former President of Brazil (chair)
  • George Papandreou, Prime Minister of Greece
  • George P. Shultz, former Secretary of State, United States (honorary chair)
  • Javier Solana, former European Union High Representative for the Common Foreign and Security Policy, Spain
  • John Whitehead, banker and civil servant, chair of the World Trade Center Memorial Foundation, United States
  • Kofi Annan, former Secretary General of the United Nations, Ghana
  • Louise Arbour, former UN High Commissioner for Human Rights, President of the International Crisis Group, Canada
  • Maria Cattaui, Petroplus Holdings Board member, former Secretary-General of the International Chamber of Commerce, Switzerland
  • Mario Vargas Llosa, writer and public intellectual, Peru
  • Marion Caspers-Merk, former State Secretary at the German Federal Ministry of Health
  • Michel Kazatchkine, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, France
  • Paul Volcker, former Chairman of the United States Federal Reserve and of the Economic Recovery Board
  • Richard Branson, entrepreneur, advocate for social causes, founder of the Virgin Group, co-founder of The Elders, United Kingdom
  • Ruth Dreifuss, former President of Switzerland and Minister of Home Affairs
  • Thorvald Stoltenberg, former Minister of Foreign Affairs and UN High Commissioner for Refugees, Norway

The report of The Global Commission on Drug Policy is very strongly worded and the commissioners are so stellar it will be difficult to ignore.

*Pox: An American History*, by Michael Willrich

The Medical Department’s vaccination program had carried vaccination to the people on an unprecedented scale.  According to Hoff, the vaccinators had performed nearly 860,000 operations (742,062 vaccinations and 116,955 revaccinations) in a period of five months.  And the vaccine produced at Coamo Springs was, by contemporary standards, good, with a reported success rate of 87.5 percent.  Colonial administrators always kept the bottom line in view.  Hoff noted with satisfaction that the entire vaccination campaign had cost only $43,000.

By the end of June, the “head-fire of vaccination” had stopped variola [smallpox] in its tracks.  In the decade before the arrival of the U.S. Army, the annual death rate from the disease had averaged 620 people.  From January 1 to April 30, 1900, not a single death from smallpox was reported.

This was done under a form of martial law.  The Philippines, under colonial control, was another early example of a largely successful public health program: “Americanized Manila stood as a model of the healthful city.”  Who would have thought?

It’s an interesting book.

Sentences to ponder

There’s a measles outbreak in Massachusetts, probably thanks to low vaccination rates.

It’s hard to believe, but we’re sliding backwards on two of the three public health achievements of the 20th century: vaccination, antibiotics, and clean water.  Antibiotic resistance is a growing problem, one that we’re partly inflicting on ourselves by rampant overuse.  And now vaccine resistance is spreading among parents who want to free ride on the herd immunity of others.  If these diseases were widespread, they’d be rushing to vaccinate their kids.  But they can delay, or forgo the vaccines entirely, thanks to other parents who are willing to risk their kids in order to do the right thing.  They’re already killing little babies who catch pertussis before they can be vaccinated, and now measles has killed six people in France just since the start of the year.

That is from Megan McArdle.

Why not let the dead pay for Medicare?

Kevin Drum reports:

Medicare stays roughly the same, but every time you receive medical care you also get a bill. You don’t have to pay it, though. It’s just there for accounting purposes. When you die, the bill gets paid out of your estate. If your estate is small or nonexistent, you’ve gotten lots of free medical care. If it’s large, you’ll pay for it all. If you’re somewhere in between, you’ll end up paying for part of the care you’ve received.

Obviously this gives people incentives to spend all their money before they die. That’s fine. I suspect they wouldn’t end up spending as much as you’d think. What it does mean, though, is that Medicare has first claim on their estate, not their kids. But that seems fair, doesn’t it?

There is more at the link.

Facts about health care coverage

Among workers who provide hands-on care to nursing home residents, one in four has no health insurance. Among those who provide care to people living at home, one in three is uninsured.

But here is the clincher:

The new health care law is supposed to fix the problem by guaranteeing access to affordable coverage for all. But many nursing homes and home care agencies, alarmed at the cost of providing health insurance to hundreds of thousands of health care workers, have started a lobbying effort seeking some kind of exemption or special treatment.

This is not a good sign for the future of the mandate.  The full story is here.