Category: Medicine
Did rising health care expenditures damage the U.S. savings rate?
Maybe so:
The U.S. saving rate declined by 8 percent between 1980 and 2009. We document that the decline can be explained by rising health expenditures. Using exogenous variation in medical expenses generated by FDA drug approvals, we document that a 1 percentage point increase in health expenditure generated a decline in saving rate of 0.9 percentage points. We then estimate a model of household decisions to evaluate the mechanisms behind the decline. We find that the rise in health expenses and drop in saving rate are driven by progress in health technology, reduction in co‐payment rates, and improvements in income processes.
That is by Yi Chen, Maurizio Mazzocco, and Béla Személy, via the excellent Kevin Lewis.
The multi-product firm?
Philip Morris International, the tobacco company that sells Marlboro cigarettes, is getting into the life insurance business.
Called Reviti, the wholly owned subsidiary will initially sell life insurance in the U.K. with plans to expand into more markets overseas. Smokers will receive discounts if they stop, quit or switch to a possibly less carcinogenic product, like Philip Morris’ vaping devices.
On average, people who switch to e-cigarettes will receive a 2.5% discount on premiums, people who switch to Philip Morris’ heated tobacco product iQOS for three months will receive a 25% discount, and people who quit smoking for at least a year will receive a 50% discount, the company said. Premiums for a 20-year-old nonsmoker run about £5 ($6.47) per month for a life insurance policy that pays £150,000 ($194,125). The same premium would buy a £60,000 ($77,650) policy for a 40-year-old nonsmoker.
Here is more from Angelica LaVito, via Sheel.
Frank Lichtenberg and the cost of saving lives through pharmaceuticals
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.)
Between 1982 and 2015, for example, the US saw the launch of 719 new drugs, the most of any country in the sample; Israel had about half as many launches. By looking at the resultant change in each country between mortality and disease, Lichtenberg calculated that the years of life lost before the age of 85 in 2013 would have been 2.16 times as high if no new drugs had been launched after 1981. For a subset of 22 countries with more full data, the number of life-years gained in 2013 from drugs launched after 1981 was 148.7 million.
Here is more from Stephen Kurczy, and here is previous MR coverage of Lichtenberg and his work. Given these estimates, do you really think we should be spending less on pharmaceuticals?
Peter Thiel on medicine and longevity
Or is it that there’s something wrong with culture, with the funding? Almost no grants go to younger scientists. When it’s scientists under age 40 that make […] of the most big discoveries, 2% of NIH grants go to scientists under age 40. That seems a little bit off. You have a peer-review process where anything heterodox can’t get funded. You have sort of a publish or perish dynamic where you have to do small, incremental things to publish lots of articles that don’t add up to anything ever…
And again, my sort of libertarian cut on what happened would be the history of was that we had a healthy, scientific world that was non-governmental. It was decentralized. It was idiosyncratic. Different people were doing different kinds of things. And in the 1930s, 1940s, it got centralized accelerated. The Manhattan Project…there was actually a way you could accelerate science temporarily by adding tons of money and centralizing…
So the centralization worked. But to use an ecological metaphor, it worked by creating a monoculture. And we’re now two generations in to where that monoculture has been just catastrophic.
That is from this taped dialogue between Peter and Bill Hurlbut, previously linked on MR.
Tooth extraction markets in everything
Dozens of medical professionals in seven states were charged Wednesday with participating in the illegal prescribing of more than 32 million pain pills, including doctors who prosecutors said traded sex for prescriptions and a dentist who unnecessarily pulled teeth from patients to justify giving them opioids…
Another Alabama doctor allegedly prescribed opioids in high doses and charged a “concierge fee” of $600 per year to be one of his patients.
By Sari Horwitz and Scott Higham, there is more of interest at the link. For the pointer I thank Harrison Brown.
Families and social networks don’t always help stroke victims
A recent study in Nature Communications shows that when stroke patients are surrounded by close connections like their immediate family, they are less likely to get to the hospital in time for treatment, compared to patients with looser social connections.
Amar Dhand is a neurologist at Harvard Medical School with a PhD in sociology from Oxford who studies the relationship between social connections and health. His team surveyed 175 stroke patients in Boston and St. Louis, and mapped their social networks against the time it took them to arrive at the hospital. The 67 patients who took more than six hours to arrive had both smaller and tighter-knit social networks than the 108 who arrived in under six hours…
“This is the biggest problem in stroke therapy today,” Dhand says. “The delay that is caused by patients and the caregivers. The social context is the largest part of the delay, hands down, in stroke patients arriving in hospital in time.” There’s a predictable sequence of events for stroke patients in close networks, he notes. Initially, a patient may delay telling their family about their symptoms, not wanting them to worry. “Secondly, they [the family] over-negotiate the symptoms, and perhaps even argue about them,” Dhand says. “Then they all validate each others opinion to watch and wait.”
He calls it an”echo chamber,” where family members, hoping for the best, minimize the gravity of the situation and conflate it with previous, less severe illnesses.
In contrast, when patients with only loose social networks have a stroke, there isn’t as much dithering. Patients who suffer strokes in a public place may be sent to the emergency room out of an abundance of caution by employees of the mall, store, or restaurant where they are afflicted. In some cases, an ambulance may be called by someone who doesn’t want the responsibility of caring for the sick person.
Here is the full article.
Is Dentistry Safe and Effective?
The FDA may be too conservative but it does subject new pharmaceuticals to real scientific tests for efficacy. In contrasts, many medical and surgical procedures have not been tested in randomized controlled trials. Moreover, dental care is far behind medical care in demanding scientific evidence of efficacy. A long-read in The Atlantic spends far too much time on a single case of egregious dental fraud but it’s larger point is correct:
Common dental procedures are not always as safe, effective, or durable as we are meant to believe. As a profession, dentistry has not yet applied the same level of self-scrutiny as medicine, or embraced as sweeping an emphasis on scientific evidence.
…Consider the maxim that everyone should visit the dentist twice a year for cleanings. We hear it so often, and from such a young age, that we’ve internalized it as truth. But this supposed commandment of oral health has no scientific grounding. Scholars have traced its origins to a few potential sources, including a toothpaste advertisement from the 1930s and an illustrated pamphlet from 1849 that follows the travails of a man with a severe toothache. Today, an increasing number of dentists acknowledge that adults with good oral hygiene need to see a dentist only once every 12 to 16 months.
The joke, of course, is that there’s no evidence for the 12 to 16 month rule either. Still give credit to Ferris Jabr for mentioning that the case for fluoridation is also weak by modern standards–questioning fluoridation has been a taboo in American society since anti-fluoridation activists were branded as far-right conspiracy theorists in the 1950s.
The Cochrane organization, a highly respected arbiter of evidence-based medicine, has conducted systematic reviews of oral-health studies since 1999….most of the Cochrane reviews reach one of two disheartening conclusions: Either the available evidence fails to confirm the purported benefits of a given dental intervention, or there is simply not enough research to say anything substantive one way or another.
Fluoridation of drinking water seems to help reduce tooth decay in children, but there is insufficient evidence that it does the same for adults. Some data suggest that regular flossing, in addition to brushing, mitigates gum disease, but there is only “weak, very unreliable” evidence that it combats plaque. As for common but invasive dental procedures, an increasing number of dentists question the tradition of prophylactic wisdom-teeth removal; often, the safer choice is to monitor unproblematic teeth for any worrying developments. Little medical evidence justifies the substitution of tooth-colored resins for typical metal amalgams to fill cavities. And what limited data we have don’t clearly indicate whether it’s better to repair a root-canaled tooth with a crown or a filling. When Cochrane researchers tried to determine whether faulty metal fillings should be repaired or replaced, they could not find a single study that met their standards.
The cost of cannabis
Accounting for income endogeneity, our results suggested that being a current cannabis user may cost an individual over £5600 per year, in terms of lost wellbeing, while being a current user of other drugs may cost approximately £4000 per year. While acknowledging possible reverse causality, we estimated the annual population cost of drug use may be as high as £10.7bn in terms of lost wellbeing.
That is from a new paper by Anna Maccagnan, Tim Taylor, and Mathew P. White, via the excellent Rolf Degen.
The Disconnect Between Biological Time and Standard Time Reduces Health
In Poor Sleep Makes People Poor I discussed an important paper by Maulik Jagnani showing how India’s single time zone creates a big disconnect between biological time as given by light cues and clock time. The disconnects impedes sleep patterns and reduces human capital for those most effected.
In a new paper in the Journal of Health Economics, Sunset Time and the Economic Effects of Social Jetlag Giuntella and Mazzonna show that the same types of effects can be observed in the United States.
The rapid evolution into a 24h society challenges individuals’ ability to conciliate work schedules and biological needs. Epidemiological research suggests that social and biological time are increasingly drifting apart (“social jetlag”). This study uses a spatial regression discontinuity design to estimate the economic cost of the misalignment between social and biological rhythms arising at the border of a time-zone in the presence of relatively rigid social schedules (e.g., work and school schedules). Exploiting the discontinuity in the timing of natural light at a time-zone boundary, we find that an extra hour of natural light in the evening reduces sleep duration by an average of 19 minutes and increases the likelihood of reporting insufficient sleep. Using data drawn from the Centers for Disease Control and Prevention and the US Census, we find that the discontinuity in the timing of natural light has significant effects on health outcomes typically associated with circadian rhythms disruptions (e.g., obesity, diabetes, cardiovascular diseases, and breast cancer) and economic performance (per capita income). We provide a lower bound estimate of the health care costs and productivity losses associated with these effects.
Hat tip: Kevin Lewis.
Early-career setback and future career impact
Setbacks are an integral part of a scientific career, yet little is known about whether an early-career setback may augment or hamper an individual’s future career impact. Here we examine junior scientists applying for U.S. National Institutes of Health (NIH) R01 grants. By focusing on grant proposals that fell just below and just above the funding threshold, we compare “near-miss” with “near-win” individuals to examine longer-term career outcomes. Our analyses reveal that an early-career near miss has powerful, opposing effects. On one hand, it significantly increases attrition, with one near miss predicting more than a 10% chance of disappearing permanently from the NIH system. Yet, despite an early setback, individuals with near misses systematically outperformed those with near wins in the longer run, as their publications in the next ten years garnered substantially higher impact. We further find that this performance advantage seems to go beyond a screening mechanism, whereby a more selected fraction of near-miss applicants remained than the near winners, suggesting that early-career setback appears to cause a performance improvement among those who persevere. Overall, the findings are consistent with the concept that “what doesn’t kill me makes me stronger.” Whereas science is often viewed as a setting where early success begets future success, our findings unveil an intimate yet previously unknown relationship where early-career setback can become a marker for future achievement, which may have broad implications for identifying, training and nurturing junior scientists whose career will have lasting impact.
That is the abstract of a new paper by Yang Wang, Benjamin F. Jones, and Dashun Wang.
How is the Swachh Bharat Mission Really Going?
One of the goals of the Swachh Bharat or Clean India mission was to achieve an “open-defecation free” (ODF) India by 2 October 2019 (the 150th anniversary of Gandhi’s birth). OD is a big problem in India contributing to child sickness, stunting and a host of permanent problems including lower IQs. As of 2011, half of Indian households didn’t have access to a latrine but since that time millions of latrines have been built and the government has encouraged (sometimes “vigorously”) latrine use.
Unfortunately, the close connection between the Swachh Bharat mission and Prime Minister Modi has made achieving the mission, or claiming to have achieved the mission, not just a political goal but a test of patriotism and support for Modi. The Swachh Bharat website, for example, proclaims that India is now 99% open defecation free, including 100% coverage in Rajasthan, Madhya Pradesh, Utter Pradesh and Bihar.
In fact, surveys from the RICE Institute reported in an article for the India Forum show that open defecation is still common:
In Rajasthan and Madhya Pradesh, states that had been declared ODF by the time of the survey, we found rural open defecation rates of about 50% and about 25%, respectively. The vast majority of villages in Uttar Pradesh and Bihar have also been declared ODF; the quantitative survey found open defecation rates of approximately 40% and 60%, respectively, in these states (Gupta et al 2019).
How do villages, and eventually blocks, districts, and states get declared ODF despite high levels of open defecation? One reason is that ODF status is often declared where latrine coverage is, in fact, incomplete: about 30% of households in the four states we studied did not own a latrine. Another reason is that many people who own a latrine still defecate in the open. In fact, latrine use among latrine owners has not changed since 2014: one in four people who own a latrine in the 2018 survey do not use it (Gupta et al 2019).
Ambitious program need not reach their goals to be successful–progress has been made and Modi can take credit–but it’s dangerous when problems are declared solved in order to meet political timelines and narratives. Work remains to be done.
My Conversation with Ed Boyden, MIT neuroscientist
Here is the transcript and audio, highly recommended, and for background here is Ed’s Wikipedia page. Here is one relevant bit for context:
COWEN: You’ve trained in chemistry, physics, electrical engineering, and neuroscience, correct?
BOYDEN: Yeah, I started college at 14, and I focused on chemistry for two years, and then I transferred to MIT, where then I switched into physics and electrical engineering, and that’s when I worked on quantum computing.
COWEN: Five areas, actually. Maybe more.
BOYDEN: Guess so.
COWEN: Should more people do that? Not the median student, but more people?
BOYDEN: It’s a good question.
And:
COWEN: Are we less creative if all the parts of our mind become allies? Maybe I’m afraid this will happen to me, that I have rebellious parts of my mind, and they force me to do more interesting things, or they introduce randomness or variety into my life.
BOYDEN: This is a question that I think is going to become more and more urgent as neurotechnology advances. Already there are questions about attention-focusing drugs like Ritalin or Adderall. Maybe they make people more focused, but are you sacrificing some of the wandering and creativity that might exist in the brain and be very important for not only personal productivity but the future of humanity?
I think what we’re realizing is that when you intervene with the brain, even with brain stimulation, you can cause unpredictable side effects. For example, there’s a part of the brain called the dorsolateral prefrontal cortex. That’s actually an FDA-approved site for stimulation with noninvasive magnetic pulses to treat depression. But patients, when they’re stimulated here . . . People have done studies. It can also change things like trust. It can change things like driving ability.
There’s only so many brain regions, but there’s millions of things we do. Of course, intervening with one region might change many things.
And:
COWEN: What kind of students are you likely to hire that your peers would not hire?
BOYDEN: Well, I really try to get to know people at a deep level over a long period of time, and then to see how their unique background and interests might change the field for the better.
I have people in my group who are professional neurosurgeons, and then, as I mentioned, I have college dropouts, and I have people who . . . We recently published a paper where we ran the brain expansion process in reverse. So take the baby diaper polymer, add water to expand it, and then you can basically laser-print stuff inside of it, and then collapse it down, and you get a piece of nanotechnology.
The co–first author of that paper doesn’t have a scientific laboratory background. He was a professional photographer before he joined my group. But we started talking, and it turns out, if you’re a professional photographer, you know a lot of very practical chemistry. It turns out that our big demo — and why the paper got so much attention — was we made metal nanowires, and the way we did it was using a chemistry not unlike what you do in photography, which is a silver chemistry.
And this:
COWEN: Let’s say you had $10 billion or $20 billion a year, and you would control your own agency, and you were starting all over again, but current institutions stay in place. What would you do with it? How would you structure your grants? You’re in charge. You’re the board. You do it.
Finally:
COWEN: If you’re designing architecture for science, what do you do? What do you change? What would you improve? Because presumably most of it is not designed for science. Maybe none of it is.
BOYDEN: I’ve been thinking about this a lot, actually, lately. There are different philosophies, like “We should have open offices so everybody can see and talk to each other.” Or “That’s wrong. You should have closed spaces so people can think and have quiet time.” What I think is actually quite interesting is this concept that maybe neither is the right approach. You might want to think about having sort of an ecosystem of environments.
My group — we’re partly over at the Media Lab, which has a lot of very open environments, and our other part of the group is in a classical sort of neuroscience laboratory with offices and small rooms where we park microscopes and stuff like that. I actually get a lot of productivity out of switching environments in a deliberate way.
There is much more of interest at the link.
What should I ask Ezekiel J. Emanuel?
I will be doing a Conversations with Tyler with him, no associated public event. So what should I ask him? Here is his Wikipedia page.
Why is insulin so expensive?
Why aren’t we seeing more companies making insulin? There are many reasons for this, but patent evergreening is a big one. Patents give a person or organization a monopoly on a particular invention for a specific period of time. In the USA, it is generally 20 years. Humalog, Lantus and other previous generation insulins are now off patent, as are even older animal based insulins. So what’s going on? Pharmaceutical companies take advantage of loopholes in the U.S. patent system to build thickets of patents around their drugs which will make them last much longer (evergreening). This prevents competition and can keep prices high for decades. Our friends at I-MAK recently showed that Sanofi, the maker of Lantus, is no exception. Sanofi has filed 74 patent applications on Lantus alone, that means Sanofi has created the potential for a competition-free monopoly for 37 years.
More here, and yes there are a multiple of reasons, not just that one. Such as this:
… it is actually legal for one insulin producer to pay another one not to enter the market. A few years ago the company Merck announced plans to sell a biosimilar version of Sanofi’s Lantus. Sanofi sued, and eventually Merck announced that it was no longer pursuing it’s biosimilar, presumably due to payments from Sanofi to stay away.
Here is another relevant source. And this:
…Sanofi has filed lawsuits against both Merck and Mylan to prevent them from going to market with a generic lantus insulin (the Sanofi blockbuster drug).
Here is Vox coverage. Furthermore, fewer restrictions on foreign importation could solve much of the problem:
According to the Food and Drug Administration, “in most circumstances, it is illegal for individuals to import drugs into the United States for personal use.”
New bills by Peter Welch, Elijah Cummings, and Bernie Sanders would ease those restraints. It seems easy enough to address this problem without having systematic government purchases of pharmaceuticals. Insulin prices have risen as much as threefold over the last ten years, but that doesn’t have to be the case.
Price Discrimination Versus Medical Tourism
In our principles textbook, Tyler and I open our chapter on price discrimination with the following:
After months of investigation, police from Interpol swooped down on an international drug syndicate operating out of Antwerp, Belgium. The syndicate had been smuggling drugs from Kenya, Uganda and Tanzania into the port of Antwerp for distribution throughout Europe. Smuggling had netted the syndicate millions of dollars in profit. The drug being smuggled? Heroin? Cocaine? No, something more valuable, Combivir. Why was Combivir, an anti-AIDS drug, being illegally smuggled from Africa to Europe when Combivir was manufactured in Europe and could be bought there legally?
The answer is that Combivir was priced at $12.50 per pill in Europe and, much closer to cost, about 50 cents per pill in Africa. Smugglers who bought Combivir in Africa and sold it in Europe could make approximately $12 per pill, and they were smuggling millions of pills.
Instead of smuggling the drugs to Europe, it’s also possible to send the European and American patients abroad. Gilead’s Solvadi, for example, is a very effective drug used to treat hepatitis C. In the United States a course of treatment costs about about $85,000 but due to an agreement between Gilead and generic manufactures in developing countries, in Egypt, India and much of the developed world it can be had for less than $1000. In an excellent piece, Four Reasons Drugs are Expensive, of Which Two are False, Jack Scannell illustrates the battle between arbitrageurs and pharmaceutical companies:
[The price difference] raises dreams of pharmaceutical tourism: “Enjoy a 12 week Grand Tour, where you can gaze at the awesome pyramids and the inscrutable Sphinx of Giza, explore the treasures of Tutankhamen, gasp at the wonders of Luxor, while basking in the sustained virologic response you can only dream of buying in the US.” Some may dream, but Gilead got there already and put its corporate towels on the sun loungers. Egyptians must prove residency to get Sovaldi. Tourists need not apply.
To prevent resale Gilead requires ID and it labels and tracks every bottle sold abroad:
[Patient IDs] will be used to put an identifying barcode on the bottles they receive with their name and other info. Not only can the code be used to guarantee only residents of the country get the drugs…the provisions require that patients then return a bottle to get a new bottle and allows them to get only one bottle of their prescription at a time, even though allowing them to get multiple bottles could “ease the burden on patients and health providers,” MSF says.
Médecins Sans Frontières are outraged by these restrictions but, as Tyler and I explain, the alternative is no sales in developing countries or one world-price and you can be sure that if there’s one world-price that price will be the US price and not the Egyptian price.