Remember when you could walk into a pharmacy and buy a decongestant like Sudafed? The key ingredient was pseudoephedrine, a precursor to methamphetamine. A series of laws made it more and more difficult to buy or manufacture pseudoephedrine (despite it's legality). So what did we get for our loss of liberty? A new paper (AEA) (free here) in the March AER says not much:
In mid-1995, a government effort to reduce the supply of methamphetamine precursors successfully disrupted the methamphetamine market and interrupted a trajectory of increasing usage. The price of methamphetamine tripled and purity declined from 90 percent to 20 percent. Simultaneously, amphetamine related hospital and treatment admissions dropped 50 percent and 35 percent, respectively. Methamphetamine use among arrestees declined 55 percent. Although felony methamphetamine arrests fell 50 percent, there is no evidence of substantial reductions in property or violent crime. The impact was largely temporary. The price returned to its original level within four months; purity, hospital admissions, treatment admissions, and arrests approached preintervention levels within eighteen months.
The authors conclude:
This is quite possibly the DEA’s greatest success in disrupting the supply of a
major illicit substance. The focus on disrupting the supply of inputs rather than of the drug itself proved extremely successful. This success was the result of a highly
concentrated input supply market and consequently may be difficult to replicate for drugs
with less centralized sources of supply, such as cocaine and heroin. That this massive
market disruption resulted in only a temporary reduction in adverse health events and
drug arrests and did not reduce property and violent crimes, is disappointing. (italics added)
FYI, this paper makes its case almost entirely by carefully laying out the data rather than with theory or econometrics–that was nice to see in the AER.
Hanna Rosin's article on breastfeeding in the latest Atlantic is excellent and would make a topical and accessible introduction to causality studies in an econometrics or statistics class. (And lest that sound damning it's also a great read.)
The general point will be familiar to the audience at Marginal Revolution. The studies that show breastfeeding leads to lower weight, fewer ear infections, less allergies, less stomach illnesses and so forth are almost all observational studies.
An ideal study would randomly divide a group of mothers, tell one half to breast-feed and the other not to, and then measure the outcomes. But researchers cannot ethically tell mothers what to feed their babies. Instead they have to settle for “observational” studies. These simply look for differences in two populations, one breast-fed and one not. The problem is, breast-fed infants are typically brought up in very different families from those raised on the bottle. In the U.S., breast-feeding is on the rise–69 percent of mothers initiate the practice at the hospital, and 17 percent nurse exclusively for at least six months. But the numbers are much higher among women who are white, older, and educated; a woman who attended college, for instance, is roughly twice as likely to nurse for six months.
Moreover, the better we control for other factors that might account for differences in child outcomes between mothers who breastfeed and those who do not, the less evidence there is for breastfeeding's benefits. Even looking at children within the same family (still far from the gold standard of randomization), shows many fewer benefits from breastfeeding than studies that look across families. Some modest evidence suggests a gain in IQ and better evidence suggests minor improvements in avoiding some diarrhea. Rosin does not discount these benefits (so the title of her piece is unnecessarily sensationalistic) but she very appropriately does point to opportunity cost.
The debate about breast-feeding takes place without any reference to its actual context in women’s lives. Breast-feeding exclusively is not like taking a prenatal vitamin. It is a serious time commitment that pretty much guarantees that you will not work in any meaningful way. Let’s say a baby feeds seven times a day and then a couple more times at night. That’s nine times for about a half hour each, which adds up to more than half of a working day, every day, for at least six months. This is why, when people say that breast-feeding is “free,” I want to hit them with a two-by-four. It’s only free if a woman’s time is worth nothing.
One final point, Rosin's article is also usefully read as a study in propaganda and social psychology.
This time there were so many reader requests dear to my heart. Londenio asked:
Suppose you fall into a coma. You wake up in 15 years, with your memory
and cognitive abilities intact. You hug your loved ones, you brush your
teeth and then … what would be the first thing you would like to know
about the world?
Am I allowed three questions? They would be the level of stock prices (inflation-adjusted), whether there are new countries or old countries have disappeared, and whether nuclear weapons have been used.
And what about 300 years later, from having your head frozen?
I would simply ask: "What are the three most important questions I should be asking?"
What do you all think?
Andrew Sullivan writes:
And that’s why black men in DC are more affected by HIV now than black men in Rwanda.
Don't take this as definitive, but it's more than I've seen elsewhere:
Obama's budget request would create "running room for health reform,"
the official said, by reducing spending on some health programs so the
administration would have money to devote to initiatives to expand
coverage. The biggest target is bonus payments to insurance companies
that run managed-care programs under Medicare, known as Medicare
The Bush-era program has attracted nearly a quarter of Medicare
beneficiaries to private health insurance plans that cover a package of
services such as doctor visits, prescription drugs and eyeglasses. But
the government pays the plans 13 to 17 percent more than it pays for
traditional fee-for-service coverage, according to the Medicare Payment
Advisory Commission, which advises Congress on Medicare financing
Officials also are debating whether to permit people as young as 55
to purchase coverage through Medicare. That age group is particularly
vulnerable in today's weakened economy, as many have lost jobs or seen
insurance premiums rise rapidly. The cost would depend on whether
recipients received a discount or were required to pay the full price.
There's also a good deal of information about Obama's proposed budget in that article. On health care, here is Alex's earlier post on Medicare Advantage. Medicare at age 55 is an idea I don't hear much about; is the goal to lower the standard by ten years, every now and then, to move toward a single payer system? I would think that the 55 and overs would have an incentive, and the power, to block the extension of Medicare to everyone else and thus free-ride on a medical infrastructure financed by others. The Medicare extension also has to cost real money. If you believe in adverse selection, offering Medicare at any given premium will attract only the worst risks at that premium level. So what's the break-even point? Overall the real gains from spending more money are in public health programs for the relatively young.
I'm not sure if the book is interesting, have any of you read it? But I remembered these sentences from a review:
as a mental patient who tells the intake counselor that she doesn’t
feel “safe” (the magic word) in the real world. (She tries to pay for
these visits herself, but fails: in one of the book’s few funny
moments, her insurance company rebuffs offers of cash, because only
crazy people bankroll such visits themselves.)
Here is more.
As an aside, I was sent this song about the financial crisis.
The cover of this month’s Wired promises "The Truth About Cancer" but the article inside is a tissue of misleading statistics and faulty logic. The article begins with fancy graphics telling us "If we find cancer early, 90 percent survive" but "If we find cancer late, 10 percent survive." And this:
Find the disease early "and the odds of survival approach 90 percent…This reality would seem to make a plain case for shifting resources toward patients with a 90 percent, rather than a 10 or 20 percent, chance of survival."
Thus, the opening block of text commands, "Scientists should stop trying to cure cancer and start focusing on finding it early. It’s the smart way to cheat death."
The fallacy in all of this is painfully easy to spot. If we measure survival, which these studies do, with a 5 or 10 year survival rate then obviously people whose cancers are detected early will survival longer than people whose cancers are detected late.
The key question is whether people who are treated early survive longer than people whose cancers are detected early but who are not treated. In Thomas Goetz’s long article there is not a single piece of evidence which demonstrates that this is true. Indeed, quite the opposite. About 9 pages into the article, after the jump, we find this about CT scans for lung cancer:
As with the Action Project, these studies found that, yes, CT scans detected a huge number of early cancers–10 times as many as they would expect to find without scanning. In that regard, the scans did their job as a screening test. And as expected, the number of surgeries based on those diagnoses jumped. But when Bach looked at the resulting mortality rates, he found essentially no difference between those who received a CT scan and those who had not. Despite the additional surgeries, just as many people were dying as before.
Nowhere does the author mentions that this finding invalidates just about everything he has told us in the first eight pages.
Addendum 1 : Do note that I have nothing against early detection and I am not claiming that it never works. My problem is with misleading statistical analysis.
Addendum 2: Careful readers will note that this is an almost perfect example of the economicitis fallacy that I blogged about late last year.
2,194 households containing 2,592 Ghanaian children under 5 y old were
randomised into a prepayment scheme allowing free primary care
including drugs, or to a control group whose families paid user fees
for health care (normal practice); 165 children whose families had
previously paid to enrol in the prepayment scheme formed an
observational arm. The primary outcome was moderate anaemia
(haemoglobin [Hb] < 8 g/dl); major secondary outcomes were health
care utilisation, severe anaemia, and mortality. At baseline the
randomised groups were similar. Introducing free primary health care
altered the health care seeking behaviour of households; those
randomised to the intervention arm used formal health care more and
nonformal care less than the control group. Introducing free primary
health care did not lead to any measurable difference in any health
outcome. The primary outcome of moderate anaemia was detected in 37
(3.1%) children in the control and 36 children (3.2%) in the
intervention arm (adjusted odds ratio 1.05, 95% confidence interval
0.66-1.67). There were four deaths in the control and five in the
intervention group. Mean Hb concentration, severe anaemia, parasite
prevalence, and anthropometric measurements were similar in each group.
Families who previously self-enrolled in the prepayment scheme were
significantly less poor, had better health measures, and used services
more frequently than those in the randomised group.
Is it that people love a good movie selection, or do they take the movies to be the best available signal of hospital quality?
Amenities such as good food, attentive staff, and pleasant surroundings may play an important role in hospital demand. We use a marketing survey to measure amenities at hospitals in greater Los Angeles and analyze the choice behavior of Medicare pneumonia patients in this market. We find that the mean valuation of amenities is positive and substantial. From the patient perspective, hospital quality therefore embodies amenities as well as clinical quality. We also find that a one-standard-deviation increase in amenities raises a hospital’s demand by 38.4% on average, whereas demand is substantially less responsive to clinical quality as measured by pneumonia mortality. These findings imply that hospitals may have an incentive to compete in amenities, with potentially important implications for welfare.
When the Sacred Heart Medical Center at RiverBend opens in Springfield, Ore., in August 2008, patients and their families will enter a hospital surrounded by wetlands and Douglas firs. Inside, they’ll encounter multiple fireplaces, coffee shops and visitors’ lounges.
"As you come to the hospital, you’ll be greeted warmly as you enter, much as you would by a concierge at a hotel," says Adam Kerner, an executive architect with Anshen + Allen, who partnered on RiverBend with an outside architect whose previous experience had been in designing resorts…
Gerard van Grinsven, president of the Henry Ford West Bloomfield Hospital now under construction in suburban Detroit, says area hospital executives were surprised when he was hired away from hotelier Ritz-Carlton in 2006. Up to then, his two-decade career had been exclusively in hotels and resorts.
But skepticism soon gave way to curiosity and competitiveness, van Grinsven says. In fact, Beaumont Hospitals in nearby Royal Oak, Mich., hired a Ritz-Carlton executive as their director of hospitality a short while later.
Van Grinsven is introducing a bit of the Ritz-Carlton flair to the new hospital, adding touches like mini-hotel rooms for visitors as well as healthy cooking classes for the surrounding community. The facility, which opens in July 2008, will include larger-than-normal emergency patient rooms–roughly 150 square feet–to create more space for visitors, a result of design sessions that included input from patients, nurses and doctors.
Although the vast majority of Americans have private health insurance, researchers focus almost exclusively on public provision. Data on the private insurance sector is extremely difficult to obtain because health insurance contracts are complex, renegotiated annually, and not subject to reporting requirements. This study makes use of a privately-gathered national database of insurance contracts agreed upon by a sample of large, multisite employers between 1998 and 2005. To gauge the competitiveness of the group health insurance industry, I investigate whether health insurers charge higher premiums, ceteris paribus, to more profitable firms. I find they do, and this result is not driven by cross-sectional differences across firms or plans: firms with positive profit shocks subsequently face higher premium growth, even for the same healthplans. Moreover, this relationship is strongest in geographic markets served by a small number of insurance carriers. Further analysis suggests profits act to increase employers’ switching costs, and insurers exploit this inelasticity where they have sufficient bargaining power. Given the rapid industry consolidation during the study period, these findings suggest healthcare insurers possess and exercise market power in an increasing number of geographic markets.
The Manhattan Institute asked a number of experts in health care policy to provide brief words of advice to the new FDA commissioner. Here is one bit from yours truly:
The most difficult but valuable pharmaceutical policy for the new administration will be to resist the temptation to impose price controls. Price controls promise lower prices but the cost is fewer new drugs and diminished medical progress. Moreover, the promise is illusory. Since new drugs typically lower total health care costs (by reducing time in hospital) price controls will raise total health care costs. Prizes and patent buyouts, two innovative ways of reducing pharmaceutical prices while maintaining incentives to develop new drugs, should be investigated and tested.
Henry Miller, Paul Rubin and Mary Woolley also comment.
Yes, I am skeptical of most medicine because on average it seems folks who get more medicine aren’t healthier. But I’ll heartily endorse one medical procedure: cryonics, i.e., freezing folks in liquid nitrogen when the rest of medicine gives up on them.
Here is the full post and of course that is Robin Hanson. The post has another very good sentence:
It seems far more people read this blog daily than have ever signed up for cryonics.
Here is Robin’s excellent post on why cryonics is unpopular. Here is Bryan Caplan’s. My current view is this: one’s attention is extremely scarce and limited, as are one’s affiliations. Insofar as you have the luxury of thinking "bigger thoughts," those thoughts should be directed at helping others, not at helping oneself. The real opportunity cost of cryonics is not just the money but whatever else you would have done with that intellectual energy.
Furthermore the universe (or multiverse) may be infinite, so in expected value terms it seems my copies and near-copies are already enjoying a kind of collective immortality.
There is an anthropic effect insofar that only people who are not regularly tortured have the luxury of thinking about cryonics. But not all worlds have to be so peaceful. What probability of future torture would cause us to wish to die forever rather than be resurrected? And should I therefore be scared by the idea of an infinite universe? Do Darwinian selection pressures — defined in the broadest possible way — suggest it is worth spending energy on making entities happy? Or do most entities end up as suffering slaves?
Addendum: Robin responds.
Jason Shafrin, the Healthcare Economist, has a nice post explaining how a statistical illusion can make early screening for disease appear much more effective than it really is.
Here is an example using the dreaded disease economicitis. Let us
divide people into 3 groups.
- Healthy: You live forever.
- 1st stage economicitis is asymptomatic. Life
expectancy when 1st stage economicitis begins is 10 years. One half of
economicisits cases are 1st stage.
- 2nd stage economicitis appears when individuals
mysteriously grow a third or possibly fourth hand. Life expectancy with second
stage economicitis is 2 years. One half of economicitis cases
are 2nd stage.
Before any screening was developed, individuals would learn they had
economicitis when they started growing extra hands. Thus, documented
life expectancy for those with economicitis was 2 years, since all
individuals who were recorded as having economicitis were in the 2nd
Let us assume that a screening technique is now available. If the screening
device is able to detect 100% of stage 1 and stage 2 economicitis
cases, then we will see that life expectancy will increased to 6 years
(10/2+2/2=6). Statisticians looking at the data may claim the following: “The
economicitis screening test has increased life expectancy after
diagnosis from 2 to 6 years!”
This claim, however, is false since there is no effective treatment for
economicitis. The increase in average life expectancy is not due to
any improvement in health care, but only because the relatively healthier
individuals with 1st stage economicitis are now being detected by the
Many years ago, David Plotkin had a article in The Atlantic dealing with this issue and others with respect to breast cancer. The statistics are somewhat out of date but the article remains of real value.
Of 51 countries that have received reward payments since 1999, six
overestimated their immunization gains by a factor of four, 10
overestimated them by a factor of two, and 23 by less than two. Eight
underestimated their progress.
Here is the article, interesting throughout. The bottom line is this:
Since 1986, progress in childhood immunization in the developing world
has been about half that officially reported by governments in the
developing world. Not only are year-to-year improvements overstated,
but the total percentage of children immunized is far lower than
publicly acknowledged, the study found.