RSS

Monthly Archives: September 2009

America’s Next Great Pundit

The Washington Post is holding a contest to find “America’s Next Great Pundit” and, having nothing to lose, I’ve decided to enter the competition. I’ve got to come up with a 400-words-or-less commentary on something in the news and a 100-words-or-less explanation of why I am said “Great Pundit” in waiting.

Here’s where you come in, and it’s a tall order.

While I’m open to crafting an entirely new piece (after all it’s only 400 words), I’m looking first at really refining something I’ve already written. So, if you’re up to the challenge, it would be great if you could let me know if there were any particular posts that you especially enjoyed. Don’t worry about their length–cutting them down without sacrificing content is my job. If there’s something else you’d rather I address, let me know that, too.

And if you’re feeling especially charitable or callous, feel free to tell me what you like and/or dislike about me and my blog. I’m a big boy, so don’t hold back.

The sooner I hear from you, the better. Just click here to send me an email.

 
Leave a comment

Posted by on September 30, 2009 in Blog Updates

 

Understanding the McEpidemic of Obesity in the U.S.


We are a nation of fat people. That makes us less healthy and more expensive to care for. Looking at the map above, which shows places based on their distance from a McDonald’s restaurant–brighter equals closer–you might begin to understand why. The black background actually depicts our fast food nation as an island awash in a sea of Pepsi-Cola.

 
1 Comment

Posted by on September 30, 2009 in Uncategorized

 

Health Care Pizza

King Solomon really nailed it on the head when he wrote “What has been will be again, what has been done will be done again; there is nothing new under the sun.” One of the “old” things under the sun, is health care costs. Related to that are other “old” things, like how to control them. In this country, generally, people tend to fall into three camps–one of which is quickly disbanding: health care costs are not a concern (that’s the disappearing group), health care costs can be controlled through market forces, or health care costs can be controlled through government intervention in the market. Certain aspects of the latter two positions are valid, but neither camp has it exactly right.

But more to the point is the need for understanding how market principles fail to operate in the world of health care. Chances are, if you follow the debate closely enough, you will have heard one or both of the following claims:

“What we need is to get consumers to have some skin in the game. If we provide them information about the various plans and providers and require them to pay a more significant portion of their health care costs, then people will start making responsible decisions about how to spend their money. At the same time, this will have the effect of making insurers and providers compete on the basis of cost and quality. This sort of healthy competition is the basis of the American economy, the strongest in the world.”

“Americans want to buy health insurance, but many of them cannot afford it. Others who have insurance often don’t know if the insurance that they have is as good as they think that it is. No one really knows what their health care actually costs or what they need. Doctors are busy being paid on the basis of what they do, rather than the outcomes that they produce, and patients have no idea whether or not they are receiving high quality care. Insurers are denying claims to make record profits, and Washington needs to do something about it. The status quo is unsustainable.”

Now, neither of those statements are actual quotes from any one individual, but they offer a flavor of the two competing camps for how to tackle the issue of health care costs. There is a great deal of truth in both positions. We know, for example, that if people are made to pay for more of their care, they will tend to use less of it. The trouble is, they don’t often make wise decisions about which care they stop seeking, meaning they continue to seek unnecessary care while foregoing many necessary services. It’s also true that people have little understanding of the true value of the insurance coverage they currently have. Both accounts underscore people’s lack of information on quality, and both suggest that insurers are exploiting this weakness to make money.

What is missed, unless you dig a little deeper, is that health care does not adhere well to market principles. This, too, is an “old” idea. In fact, the issue is discussed beautifully by economist Kenneth Arrow in an article that was published in…..wait for it…..1963. That’s right. Knowledge of these problems pre-dates Medicaid and Medicare. If you have the time, you should read it, but in case you don’t, here are the takeaways:

  1. An individual’s demand for health care is not steady–like that for food or clothing–but rather is irregular and unpredictable.
  2. The product (delivery of health care) and the activity of production (delivery of health care) are identical, meaning that potential patients cannot “test” the product before consuming it (i.e., becoming actual patients). Therefore, you take your decision to seek care on faith that your provider will do right by you.
  3. Related to point 2, and complicated by the uncertain nature of illness and the patient’s lack of medical knowledge, it is very difficult to judge the quality of health care provided.
  4. Entry of suppliers into the market is limited by licensing. Of course, we license providers as a means of ensuring that quality care is being delivered–or at least signaling that to the public, but the fact remains that licensing restricts supply and reduced supply–holding demand constant–increases cost.
  5. Providers practice a great deal of price discrimination, ranging from providing free care to the indigent to reduced fee care to the insured to full-price care to the uninsured with means to pay.

Let’s take these 5 points and apply them to a more standardized good: Pizza. With some variation due to regional cost of living, restaurant preferences, etc., we can imagine that a large pizza might cost roughly $15. If it were, say, $3, we might be a bit suspicious as to why it was being offered so cheaply. Perhaps it is terrible pizza? On the other hand, if it were, say, $30, we would likely decide against purchasing it, because we would think to ourselves “No pizza is good enough to cost $30.” That’s the result of a well-established market. We inherently know what pizza should cost.

Now, imagine that about 3 or 4 times a year, you suddenly had to have a pizza. I’m not talking about a craving, but a literal need. If you didn’t get your pizza, you’d risk missing work for a week or maybe more. Imagine that you had just moved to a new city, and the only pizza place in town was a locally-owned spot you’d never heard of and had never previously tried, so you’re hoping it’s good. To make matters worse, when you call the pizza place, you find out that they use a whole bunch of ingredients with which you’re unfamiliar. After all, they’re the pizza experts, not you. Finally, imagine that they tell you their weekly specials, and you learn that the same pizza you need costs as little as $5 on Monday, but as much as $50 on Friday. Fortunately, it’s Saturday when you get your debilitating craving, and you’re told that the pizza will only cost you $30. Would you order the pizza?

I’m guessing that how you answer that question depends on several factors, including: how bad your condition will get if you don’t get the pizza, how much you trust the particular pizza parlor, and whether or not you can wait until Monday to place your order. Or, you might think, I need this–now–and at least it’s not going to cost me $50. That $30 may be worth it or it may not, but you won’t know that until you take your first bite. Of course, if you’re lucky enough to have pizza insurance, you won’t even realize that it cost that much. You’ll just pay your $5 co-pay and get your pie. That’s what life would be like if buying pizza was like buying health care.

 
Leave a comment

Posted by on September 30, 2009 in Uncategorized

 

Senate Finance Committee Kills Public Option

Okay, so maybe that title is a bit hyperbolic, but one thing’s for sure: Two different amendments were raised in the Senate Finance Committee meeting on Tuesday that sought to include a public option in Max Baucus’ bill, and both were voted down.

First up was Sen. Rockefeller’s robust public option that was defeated 15-8. Then came Sen. Schumer’s watered-down public option that was defeated 13-10. It’s important to note that of the 23 members of Finance, 15 are Democrats and 8 are Republicans. A little quick math tells us that some Democrats voted against a public option–especially the stronger version. A couple left-of-center Senators were able to support the weaker version. No one (e.g., Snowe) crossed the aisle in the other direction.

So, what does this mean? My math says a bill with a public option should expect no more than 55 votes in the Senate (maybe less), unless for some unforeseen reason Finance members decide to switch their votes down the line. Baucus’ rationale–getting a bill that can garner 60 votes–seems a self-fulfilling prophecy at this point.

That means the Senate bill won’t have a public option, the House bill will, and conference is where the fun begins. What’s more, the results of the voting on Schumer’s amendment vs. Rockefeller’s suggest that what emerges from conference may look pretty lame as public options go….assuming one is included at all.

But don’t just take my word for it. Here’s what others in the know are saying……

Ezra Klein has this on Schumer, this on Schumer’s public option vs. Rockefeller’s public option, and this on whether Medicare and the public option will bankrupt the country.

Marc Ambinder wonders if there’s a way to bring moderate Dems back in line here.

Steve Benen offers a little of this and that.
And, finally, Jonathan Cohn throws his hat in the ring with a summary of the public option’s death and his take on Sen. Rockefeller.

 
Leave a comment

Posted by on September 30, 2009 in Uncategorized

 

Twitter Idea Experiment (TIE)

For those who follow me on Twitter, this is the place to leave your health reform ideas in the comments section.

Thanks for stopping by….

 
1 Comment

Posted by on September 29, 2009 in Uncategorized

 

Grassley Speaks Out of Both Sides of His Mouth

This, from Ezra Klein, sure makes Chuck Grassley into the worst kind of double-speaking politician imaginable. For heaven’s sake, this is as bad as Bill Clinton’s “I did not have sexual relations with that woman, Miss Lewinsky”……….”In fact, I did have a relationship with Miss Lewinsky that was inappropriate. In fact, it was wrong.” At least in Clinton’s case, he was manning up and telling the truth. Grassley’s just selling rhetoric like it’s going out of style. This is Washington, Chuck. You can relax.

 
Leave a comment

Posted by on September 29, 2009 in Uncategorized

 

Health Reform: Hold The Mayo

Alec MacGillis and Rob Stein had an interesting article in the September 20, Washington Post. The pair take a look at popular appeals to the renowned Mayo Clinic as the gold standard in health care–some from none other than President Obama–and ask: Is the Mayo Clinic really all that?

Sure, we’re all familiar with Mayo, and for good reason: The folks from Minnesota do a great job of providing high quality care, achieving stellar health outcomes, and doing all of this for much less than you might expect. Yet, if there’s anything that I’ve learned from my doctoral training, it’s that if something looks too good to be true, it probably is. (Look at that, I just saved you thousands of dollars and years of your life.)

But, seriously, we in research talk often about confounders–things that work behind the scenes and make us see things differently than they actually are. For example, imagine one did a study and discovered that people who lived in large houses smoked fewer cigarettes. It could be that somehow smoking and house size are related, or more likely, the relationship could be spurious. That is, perhaps something like income is involved. Those with higher incomes tend to buy bigger houses, but also tend to be better educated and therefore less likely to smoke. Here, income and education would both be considered confounders.

It looks like Mayo may be a bit confounded as well. As the Washington Post authors write:

“Mayo’s patients are wealthier, healthier, and less racially diverse than those elsewhere in the country. It has few poor patients. It limits the number of procedures it performs per patient, but the rates it charges private insurers and self-paying patients is higher than average, allowing it to thrive despite the lower Medicare spending cited by its supporters.”

So the relationship between low Medicare spending and the above average health outcomes seen at Mayo may simply be confounded by the nature of the patient population, which is healthier, and a bit of a shell game–making less from Medicare, but more from other sources. At the upper margin, money chases after quality after all, which explains why those from all over the world who can afford to pay almost anything for the best care in the world just happen to catch a flight to Rochester, Minnesota.

Of course, that doesn’t mean that we can’t take some lessons from what they’re doing in Rochester. It just means we should be a little bit more skeptical of such fantastic results, rather than expecting them to be easily replicated nationwide. After all, when it comes to health care, we are a nation comprised of islands of excellence in a sea of mediocrity.

Let’s be honest. If it were feasible–and profitable–to achieve Mayo’s success all across the country, don’t you think that we’d have seen more than just the two additional clinics in Jacksonville, Florida and Phoenix, Arizona spring up in the last few decades?

The fact that we haven’t witnessed that tells me one thing: Until you can replicate the Mayo Clinic’s upper-midwestern patient population nationwide, you will find it daunting to base reform on the Mayo model. So for now, when it comes to health reform, let’s hold the Mayo.

 
Leave a comment

Posted by on September 29, 2009 in Uncategorized

 
 
%d bloggers like this: