Friday, October 29, 2004

Let's Try This Again 

Back in April, I tried to calculate the amount of socialization of the US health care system by adding implicit costs of regulation to explicit costs of public funds:
If I had to make a wild guess, our health care system will be paid for by explicit or implicit public funds at a rate of 65-70%. My question is this: if we have a nationalized health care system now, and that system is by your estimation broken, is more nationalization the way to go? Especially when every other sector or industry in this country is privately funded and avoids this problem. Except, that is, for education and the military. Oh, yeah, they're publically funded, too.
Today, Arnold Kling points to a study that tries to be more precise. Christopher Conover's conclusion:
A far more accurate "bottom-up" approach suggests that the total cost of health services regulation exceeds $339.2 billion. This figure takes into account regulation of health facilities, health professionals, health insurance, drugs and medical devices, and the medical tort system, including the costs of defensive medicine. Moreover, this approach allows for a calculation of some important tangible benefits of regulation. Yet even after subtracting $170.1 billion in benefits, considerable, amounting to $169.1 billion annually. In other words, the costs of health services regulation outweigh benefits by two-to-one and cost the average household over $1,500 per year.
Kling adds:
More specific papers are linked to here. Looking at those papers, my guess is that the authors have under-estimated the cost of regulation. For example, I do not think that the work on professional accreditation and licensure captures the rigidities in the system imposed by regulation (prohibiting substitution), or the cost of rent-seeking as professional associations lobby for special favors.
So I should update my post. The $339.2 billion is approximately 28% of the $1.4 trillion in health care expenditures. Add that to the 44% of health care that is totally funded by the public yields 72%. I was close.

But maybe it's fair to only add the costs that are in excess of the benenfits. That brings the total down to 56%, which is a little under my estimation. However, tack on the $500+ billion Medicare drug benefit and the underestimations Arnold points out, you get back to about 65%. Nearly two thirds of every health care dollar is paid for or mandated by all forms of government.

So I'll ask the question again: When are we going to get that free-market health care everyone's been complaining about?

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This Rant Deserves To Be Heard 

I'll take this time to re-recommend Peter Guither's Drug War Rants. It's a good time to do so because Peter finds himself in the middle of an interesting story.

Peter writes his blog because he strongly believes that the drug war causes more harm than it prevents, violates rights at every turn, and is an immoral and illegal action taken by government agents. One of the features of his blog is a state-by-state voting guide based solely on issues of the drug war. In Peter's home state of llinois, he picks Democratic Congressional candidate Tari Renner over Republican Jerry Weller, and he has even donated to the campaign. Weller has taken to hammering Renner specifically because of this single endorsement. Weller has likened this to an endorsement from the Ku Klux Klan and has stated that Peter's site has direction on how to inject heroin (patently false). The kicker? Renner returned Peter's check. This all is to illustrate the sad state of the debate over drug policy in this country.

WindyPudit sums it up:
Guither's article just made me despair a little. If the Ku Klux Klan gives your campaign money, you give it back. If an Al-Qaeda-linked "charity" gives you money, you give it back. Do these politicians really put drug legalization into the same category as racism and terrorism? Do these people actually see Pete Guither's views, Pete Guither's values, my values, as so abhorrent that they don't even want our money? That they slander and libel us?
Read Peter's story here and here.

Go back and read why I argue that the medical community should lead the revolt against the War on Drugs.

To close, I'll quote the top of Peter's page: "If you support prohibition, you are part of the drug problem.

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Wednesday, October 27, 2004

What I Learned In School Today 

Two patients walk into an ER. Both are 45-year-old women with acute onset of chest "pressure," both of whose pain radiates into the left arm. Patient A has a totally benign past medical history. Patient B is a smoking diabetic with high cholesterol. Which patient has the greatest chance of having had an acute MI after slapping an EKG on them and drawing serial cardiac enzymes?

The surprising answer: For all intents and purposes, they have an equal probability of having had an MI. According to a study by Jayes, et al. in 1992 published in The Journal of Clinical Epidemiology, the major risk factors for cardiac disease have no value in predicting acute MI in patients with chest pain. They predict who's more likely to walk into the ER with chest pain, but once inside the walls of the ER, they can't predict whether a chest-pain-patient has actually had an MI.

I'm sure our licensed brethren knew that already, but it is strange that it had taken 3.5 years of medical training for someone to spell out that fairly simple and important concept to me.

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Thursday, October 21, 2004


As the medical blogosphere's competitive advantage is in correcting the "conventional wisdom" of health facts, I think this needs to see a lot of light:
The annual median number of deaths is 1137, of which 85% are over 65, and 2% are 15 or younger. About 10 infants a year die from influenza, which is probably comparable to the death rate among infants from lightning strikes. Also worth noting is that in the most at-risk population, those 85+, deaths from influenza account for 2.2 per 100,000 of population.
Needs verification, of course; but, since I put in my 10 seconds of work in linking to this, I'll let someone else pick it up.

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Wednesday, October 20, 2004

The Blogosphere Just Got A Little Better 

I am pleased to announce that my personal intellectual hero, Steven Landsburg, will be guest-blogging this week at Marginal Revolution. I remember staying up until 4 AM reading Fair Play, because I refused to put it down. And I will be excited everyday to read MR. Now that you know, you have no excuse!
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The Favored Class 

We forgot to add one group to the "at-risk" list who should obtain flu vaccinations: federal legislators and their minions:
While many Americans search in vain for flu shots, members and employees of Congress are able to obtain them quickly and at no charge from the Capitol's attending physician, who has urged all 535 lawmakers to get the vaccines even if they are young and healthy.
You can bet that Kerry and Bush got their shots, even after lecturing us about our responsibility to society to let high risk groups have them. When everything is a political issue, the politically powerful get preference.

Here's something that actually makes a little sense:
Senate Majority Leader Bill Frist (Tenn.), a heart surgeon, sent letters urging his 99 colleagues to get the shots because they mingle and shake hands with so many people, his spokeswoman, Amy Call, said. She said she did not know how many senators have taken his advice.

Eisold "is a big believer that members of Congress are at high risk, because they shake hands with a lot of people" and then visit veterans centers and other concentrations of susceptible people, his spokesman said. Because lawmakers can be both victims and spreaders of flu, he said, Eisold urged all 535 to get the shots.
It may be more important to get the vaccine to super-spreaders, like health care personnel. And politicians who shake a lot of hands. However, while no one would argue that health workers stop working, shouldn't someone raise the possibility that these polticians stop shaking so many hands? Because every time a politician's hand shakes, someone gets f%@#ed out of their money (kind of a It's a Wonderful Life meets Mr. Smith Goes To Washington).

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FDA Lifts Ban On Artificial Hearts For Those Awaiting Transplant 

I'm taking the cue from Alex Tabarrok on the headline there. It is certaily apt.

The FDA stands in the way of life-saving and life-improving drugs and devices all the time. That is what they do, their purpose. Only when there is clear and overwhelming evidence that they have done enough harm will they lift their bans.

Of course, there are those who have recently been heard calling for tighter regulation. With more money going to the FDA. So we can wait longer for our artificial hearts.

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Sunday, October 17, 2004

Gouged Yet Again 

Back when hurricanes where bludgeoning the Florida peninsula on a weekly basis, I wrote multiple times regarding the short-sighted, wrong-headed calls against "price gouging." It's a pretty open-and-shut case that anti-price-gouging (is that the record for most hyphens in a single paragraph? I feel like Carlos Beltran.) laws are harmful to the very people they are supposed to "protect."

Well, it's reared its ugly head again, this time with respect to the very unnatural disaster that is the flu vaccine shortage. And being that fundamental economic principles and the world we live in haven't changed in the, oh, four weeks since the hurricane seasom ended, the same arguments apply. But this hasn't stopped some otherwise reasonable people to say unreasonable things. Here's Medpundit:
The news that some medical supply wholesalers are price gouging the flu vaccine probably shouldn't come as a surprise, human nature being what it is. But I doubt the practice is as widespread as the media reports are making it sound. I, for one, haven't received a single fax offering flu vaccine. And the offices and drug stores in our area who have the vaccine seem to be acting responsibly by only giving it to those who are at high risk. At the original price.
And the Public Health Press:
He also could have denounced the price gouging of flu shots which is going on in some parts of the country, but knowledge about the true costs of things to the typical American may be too much to expect from the Boy in the Bubble.
And the CDC:
Shame on the people who are price gouging," said Julie Gerberding, director of the Centers for Disease Control and Prevention. "There's no room for this kind of behavior in an environment where we need to pull together as a country to protect our vulnerable populations.
(I should point out here the irony of a government causing a shortage through its various policies, and then trying to outlaw the natural response to such a shortage, thus worsening the effects of the shortage. Rinse. Repeat.)

OK, it seems that it takes a monthly reminder to get the message through; but don't take it from me. There are people whose job it is to understand these things so we don't have to. Economist Don Boudreaux:
But lectures like these, asking us to pull together or do the right thing, work best in small close communities or families. In a large nation, high prices do the lecturing more effectively. It's not perfect. Some poor people will also get discouraged from buying and we might want public or voluntary measures to help them out. But when we hold prices down artificially or by social pressure or by threat of government prosecution for price gouging, there are costs born today and tomorrow. By not allowing people to profit from setting some supply aside for a crisis, we discourage people from taking such risks in the future.

...Every time we hold prices down, we make such shortages more likely in the future.
I'm sure this will generate the same tired replies. And we will do the dance one more time.

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Saturday, October 09, 2004

Market Failure or Government Failure? 

A question for the medical blogosphere - is the recent announcement of the impending shrotage in flu vaccine supply an example of a market failure or a government failure?

My vote? Let's see - while I'm sure many of our liberty-hostile frineds wuld try to argue that the free market has failed us, it seems t me this is obviously an example of government failure. Vaccine production is highly-regulated and the major purchasers are government agencies. For those of you who have faith in such things - when this doesn't ensure that most people can get a vaccine, what do you do next? Regulate it more? Impose an explicit price control?

Truck and Barter has more:
Hold the phone! You mean to say that government purchasing of vaccines at a forced discount has something to do with this? Could these be the mysterious "business reasons" that cause some companies to underproduce vaccines?

I'm shocked. Shocked, I say.

I suppose to anyone who was paying attention when this measure went into place and had a bit of economic sense about them, this is old news. And frankly, the point has been made before. I just think it's worth bringing up again. And again and again until people start to see the connection between government driven health care and undersupply of goods.

Imagine, now, that the government were to do the same thing for x-ray machines, painkillers, MRIs, nurses, obstetricians, and just about everything else. Government need not be the "provider" of health care to make lives worse. It need only be the majority purchaser, dictating prices to companies and potential doctors. Even with a second-tier in the system for those people who want to shell out money themselves for better care (though I have problems with people paying twice and getting one service), imagine the disparity in health care treatment between those who can pay and have access to the advanced care, and those who have to wait in lines hoping their heart murmer isn't something serious. How many doctors are going to choose to participate in the socialized system?

These shortages, that extend well beyond flu shots into treatments for preventable diseases in children are directly caused by government action.

Maybe regulation not only causes crime, it makes people sick, too.

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What's In A Name? Maybe A Violation of the Law 

As an extreme libertarian, I occasionally encounter ridicule over my paranoia of government intrusion. But it would be hard for the most ardent statist to go to bat for this one:
People expecting children can choose a pre-approved name from a government list of 7,000 mostly Western European and English names - 3,000 for boys, 4,000 for girls. A few ethnic names, like Ali and Hassan, have recently been added. But those wishing to deviate from the official list must seek permission at their local parish church, where all newborns' names are registered. A request for an unapproved name triggers a review at Copenhagen University's Names Investigation Department and at the Ministry of Ecclesiastical Affairs, which has the ultimate authority. The law only applies if one of the parents is Danish.

Many parents do not realize how difficult it can be to get a name approved by the government. About 1,100 names are reviewed every year, and 15 percent to 20 percent are rejected, mostly for odd spellings. Compound surnames, like Tan-Farnsden, also pose a problem.

Parents who try to be creative by naming their child Jakobp or Bebop or Ashleiy (three recent applications) are typically stunned when they are rejected. In some cases, a baby may go without an officially approved name for weeks, even months, making for irate, already sleep-deprived, parents.
That's from a New York Times story about Denmark. It's not from The Onion in case you were wondering.

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