Marginal Revolution: Why health care is good for you

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Why health care is good for you

Here are the bald asseverations I made to Bryan Caplan yesterday, over Bolivian food:

1. Health care is very, very good for you. Here is one good summary of the earlier blogosphere debate.

2. Don't be fooled by studies that say the opposite.

3. At most those studies show that health care is not good for you at some additional margin. Make sure you get to that margin.

4. It is true that many regressions show a zero positive effect for health care once you introduce a variable for income. This mainly shows that income is a better proxy for real health care than many of our highly imperfect measures for health care.

5. Almost every family in my Mexican village has lost a kid or two before the kid reaches age five. Few of these deaths would have occurred if a) a doctor rather than a shaman were around, b) they had a ready antidote for scorpion bites, c) they knew to take the right pills for diarrhea and fever and to stay hydrated. These variables will be more closely correlated with measured income than with whatever screwy figure the Mexican government provides for expenditures on medical care. Health care still matters, even though it won't show up as significant in the regression.

6. The above example can be generalized to wealthier countries. Might education be the best proxy of all for the consumption of real health care? Yes stupid doctors can kill you but a smart patient will not do better staying at home.

7. It is obvious that health care leads to greater longevity, and this is the greatest good of all. Just ask yourself, how much money would you have to receive to give up health care for the rest of your life? For me no sum of money would suffice.

8. Yes the famous Rand Corporation study showed that more doctor visits don't help people. I can buy that, but advances in medical science still bring huge pay-offs.

Caveats: These are lunchtime comments, I am not accountable for them in the same way as if I posted them on my blog. And I am still too afraid to go see the doctor and get a check-up.

Posted by Tyler Cowen on June 22, 2005 at 05:16 AM in Medicine | Permalink

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Comments

In my opinion having and using wisdom is more important than professional health care. Thinking that "health care knowlege" resides only in professional health care providers is ludicrous.

90% of health care is sanitation, cleanliness, first aid, and eating nutritious foods in the right quantities. Without pills and peroxide a Doctor is of limited use.

What is the value of extenting someone's life from 80 years to 81? Usually with great pain on the patients part. To get the numbers up? To provide full employment? To pay for all that expensive equipment and training? To feel good about saving someone's life? ... over and over again until you can't. The Doctors don't seem to handle these questions well. Don't think it was taught in medical school.

Posted by: Huggy at Jun 22, 2005 10:07:18 AM

I think number 4) is the key. This is exactly the issue with a
similar finding in education: that education quality doesn't seem
to matter if you take parental income and education into account.
Obviously, parental income and education are better proxies for school
quality than any arbitrary measure that you might come up with:
teacher pay, class size, or spending per student.

Posted by: Michael H. at Jun 22, 2005 12:43:19 PM

Tyler writes: "Few of these deaths would have occurred if a) a doctor rather than a shaman were around, b) they had a ready antidote for scorpion bites, c) they knew to take the right pills for diarrhea and fever and to stay hydrated....

Yes stupid doctors can kill you but a smart patient will not do better staying at home."

Aren't these rather contradictory? Without figures, I obviously have no idea how large each of these three factors listed actually is involved with high child mortality rates from that village. But I would imagine that simply -knowing- that importance of medicine and sanitation would help save many lives.

You mention a 'smart patient' staying at home... but I believe that a smart patient is less likely to get sick in the first place, and is more likely to go to a doctor once the unfortunate occurs.

That having been said, I agree with the spirit of the post, that spending on "health care" is a good thing. But if the Rand research you quote is believable, why not just say spending on "medical research" instead of health care in general? Even looking at the other MR post from Oct 2003, Alex writes that "Although the marginal dollar has low return the value of improvements in medical technology is enormous." I would suggest that supporting broad increases on healt chare spending in general would have decreased returns, compared with a focus on increasing research funding.

Posted by: Jon at Jun 22, 2005 2:43:59 PM

Health care is good for you, but that doesn't always make it the best use of resources. Even in the Mexican village example, which would result in better health, trading the shaman for a doctor or cleaning up the water supply?

Posted by: Tom Hanna at Jun 22, 2005 5:16:08 PM

Doctors don't cure people, drugs cure people. If the doctor won't prescribe
you expensive drugs because your HMO won't let him, more visits won't
help. Doctors are only as good as their diagnosis and prescription.
Doctors will give you placebos like penicillin instead of vancomycin, and
allergy tests instead of dq tests (to see if you are one of the people
with celiac genes), because they are cheap, not because they work.

Posted by: wkwillis at Jun 22, 2005 5:27:15 PM

Good ol' penicillin is still very effective for many infections.
No doc worth his salt would use Vanco for any but the most severe,
or resistent infections.

Posted by: synapse at Jun 22, 2005 7:59:26 PM

Increased spending on medical research will provide far greater returns on investment than increased spending on medical services.

I propose a simple change: 10% of every government medical entitlements program should go to medical research. Then as medical spending rises medical research will rise in lock step. Currently medical services spending is rising faster than inflation but medical research spending is rising more slowly than inflation. This is bad policy.

Posted by: Randall Parker at Jun 22, 2005 9:24:17 PM

I don't think that people living in America (or in countries with levels comparable to America's of both health care and other profoundly health-influencing things like sanitation) can extrapolate easily about the benefit of "health care" investment from the example provided by places where children are dying of fevers and diarrhea on a regular basis.

Health care spending in modern industrialized countries seems very likely to be plagued by diminishing marginal returns. It's far, far more cost-effective to save large numbers of lives in the third world with sanitation improvements and access to basic medical care than it is to attain slight extensions to a few lives here by further advancing the state of the art.

(Not that I don't think advancing the state of the art is a good thing...but it's not quite as exceptionally good as is implied above.)

Posted by: Matt at Jun 23, 2005 3:50:54 AM

Hmm. The Mexican under-five mortality rate in 1999 was 36 per thousand, down from about twice that (74/1000) in 1980. Over that time, GDP/capita PPP crawled up from $7,758 to $8,502. This example is hardly unique --Bill Easterly's cross-country analysis suggests that whatever is behind improvements in health in developing countries, it doesn't appear to be income growth. (see http://www.cgdev.org/docs/easterly_lifeduringgrowth.pdf). This leaves a nice big role for public health interventions and technology change...

Posted by: Adamsmithee at Jun 23, 2005 4:25:58 PM

When I was a child, a Mennonite doctor who went on many missionary service trips told me about the most important medical supplies he packed with him when he went to the third world: several pounds of sugar and salt. Sweetened saltwater was, he told me, the most cost effective way to treat severe diarrheal diseases like dissentary, and the lack of this simple treatment caused for thousands of deaths each year in the third world.

I had very severe diarrhea yesterday, and despite the fact that I drank plenty of water, I was still quite dizzy and stopped sweating (despite a high fever and no A/C). I considered going to a hospital, but instead opted for acetaminophen and his treatment (though I added lemon juice for flavor). It worked like a charm--I started sweating again, and the dizziness went away. The diarrhea cleared up in a few more hours, and I saved a *very* expensive trip to the emergency room (probably >$300, sans insurance) where their treatment would have been to hook me up to an i.v. bag filled with sterile salt and sugar.

I wonder how much money could be saved if people would learn how to intelligently deal with simple diseases in this country.

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