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Assorted links
1. Markets in everything: Do Stuff for Money.
2. Ezra Klein on administrative costs.
3. Jeff Friedman's Critical Review, special issue on the financial crisis, $$ but recommended; view the abstracts here.
4. Our culture of (pornographic) small bits (totally safe link).
5. Michael Lewis and derivatives and AIG.
6. Superb Dave Leonhardt column on health care and prostate cancer.
Posted by Tyler Cowen on July 8, 2009 at 07:38 AM in Web/Tech | Permalink
Comments
Tyler,
Please read again Leonhardt column. It's terrible. I don't know anything about treatments for prostate cancer but to call "watchful waiting" a treatment in the same category as the others is nonsense. I fully agree with Arnold Kling about the terrible incentives of the current system, but do you believe that doctors will recommend you any of the two most expensive treatments because some day you MAY have prostate cancer? Leonhardt thinks that we can determine which treatment is best; you should know how difficult it is to know which one is good. Since Arnold Kling has reading again Sowell's A Conflict of Visions, I suggest you talk to Arnold about the relevance of Sowell's ideas for this type of problem.
Posted by: E. Barandiaran at Jul 8, 2009 8:39:03 AM
I like this offer on "Do Stuff for Money":
"Bryan offered Jesus $999.00 to "To come forward and prove his existence.""
Posted by: Mark at Jul 8, 2009 8:50:33 AM
Leonhardt's article is important for two reasons. It addresses the health care cost issue and it addresses the way we debate the issue.
In almost any debate about this issue, you get someone claiming our system is the best in the world. That is not what the data show. The one area where we might come out ahead, is in cancer, but that is difficult to judge by the way we compile data. If we diagnose prostate cancer in a 67 y/o, we treat it. If most other places find prostate cancer, they watch it. Both patients then live for 20 years. Prostate cancer is almost a slow, non-invasive cancer. Yet, our data showsa cancer patient with a 20 year survival.
E.B. Watchful waiting is not that uncommon, at least where I practice. Not just for prostate cancer, but for many illnesses. The idea is that you have a disease or process that does not immediately need surgery, and in fact, may never require surgery. So you watch and see if it does. Just as an example, if someone has an enlarged aortic, we will follow it until it hits a critical size, before considering replacement. Often it never reaches that size or the patient dies from other causes. The key here is that your not knowing anything about cancer treatments, seems to make you think it must be treated. Following it with serial exams and labs looking to see if it really does need surgery or radiation is also treatment. We just call it watching.
Leonhardt also points out that there is little incentive for treatment innovators or providers to do cost effectiveness research. At this point, I see no alternative to some governmental effort here.
Steve
Posted by: steve at Jul 8, 2009 9:02:37 AM
I can't believe that in the last 25% of Leonhardt's entire column devoted to incentives that he doesn't discuss the problem that insurance presents. If people paid for more procedures out of pocket, with insurance reserved for emergency and catastrophic care, you can bet that cost effectiveness would suddenly become a bigger consideration. We need to end the insurance tax credit for employers and promote a system based on real competition.
And yes, I realize that 23K for a prostate operation is pretty hefty. However, with competition I am convinced that we could also drive such costs down substantially.
Posted by: Colin at Jul 8, 2009 9:14:04 AM
Leonhardt's column must be pretty awful if its keeping people from mentioning the latest from little Ezra.
Posted by: josh at Jul 8, 2009 9:21:27 AM
Steve,
You say "If we diagnose prostate cancer in a 67 y/o, we treat it. If most other places find prostate cancer, they watch it. Both patients then live for 20 years". Are you comparing identical situations in the US and other places? My experience with the use of statins is that despite the many studies of their desired and adverse effects we don't know under what conditions they are good (certainly we don't know when they are the best treatment). From my conversations with my doctor about prostate cancer (I'm 67 and live in Chile), I don't have any reason to believe that there is any significant difference between the treatment of clogged heart arteries (a condition I had five years ago) and the treatment of prostate cancer.
In economics, a "credence" good is a good whose utility impact is difficult or impossible for the consumer to ascertain. Most medical treatments are typical examples of "credence" goods and no amount of research will determine with certainty the conditions under which their desired effects more than compensate their adverse side effects.
Posted by: E. Barandiaran at Jul 8, 2009 9:47:55 AM
I thought the Leonhardt article was great. It left me 80% convinced that watchful waiting is wisest for prostate cancer, when costs are considered, and, importantly, the author only seemed to claim to be 80% sure on this point. Meanwhile, the author seemed 100% sure of what the prostate example illustrated -- bloated, excessively expensive, an overly technological treatment in the United States -- and I found that claim 100% convincing.
Posted by: Parke at Jul 8, 2009 10:04:29 AM
So, a fairly leftish (Ezra Klein) guy does two weeks of research and reports that a poster child statistic the left has been brandishing is not as advertised. This has to be a first.
(You see, this comment should get style points because it can be read as either sarcasm or snark)
Posted by: Andrew at Jul 8, 2009 10:05:52 AM
Let's apply the Kinsley test to the prostate cancer treatment options: If Obama is diagnosed with it this year, what option is he going to get? That's the one I want.
Posted by: TA at Jul 8, 2009 10:18:33 AM
"Leonhardt's article is important for two reasons. It addresses the health care cost issue and it addresses the way we debate the issue."
It's a more nuanced take than what is typically seen, but it's still fairly superficial. Prostate cancer is a very different disease to face depending (among other things) on your age group, and the physical and psychological cost of the disease is measured in much more than simply temporary side effects from treatment. That is the sort of spot where I begin to seriously worry about any additional bureaucratic involvement. I have the same sort of misgivings about truly deadly cancers such as acute myeloid leukemia, where it is clear that more tailored treatments for smaller cohorts is the only route that really remains to advance in treating what is still a cancer with an often horrific prognosis even by the standards of most cancers.
"In almost any debate about this issue, you get someone claiming our system is the best in the world."
Odd. Any time I run across a debate over health care the first thing I see is someone claiming our health care system is terrible. I have even seen it not uncommonly called "the worst in the world," though usually by who don't actually live here.
"Leonhardt also points out that there is little incentive for treatment innovators or providers to do cost effectiveness research. At this point, I see no alternative to some governmental effort here."
I simply don't trust a governmental effort here more than - or even equal to - anyone else's. This country needs a long and hard debate, one as serious and apolitical as possible, about what how it wants to approach health care and what it wants to achieve. Something is going to give, unless we manage to create a system no other country has been able to achieve, and my fear is that it'll be what gives in other countries - research and development for technologies to employ when the crap really hits the fan in someone's life. Americans won't like that if it becomes a reality, and though they don't really know it (yet) neither will non-Americans.
Posted by: MPO at Jul 8, 2009 10:26:28 AM
Steve,
What medical systems are superior that the US? I don't mean more cost effective.
Posted by: Andrew at Jul 8, 2009 10:33:16 AM
The NIH spends 1/3 of the medical research dollars. If they don't do the right kind of research, who is that on?
Posted by: Andrew at Jul 8, 2009 10:42:44 AM
One thing about health Americans in particular have a hard time grasping is that everyone will die of something. If you avoid dying from disease X, it just means you get to die from disease Y.
I don't mean to be flippant. Y might take longer to kill you. X might leave you with a better quality of life while you suffer from it. But you don't necessarily turn your life inside out or go in debt to fight one disease.
Life expectancy in the US is somewhere in the 70s. If prostrate cancer kills slowly, the odds of a 67 man not being killed by prostrate cancer because he get killed by something else are pretty good. That does not mean you don't treat the cancer. It is an argument for waiting to see what happens.
Posted by: Ed at Jul 8, 2009 11:18:18 AM
Anybody have a link to draft ungated versions of the articles in the Critical Review?
Posted by: Michael F. Martin at Jul 8, 2009 11:39:10 AM
Another problem with Leonhardt's argument.
http://www.liberalorder.com/2009/07/medical-research-is-still-affected-by-public-choice-arguments.html
Posted by: Mark at Jul 8, 2009 12:38:23 PM
Andrew-As far as I can tell, and it is hard to get perfect statistics, France, Germany and Japan are roughly equivalent to us in outcomes, excluding cancer care, which has the caveat discussed above. Some of the smaller Scandinavian countries probably are also, but I do not think we can fairly compare very small countries with the US. I am not claiming other systems are better, but rather that ours is not convincingly better. We have little to show for our extra expenditures.
EB-There is much, much better data for cardiac disease, at least for outcomes. Even for cardiac disease there is not much done on cost effectiveness.
"Most medical treatments are typical examples of "credence" goods and no amount of research will determine with certainty the conditions under which their desired effects more than compensate their adverse side effects."
Medicine is largely the art of applying large scale statistics to individuals. You do not get many certainties, you get probabilities. That is one of the reason I dislike the use of so many anecdotes in these debates. They may be interesting, but not very useful in the larger debate. I would disagree and say that we already have much data on outcomes and best practices. What we do not know, IMHO, is the cost effectiveness of our treatments.
MPO- What are the incentives for device makers or drug companies to do cost effectiveness studies? If they exist now, why don't they do them now? Are they stupid?
Steve
Posted by: steve at Jul 8, 2009 1:11:55 PM
Ezra Klein's article is comprehensive. Guess a journalist generally has more time and resources than a blogger .
"The answers are that we do more stuff and have more technology...."
And its hard to do (or allow) cost-benefit analyses on seriously ill patients.
Posted by: Rama at Jul 8, 2009 1:15:54 PM
gerd gigerenzer's book "Risk" is the one for the layman to read about medical risk. He uses prostate cancer and breast cancer as examples. Tip top.
Posted by: dearieme at Jul 8, 2009 2:51:38 PM
Wow. Seriously, nobody jumped at the opportunity to quote the Big Lebowski about standards falling in the adult entertainment industry? I don't know whether I should be disappointed with the discussion above, or with myself for just snickering and thinking of the Big Lebowski.
Also, I love that Tyler and Alex just have to mention partisan politics, religion, or health care to really get the readers all hot and bothered.
Posted by: d.cous. at Jul 8, 2009 2:55:04 PM
I predict the healthcare debate will fully jump the shark within the next week or so.
Posted by: Andrew at Jul 8, 2009 3:15:39 PM
"In almost any debate about this issue, you get someone claiming our system is the best in the world. That is not what the data show."
Steve, even in the WHO report, where the US is 37th overall, we are #1 in outcomes.
It takes little time to tease out the facts about life expectancy, ect. This has been done ad nauseum.
Lets call it WHO's Law. Whoever throws out how bad our system is automatically loses the argument.
Posted by: Tom at Jul 8, 2009 3:39:21 PM
I just wish the U.S. government would nationalize healthcare already, so it can crash and burn miserably and we can end this debate.
Even if you are a hardcore socialist ideologically, does anyone here actually believe that the U.S. government will be capable of running a decent health care system? We all know it is going to suck, that is why Obama is desperately trying to drag his feet on the issue - He wants healthcare to implode after his second term.
There, I just water skied over that shark for you Andrew!
Posted by: Vehical Driver at Jul 8, 2009 3:51:19 PM
That’s about it. You can delete this article if you wish. Oh, and thank you for choosing runescape gold.
Posted by: runescape money at Jul 8, 2009 9:06:20 PM
This country needs a long and hard debate, one as serious and apolitical as possible, about what how it wants to approach health care and what it wants to achieve.
Six decades isn't long enough?
We have Truman's proposal.
Then again in the 60s, with the bone of government insurance for the people insurers didn't want to insure: the old and people without money.
Then Nixon boosts HMOs via employer insurance.
Then Reagan shifts Medicare payment from treating disease to paying for each proceedure, and industry follows suit.
Clinton proposes reform which is rejected as government control of health care that would result in a health care crisis.
Bush comes in and jacks up spending and profits for drug companies by providing drug insurance for the old and poor the private insurers don't want to insure anyway.
In those six decades, I don't think anything has changed, except for the US costs breaking away from the pack of Canada, Switzerland, Germany, England, France, Japan, et al, around 1980 in terms of share of GDP spent on health care. Before then, the US was in the pack, but within a decade it was taking a much bigger share of GDP. And today, the US spends easily 5% of GDP more than even the most expensive of the others.
So, the need for more debate is?
Posted by: mulp at Jul 8, 2009 11:03:26 PM
