September 2007

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Legislating Medical Care

September 28, 2007 in Current Events, Public Policy | Permalink

A press release from Senator Ron Wyden sent to me at 7am this morning states the following:

Working to enhance screening and prevention of childhood type 2 diabetes, U.S Senator Ron Wyden (D-OR) today announced that an amendment giving states $15 million to combat the disease has been included in the final conference version of the State Children’s Health Insurance Program bill (S-CHIP).  Wyden is the amendment’s sponsor.  The S-CHIP conference report passed the Senate yesterday evening and will now be sent to the President for his consideration.
 
“This amendment gives states the power to develop creative solutions to the closely related problems of childhood obesity and type 2 diabetes in children,â€? said Wyden.  “Children who develop type 2 diabetes are saddled with health problems for life.  By investing in prevention, we can not only save lives, we can make a greater impact with less money.â€?

Sounds like a great program…but is it really?  The question is, do we want federal politicians legislating medical care?  Certain politicians, often with the best of intentions in mind, will have a pet disease at which they will want to throw money.  Type 2 diabetes is a serious problem.  However, it is the most pressing issue?  Are there other medical problems that need funding more urgently?  Would providing funding for other medical conditions result in a bigger marginal improvement in health outcomes?

Without looking at this situation holistically, a federal health spending budget is put together in a piecemeal fashion.  Diseases which receive more media attention or have stricken relatives of politicians will likely receive more funding even if this is not the best use of our tax dollars.

Along the same lines, in 2004 California approved $3 billion for stem-cell research (see MSNBC article).  While stem cell research funds are certainly needed, $3 billion may be excessive.  Directing so much cash to one cause may siphon off research funds for other worthy diseases.

A Random Walk

September 28, 2007 in Books, Economics - General | Permalink

I just finished reading Burton Malkiel’s influential book A Random Walk Down Wall Street. Originally published in 1973, the book was one of the first to advocate for the creation of a “no-load, minimum-management-fee mutual fund that simply buys the hundreds of stocks making up the broad stock-market averages and does no trading from security to security in an attempt to catch the winners.” In other words, the book called for the creation of the index funds, which have become extremely popular.

The book talks about how difficult it is to pick winners, since by definition half of investors will do worse than the market and half will do better. As John Maynard Keynes stated:

Playing the stock market is analogous to entering a newspaper beauty-judging contest in which one must select the six prettiest faces out of a hundred photographs, with the prize going to the person whose selections most nearly conform to those of the group as a whole.

The book recommends a buy-and-hold strategy using dollar cost averaging. Some critics of this passive investment style claim that some individuals (e.g.: Peter Lynch and Warren Buffet) have been able to beat the market consistently. A reply would be that Mr. Lynch and Mr. Buffet have access to information which is not possessed by the typical investor. Also, mathematical probability states that when many people are betting on the market, their are bound to be a few people who have a string of winning years.

The book also talks about some historical investment crazes; or as Dr. Malkiel calls them, creating “castles in the air.” For instance:

  • Tulip Bulb craze: Tulips imported into Holland from Turkey during the 17th century gained instant popularity. According to Investopedia: “The true bulb buyers (the garden centers of the past) began to fill up inventories for the growing season, depleting the supply further and increasing scarcity and demand. Soon, prices were rising so fast and high that people were trading their land, life savings, and anything else they could liquidate to get more tulip bulbs. Many Dutch persisted in believing they would sell their hoard to hapless and unenlightened foreigners, thereby reaping enormous profits. Somehow, the originally overpriced tulips enjoyed a twenty-fold increase in value – in one month!” Eventually the market crashed and individuals who had traded the value of their home for a single tulip realized the error of their ways.
  • South Seas bubble: This financial institution was granted a monopoly over trade in the South Seas by the British government. The company was supposed to grow due to trade in slaves, as well as mineral wealth (i.e.: gold and jewels). The company even agreed to finance a large debt Britain incurred after a war. “Investors quickly saw what they perceived as value in the monopoly of the South Seas. Shares were quickly snatched up from the start… The management team of this company started hyping the stock, spouting illusions of grandeur to the investors.” After the stock price reached astronomical levels, the crash began. “Eventually word broke out that the management team had sold out completely. Investors were left holding the bag. Panic selling of the worthless shares immediately ensued. Fortunes were lost in a heartbeat.”

This book is a great read for any investor and I highly recommend it.

Public Health vs. Medicine

September 27, 2007 in Medical Studies, Public Policy | Permalink

What are the major differences between medicine and public health? What challenges do public health officials frequently ignore?

On Tuesday, I attended a seminar by Dr. Richard Schieber. Dr. Schieber was a practicing pediatrician, however for the last fifteen years he has worked as a medical epidemiologist for the CDC.

One of the major challenges facing the CDC is how to translate public health medical recommendations down to the clinical level. According to Schuster et al. (1998), little of public health care recommendations are preformed in the clinical setting. “Simple averages from a number of studies indicate that 50 percent of people received recommended preventive care; 70 percent, recommended acute care;… 60 percent, recommended chronic care.”

Why are these numbers so low? Well, public health officials have many recommendations. What if a physician is confronted with a patient who has diabetes and is also obese and a smoker. Will they be able to fulfill all the recommendations in the 15-20 minute time slot they have with their patient? Likely not.

A study by Yarnall et al. (2003) finds that “To fully satisfy the USPSTF [US Preventative Services Task Force] recommendations, 1773 hours of a physician’s annual time, or 7.4 hours per working day, is needed for the provision of preventive services. ”

Dr. Schrieber’s main point of the talk is that recommendations in and of themselves are not very useful. They must be “translated” so they are useful and feasible for both the medical provider and the patient. Further, public health programs should be measured by outcomes, not by processes.

Finally, some of the talk was spent on differences between public health and medicine. Some of these differences are listed below.

  Medicine Public Health
Scope Individual Populations
Boss CEO or MD Bureaucrat
Environment Clinical Desk Job
Salary High Not as high
Satisfiers Positive patient outcome Vague
Language Very Technical (Greek) English
Funding Patient (via insurance or gov’t) Government
Unbreakable rule Primum non nocere Help underserved
View of EBM Dictatorial Magically improve patient care
Basis of Decision Patient history, physical, tests Risk, QALYs, etc.
     

CoR #35

September 26, 2007 in Carnivals | Permalink

The latest edition of the Cavalcade of Risk is up at Investments and Loans.

Flu Shots May Have Little Mortality Benefit in Older Adults

September 26, 2007 in Medical Studies | Permalink

Over the years, the CDC’s Advisory Committee on Immunization Practices (ACIP) has greatly increased the scope of the population for whom it recommends to receive an influenza vaccination.  Currently, ACIP recommends that all children 6–59 months old, all health care workers, and all persons aged over 50–in addition to many other groups–should receive an annual flu shot.

However, MedPageToday reports (“…little mortality benefit…“) on an research by Simonsen et al. (2007) in The Lancet Infectious Disease journal. The Simonsen paper claims that influenza vaccination may be saving fewer lives than once thought among older adults.

The reason is that estimates of a 50% or greater reduction in all-cause mortality have emerged from cohort studies fraught with selection bias, asserted a review article in the October issue of The Lancet Infectious Diseases.

But the real effect with flu shots for those 65 and older during December through March could not have been any greater than 5% to 10%, said Lone Simonsen, Ph.D., of George Washington University here, and colleagues. That’s the flu-related mortality burden found in studies of excess all-cause mortality.

Aside from these cohort studies, the evidence is too weak to show any mortality benefit in older adults, who account for 90% of influenza deaths each year, Dr. Simonsen and colleagues added.

Why have other studies found that influenza vaccination had such a large effect of decreased mortality.   Seriously ill people are less likely to get influenza shots; they have more immediate medical worries.  These people are also more likely to die.  Thus, we have a spurious, non-causal relationship between influenza vaccination and mortality due to selection bias.

The authors of the study wisely state the following:

“We must never again allow layers of poor research to mask substantial uncertainty about the effects of a public-health intervention and present a falsely optimistic view of policy,” they wrote. They called for placebo-controlled trials.

Breast Cancer information

September 25, 2007 in Miscellaneous | Permalink

For information on breast cancer symptoms, diagnoses, treatments, and recovery options, BreastCancer.org is a great resource.  BreastCancer.org is “…a nonprofit organization dedicated to providing the most reliable, complete, and up-to-date information about breast cancer.”

The American Cancer Society also has reliable information on breast cancer.

More resources are also available at Breast Cancer Hope forum.  This site is Comcast’s video-on-demand and internet-based initiative.  It offers a support community for those with breast cancer as well as for those dedicated to fighting the disease.

Neo-Laffer Curve

September 25, 2007 in Economics - General | 2 comments

The Laffer curve is a compelling economic concept.  It claims that government revenue as a function of tax rates is shaped as an inverted-U.  This means that, at first, raising the tax rate from zero will increase tax rates.  However, there is some tax rate which maximizes government revenue (but not necessarily social welfare).  When tax rates are increased beyond this point, however, tax revenues decrease because as income taxes rise, the disincentive to work becomes sufficiently great that the higher per hour amount of tax receipts will be more than offset by the workers incentive to work less hours.

The theory is theoretically sound and elegant, but do economists actually know what the tax rate which maximizes government revenue will be?

The mathematician Martin Gardner claims not.  His satirical construct called the neo-Laffer curve (see image).  According to Wikipedia, “The neo-Laffer curve matches the original curve near the two extremes of 0% and 100%, but rapidly collapses into an incomprehensible snarl of chaos at the middle. Gardner based his curve on actual US economic data collected in a fifty year period by statistician Persi Diaconis.”

Gardner makes the sound point that the Laffer curves is very appropriate for theoretical analysis and as a pedagogical tool, but it does not sufficiently reflect reality in order for politicians to make tax policy based on the construct.

Banzhof power index

September 24, 2007 in Economics - General, Public Policy | Permalink

Why do the Orthodox Jews have so much political power in Israel? Why are third parties in the U.S. so weak? These phenomenon can be explained by the Banzhof power index. The index is calculated as follows. Let us look at the Israeli election in 2003 for the Knesset. Here are the voting results of the top 3 parties:

Party Votes % Seats at end of session  
Likud 925279 29.39% 27  
Labour 455183 14.46% 21  
Shas 258879 8.22% 11  

In the Knesset, the parties must form a coalitions which has at least a majority of the seats. In the case above, a majority would consist of a coalition with at least 30 seats. The Banzhof power index tells us the Shas (religious) party is equally powerful as the Likud (conservative) and Labour (liberal) parties even though the Shah party has less than half the number of seats as the Likud. Let us look at all the winning coalitions:

Likud-Labor; Likud-Shas; Labor-Shas; Likud-Labor-Shas

There are 4 possible coalitions. The groups which are pivotal are underlined in each coalition. We see that each group is pivotal 2 times, and thus each has a Banzhof power index of 2/6=1/3. This is why the religious parties in Israel are so powerful even though they receive a much lower percentage of the vote.

Why is this not a problem in the U.S? In the U.S. no coalitions need to be formed. A candidate must win a majority of electoral college votes and if they do not then there is a run off. The benefit of this system is that small third parties do not become more powerful than they deserve. On the other hand, however, the concerns of third party voters are often ignored due to the American election rules.

Time Allocation in Primary Care Visits

September 24, 2007 in Medical Studies, Supply of Medical Services | Permalink

A new study by Tai-Seale, McGuire, and Zhang (HSR 2007) analyzes how primary care physicians allocate their time in a typical office visit. The authors use data from 392 videotaped office visits conducted in three settings: 1) a salaried group practice in an academic medical center (AMC), 2) a managed care group (MCG), and a fee-for-service inner city solo (ICS) practitioners with an Independent Practice Association contract. The authors found that the average length of a visit was 17.4 minutes but the median visit length was only 15.7 minutes.


 Total AMC MCG ICS
Median visit Length 15.7 23.3 13.4 9.7
Median time spent on Major topic 5.3 6.7 4.8 3.2
Median time spent on Minor topic 1.1 1.4 0.9 0.7
         

The data above show that only about 5 minutes was spent on discussing the major issue facing the patient. For minor issues, the doctor and patient only spent one minute discussing the issue. We see that physicians at the AMC spent the most time with their patient while the physicians at the ICS spent the least. The authors find that “…while time spent by the patient and physician on a topic responds to many factors, time of the visit overall is much less malleable.”

The paper also notes that “[i]ncentives in prevailing physician payments favor procedure-based patient care over time-intensive evaluation and management care.” One could easily imagine a system with a flexible physician schedule. The patient could schedule a standard 15 minute appointment for the usual co-pay, or could pay the physician extra if they wanted a 20 minute, 30 minute or 1 hour appointment. This way, the physician would be reimbursed for their time. If the insurance company paid for these extra minutes, the physicians would have an incentive to exaggerate the number of minutes spent on each patient. Thus, a likely solution is for the insurance company to pay for the base appointment length (15 minutes) and anything over this the patient will have to pay for.

More on convenience clinics

September 21, 2007 in Current Events, Nonphysician Clinicians, Supply of Medical Services | Permalink

Much has been written on this site about the growth of convenience clinics (see posts on July 25, April 26, and April 17).  The Economist’s Free exchange blog adds to the discussion (“A spoonful of monopoly…“).  It warns how the AMAs monopoly powers may be a threat to convenience clinics such as Medical Marts.

“The fact that there is a shortage of family physicians in many areas did not stop the AMA from trying to stem the growth of these clinics by passing a resolution in June that asked government authorities to investigate the possibility of a conflict of interest in clinic-housing drug store chains that, in effect, both write and fill prescriptions.”

Free exchange agrees with the opinions stated previously on Healthcare Economist.  Convenience clinics should expand choice, offer a low cost alternative, reduce waiting times, make available expanded hours of operation, and should maintain high quality standards for basic ailments.  The Free exchange blog concludes:

“However, it seems the AMA would like to make sure its members profit no matter what choice you make. As it happens, nurse practitioners are required by law to practise under the supervision of a physician in 28 states — including in Illinois. I’ll swallow a stethoscope if the AMA didn’t have more than a little to do with the existence of those laws. “

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