February 2008

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Doctors are very empathetic…until they start seeing patients

February 29, 2008 in Medical Studies | Permalink

According to InsideHigherEd.com (“Tomorrow’s Doctors…“) medical students are very altruistic, empathetic people…until the start medical school.  The article describes the findings of a study titled “Is There Hardening of the Heart During Medical School?” in March’s Academic Medicine. 

The longitudinal study finds significant decreases in “vicarious,” or emotionally driven, empathy, during the course of medical education. Significant drops happen after the first year and after the third, clinical year when “students,” the article notes, “were seeing patients they had, presumably, looked forward to helping.”  (The drop at that point of first patient contact in the third year is particularly concerning, the lead author, Bruce W. Newton, said in an interview Thursday)…

The authors find, for instance, that students who choose the “core” specialties, where they see many of the same patients (i.e. internal medicine, family medicine, pediatrics, obstetrics-gynecology and psychiatry), manage to better maintain their empathy throughout medical school compared to those who choose “noncore” specialties (like radiology or surgery), where continuous contact with specific patients is limited.

[Hat tip to Marginal Revolution]

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Should all children get flu shots?

February 29, 2008 in Current Events, HC Economist Models, Vaccinations | Permalink

According to Reuters (“All U.S. kids…“), the CDC’s Advisory Committee on Immunization Practices (ACIP) is recommending that all kids should receive an influenza vaccination. Previously, the CDC recommended that all children 0-6 receive a flu shot. Now, all children 18 and under should get the shot.

In addition to the direct health benefits the children will receive from a decreased likelihood of getting the flu, the probability that they will spread it to adults, teachers, other children, and senior citizens will decrease.

However, there will be costs to the flu vaccine expansion. According to the U.S. Census, there were 61.3 million children aged 5-19 in the U.S. Getting all these children vaccinated will be very costly and since the vaccines will be given in the fall, the logistics of providing 61 million additional flu shots will be difficult to manage.

Further, one of my working papers (“Adam Smith meets Jonas Salk: Estimating the Social Cost of Third-Party Influenza Vaccination Restrictions“) finds that when kids 0-18 year old must receive a flu vaccine efficiency losses could increase to as much as $560 million if insurance companies continue to prohibiting reimbursement to pediatricians for vaccinating adults.

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Cross-border health insurance

February 28, 2008 in Current Events, Health Insurance | 1 comment

The San Diego Union Tribune has an article (“Cross-border coverage“) profiling entreprenuer Jim Arriola and his low cost health insurance plan covering medical care in both the U.S. and Mexico.

His company, Sekure Healthcare, provides a limited-benefit insurance program through employers along with a discount health card program. Both can be used by Sekure members and family members to visit doctors and hospitals on either side of the U.S.-Mexico border.

The health plan is not as generous as typical employer-provided health insurance, but may be an attractive option for low wage workers who can not afford top-of-the-line coverage.  Sekure specifically targets low wage Mexican workers in California.

While the plan certainly fills a niche, this type of cross border plan likely will not gain broad appeal.  First, most people want to receive their medical care where they live.  Thus, the option to have treatment in Mexico will likely only be attractive to frequent migrants or those living near the border (i.e. San Diego).  Secondly, the Sekuye plan does not cover catastrophic medical costs.

“Sekure pays up to $50 for each doctor’s office visit and a maximum of $300 a year for the service. Beneficiaries can get up to $800 a day and a maximum of $3,000 a year for hospitalization. They pay out of their own pockets for any charges exceeding their benefits. “

The Sekure plan is the exact opposite of health plans advocated by Republicans.  Instead of having catastrophic health insurance with a high deductible, the Sekure plan provides a minimal benefit and does not cover catastrophic costs.

Nevertheless, some insurance is better than no insurance for many low wage workers.

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Google Health preview

February 28, 2008 in Healthcare IT, Information | Permalink

Google’s blog gives a preview of its Google Health application.  TechCrunch provides some analysis.

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Doctors, Patients, and the Racial Mortality Gap

February 28, 2008 in Academic Articles, Medical Studies | Permalink

Differences in the health outcomes between white and minority patients has been well documented in the medical and economics literature. Reasons for this difference could be:

  • Unequal access to treatment. Minorities are poorer and less likely to be covered by insurance than whites.
  • Unequal treatment – Minorities are less likely to have a regular doc, which leads to discontinuities in care.
  • Unequal quality of care available to minorities – For instance, doctors who treat blacks are less likely to be board certified.

A recent paper by Emilia Simeonova tries to dig deeper into what is causing the racial mortality gap for chronic heart failure (CHF). CHF is one of the leading causes of death for the elderly and one of the major components of the racial mortality gap.

Methods

Ms. Simeonova uses a six-year panel data set from Veterans Affairs [i.e.: the VHA Medical SAS inpatient and outpatient datasets,the Beneficiary Identification Records Locator Subsystem (BIRLS) death files, the VHA Enrollment files, and the Veterans Service Support Administration (VSSA) clinic performance measures database]. The data allow the author to compare treatment within facilities rather than just between them. This is important because it is possible that blacks go to bad doctors and whites go to good doctors and this may constitute the entire mortality gap. By comparing outcomes within a clinic or within the same doctor, the author can better analyze what is causing the mortality differences.

The author calculates 3 year survival probabilities conditional on surviving two years. This should help to eliminate different CHF severity levels. In her regression, Simeonova uses patient and clinic characteristics, as well as clinic fixed effects, and time and cohort dummies. Simeonova measures doctor quality as the probability the doctor prescribes beta blockers and ACE inhibitors to patients with chronic heart failure (CHF). However, another aspect of the quality of medical care is patient compliance. Patient compliance is calculated as the number of prescriptions filled on time divided by the total number of prescriptions filled.

Results

Simeonova finds that doctor quality accounts for 5% of the CHF mortality gap and socio-economic factors account for 20% of the differences in CHF mortality. However, the vast majority of the mortality differences are due to the fact that blacks are less likely to take their medication than whites.

“I show that doctor quality significantly influences patient outcomes. While minority patients visit slightly less competent doctors, this does not explain the large gap in survival. Individual doctors are found to treat their patients similarly regardless of race. On the patient side, I demonstrate that variation in compliance triggers a racial mortality gap. Differences in patient response to treatment significantly alter survival probabilities. Considerable reductions in medical costs could be achieved by convincing patients of the importance of strictly following the therapy regimen. I estimate that targeting compliance patterns could reduce the black-white mortality gap by at least two-thirds.”

Also interesting is that the paper found that when blacks have a regular doctor, they end up seeing a lower quality doctor. Nevertheless, compliance rates and mortality decrease for blacks when they have a regular doctor despite the fact that this doctor may be of a somewhat lower quality.

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Cavalcade of Risk #46

February 27, 2008 in Carnivals | Permalink

The latest edition of the Cavalcade of Risk is up at the uniquely titled “Wisdom from Wenchypoo’s Mental Wastebasket” blog.

Particularly interesting is the Colorado Health Insider‘s finding that “Those with Medicaid were 80% more likely to have advanced-stage cancer when diagnosed [than those with private insurance].”  The blog supports universal healthcare but notes the early-diagnosis statistics would not likely change for these cohorts after universal healthcare was implemented.

“Does education level or social status have anything to do with delaying a medical check up? Perhaps Medicaid recipients as a group are less educated about things like colon cancer and breast cancer than their more affluent, privately insured neighbors.”

Also interesting is InsureBlog‘s discussion of the health care shopping site Carol.com.

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Choice, Price Competition and Complexity in Markets for Health Insurance

February 27, 2008 in Asymmetric Information, Health Insurance, International Health Care Systems | Permalink

Yesterday, I spoke about the Swiss health care system. One of the main attributes of this system is that patients are allowed to choose from any health care plan and the health insurers can not refuse to cover them. Further, since the insurance benefit is mandated by law, there is very little quality difference between plans. Only 8% of health plans restrict provider choice in any way.

An NBER working paper by Frank and Lamiraud analyzes how the number of firms offering health insurance in Switzerland has affected price dispersion and expected price.

Economists generally believe that when more firms/products enter the market, this will increase the probability that a superior health insurer will be available to the public. However, when more products enter the market, search costs increase. Thus, it is theoretically possible for more health insurance offerings to decrease utility.

A paper by Janssen and Moraga-Gonzales (2004) show that an the welfare impact of an increase in the number of sellers depends on the consumers’ search intensity. When consumers search with low intensity, having more firms will reduce search, will not affect expected price and will to greater price dispersion. One can think that inexpensive and/or infrequently purchased items would fall in to this category. When consumers search with high intensity, an increase in the number of firms will increase searching and decrease prices. In the 401(k) market, when employees are offered more than 10 choices, there are reductions in consumer responses (i.e.: less investment switching occurs).

Frank and Lamiraud aim to analyze how the number of firms affects insurance choice in Switzerland. They use a panel survey from the Federal Office for Social Insurance (OFAS). It contains a sample of 2152 individuals and asks about their insurance coverage between 1997 and 2000. Yearly premiums are available at the Federal Office for Public Health (OFSP) website. While there was consolidation in the health insurance market among firms, the average number of health plans offered per canton increased from 39 in 1998 to 52 in 2003. The number of people switching plans was 4.8% in 1997, 5.4% in 1998, 2.7% in 1999 and 2.1% in 2000.

How do people choose their plan?

…40% of people choose a health plan following their parents’ and friends’ choices, and what they see as tradition. Furthermore, as many as 25% individuals declare that they do not strive to pick the health insurance plan with the lowest premium. A substantial number of people explicitly report staying with their health plan based on habit (13.5%) or because they are satisfied with their arrangement (79%)

What do the authors conclude from the data?

First, we show that consumers that switch health plan pay 15% to 16% less in health insurance premiums per month holding ceteris paribus. Second, we show that among consumers expressing dissatisfaction with their health plans those in markets with fewer choices are more likely to express intent to switch. Finally, consumers that used an agent to help them purchase insurance consistently paid significantly lower premiums. This set of results suggests that “mistakes may have been made”.

Despite what orthodox economic theory states, no market is perfect. Understanding these market imperfection imparts important knowledge for economists and health policy makers.

Swiss Healthcare System: Part II

February 26, 2008 in International Health Care Systems | 5 comments

In November, I wrote a post about the Swiss healthcare system. Today, I am giving you a bullet-point summary, offering more detail concerning healthcare in Switzerland. Most of this information comes from Frank and Lamiraud’s working paper.

In the Swiss healthcare system:

  • there is an insurance mandate for all individuals,
  • the government defines a what the insurance benefit will be for all standard health insurers,
  • insurance companies are not allowed to deny coverage to any individual,
  • health insurance and medical procedure prices are made publicly available,
  • in exchange for providing health insurance to consumers, insurance companies receive premiums from consumers and risk-adjustment payments from the government in order that insurance companies are not punished if they decide to insure a sicker population,
  • premiums are community rated, meaning that sick and healthy individuals pay the same price within each age group (the age groupings are 0-18, 19-25, >25 years old).
  • individuals are allowed to purchase supplement insurance as well (there is no regulated benefit for supplemental insurance),
  • there is significant cost sharing in all insurance plans (i.e.: deductibles, 10% coinsurance rates up to an annual ceiling),
  • open enrollment occurs twice per year (June and Ddecember).

In 2003, 49.7% of Swiss individuals choose ordinary deductible health insurance, 42.0% choose higher deductible health insurance, and 8.2% chose insurance with limited choice of provider networks (HMO-style contracts). Since only 8% of individuals are in managed care insurance firms, quality is fairly homogeneous across insurance companies.

Tomorrow, we will discuss other findings of the Frank and Lamiraud working paper.

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Markets and Medicare

February 25, 2008 in Current Events, Medicaid/Medicare | Permalink

The Wall Street Journal has an interesting article (“Markets and Medicare“) by John Goodman, President of the National Center for Policy Analysis. The article has some innovative suggestions regarding how to improve the health care system.

Medicare should allow alternative payment mechanisms, such as compensating doctors for e-mail and telephone communication with the patient (I completely agree with this). Geisinger Health System “…offers a 90-day warranty on heart surgery, similar to the type of warranties found in consumer product markets. If the patient returns with complications in that period, Geisinger promises to attend to it without sending the patient or the insurer another bill.” While this may seem like a good idea, if someone falls sick within 90 days, it may not always be possible to attribute the complication direction to the heart surgery. It may be due other co-morbidities and how seriously the health system takes this guarantee is unknown.

Virginia Mason Medical Center in Seattle will not give patients MRIs for back pain without first seeing a physical therapist. This is entirely sensible and will greatly cut costs without affecting the quality of patient care.

It is interesting that Goodman advocates the “resticted MRI use” since the NCPA says that “The NCPA’s goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.” Reducing the number of MRIs run is certainly the optimal solution from a systems point of view, but reducing MRI use smells like rationing. Physicians have no incentive to decrease the number of MRIs taken–unless the insurers refuse to pay for them–since the patients demand them and many physicians are owners of the MRI care centers to which they refer patients.

What we all must realize is that all good are rationed. They are either rationed through a price mechanism, through queues or through by insurance company or government mandates.

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Economist health care articles

February 25, 2008 in Current Events | Permalink

This week’s edition of The Economist magazine has some great articles on health care.

  • Mayo with Everything: World-famous hospitals are becoming the hub of economic activity for many cities. For instance, Rochester, Minnesota’s economy is heavily dependent on the Mayo Clinic and Cleveland relies heavily on the Cleveland Clinic to attract high quality health care workers to the Midwest. Are these mega-hospitals welfare improving or are they growing too big?
  • Health care in China: Despite dramatic economic growth, health care is often prohibitively expensive for the poor. Doctors are under-compensated and often accept bribes to supplement their income. “Even though urban health care receives a disproportionate share of total government spending on health, many urban residents fare just as badly [as rural residents]. Li Ling of Peking University estimates that more than half of the urban population has no insurance.”
  • India’s fake doctors: India only has 60 doctors per 100,000 people (compared to 257 per 100,000 in the US). Untrained individuals posing as doctors have stepped in to fill the void. In fact there are more “quacks” than real doctors in India. “Indeed, so essential are quacks to India’s health-care system that the National AIDS Control Organisation says it is planning to include them in its AIDS-control programme, training them in basic care and counselling of people with sexually transmitted diseases. Some quacks, of course, may be perfectly responsible. Mr Noor, for example, swears that he refers all ‘serious cases’ to government hospitals. How he diagnoses them is not clear.“
  • Gates Foundation as a monopoly: The Gates Foundation has done great things to help alleviate poverty and increase the health of residents of developing nations. But is the Gates Foundation gorilla a non-profit monopoly, stifling innovative ideas from smaller non-profits?
  • Virus forecast: Dr. Wolfe proposes a Global Viral Forecasting Initiative. He needs $50 million to build this planet-wide epidemic surveillance system.

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