July 2008

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MedPedia is a new project similar to Wikipedia but for medicine. It will act as an online collaborative medical encyclopedia available to the general public. Unlike Wikipedia, content editors and creators are required to have an MD or a PhD. Organizations funding MedPedia include some well-known acronyms: CDC, NIH, and FDA.

One question remains: will MedPedia be a significant improvement over existing sites such as WebMD and MayoClinic? We will see when the site goes live at the end of 2008.

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What have my fellow brethren of social scientists discovered lately? The Boston Globe summaries some interesting findings such as:

  • Women find men with stubble more attractive than those who are clean shaven or have significant amounts of facial hair. I guess women must think Brett Favre is a sexy dude…whether or not he is retired.
  • Evidence of the winner’s curse is found in major league baseball free agency.
  • Award-winning CEOs earn more money, but their companies preform worse. Is regression to the mean at work?

Hat tip: The Sports Economist.

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In 2006, Columbia/HCA was forced to return $1.7 billion to the federal government for defrauding Medicare. How was the federal government able to amass such strong evidence against HCA in order to win such a large settlement?

The answer to the question is revealed in a book called Undercover by John W. Schilling. The book details how Mr. Schilling, a former accountant of HCA, found significant irregularities in HCA’s Medicare reimbursement charges. When his concerns were voiced about this illicit behavior, his bosses told him to ignore the issue. But Mr. Schilling did not ignore the issue. Instead he filed a qui tam whistleblower lawsuit an in the process became a multi-millionaire.

The book is interesting in that it goes into such vivid detail with respect to how deciding to reveal Medicare fraud alters one’s life. It is interesting to see how the Schilling uncovers lies on top of lies. By filing the suit, Schilling knew he would be excommunicated from the health care finance industry; this led to significant strain on his personal, family, and financial life.

Most of the blame for the fraud is of course heaped upon HCA, the worthy culprit. But some of the blame is also place on Medicare, whose complex reimbursement schemes often make hospital reimbursement decisions fall into a gray area.

While the book stimulates readers by revealing the truth behind what happens in whistleblower cases, the book isn’t necessarily a page turner. The writing style is: this happens, then that happens, then this happens. Schilling always portrays himself positively; he is always the best witness or the most honest person. While this may or may not be true, I would say that Schilling has an unbiased point of view.

Nevertheless, if you really want to know what it takes to expose fraud in the health care industry on a grand scale, this book reveals a the dirty underbelly of the health care industry rarely visited.

  • Schilling, John W. (2008) “Undercover: How I Went from Company Man to FBI Spy — and Exposed the Worst Healthcare Fraud in US History,” AMACOM, 304 pages.

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The latest edition of the Cavalcade of Risk is up at The Sentinel Effect.

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Contagious disease are spread (generally) when one person comes in contact with another. Thus, the number of links in a network (the number of connections one has) will go a long way to determining how fast diseases are spread.

One question which needs to be answered is whether a hub-and-spoke network or a more diffused network will spread diseases faster. On the one hand, if the hub gets infected, it is very likely that everyone else gets infected in the hub and spoke diagram. On the other hand, if the hub does not get infected, then a more diffused network likely will spread diseases more quickly.

A paper by Jackson and Rogers (2007) uses the concept of stochastic dominance to demonstrate which types of networks spread diseases the quickest. Today, I will summarize their model.

Model

All nodes (think of a node as a person) in a network can either be infected (have the disease) or susceptible (do not have the disease and are not immune). We will ignore immunity in this model. The probability a node is infected is: ν(diθi + x) where ν ∈ (0,1) describes the infection rate. The variable di represents the degree (number of connections) that node i has, θi ∈ [0,1] is the fraction of i‘s neighbors who are infected and x is a non-negative scalar representing the rate at which infection sprouts up independent of social connections.

An individual recovers from a disease with probability δ.

Now we want to characterize how diseases spread through different social networks. Let P(d) be the probability a randomly chosen node has d connections (degree d). If ρ(d) equal the average infection rate among nodes with degree d, then the average infection rate can be calculated as:

  • θ=(Σdρ(d)P(d)d)/(ΣdP(d)d)

The variable θ is the average neighbor infection rate. We can estimate the change in the infection rate over time for nodes of degree d with the following equation:

  • ∂ρ(d)/∂t=[1-ρ(d)] ν(θd+x) – ρ(d)δ

The first part of the fraction shows how quickly susceptible nodes (i.e.; 1-ρ(d)) are infected and the second part show how quickly infected nodes (i.e., ρ(d)) are cured. In steady state [i.e., ∂ρ(d)/∂t=0], we have that the average infection rate is:

  • θ=m-1Σd[(ν(θd2+xd)P(d)/δ]/[1+ν(θd +x)/δ]]
  • m = ΣdP(d)d

Network Comparisons

Let us now define networks according to the concept of stochastic dominance. Network P’ has first order stochastic dominance over P if Σ(d=0 to Y) P’(d) ≤ Σ(d=0 to Y) P(d) ∀ Y, with Σ(d=0 to Y)P’(d) < Σ(d=0 to Y) P(d) for some Y. This means that network P’ has a higher fraction of nodes with lots of connections compared to network P. Jackson and Rogers prove the following:

  1. If P’ strictly first order stochastically dominates P, then the steady state θ’ > θ and the steady state ρ’ > ρ.
  2. If P’ is a strict mean-preserving spread of P, then θ’ > θ.

Theory (1) implies that if a network has more connections, it will have a higher steady state average neighbor infection rate (θ), and a higher overall average infection rate (ρ). This makes perfect sense.

One the other hand, theory (2) shows what happens as we move towards a hub and spoke system (i.e., a mean-preserving spread in P). A mean preserving spread means the average number of connections between nodes stays the same, but there are more likely to be nodes with very few connection or very many connection. Thus, a hub and spoke system will have a higher neighborly infection rate, but this does not mean that the average infection rate will be higher.

The authors expound on theory (2) in more detail below:

The change in infection rate due to a change in the degree distribution comes from countervailing sources, as more extreme distributions have relatively more very high degree nodes and very low degree nodes. Very high degree nodes have high infection rates and serve as conduits for infection, thus putting upward pressure on average infection. Very low degree nodes have fewer neighbors to become infected by and thus have relatively low infection rates. Which of these two forces is the more important one depends on the ratio λ=ν/δ, i.e., the effective spreading rate. For low λ, the first effect is the more important one, as nodes recover relatively rapidly, and so there must be nodes with many neighbors in order keep the infection from dying out. In contrast, when λ is high, then nodes become infected more quickly than they recover. Here the more important effect is the second one, as most nodes tend to have high infection rates, and so how many neighbors a given node has is more important than how well those neighbors are connected.

Conclusion

For fast spreading disease where people recover slowly, a diffuse network increases the average infection rate. For slow spread diseases, or diseases where people recover relatively quickly, a hub-and-spoke system increases the average infection rate.

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What is the typical salary of an Economist just after they finish graduate school? This question is of particular interest to me personally, since I am going on the job market this year.

Below are some of the results from the Survey of the Labor Market for New Ph.D. Hires in Economics, from the University of Arkansas School of Business. The data are from new hires in 2006.

Institution Type
PhD Top 30 (PhD) Bachelors/Masters All
Mean Actual Offer $85,565 $95,193 $65,316 $76,649
Mean Expected Offer $84,070 $92,750 $65,520 $74,845
Actual Less Expected $1,495 $2,443 -$204 $1,804
Percent Difference 1.8% 2.6% -0.3% 2.4%

The AEA Paper and Proceeding from also has data on new assistant professors salaries for economists as well.

Institution Type Salary Add’l compensation Teaching Load/yr
PhD $86,078 $30,007 3.3 courses
M.A. $70,026 $10,208 4.6 courses
B.A. $60,087 $13,293 5.6 courses

Additional compensation includes guaranteed summer compensation and signing bonus. It does not include fringe benefits.

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The Boston Globe reports that some of Massachusetts largest insurers are beginning to cover medical visits made at retail clinics at CVS and Walgreens drug stores.  Blue Cross/Blue Shield of Minnesota is waiving copays for visits to retail clinics.  The American Association of Family Physicians (AAFP) is not happy about this.

Carpe Diem says the AAFP’s resistance to accept retail clinics can be understood follows: “The family doc cartel is worried about increased competition.”

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As an academic researcher, using the web has made my life significantly easier.  I can access millions of articles from academic journals in the click of a button.  Sites such as JStor and ScienceDirect have hundreds of journals located in the same place for easy use.  With so much more information online, I am able to access information in the “long tail” of the academic knowledge spectrum.

In an article titled “Digital Libraries,” The Economist magazine, however, reports that “as more journals become available online, fewer articles are being cited in the reference lists of the research papers published within them.”  The findings are from a study by James Evans, a sociologist at the University of Chicago.

“…for every additional year of back-issues of a journal available online, the average age of the articles cited from that journal fell by a month. He also found a fall, once a journal was online, in the number of papers in it that got any citations at all.”

This phenomenon is likely due to the advent of search engines.  Search engines often rank academic article by either the date published or the number of citations the article has received.  Whereas a manual library search in the old days treated each article as near equals regardless of its publication date and number of citations, electronic searchers are more likely to come across the best most popular work.

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The latest edition of the Health Wonk Review is up at David Williams’ Health Business Blog.

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For researchers interested in studying the Medicare prescription drug benefit, CMS has claims data for Medicare Part D.  Academy Health also has a useful powerpoint presentation giving some more information regarding Medicare Part D and what information is available as part of the CMS Medicare Part D claims data.

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