The latest edition of the Cavalcade of Risk is up at Healthcare Manumission.
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Tags: CoR
A Health Economics paper by Timothy K. M. Beatty finds that “households who make more frequent, smaller food purchases buy healthier foods than households who make fewer, larger purchases. These households are more likely to purchase foods with a lower share of total calories from fats, saturated fats and a larger share of calories from fruits and vegetables.”
However, I am not exactly sure what this proves. If you want to eat healthy food (fruits and vegetables), you need to shop more frequently since these “healthy” foods tend to spoil more easily than fatty, non-perishable foods (frozen burritos). Further, invidiuduals who live in denser, urban environoments likely 1) live closer to grocery stores and 2) have a social network that values healthy eating. Beatty even admits that “The exact causal relationship between dietary quality and expenditure dispersion is ambiguous.”
It seems more sensible that the desire to eat healthy foods determines shopping habits rather than the converse.
- Timothy K. M. Beatty (2008) “Expenditure dispersion and dietary quality: evidence from Canada” Health Economics, Volume 17, Issue 9 (p 1001-1014)
According to the U.S. Census:
- Both the percentage and number of people without health insurance decreased in 2007. The percentage without health insurance was 15.3 percent in 2007, down from 15.8 percent in 2006, and the number of uninsured was 45.7 million, down from 47.0 million.
- The percentage of people covered by private health insurance was 67.5 percent, down from 67.9 percent in 2006.
- The percentage of people covered by government health insurance programs increased to 27.8 percent in 2007, from 27.0 percent in 2006.
See also a USA Today story concerning these Census numbers on health insurance as well as income and poverty.
- U.S. Census (2008) “Income, Poverty & Health Insurance Coverage in the United States, 2007” p60-235.
Tags: Uninsurance rate
Merrill Goozner writes about MDR-TB in Russia in a four-part feature article in Scientific American.
Tags: Contagious Disease, Russia
The New York Times writes that its “Better to Be Fat and Fit Than Skinny and Unfit.”
Tags: Add new tag, Obesity
Many experimental economists have been interested in measuring the level of risk aversion as well as the determinants of risk aversion. These studies often take place in a controlled, laboratory setting and designing an experiment which will elicit responses which are true to life is essential.
In “Risk Aversion in the Laboratory,” Harrison and Rutström review some of the techniques used to elicit risk aversion preferences. We will review 5 of these techniques: multiple price list (MPL), random lottery pairs (RLP), ordered lottery selection (OLS), Becker-DeGrot-Marschak (BDM) and trade-off (TO).
- Multiple price list (MPL). In this type of lottery, subjects are given a list of binary lottery choices to make all at once. The most famous example of MPL is the Holt and Laury (2002) study. MPL is probably the most widely used method to elicit risk preferences, but do suffer from the problem of framing. In the Holt & Laury study, subjects may have tended to choose a switching point in the middle of lottery list even if their actions in the real world would not have reflected this choice.
- Random lottery pairs (RLP). Under RLP, subjects face binary lottery choices in a sequence and must choose the preferred lottery. Hey and Orme (1994) used this methodology to test expected utility predictions. The experimenters’ elicited the subjects preferences over 100 pairs of lotteries, where the outcome values were fixed (£0, £10, £20, £30) but the probabilities for each outcome changed among the 100 lottery pairs.
- Ordered lottery selection (OLS). In this methodology, the subject chooses one lottery from an ordered set. For instance, Barr (2003) allowed villagers in Zimbabwe to choose from the following 50/50 lotteries: (100; 100); (90, 190); (80, 240); (60, 300); (20, 380); (0, 400). The OLS structure can help to answer questions about risk preferences, but since all lotteries are 50-50, they can not answer questions regarding higher order risk preferences (e.g., prudence, temperance). Further, this method does not allow for the analysis of any Kahneman and Tversky-style probability weighting.
- Becker-DeGrot-Marschak (BDM). In the words of Blavatsky & Köhler (2007), “Under the BDM procedure, individuals are asked to state their minimum selling price for a risky lottery. The experimenter then draws a random number between the lowest and the highest outcome of the lottery. If the price that the individual states is lower than or equal to the drawn number, she receives the drawn number as her payoff. Otherwise she has to play the risky lottery.” The benefit of BDM is that if preferences satisfy the independence axiom, then the bid will be the individuals exact certainty equivalent. However, it assumes that individuals do not make errors and understand the fairly complex nature of the game.
- Trade-off (TO). The trade off design gives subjects choices over lotteries and these lotteries are endogenously defined in real-time by prior responses of the same subject. This can lead to a more precise measure of the certainty equivalent, but does the lotteries played will vary by subject.
With any of these experiments it is important to pay real money for the subjects answers. Otherwise, many of the results will suffer from hypothetical bias (see Camerer and Hogarth, 1999).
- Cox and Harrison (2008), “Risk Aversion in the Laboratory,” Risk Aversion in Experiments, Research in Experimental Economics, volume 12.
Tags: Experimental, Risk Aversion
Recently, the San Diego Union Tribune reported that the Sharp Grossmont Hospital in eastern San Diego county was cited for a number of preventable deaths. Reporter Cherl Clark found numerous problems, which included:
“staff members restraining a highly medicated, 25-year-old man with schizophrenia in such a way that he was allowed to suffocate. In addition, hospital workers caused the death of an 83-year-old woman who had undergone a hysterectomy by injecting a dangerous anti-narcotic into her bloodstream. Other problems included nurses who did not know or use proper CPR, an unsanitary operating-room mattress held together by tape and glue, unsafe storage and handling of food and kitchen equipment, and use of critical medications such as heparin that had expired up to a year earlier.”
CMS is threatening Sharp Grossmont that it could lose all federal money (i.e., Medicare and Medicaid). Since 50% of Sharp Grossmont’s business comes from Medicare and Medicaid patient, this would be a disaster for the hospital. What should we do with underpreforming hospitals?
In regular markets, when a product has lower quality, people stop buying that product and switch to another one. For instance, if GM stops making high quality cars, people switch to Toyota. The market compels companies to offer a desirable bundle of quality and price or else they will lose business. Because markets are so effective at maintaining high quality, withholding Medicare and Medicaid payments from Sharp Grossmont makes sense, right?
Maybe not in this case. First of all, some hospitals may not be in a competitive market. While urban hospitals must compete with other, nearby hospitals, Sharp Grossmont is supposed to provide medical care for the entire Grossmont Healthcare District, which covers 750 square miles in San Diego’s more suburban and rural East County. This area has more than 652,000 residents and Sharp Grossmont has the busiest emergency department in San Diego County. By reducing funding, individuals who have emergencies will receive even worse care than before.
This is similar to the no child life behind program. Low preforming schools lose money. But these are exactly the schools that need more money to survive. If students had the freedom to switch schools, then penalizing a failing school would make perfect sense since the students could opt for higher quality schools. The failure of low quality schools would not be a problem if students had other schools available for them to choose to attend. If individuals do not have any choice of which school they attend, however, withholding funding from schools or hospitals can make low quality schools worse.
Will Sharp Grossmont be decertified? The CMS threat to withhold funding is likely just a bluff.
“Among the 450 hospitals in [CMS certification officer Steven] Chickering’s jurisdiction of Hawaii, California, Nevada and Arizona, 10 to 12 a year have as many major lapses, he said. Ninety-nine percent of those facilities resolve their crises and keep their federal payments, Chickering said.”
The federal government knows that removing funding from the only emergency room in a 750 square mile area is not politically feasible. Although individuals may not have much choice of a hospital in an emergency situation, in non-emergency situations patients can decide to drive longer distances to visit physicians at more competent hospitals. If CMS payments are proportional to patient volume, then Sharp Grossmont may take a financial hit due to this lower patient volume without having the hospital decertified.
Decertification is likely not the answer, but having such serious quality lapses reflects poorly on the state of health care in San Diego, and in the U.S. in general.
- Additional information on Sharp Grossmont’s predicament can be found at KPBS’s the Editors Roundtable.
Tags: Certification, CMS, hospital, Medicaid, Medicare, Quality
The most inspirational television advertisement of the Olympics (and a longer YouTube video).
Tags: Olympics
Justin Wolfers writes in the Freakonomics blog that economists should limit their objections during academic seminars to a list of comments to make discussions of research papers more efficient. Here are some of my favorite:
- Adam Smith said that.
- Unfortunately, there is an identification problem which is not dealt with adequately in the paper.
- The residuals are clearly non-normal, and the specification of the model is incorrect.
- Have you tried two-stage least squares?
- The conclusions change if you introduce uncertainty.
- I proved the main results in a paper published years ago.
- The market cannot, of course, deal satisfactorily with that externality.
- But what if transaction costs are not zero?
- What empirical finding would contradict your theory?
- What happens when you extend the analysis to the later (or earlier) period?
- That is alright in theory, but it doesn’t work out in practice.
- The problem cannot be dealt with by partial equilibrium methods; it requires a general equilibrium formulation.
- Is there a weak instruments problem?
- The conclusion rests on the assumption of fixed tastes, but (of course) tastes have surely changed.
- The trouble with the present situation is that the property rights have not been fully assigned.
- How did you handle endogeneity problem?
This list is likely only entertaining for academic economics. Wolfers wonders if the economics fields ability to characterize objections to research paper with such a list may suggest “…a methodological narrowness to neoclassical economics. But equally, it is the clarity of the framework that gives economic analysis its power.”
Tags: Academics, Economics, Economics - General, Seminars
Book Review: Management Lessons from Mayo Clinic
August 29, 2008 in Books, Hospitals, Supply of Medical Services | 2 comments
I recently finished reading Management Lessons from Mayo Clinic by Leonard Berry and Kent Seltman. The book provides a glimpse inside one of the most successful health care organizations. While the book illuminates how Mayo Clinic has solved many of its operational issues and how it has built its reputation, the book is overwhelmingly positive. This should not be surprising since Kent Seltman was the director of marketing at Mayo Clinic from 1992 to 2006.
Thus, I would recommend this book for healthcare management professionals as long as it is read with the knowledge that the book is not an unbiased analysis of the Mayo Clinic but more of a chronicle of the Mayo Clinic’s successes.
Some of the highlights from the book are:
Berry, Leonard L; Seltman, Kent D. (2008) “Management Lessons from Mayo Clinic: Inside one of the world’s most admired service organizations,” McGraw-Hill, 256 pages.
Tags: Books, Mayo Clinic