Unbiased Analysis of Today's Healthcare Issues

Quotation of the Day

Written By: Jason Shafrin - Jul• 20•15

The human mind is generally far more eater to praise and dispraise than to describe and define.  It wants to make every distinction of value; hence those fatal critics who can never point out the differing quality of two poets without putting them in an order of preference as if they were candidates for a prize.

C.S. Lewis, The Four Loves.

Half a trillion dollars

Written By: Jason Shafrin - Jul• 19•15

Clearly, the care family members provide for sick relatives add significant value to the life of the infirm. Many non-economists may consider the cost of this care as “free” because family members typically are not paid for this services.  However, nothing could be further from the truth.  If family members were not caring for their elderly relatives, the cost to care for elderly patients would be increased nursing home admissions and additional home health visits.  Further, adults often must give up on their own careers to help out with their elderly parents.

Thus, it is not surprising that a recent AARP study found that the cost of caregiving is high.  What may be surprising is just how high it is. According to the Valuing the Invaluable: 2015 Update report:

In 2013, about 40 million family caregivers in the United States provided an estimated 37 billion hours of care to an adult with limitations in daily activities. The estimated economic value of their unpaid contributions was approximately $470 billion in 2013, up from an estimated $450 billion in 2009.

Adults who care for elderly parents often do not get the credit they deserve.  Thus study shows not only does caregiving provide valuable intangible benefits to the infirm, but it also generates significant monetary value as well.


Written By: Jason Shafrin - Jul• 16•15

Health Wonk Review is up

Written By: Jason Shafrin - Jul• 16•15

The “Hot Summer Nights, Cool Summer Drinks” edition of the Health Wonk Review is up at InsureBlog.  Hosted by the always-insightful Hank Stern, it filled with useful insights from the world of health policy.

Choice in the Health Insurance Exchanges

Written By: Jason Shafrin - Jul• 15•15

I have posted frequently on the ACA and narrow networks (here and here). How narrow are the networks plans available in the health insurance exchanges? How does provider choice differ between standard commercial insurance plans and those in the exchanges? A study by Avalere finds:

…exchange plan networks include 42 percent fewer oncology and cardiology specialists; 32 percent fewer mental health and primary care providers; and 24 percent fewer hospitals. Importantly, care provided by out-of-network providers does not count toward the out-of-pocket limits put in place by the ACA.


Choice is always a good thing. However, does less choice reduce cost? Likely yes. Does less choice decrease quality? It depends on which providers are included in the network, but the answer is also likely yes. The question is whether any quality decreases are offset by lower premiums through lower reimbursement to these narrower networks of providers. Are patients better or worse off in exchanges? Additional research is needed.

Cholera and Haiti

Written By: Jason Shafrin - Jul• 14•15

Cholera has been a huge problem for Haiti. The excellent investigative journalist and author Rose George reports:

Five years on, cholera has killed nearly 9,000 Haitians. More than 730,000 people have been infected. It is the worst outbreak of the disease, globally, in modern history.

In 2014, Cholera was on the verge of being eradicated from Haiti:

After the dreadful death tolls of 2010–12, disease spread and fatality were being cut by nearly half each year. There were 352,033 cases and 2,927 deaths in 2011, compared to 27,659 cases and 295 deaths in 2014 (although the number of cases in 2013 in Haiti was still more than the rest of the world’s put together).

“In 2014 we were close to eliminating cholera. We were really close,” says Gregory Bulit, the emergency manager for UNICEF.

Later that year, however, cholera is back in full force. There were over 5,000 cases in October 2014 alone. Cholera can be easily treated with rehydration and IVs. So why hasn’t it been eradicated? In short, a lack of sanitation.

…[Haiti’s] sanitation is described as “practically non-existent”. Port-au-Prince has only one operational waste treatment centre for a city of two to three million people. People who do have latrines have them emptied manually by an underclass of bayakou (men who jump, often naked, into the pits and shovel out their contents). Hardly any of that shit is disposed of at the treatment plant; instead, it ends up anywhere the bayakou can put it. It’s the same ‘anywhere’ where the majority of Haitians without latrines go to do their open defecation. It’s the anywhere where cholera thrives.

Although there are more glamorous places to donate your money, getting sanitation for those who need is one of the best ways to improve health in developing countries.

What is they key driver of cancer care spending?

Written By: Jason Shafrin - Jul• 13•15

High-cost cancer drugs often get bad press. Cancer treatment certainly is expensive. However, drug costs are not the primary driver of high cost of cancer treatment; hospitalizations are. Using data from SEER-Medicare, Brooks et al. (2014) examine regional variation in the cost of cancer care and find:

Acute hospital care was the largest component of spending and the chief driver of regional spending variation, accounting for 48 percent of spending and 67 percent of variation. In contrast, chemotherapy accounted for 16 percent of spending and 10 percent of variation. Hospice care constituted 5 percent of spending.

Thus, providing high-value cancer care may not involve reduced spending on high-value drugs, but rather higher quality treatment that can (hopefully) keep patients with cancer out of the hospital.

“Affordable” Care Act

Written By: Jason Shafrin - Jul• 13•15

Is the Affordable Care Act making health insurance more affordable?  Generally, the answer is yes.  More individuals are insured due to Medicaid coverage expansions in some but not all states and the implementation of health insurance exchanges.  However, there is one worrying trend in affordability: increasing patient cost sharing. A paper by Hempstead et al. (2015), find the following:

Primary payments—those made by insurance carriers—to office-based physicians rose moderately between 2013 and 2014. Payments declined for orthopedics and surgery while increasing for primary care and obstetrics-gynecology. Patients’ payment obligations rose for all specialties, and deductibles were the largest category of increased patient spending

The trend towards higher deductibles may be a good thing in the presence of moral hazard where a large share of health care services are of little or negative value. However, higher deductibles also means that low-income patients may not be receiving the care they need. Thus, the net effect of higher deductibles on social welfare is not entirely clear. Additional research is needed on this topic.

End of week links

Written By: Jason Shafrin - Jul• 09•15

The case for and against prescription painkillers

Written By: Jason Shafrin - Jul• 07•15

Oftentimes, prescription pain killers are demonized. Opponents of painkiller are likely to cite statistics like this:

The annual number of opioid painkiller prescriptions is now at more than 200 million. In hand with that, overdose deaths have shot up from over 4,000 in 1999 to more than 16,000 in 2013, according to data provided by the Centers for Disease Control and Prevention.

However, painkillers do have a key benefit; they decrease patient pain. About 100 million US patients suffer from chronic pain. And patients are asking for these painkillers. According to Vox:

“[My patients] are not saying, ‘Hey, can you take away all my pain? I can’t handle any pain,'” [Sean] Mackey said. “For the most part, what they want is control of their lives back. They want to be able to get back to doing the things they were doing that they can no longer do because pain has robbed them of that.”

How much do you value individual freedom of choice compared to paternalistic policies to help avoid addiction? Your answer to that question likely will determine where you fall in the painkiller debate.