Unbiased Analysis of Today's Healthcare Issues

Free Heroin?

Written By: Jason Shafrin - Feb• 24•14

Giving away heroin may sound like a good plan for a start-up drug dealer.; get new customers hooked and them make money off their addiction.  Drug dealers aren’t the only ones considering giving heroin away for free; so are some European governments.

The Economist reports:

Over the past two decades many have come to favour tackling heroin abuse through “harm reduction” policies, rather than tougher policing. Many governments have decriminalised personal use and provided free therapy programmes, using drugs such as methadone and buprenorphine that block heroin’s high. Two other proven ways to reduce harm, however, are more politically controversial: setting up safe sites where users can inject while monitored by health-care staff, and—for registered addicts who cannot or will not comply with treatment regimes—providing heroin itself free.

Switzerland and the Netherlands pioneered “Heroin Assisted Treatment” (HAT) approach and Britain, Canada, Germany and Spain have run trials of HAT.

Is this a good policy? This basically depends on two factors. The first factor is whether giving away heroin for free improves health and/or reduces costs among the current addicts. Giving away heroin can reduce heroin-related crime and also reduce medical cost from HIV infections through unclean needles. If these gains outweigh the gains, then the program could potentially be worthwhile.

A second factor to consider is how giving away heroin for free affects the likelihood non-addicts become addicts. Giving away heroin for free reduces the price of heroin and makes a heroin habit less costly. Further, it could de-stigmatize the use of heroin and increase the likelihood individuals sample the drug. Thus, giving away heroin for free could increase the number of addicts and actually be detrimental to society.

Although I doubt this policy will come to the U.S. the near future, recent developments–including the decriminalization of marijuana by Colorado and the death of Philip Seymour Hoffman–could shift the balance of public opinion.

Friday Links

Written By: Jason Shafrin - Feb• 21•14

Health Care Quotations of the Day

Written By: Jason Shafrin - Feb• 19•14

“If people let the government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as the souls who live under tyranny.”
― Thomas Jefferson

“America’s health care system is neither healthy, caring, nor a system.”
― Walter Cronkite


CoR is up

Written By: Jason Shafrin - Feb• 19•14

Jeff Rose hosts this week’s round-up of risk-related posts. From insurance riders to self-funding, data breaches and tobacco sales, there’s sure to be something to pique your interest in the latest edition of the Cavalcade of Risk at Life Insurance by Jeff.

PhARMA’s reputation

Written By: Jason Shafrin - Feb• 19•14

The pharma industry’s reputation is getting worse. Pharmafile reports that “35.4% said that multinational pharma companies had either an ‘excellent’ or ‘good’ reputation in 2013. While this is about the same result as in 2012, it is well below 2011 when 41% of respondents gave that answer.”

Below are the 2013 reputation rankings for different healthcare industries.

  1. Retail pharmacists, 61.9% (had either an ‘excellent’ or ‘good’ reputation)
  2. Medical-device companies, 54.9%
  3. Healthcare services (private sector), 51.1%
  4. Health insurers (not-for-profit), 42.8%
  5. Generic drug manufacturers, 41.5%
  6. Biotechnology companies, 40.6%
  7. Multinational pharma companies, 35.4%
  8. Health insurers (for-profit), 26.7 per cent.

Although patients view pharmaceutical companies negatively, they view for-profit health insurers as having the worst reputation.

30-day readmission rates

Written By: Jason Shafrin - Feb• 17•14

AHRQ has put together a nice infographic, which I show below.


Does putting health care report cards online matter?

Written By: Jason Shafrin - Feb• 16•14

Pennsylvania, through the Pennsylvania Health Care Cost Containment Council (PHC4), has been a pioneer in developing performance grades on Coronary Artery Bypass Craft Surgery for health care providers and posting them online.  Although PHC4 has published Pennsylvania’s Guide to Coronary Artery Bypass Graft Surgery since the early 1990s, these documents were paper documents and potentially difficult to access.  In 1998, the CABG report cards first appeared online.

One paper by Chou et al. (2014) looks at whether the publication of the CABG report cards improved outcomes and whether the effect was larger in more competitive markets. The authors use data from PHC4′s inpatient database linked to information from the AHA’s Annual Survey of Hospitals.  The authors measure competition using the CABG HHI for each zipcode.
The authors find that “after the report cards went online, hospitals in more competitive markets used more resources per patient, and achieved lower mortality among more severely ill patients.”  Specifically, costs increased by 9.5% in the most competitive markets, but the mortality rate fell by 0.6 to 0.7 percentage points.

Friday Links

Written By: Jason Shafrin - Feb• 14•14


“Be Mine” Edition of Health Wonk Review

Written By: Jason Shafrin - Feb• 13•14

Who loves you, baby?

Steve Anderson does – he’s posted a great Valentine’s day themed Health Wonk Review at the HealthInsurance.org Blog.

Coming to a town near you?

Written By: Jason Shafrin - Feb• 12•14



Many people living outside the U.S., may find it odd that U.S. pharmacies–stores that provide products that are supposed to improve health–sell tobacco as well.  However, this practice may go the way of the dinosaur.  According to the New York Times, CVS Caremark, the country’s largest drugstore chain in overall sales, announced on Wednesday that it planned to stop selling cigarettes and other tobacco products by October.

The chief executive of CVS Larry J. Merlo, said “We came to the decision that cigarettes and providing health care just don’t go together in the same setting.”  In other words, they decided that they can make more money selling health care products than tobacco products.  

How will this effect smoking rates? My guess is that it will have little effect on smoking rates.  Removing CVS as a option to purchase cigarettes decreases the convenience factor for smokers.  Thus, in partial equilibrium, smoking should decrease.  However, suppliers will respond to this new equilibrium.  We could see new stores selling only tobacco pop-up to replace pharmacies.  Alternatively, regular smokers may already be turning to purchasing their cigarettes online.  Thus, in the general equilibrium, the decrease  in convenience factor is likely short-lived.

CVS’s decision may not have a large direct effect on smoking rates, but is part of a larger trend in the U.S. towards decreased prevalence of smoking.