Map of life expectancy at birth from Global Education Project.

Wednesday, February 22, 2017

Kenneth Arrow, 1921-2017


The death of economist Kenneth Arrow offers an opportunity for me to revisit a subject of great importance, that I have discussed here before. It is perhaps more urgent than ever as the congress prepares to deprive millions of people of health care. You can read an important paper of his here if you like, from 1963, but I will state the case more accessibly, I hope, and also put it in larger context.

A constant refrain of conservatives is that the Free Market® is the best solution to resource allocation. Interfering in the Free Market® is tantamount to depriving individuals of their freedom. The Free Market® is conceived of as a force of nature, existing independent of society and suffering only damage from political interference.

Of course, this theology is invoked only hypocritically. When capitalists want government to do something for them, they forget about it completely for as long as it is convenient.  The conventional wisdom among economists and moderately sane politicians is that "market failures" do exist, such that intervention is occasionally called for; but these are abnormal and require special justification.

This is all completely bullshit. In the first place, there is no such thing as a Free Market®, never has been, and never can be. Markets are social constructions. In modern, complex societies, they require continuous, pervasive government activity in order to function at all. All markets are structured and regulated, the question is not whether this happens, but on whose behalf?

Let us consider the theoretical conditions necessary for the functioning of a Free Market®, and consider whether medical care can conceivably be allocated through such a mechanism. (Note that the Free Market® always fails, for all good and services, and I can prove it. But it's more obvious in the case of medical services so I'll stick to the knitting for now.)

We'll begin with demand. People have a largely predictable need for typical commodities such as food and clothing, and a desire for some other goods such as entertainment that they will satisfy as their means allow. However, we have no idea what medical services we may need tomorrow or next year, and we rarely desire them at all. The need for medical services is an unpredictable misfortune. Furthermore, it is entirely possible that the cost of what is necessary will entirely exceed our means, while our more fortunate neighbor has negligible medical expenses. The only solution is some form of insurance -- a mechanism for pooling risk.

However, for profit insurance companies have an unavoidable incentive not to accept customers who are at high risk, and to try to avoid paying claims if they can get away with it. So in order for health insurance markets to function at all, they must be regulated.

At the same time, to the extent we have to rely on the monetary contributions individuals are willing and able to make to risk pools voluntarily, medical services will be underfunded and underproduced. There are several reasons for this. One should be obvious: transmissible diseases threaten everyone. Disease prevention and treatment benefits everyone beyond the cost for the individual. Furthermore, sick people can't work or take care of dependents to the extent healthy people can, if at all, and having sick friends and relatives, or even seeing strangers suffer, makes at least some of us sad.

Furthermore, as consumers, we are not only involuntary but incompetent. We depend on physicians' expertise to decide what to purchase, or to have purchased on our behalf by our insurer. While the current fashion is to involve patients in decision making, our capacity for that involvement is limited. We still need providers to explain our options accurately, in a way that we can understand and is relevant to us. But they're making more money by some choices than by others. So it matters how these incentives are structured.

There is a good deal more I could say about this, but the unavoidable conclusion is that we need a universal risk pool, regulated medical practice with some constraints on spending, and that people pay no more than they can afford to participate. Universal, comprehensive, single payer national health care accomplishes this. And it makes us all more free. 


Thursday, February 16, 2017

Fiscal responsibility. Also, Freedom.


One of the most popular methods for not stayin' alive in the U.S. is the motor vehicle crash. You may have heard about the sharp reversal of the long-term trend in traffic deaths over he past two years.

This cuts against improvements in the safety features of vehicles and the design of highways, which had helped bring down the fatality rate over decades. We don't have the hard core evidence to explain the reversal, but experts offer a few suggestions. Yes, we have more ways to be distracted by our gadgets. However, sayeth the Sage of 41st St.:

Government officials and safety advocates contend, however, that more than anything else, the increase in deaths has been caused by more lenient enforcement of seatbelt, drunken driving and speeding regulations by authorities and a reluctance by lawmakers to pass more restrictive measures.
In Alabama, crashes are up only 5% but fatalities are up 25%. That's because more people are speeding -- obviously the faster you're going the more  deadly your crash will be. Continuous budget cuts have reduced the number of state troopers -- now there are only 2 on duty at times in entire counties. Texas has raised its highways speed limits to 85. Seat belt laws are unenforced, where they are in place in meaningful form at all. Other approaches to improving safety, such as traffic monitoring cameras and ignition interlocks for people convicted of DUI, are also contrary to Ayn Rand.

Libertarian claims about traffic safety legislation are obviously nonsensical because you aren't necessarily just killing yourself. But even if you were, crashes, deadly or otherwise, cost the rest of us money. They block traffic, they cause lifelong disability with enormous cost, they destroy property, they deprive children of parents and I could go on and on.

Driving is not a right, and any freedom to drive is constrained by the freedom of the rest of us not to be endangered by you. It is a privilege in return for which you owe it to the rest of us to be responsible. And that must be encoded in the law, and the law must be enforced.

I will just mention that I witnessed a crash on Rte. 6 in Johnston, RI a few weeks ago in which two teenagers were killed, and it could have been a lot worse. A bystander car was also struck, and driven into a gas pump, which exploded. Fortunately, the driver was inside paying. So yeah, I've been thinking about it.


Monday, February 13, 2017

Simple Arithmetic


Making affordable health care available for people with low incomes costs money. It has to come from somewhere. The Affordable Care Act is financed by taxes. The Republican congress wants to eliminate those taxes, because they fall mostly on wealthy people. (There are some additional levies on insurance and pharmaceutical companies that pay for parts of the act that are really side issues.) But they also know they will pay a political price for eliminating health insurance for millions of people, and specifically for sick people who really need it.

There is no way to square this circle. But most citizens don't understand this basic fact. Many of them don't even know that Obamacare and the Affordable Care Act are the same thing. And:

[O]nly 61 percent of adults knew that many people would lose coverage through Medicaid or subsidies for private health insurance if the A.C.A. were repealed and no replacement enacted. In contrast, approximately one in six Americans, or 16 percent, said that “coverage through Medicaid and subsidies that help people buy private health insurance would not be affected” by repeal, and 23 percent did not know.

It's no wonder that no legislation has moved yet in the Congress. There is no alternative to the ACA that won't kick millions of people off of the insurance roles, make insurance worse for most other people, and won't require taxes. Therefore the Republicans will never be able to do what they have promised to do.

What will they do instead?

Tuesday, February 07, 2017

Global impact

Sorry for the absence. Frankly, I've felt that writing about quotidian subjects is somehow futile or beside the point. Truth and logic no longer matter in the making of policy. But, I suppose life must go on.

We Americans are often too self-obsessed and don't bother to know or understand much about the rest of the world. On the other hand, the U.S. does matter, a lot. Reading the new BMJ (British Medical Journal) illustrates the point. It's as much about the U.S. as it is about Britain.

For example, there's Travel ban threatens medical research and access to care in the US, medical groups warn. This tells the story of a resident physician at the Cleveland Clinic who was refused re-entry because she holds a Sudanese passport.

Nitin S Damle, president of the American College of Physicians, said that foreign physicians and medical students working in the US have to be “thoroughly vetted” to obtain their visas. The order was “discrimination based on religion” and should be rescinded, he said. “If the executive order is not permanently rescinded, blocked by the courts, or reversed by Congress, it will hinder the free exchange of information and travel among doctors around the world,” he said.

The president and chief executive of the Association of American Medical Colleges, Darrel C Kirch, said that international graduates played an essential role in US healthcare, accounting for 25% of the workforce, and that the ability of the US to attract top talent to its medical centers had helped make it a global leader in medical research. “Because disease knows no geographic boundaries, it is essential to ensure that we continue to foster, rather than impede, scientific cooperation with physicians and researchers of all nationalities, as we strive to keep our country healthy,” he said.
Then there's this, on the proposed of a bilateral trade deal between the U.S. and Britain which the "president' is pushing to facilitate the breakup of the E.U. Doesn't sound like a bad thing, right? Well, it's a bit complicated, but it could be very bad for Britain, given the highly unequal negotiating power between two economies of such disparate size. Read if you want to get a little more sophisticated about trade.

Then there's the global gag rule. Republican presidents always forbid U.S. funding of agencies abroad that make referrals for abortion or even discuss it with patients. But the "president" has gone beyond George W. Bush's version to extend it to all U.S. departments and agencies, not just AID, including the CDC, NIH and FDA.

The administrative burdens of implementing this rule, on both US agencies and aid recipients, could be very large. Such rules are likely to prevent the US from effectively tackling a problem like the Zika virus.

The consequences of this action can be expected to be widespread and contrary to the stated intent of the rule. If the goal of this policy is to reduce the number of abortions worldwide, then it will fail. Countries exposed to the gag rule show a rise in abortion rates when the rule is in effect and a reduction when it is not.2 Policies that curtail investments into comprehensive family planning programmes reduce the outreach of these programmes to the rural areas where the majority of people in sub-Saharan Africa live.

By limiting women’s access to modern contraception, the rate of unwanted pregnancies rises. In this situation women will often turn to abortion.
Reducing access to abortion and contraception results in shorter birth intervals, which negatively impact the health of women and their children and result in higher levels of child malnutrition.3 Rather than improving the health of women and children in the world’s poorest countries, the global gag order increases maternal and child morbidity and mortality.
In short, making policy based on ignorance and prejudice is usually not a good idea.