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Thursday, July 31, 2014

Miscellany: 7/31/14

Quote of the Day
People are always blaming their circumstances for what they are. 
I don't believe in circumstances. 
The people who get on in this world are the people 
who get up and look for the circumstances they want, and, 
if they can't find them, make them.
George Bernard Shaw

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Guest Post Comment

Why is Voices of Liberty promoting an article presenting a polemical self-congratulatory study of Statist healthcare "solutions"?

Here is a main exhibit for this piece:
Via Commonwealth Fund
Now debunking the Commonwealth Fund report comprehensively is beyond the scope of this post. But as a researcher, I'm immediately wary of cross-international comparisons and the nature of the underlying metrics, especially subjective/self-report measures; also, a measure often reflects and/or masks the developer's perspective, weightings, etc. I have not whiteboxed the Fund's methodology, but, for example, I would focus particularly incidents involving major medical incidents/conditions: suppose, for example, someone has a painful condition disrupting other activities like work or has been diagnosed with cancer. How soon is a person able to see a specialist, undergo a relevant operation/repair? Does the patient have access to the latest, greatest pharmaceutical drugs? What about access to the newest innovations in products and services, the quality of medical training, the existence of world-class medical facilities (e.g., the Mayo Clinic)? What about the cost/quality tradeoff? I suspect that America would rank very highly on a number of innovation, quality and accessibility measures, whereas not unlike Paul Krugman picks and chooses economic datapoints reflecting his perspective, the Commonwealth Fund picks and weighs its preferred practices accordingly.

Let me just point out a couple of related posts which raised relevant points about the Commonwealth Fund. This is from an AEI discussion of cross-country comparisons:
 The primary source of comparison data on health outcomes is the Organisation for Economic Co-operation and Development’s (OECD) health system performance data and reports. This information is used to support broad criticisms of the US health care system and to compare it unfavorably with others, particularly the state-operated or state-controlled systems of Europe. Illustrations of such critiques include assessments by Washington Post columnist Richard Cohen and the Commonwealth Fund.
The OECD uses infant mortality, life expectancy, and premature death as measures of mortality in their report. One major concern is that the basic definitions of infant mortality are not consistent across countries...The combination of higher delivery costs because of greater NICU use and the unique way the United States counts live births could lead one to erroneously conclude that the United States is highly inefficient compared to other industrialized nations. Teenage mothers are more likely to have preterm, low-birth-weight babies.  The US rate of births for teenage mothers is very high—2.8 times that of Canada and 7.0 times that of Sweden and Japan... The OECD uses LE at birth [vs. higher age levels]... Premature mortality, which is determined by potential years of life lost (PYLL), is a useful measure if appropriately calculated, though it is also strongly influenced by infant mortality.In the OECD report, the maximum age at which to establish PYLL is seventy. Thus, the costs and success (or lack of success) of a health care system in extending life and the quality of life beyond age seventy are not reflected. 
I leave it to the reader to read the rest of the report. But note that there are cultural factors that factor in statistics which may not be factored for in findings. Take, for instance, the high rate of illegitimate births, roughly 40% in the US. Related infant mortality is NOT a reflection so much on healthcare available to unwed mothers as much as, say, the proportion of higher-risk pregnancies.  In addition, the US has a higher percentage of auto fatalities and homicides; these factors, once again, are extrinsic to healthcare delivery. Unless the Commonwealth Fund explicitly controls for extrinsic factors statistically, its comparisons are methodologically dubious at best.

Second, Kristian Niemietz for the Institute of Economics Affairs published a useful short critique of the Commonwealth Fund report; the author noted that a British publication was hyping results showing the UK rated top. A relevant excerpt:
The Guardian article refers to a study by the Commonwealth Fund (CF), which attempts to measure and rank the performance of healthcare systems in 11 developed countries, according to a range of criteria. What is unusual about the study is that it is mostly based on inputs and procedures, not outcomes. There is nothing wrong with that. The problem with health outcomes is that it is notoriously difficult to work out to what extent they are really attributable to the health system, and to what extent they are attributable to lifestyle, environmental or socioeconomic factors. Firstly, the study is built on a very specific idea of how healthcare ought to be delivered, and compares healthcare procedures as reported by doctors and patients to that benchmark. Secondly, some questions are designed to favour a single-payer, free-at-the-point-of-use system over systems that make greater use of insurance mechanisms or patient co-payments. Thirdly, and this may be a minor point, the CF study does not attempt to control for social desirability bias, which can be a problem when sentiments towards healthcare systems differ vastly across countries. Finally, while it is inevitable that the study design reflects value judgments, some judgments are more subjective than others. 
Third, here is a piece from the Adam Smith Institue (see blogroll). With respect to the hyped British national healthcare system, the opening paragraph from the executive summary says it all:
It is a common belief that tax funding is the only way to guarantee good healthcare for  all. And yet statistics show that, after 50 years of just such a policy, our National HealthService (NHS) actually delivers for UK citizens one of the poorest-quality health systems in the developed world. Like other tax-funded industries of the postwar era, it is  burdened by bureaucracy, politicisation, low wages, a lack of customer responsiveness,low rates of innovation, queuing, and mis-directed resources.
One of the most interesting soundbites from this piece is even though private healthcare in the UK has to compete against "free" public healthcare, many people still choose to pay for it. Why bypass the world's "best" healthcare one has already paid for with one's own taxes?
 It is hard for any private-sector provider to compete against an alternative that comes in at zero cost to the user. And yet it is an indictment of the NHS that despite the fact that the government alternative is “free”,many people still go private: indeed, private spending on healthcare is now over 15% of government spending.
Facebook Corner

(IPI). Should Chicago gas stations be forced to carry fuel with higher ethanol content? Several Chicago aldermen think so.
Earlier this week, the Chicago City Council’s Finance Committee considered an ordinance that would mandate all gas stations in the city to carry E15, a fuel consisting of 15% ethanol.
If consumers really wanted a product, government wouldn’t have to force them to buy it or businesses to sell it.
When even the high priest of environmental alarmism, Al Gore, admits ethanol policy has been a failure, these paternalistic ideologues continue their day-late, dollar-short agenda.

(IPI). Instead of reducing premiums by an average of $2,500 per family as promised, ObamaCare has increased what families have to pay for coverage.
And the trend is only going to get worse.
(I'm not republishing a lengthy, detailed thread between a "progressive" ObamaCare troll and IPI where the troll is accusing IPI of publishing bad statistics. I don't have the time or patience to debunk some rambling discourse by some Statist conspiracy theorist.)
What I'm hearing is a bunch of predictable crappy "progressive" excuses. What is incontrovertible is that "progressives" promised that further federal meddling in a sector already inflation-bound with nearly half of funding via redistributed dollars, dysfunctional policies which essentially don't vest the policyholder with "skin in the game", which confuse ordinary expenses with legitimate risk-sharing, which mandate non-major medical benefits, etc. would "bend the cost curve". This is absolute hubris, bullshit.

 I'm put off by this troll's whiny excuses that you can't blame Obama because this fetid piece of one party's legislative sausage making wasn't his ideal is knowingly crap. Obama didn't introduce his plan in either chamber because it would have been rejected, a major political defeat. So he, leading from behind as usual, cheered partisan proposals from the sidelines and waited for whatever the Senate Dems could cobble together. If he didn't like it, he could have vetoed it. And coming up with shabby legalistic sophist excuses like "he didn't promise $2500--he said up to $2500" doesn't convince anyone. The Dem rhetoric was always "if we eliminated profits and administrative costs, we can bring down costs." Tell me, did the government micromanage the high tech sector? PC costs have dropped steeply, even on a nominal vs real basis, over the past 3 decades precisely because it operated in a less regulated, more market-oriented system. In fact, economically-illiterate government policies like price-fixing provider charges, other regulatory mandates (e.g., reporting) do not save a penny in health costs but impose a heavy cost on providers and ultimately other healthcare consumers, and every study I've seen shows that newly insured patients dramatically increase usage of healthcare goods and services without a commensurate improvement in health outcomes. Redistribution of costs is little more than a shell game gimmick; you make overpriced insurance because of dysfunctional government policies below cost to some people at the expense of other people. Unlike this pretentious troll, even Econ 101 students know that you can increase demand for a good or service by cutting its price below cost, i.e., the new parasitic insured, but it's not a sustainable business model. This only works if you can impose their costs on other people, and the government is imposing these costs through unconstitutional mandates, at the point of a gun. That's exactly what IPI is pointing out; other people are finding out they are picking up more than their true risk-based costs. This isn't a question of whose numbers you use: it's an economic fact of life

 The status quo is unsustainable, particularly in a rapid aging population, where age correlates with cost. The only TRUE reform in healthcare would be to PRIVATIZE it. Reform the medical occupation cartels; eliminate anti-competitive state barriers to entry; enable cross-state pooling of risks and allow self-insuring of entities; allow universal marketing of bare-bones major medical plans; eliminate tax deductions for healthcare dollars, particularly for non-major medical expenses; eliminate barriers to innovation in the sector, including critical path FDA approvals for new meds; expedite immigration paths for healthcare professionals; devolve federal healthcare expenditures; rollback special-interest mandates, etc. I'm not claiming this list is comprehensive, but it's a good start. An unfettered free market, not fascist medicine, is the goal.

Political Cartoon
Courtesy of Dana Summers and US News
Musical Interlude: My Favorite Vocalists

Billy Joel, "You May Be Right"

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