Latest Blog Posts & Articles
Biologic drugs are a big deal for the pharmaceutical industry right now. Blockbuster chemicals for common conditions like diabetes and hypertension are largely things of the past. We’re getting pretty good at controlling those conditions, and few people expect a slew of major scientific breakthroughs that will lead to many more multibillion dollar treatments for these conditions. So the pharmaceutical industry has turned to what are known as “biologics” – treatments manufactured from cultures of living cells, rather than from chemistry labs like most pharmaceuticals in the past.
Biologics are typically more complicated and expensive to produce than traditional pharmaceutical interventions. For some healthcare conditions, the impact of biologics has been significant enough to warrant high prices. Here, in fact, are the top-selling biological products in the United States circa 2011…(To read the rest of the article and view comments, please visit Forbes.)
High costs make it hard for many patients to afford their medications. That’s why some medical experts believe we should give important medications to patients for free, to see if that improves their health outcomes. One famous example of this approach is the MI FREEE Trial, which offered free cardiovascular medication to patients who would experience heart attacks. The trial increased the percent of patients taking their heart medicines, medicines known to reduce the likelihood of subsequent heart attacks. In the case of minority patients, these free medicines significantly improved their long term health. (Visit Forbes to read more and view comments.)
When the health insurance exchanges began operating last year, critics complained that people were being forced out of their insurance plans. They correctly pointed out that Obama was mistaken to promise that “if you like your healthcare plan, you will be able to keep your plan.” Obama’s promise was wrong not because the Affordable Care Act (aka Obamacare) ripped irreplaceable insurance plans from people. He was wrong because he failed to recognize that the way the insurance industry works in the U.S., people regularly lose their plans.
A study in Health Affairs by Benjamin Sommers (from the Harvard School of Public Health) explored what happened to a nationally representative population of non-elderly people who – ahem, prior to the ACA – purchased insurance without the help of an employer or union. His analysis shows tremendous turnover in health insurance coverage. (Please visit Forbes to read the full article and view comments.)
One of my favorite reporters, Dan Gorenstein from NPR’s Marketplace, interviewed me and a few other people recently, to discuss challenges of trying to pay physicians, reward them essentially, for providing high-quality care. It turns out to be a much more complicated topic than you might think at first glance. Thought you might enjoy the show:
I have done some research on political partisanship, as well as some writing. I think political dysfunction in this country threatens our future. So it was nice to read this opening paragraph, in a relatively recent and wonderfully written article in Time magazine:
Here’s a rainy-season parable about cooperation in American politics: In July 2012, Republicans and Democrats came together during a bitter campaign season to enact sweeping reforms to the National Flood Insurance Program, phasing out subsidies for hundreds of thousands of property owners in flood-prone areas, dragging a debt-ridden program toward fiscal and ecological sustainability. The reforms attracted a genuine bipartisan coalition with groups like the Heritage Foundation on the right and the Nature Conservancy on the left joining forces with Realtors, bankers and insurers. The simple notion that insurance rates should reflect risk was so compelling that the usually polarized House passed the reforms by a 406-to-22 vote. “Everyone was like, Wow,” says David Conrad, a consultant for the Association of State Floodplain Managers. “We had been talking about reform for 15 years, and rationality finally caught up to Congress.”
Then the article continued with the following much shorter paragraph:
It was a rare moment of unity, and in March 2014, the two parties came together for another festival of bipartisanship. This time, they gutted the reforms they had passed less than two years before.
Check out the magazine article, if you want to find out why this all happened. But the article showed me that our political problems run much deeper than partisanship. Even when Congress agrees on something, it often responds to special interests that don’t have the broader interests of the American public in mind. Very disturbing!
Not long ago, the Joint Commission (a healthcare quality organization) established that patients with pneumonia should receive antibiotics within four hours of diagnosis. Timely diagnosis and treatment can be the difference between life and death in patients with this illness. In fact, some people believe this kind of quality measure should play a large role in how we pay for medical care. After all, doctors should not be paid solely on the basis of how much care they provide, but also based on the quality of that care. All else equal, a physician who treats pneumonia efficiently should be rewarded more handsomely than one who takes a fortnight to make a diagnosis.
Only one problem with this seemingly sensible view. Experts believe this four-hours-to-treat requirement leads to an over diagnosis of pneumonia and, consequently, to an overuse of antibiotics.
Consider another life-threatening illness – sepsis, a syndrome of widespread inflammation and, at its most extreme, multi-organ failure caused by infection. Sepsis typically requires not only high power antibiotics but also intensive care from multiple specialists. A recent article in the New England Journal of Medicine suggests we may be experiencing an over diagnosis of this syndrome, because hospitals often receive higher reimbursement for patients with sepsis than for ones with milder infections. In other words, it pays not to miss sepsis diagnoses. (Visit Forbes to read more and leave comments.)
A recent study published in the Annals of Internal Medicine showed that that old advice – to avoid fat and cholesterol in your diet lest you become a fat person with high cholesterol – is wrong. Instead, it is carbohydrates we should be more wary of. Consider their picture, comparing people with low-carb versus low-fat diets. The low-carb diet wins, hands down:
Now don’t think this study gives us all license to gorge on cheeseburgers to our heart’s content. Instead, just make sure you don’t fill yourself up with carbs thinking its helping you, by curbing your desire for fat.
Carbs are the enemy!
Recently, I wrote about relative wealth and happiness. A new NBER paper, by Stevenson and Wolfers, seems to belie this view. It shows a sharp increase in happiness with increasing income:
But these data are consistent with the idea that relative wealth plays an important role in happiness. Americans are much wealthier now than they were, say, before World War II. But there has not been a commensurate increase in happiness. But at any point in time, wealthy people are happier, on average, than less wealthy ones. Relativity still matters.
According to many traditional economic theories of human nature, higher income should make people happier. That’s because with every additional dollar we make, we can purchase goods that increase our “utility.” Or we can save more money, and reduce anxiety about our financial future.
But of course, once people have enough money to meet the basic necessities, the relationship between additional money and additional happiness gets more complicated. For instance, for many people with high incomes, how happy they are with their earnings depends on the size of their earnings compared to their peers.
Consider a banker who wrote an op-ed in the New York Times a while ago, complaining about his income:
“In my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough.”
The problem of course isn’t the size of the bonus, but the size of his best friend’s bonus, or the size of the bonus he got the previous year.
Traditional economics still provides us with wonderful tools to understand human behavior. We just have to remember to reach into our toolbox for other insights into human nature, to better grasp how people think, decide and behave.
Take a look at the image below and decide what you are seeing:
Some of you might have seen a “B.” Others might have seen the number 13. The image, after all, is ambiguous. For that reason, in fact, it was used by researchers to study how our hopes influence our perceptions.
The study design was straightforward. One group of participants was told that each time a number flashed up on the screen, they would get to drink a tasty beverage whereas when a letter appeared, they would be forced to drink a noxious health-food smoothie. (I am guessing kale was involved!) The researches then showed people this image for only 400 milliseconds and these folks thought they saw the number 13. In another group of participants, the researchers reversed punishment and reward, with letters now leading to tasty beverages. In that setting, most people viewing this image saw the letter “B.”
Are you worried that people are lying? (Please visit Forbes to read the article in full.)