Archive for the ‘Health Economics’ Category

on the Republican replacement for Obamacare

Friday, July 21st, 2017

Sherry Glied, dean of New York University’s Robert F. Wagner graduate school of public service, said: “I have been doing US health policy for 25 years. This is the greatest, craziest nonsense I have ever seen. This is crazy.”

Barney Jopson, “The steps Donald Trump can take to let Obamacare fail“, Financial Times, 22 July 2017 (gated paywall).

US healthcare reform is on life support

Wednesday, July 12th, 2017

Why is it so difficult for the Republicans to replace Obamacare? Edward Luce reasons that Obamacare is very conservative, and there are no viable conservative alternatives available. During the campaign, I recall that Donald Trump promised to replace Obamacare with a single-payer system, like Medicare in Canada, or the National Health Service in Scotland, but I haven’t heard any support from him for this option since taking office. For that matter, Medicare, Medicaid and the Veterans Administration in the USA are single-payer programmes, so I don’t understand why a single-payer option is anathema to Republicans.

The dilemma is that Republican lawmakers can only agree on the first half of their vow to “repeal and replace” Obamacare. The difficulty with the “replace” portion is that there are no viable conservative healthcare options available. Obamacare itself was a conservative reform. Its key tenets were based on a plan drawn up in the 1990s by the conservative Heritage Foundation as an alternative to the more dirigiste “Hillarycare” — the failed reform effort championed by Hillary Clinton, then first lady. The Heritage Plan then became “Romneycare”, which was enacted in 2006 by Mitt Romney, the then Massachusetts governor.

Obamacare is based on the same principle that individuals buy healthcare policies from private insurance companies on market-based exchanges. It would be hard to come up with something more free market than that.

Edward Luce, “Republican ‘kamikaze’ healthcare plan on life support“, Financial Times, 11 July 2017 (gated paywall).

HIV/AIDS in South Africa

Monday, July 10th, 2017

Despite massive expenditure, South Africa has been unable to control its HIV epidemic.

Ten years ago, [with more than 11 per cent of the population infected by HIV,] South Africa unveiled a long-term plan to tackle its HIV problem. ….

Today HIV prevalence is about 12 per cent, partly reflecting the fact that those with the disease are living longer thanks to better treatment. ….

[But the plan is in trouble.] Even as it aims to reduce a persistently high level of new HIV infections to 100,000 a year by 2022, from 270,000 last year, many civil society groups say that South Africa is falling behind the latest thinking on HIV prevention …. ….

With just over half of the HIV-infected population of 7m taking ARVs [antiretrovirals], South Africa already runs the largest such programme in the world. ….

Clinicians speak of an urgent need to break a “cycle of HIV transmission” from older men to younger women by focusing on the prevention of infection. They estimate hundreds of new cases appear every day and, of the 270,000 people infected last year, 100,000 were young women and girls. ….

[The programme] has come under fire from activists for failing to press the government to follow a World Health Organization recommendation by decriminalising sex workers, which is one of the highest-risk groups. This move would make it easier for them to have access to anti-HIV drugs and stop police taking condoms away from them.

Joseph Cotterill, “South Africa reaches a make-or-break point over HIV“, Financial Times, 6 July 2017 (gated paywall).

deaths of despair in the USA

Sunday, June 11th, 2017

After a century of decreases, the overall death rate for American adults aged 25-44 years rose 8.2 percent between 2010 and 2015. The disturbing trend seems to have continued in 2016.

The opioid epidemic that has ravaged life expectancy among economically stressed white Americans is taking a rising toll among blacks, Hispanics and Native Americans, driving up the overall rate of death among Americans in the prime of their lives.

Since the beginning of this decade, death rates have risen among people between the ages of 25 and 44 in virtually every racial and ethnic group and almost all states, according to a Washington Post analysis. ….

The [death] rate is adjusted for the nation’s changing age profile, and every five-year age group [25-29, 30-34, etc.] … showed an increase in mortality.

Preliminary data from the first half of 2016 suggests that the trend is continuing ….

One clear distinction remains: education level. The only 25-44 group whose death rate is not climbing is people with four-year college degrees. ….

The jump in death rates has been driven in large measure by drug overdoses and alcohol abuse ….

Joel Achenbach and Dan Keating, “Drug crisis is pushing up death rates for almost all groups of Americans“, Washington Post, 9 June 2017.

See also this earlier TdJ blog.

the high price of pills for cancer

Monday, May 1st, 2017

The Financial Times has a must-read column in today’s paper on the pricing of drugs for treatment of cancer. The article is gated, but those who register without charge are allowed to download three FT articles each month. This article is long, and very informative. It might be a good use of one of your free downloads this month. (more…)

the long lives of South Koreans

Saturday, April 22nd, 2017

I somehow missed this interesting column from Bryan Harris, chief of the FT’s Seoul bureau. Asia is amazing. The continent is changing rapidly, and not just in China. (more…)

the US epidemic of “deaths of despair”

Thursday, March 30th, 2017

The 23 March 2017 Brookings paper, “Mortality and morbidity in the 21st century”, authored by Princeton Professors Anne Case and Angus Deaton, has attracted considerable attention from bloggers. Much of the reaction has been negative, very critical of the study.

Case and Deaton found that the US is experiencing an epidemic of  “deaths of despair”, concentrated in middle-aged White, non-Hispanic persons with high school education or less.

Noah Smith, a PhD Candidate in Economics at the University of Michigan (and journalist at Boomberg News), writes that the Case-Deaton finding holds up well against their critics. I agree.

[I]t’s rapidly becoming conventional-wisdom in some circles that the Case-Deaton result is bunk – one person even called the paper a “bogus report” and criticized me for “falling for” it.

But most of the critics have overstated their case pretty severely here. The Case-Deaton result is not bunk – it’s a real and striking finding.

Noah Smith, “The blogs vs. Case-Deaton“, Noahpinion, 29 March 2017.

Click on the ungated link above for details.

charts of the day

Thursday, March 23rd, 2017

The US is experiencing an epidemic of high mortality, concentrated in middle-aged White, non-Hispanic persons with high school education or less. This is self-inflicted harm, and is frightening. It is Trump’s political base, and conditions are deteriorating quickly.

https://www.brookings.edu/wp-content/uploads/2017/03/bpea_20170323_case_deaton_fig1_5share.png

https://www.brookings.edu/wp-content/uploads/2017/03/bpea_20170323_case_deaton_fig1_11share.png

For further information, see Alison Burke, “Working class white Americans are now dying in middle age at faster rates than minority groups“, Brookings Institution, 23 March 2017.

Case and Deaton’s full paper can be downloaded here.

America’s accidental healthcare system

Sunday, March 19th, 2017

The USA has a very inefficient healthcare system that is also the most expensive in the world. About two-thirds of the population receive health insurance as employer-based benefits. Benefits are not taxable, and came into being as a way to attract workers when wages were frozen during the second world war.

FT columnist Rana Foroohar has written an excellent column that explains why the system works so poorly and why neither Obamacare, nor the Republicans’ proposed replacement, can mend it.

America has a healthcare market that is not anywhere close to what Adam Smith would have considered functional. It has almost no price transparency (you don’t get a bill until weeks or months after you’ve made treatment choices), is controlled by vested interests (doctors, pharmaceutical and insurance companies) who exert monopoly power against the businesses and consumers they are supposed to service, and is highly fragmented and inefficient.

All this contributes to the fact that the economic implications of rising health costs on not just individuals, but American business itself, have been poorly understood. In the 1950s, healthcare made up only 7 per cent of total worker compensation; today, it’s 20 per cent. Given that, it is no surprise that as healthcare costs in the US have gone up, wages have stagnated.

Rana Foroohar, “Employers can help fix American healthcare“, Financial Times, 20 March 2017 (metered paywall).

Turkish-American journalist Rana Foroohar (born 1970) is the FT Global Business Columnist.

Ms Foroohar calls on employers to ‘help fix’ the broken healthcare system. She ignores the single-payer solution because it “is still an ideological leap too far for US business.” But Medicare for the elderly, and Medicaid for the poor, exist. These (despite opt-out provisions) are single-payer systems that cost less than employer-based insurance plans. Reform of US healthcare can be done with a simple reduction of the age of eligibility for Medicare from 65 years to zero. Employer-based benefits could continue for benefits not covered by Medicare, such as private or semi-private hospital rooms. Importantly, they could also be taxed as part of employee remuneration.

repealing and replacing Obamacare

Saturday, February 25th, 2017

A draft bill to repeal and replace Obamacare has been leaked to the press. According to “The Hill”:

The bill would eliminate subsidies for people to obtain coverage, and federal funds for states to expand Medicaid would be phased out in 2020. The mandate for people to buy insurance would also be killed.

Peter Sullivan, “Leaked ObamaCare bill outlines GOP plan“, The Hill, 24 February 2017.

That’s the “repeal” part. According to “The Hill”, here is the gist of the replace part:

The plan calls for a tax credit, which would increase based on a person’s age, to help recipients afford insurance. The credit would be between $2,000 and $4,000. ….

In contrast to ObamaCare, the credits are not based on income, which Democrats argue means not enough help is given to low-income people to be able to afford coverage. Republicans say income-based credits discourage work.

The tax credits are per year, not per month, and they are flat, increasing only with age. (Note also, that tax credits are useless to the unemployed, or the very poor, who have little or no income tax to pay.) As an alternative to the individual mandate, the plan allows insurance companies to charge applicants an additional 30% on premiums if they wait until they are sick to sign up. (more…)