Higher speed limits

Today, I received my copy of The Nation's Health, a newspaper put out by the American Public Health Association.  In one section of the "paper", articles from the American Journal of Public Health are highlighted.  A recent article focused on the changes in speed limits that date back to 1995.  In that year, the federal regulations that had kept urban speed limits at 55 MPH and rural  speed limits at 65 MPH were lifted and states were allowed to set their own rates.  There are some states with rural area speed limits that are now 70 or 75 MPH.

Why is this of interest and why was it studied?  The article in The Nation's Health suggests that 12,500 deaths and 36,600 injuries were associated with the higher speed limits.  The deaths alone have been assigned a dollar value of $12 billion.  That translates into just under $1 million per death.

This brings us to the economic questions of the day.

• What is a life worth? 
• What does accepting $12 billion in lost life for faster speeds mean about our society.  

The value of life is often estimated at more than $1 million.  So, it is interesting that the researchers used such a conservative figure.  This is based in part on lifetime earnings and in part on estimates of how society has made tradeoffs between money and life in the past.  Interestingly, while the estimates are often over $1 million, the range of estimates is wide.

As for the second question, to the degree that we understand the $12 billion loss and agree that that is a reasonable valuation of lives lost, it means that we accept this in order to gain something from getting  where we need to go more quickly.  The study did not present an estimate of the value of getting places more quickly.  It is not clear that most people understand what $12 billion means or think that their own behavior will affect this.  The assumption is that society feels that the value of faster transportation outweighs the $12 billion loss (as well as the higher gasoline consumption associated with higher speeds).  It is quite possible that this is a rational choice at a societal level--even though for each family with a member who dies as a result of faster speeds it is an awful experience.

The researchers or the original article stated that "policy decisions that appear harmless can have long-term repercussions" and recommended reducing speed limits again.  I am not convinced that this policy was expected to be harmless in the first place or that society as a whole is not willing to accept the tradeoffs.  We cannot reduce the risk to zero.  We must decide what risk at what cost in return for what convenience is appropriate.

More on H1N1

The economics of H1N1 and influenza in general have been things that I have commented on multiple times.  Today on the Marc Steiner show, I heard a physician/vaccination researcher being interviewed who made a really good comment.  The H1N1 infection does seem to be any worse for complications than the general flu--in other words of every 10000 people who are infected the same number will have cases that are bad enough to land them in the hospital and/or die.  The key is that more people are getting the flu (the guest described the "attack rate"  as four times higher) because no one under age 50 has been exposed to anything like this version of the flu virus before.

How does this relate to economics?  Well, consider someone who had not gotten an influenza vaccination in past years.  If this person recognizes that hospital beds are likely to be more crowded with H1N1 cases, the person might be more likely to get a seasonal influenza vaccination.  In addition, an otherwise healthy young to early middle age adult might reach the conclusion that the risk of H1N1 is sufficiently high to warrant getting a vaccination even though he or she had not in the past.  Again, this is the overall risk of complications and death which is made up of the two parts and the one part (getting influenza) has changed considerably.

In summary, a lot more people will probably get flu shots this year.  Even me.  Is it because of public health officials' exhortations?  Perhaps in part.  But it is also a simple economic reaction to a change in risks.    

Kids' reactions to medications

In today's Washington Post, there is an article about kids reactions to medications.  The article's headline is "bad drug reactions".  I have chosen to use the term medications to emphasize that we are talking about legal prescriptions rather than "drugs" in the sense of illegal drugs. 

The article describes a professional manuscript published in the journal Pediatrics that indicates:

• "It's [the results are] based on national statistics on patients' visits to clinics and emergency rooms between 1995 and 2005. The number of children treated for bad drug reactions each year was mostly stable during that time, averaging 585,922"

What does this mean? It may mean that physicians and pharmacists don't communicate well with parents. It may mean that parents don't implement well drug administration, regardless of what has been communicated to them. It is not meant to say that the pharmaceutical companies purposefully put dangerous products on the market. It is worth thinking about the economics.


Why is there not better communication? It may be a matter of time and what the physicians and pharmacists are paid for (and ARE NOT paid for).

Why do parents not administer better? It may be a matter of rushed time, also an economic issue.

As 5% of the children needed hospitalizations, this represents over 25,000 hospitalizations per year that result from giving things to try to keep our kids healthy. Given that this is 25,000 out of millions of children, the chance that this will happen to any one child is small. However, it is worth thinking about how much could be spent on better research, better incentives for communication, and better incentives for parents to understand the communication and monitor their children closely when they are given medications. Even at only $4000 per admission for a two day admission, avoiding just the hospitalized cases could save $100 million. This is a drop in the bucket in terms of overall health care spending, but may be well worth the investment to help our children avoid the side effects of trying to keep them healthy.

Incentives for better food

Today's New York Times contains an article about incentives for full service supermarkets in neighborhoods characterized by little fresh produce, high rates of obesity, and accompanying high rates of chronic disease.  The solution--new zoning laws and tax incentives.  Will it work?  Maybe.

Why don't consumers eat healthy foods?  Price is one reason.  Time required to get the healthy foods is another.  If the supermarkets that locate in the targeted neighborhoods offer healthy foods (including fresh produce) at a reasonable price this will take care of the two issue mentioned--price and access.  However, I think there are still other things.

Healthier foods often take longer to prepare.  Does the proposed solution solve that problem?  No.

Healthier foods may not be preferred for taste.  Does the proposed solution solve that problem?  No.

Are there ways to solve those problems.  Of course, but that takes more investment by the stores.  They need to spend money to market healthy foods.

So the question of whether this policy will improve health in New York City (and other locales that may try it) comes down to a two part question:

(1) Are the incentives strong enough with existing demand in the neighborhoods  such that the businesses can be profitable if they just set themselves up there with a little help on incentives?

(2) If the answer to #1 is no, is it profitable to locate in new neighborhoods and market healthy foods?  In other words, can the demand for the foods that full service markets carry that corner stores don't be shifted enough with inexpensive marketing efforts to make the stores profitable.

I don't know.  It will be interesting to see how well this works.  Perhaps the stores can work with local community leaders so that the local communities "invest in themselves" and use some of their own effort to encourage community members to purchase and use healthier foods.  In short, I'm a little skeptical of the "build it and they will come" approach to providing only supply side incentives.

Grants from the NIH

It is interesting that as I prepare for the end of a meeting at NIH, the Johns Hopkins Bloomberg School of Public Health newsfeed yesterday highlighted an article on how the NIH has been awarding grants  The key message from this article is that 19 percent of grants awarded were 'not in rank order' assigned by the scientific review committee and that half of the exceptions to the ordering that would be suggested by the scientific review committee were made for "new investigators".

What does this mean?  The NIH has finite funds for research.  These have to be allocated in some way.  Scientists write proposals for research.  Review committees of experts in the field review proposals and assign scores. The scores are not like in school where if you get a 90 or above you have an A.  The scores are all relative.  With grants, it is still the case that a 99 is better than a 98, but the key is how the studies "line up" rather than having an "absolute cutoff" for funding.  So, a 90 or higher would not guarantee funding.  Some years you'd need a 92--other years an 88.  It depends on the budget the NIH has, the budget for each grant, and the number of grants submitted.

The public policy question is whether all grants should be awarded based on their rank order, assuming that rank order implies how meritorious the proposals are, or whether there should be room for exceptions.  Then, if there is room for exceptions, should there be rules for making those exceptions?

There are few rules for the exceptions at the moment, other than the notion that the grants should still represent good science.  The question is whether the scores that are given really tell us anything about the science.  Having served on a scientific review committee, I can say that the scores are only partly about the science.  They also reflect the quality of the research team and that is inherently subjective.  A new investigator could "work the system" by making sure that he or she knows likely reviewers and knows those within NIH to be considered more favorably.  In some ways that is just human nature on the part of the reviewers and decision makers within NIH.  The question is whether human nature or something more objective should guide resource allocation.  Even if we'd desire something "more objective" it is not clear how we'd arrange that.

Questioning assumptions

The hotel at which I am staying for a 1 1/2 day NIH meeting provided either USA Today or the Wall Street Journal as a complementary paper. I chose the WSJ. Probably no surprise there. So, today I had the opportunity to see not only the news feed from the Johns Hopkins Bloomberg School of Public Health, but all the articles in the paper. One caught my attention (as I am a "winter baby"): "New Light on the Plight of Winter Babies" by Justin Lahart.

What is the issue here? Past studies have consistently found that, on average, babies born in January have lower educational attainment and earnings than babies born in other months. This puzzled economists for a while. Almost two decades ago, a pair of economists put forward the hypothesis that because of when it is legal for kids to drop out of school, being born early in the year made it possible to drop out at an earlier grade. As a result, the average January baby would earn less, although many January babies do not drop out. Other economists have suggested other reasons, but the best known is the early drop out presumption.

The reason that this blog entry is titled "questioning assumptions" is that the assumption throughout is that the babies born in different months are otherwise similar. In other words, birth month is relatively random and all mothers are just as likely to have a baby in any month. A recent working paper has suggested that the mothers of babies born in different months are quite different. Each year, mothers of children born in January were less likely to be married, more likely to be teenagers, and had a lower average level of education. In contrast, mothers of babies born in May had the opposite characteristics. What this suggests is that the babies (or at least the families of the babies who may have a large role in determining educational attainment) are not all the same. As a result, we can't say whether the effect of month is actually a time effect or is an effect of family background.

I imagine that economists will debate for some time how important this alternative explanation is, but the fact is that a basic assumption driving the old analysis is now questioned.  Economists will also have to explain why there are differences in mothers associated with the month of their child's birth.

How could this be applied to analyses in health care? There are two examples I thin of immediately:

(1) Not all babies who are breastfed have mothers who are the same. Thus, any findings about the effects of breastfeeding are shaped by the differences in the babies' families.

(2) Not all infants are expected to be as healthy by their mothers when they are fetuses. The expected health of the baby may affect the mother's choice of when to initiate prenatal care and how much to get.

The key is that when we are not using a randomized study design, we have to carefully consider all our assumptions. Sometimes we have no way of assessing the validity of our assumptions. However, when we are given an opportunity to do so, we should take it and reassess conclusions as necessary. That way we can make more informed (and hopefully better) policy.

Unintended Consequences

I think I have mentioned before that one of my graduate school mentors (Richard Hirth who is now a full professor at the University of Michigan) sometimes  referred to health economics as the study of unintended consequences.  On so many occasions in the history of health economics in the United States, a policy was made without fully anticipating how stakeholders in the health care system would respond to the change.  After a policy changed, people changed behavior in ways that were not expected and more research was needed to understand what went wrong.

On Friday of last week, I commented on the idea of taxing generous health insurance plans.  I want to spend a little more time on that topic.  There was a New York Times article published yesterday on the issues around the idea of taxing generous health insurance plans.  Since this information is out there, if the bill passes as is (unlikely) we will not be able to say we were unaware of the consequences.  They may even be fully intended.  The key is that they are not unknown or unanticipated and that is usually part of how we would define unintended consequences.

Since employer-provided health insurance plans receive favorable tax treatment, one way of thinking of the plan to tax generous insurance policies is that this would simply represent realigning the tax incentives so that the are less favorable and there will be less distortion of the system than there is at this time.

While that is a legitimate economic argument, people are used to having the favorable tax treatment.  What the article points out is that while the plan is labeled as "targeting the most generous plans" it may capture any number of those who consider themselves middle class and who are getting only "good" plans rather than really excellent plans.  There are three reasons:

(1) A "one price fits all" policy across the nation is often a problem.  Some people face higher prices for medical care and live in areas where medical care is practiced more aggressively.  Both of these will result in higher insurance premiums.  An interesting distributional question is whether everyone  should face identical thresholds or whether they should be adjusted for local circumstances.  We do some of each in public policy.

(2) The possibility that the threshold for premiums for policies that will be taxed may not keep up with inflation and, over time, more people will end up paying the tax.  This is similar to the alternative minimum tax that was originally intended to affect only those with high (often non-wage) income.  However, because of a lack of adjusting the threshold for this tax over time, this tax now affects more people.

(3) From the description in the New York Times piece, it appears that anyone with a cafeteria style flexible spending account may have the entire value of their flexible spending account  rather than only their health insurance included in the calculation of whether the premium is high enough for the individual to be taxed.  Robert Hansen was quoted on the second screen of the article.  I had not seen that anywhere else.

In short, while my economic logic may favor making people who spend the most face the true cost of their choices, this type of policy must carefully consider not who is the intended target but who actually ends up paying more as a result of policy change.  This policy would affect a lot more people than I'd considered when commenting on Friday.  That does not change the theory or the rational response.  Just the distributional implications.  And that is a political question.

Why tax the insurers who provide generous health insurance plans?

The bill introduced by Senator Baucus earlier this week suggests placing a tax on the most expensive health insurance plans. The approach is to place a tax on only he most expensive plans. Below a given value per enrollee there is no tax. Above a certain value per enrollee the plans would be taxed. The claim by insurers (and by those with the most generous plans like unions) is that this would be passed on to the enrollees. Does this make sense?

In fact, it does. If all insurers who offer generous plans have to charge the tax, then there is no distinction between insurers offering generous plans. Typically “more insurance” costs more to provide. In this case there would be a distinct break in the supply curve. The demand for some groups would suggest that they would still buy a generous plan that is taxed, but a slightly less generous plan. They’d end up paying more overall and get a less generous plan. There are others, however, whose demand would not be consistent with paying a higher premium for a less generous plan. This group would actually save money compared with their original plan but would have a much less generous plan.


So, would the tax hit enrollees? Yes. Over time, it would not necessarily be the full tax on the original premium. But it would either cost them more for a slightly less generous plan or cost them less but for a substantially less generous plan. It would mostly depend on how response demand is to the premiums that people pay. If it is more responsive, the actual tax from the more generous plans would be small but a lot of people would end up with substantially less generous plans. If it is less responsive, the tax collected would be substantial.

Will the insurers pay for this?  Only to the degree that they lose profits on the most generous plans.  So taxing insurers may really just be a way to make it less obvious to the population who is bearing the tax.

Can it be rational to be uninsured when there is a mandate?

In yesterday's Wall Street Journal, there was an article titled, "Mandated Health Insurance Squeezes Those in the Middle" by Vanessa Fuhrmans. Based on the stories in this article, the response to the question posed in the title of this post is "yes".

Why would it be rational? And, assuming that we agree on the argument that it is rational, what does this suggest about any attempt to mandate coverage through a system that is at least partially private at a national level?

Economists have made the argument for years that it can be rational for some to remain uninsured. Who are these people for whom it is rational? They are relatively healthy, relatively young people who have too high an income to receive assistance yet enough other expenses that the purchase of insurance is unaffordable. Why does it remain rational even when there is a mandate?

The mandate (at least in Massachusetts which is the only state to have the mandate so far and the one featured in the article) is for purchase but does not provide a very inexpensive option. Why not an inexpensive option? Well, without subsidies the policies are expensive in general. If a state has a substantial number of mandates for what has to be covered that pushes up premiums. And in some cases, the deductible prior to when coverage kicks in is so high that it seems like a bad value to pay a substantial premium while getting only very limited coverage. The mandate also provides a financial penalty if the individuals don't buy. It is large, but smaller than the premium by far. And, people will still receive emergency care regardless. This interesting situation means that even with a mandate it makes sense for people not to purchase insurance. In fact, only 2/3 of those who were previously uninsured in Massachusetts have become insured in the three years since the mandate was passed. They still have the lowest rate of uninsurance in the country—but it is not zero.

What does this tell us about attempts to mandate coverage nationally? First, if the system is similar to Massachusetts, there will continue to be a group of middle income individuals and families who simply cannot afford the mandates insurance given other expenses. Perhaps they could shift some expenses, but most policies are hundred of dollars per month. Second, on the way to trying to get this passed—especially now that people have seen what happened in Massachusetts—there is likely to be a lot of political opposition. In this case, it is not necessarily because the opposition doesn't think that everyone should have insurance—although there may be people in that group. Rather, it is because the opposition can't figure out how some people would ever pay for it given other financial constraints. In that case, we need a better solution for subsidizing or bringing down premiums and making care more accessible. For that, there are no easy answers.

Lecturing on health economics

One of the women who acted as a TA in my health economics class for graduate students is teaching her on course on health systems for undergraduates this year.  She had asked me to give a guest lecture in her class, and yesterday was the day for that lecture.  She has asked me to address the "demand for health and health care".  This morning's note is about an interesting point in the demand for health-linking the health economics theory with a philosophy about health itself.

On my way between the Johns Hopkins medical campus and the Johns Hopkins main campus yesterday, I tuned into the Diane Rehm show and heard an interview with Andrew Weil.  Dr. Weil was taking about his book, Why Our Health Matters.  His explanation was interesting and something that I could easily relate to the topic on which I was asked to lecture.

In the course of the interview, Dr. Weil pointed out that most of the institutes within the United States National Institute of Health are named after types of disease (e.g., the National Institute of Allergy and Infectious Disease) or body parts (e.g. the National Eye Institute and the National Heart, Lung, and Blood Institute).  Dr. Weil suggested a National Institute of Health and Healing.  He noted that the human body has an incredible ability to fix itself.  He suggested that one reason to make good health decisions (in terms of eating, behavior, etc.) early in life is that it makes our bodies better able to repair problems later in life.  He suggested that more studies of how that works and how each of us can augment our body's ability to do this would be a subject worthy of further research.

How does this relate to economics?  Michael Grossman (one of the top health economists in the field) wrote a paper more than 30 years ago about how our demand for health comes not just from a desire to enjoy being healthy but also from an investment in our ability to do our tasks more and from an investment in our ability to keep ourselves healthy later in life.  Dr. Weil reflected the last point in a clinical/philosophical way rather than an economic way.  The economist talks about "depreciation of" and "investment in" our health.  Dr. Weil talked about illness and injury and how we can do things to prepare our body to heal itself or speed up the medically-based process.  These two approaches to the issue are essentially the same. 

The students seemed to appreciate my ability to relate the economic theory to something medical and to something I'd just heard.  The woman teaching the course (who attended my guest lecture) noted that she had remembered my stories and pulling in of things from current policy discussion as part of the health economics class I taught last year and how useful it seemed whenever I brought in stories.  I am flattered that she considers this so useful for teaching.  I also find it useful for conference presentations.  When I was in England last week, I began my own presentation by relating it to things that I'd seen earlier during the conference.  As a basic philosophy of teaching, I told my former teaching assistant that it is good to be like a sponge--take in as much information as possible and be able to "wring it out" as necessary to go along with lectures to make them more interesting and more easily understood by the students in the class.

Retailer-based clinics

An article in the Washington Post today discussed an article from the journal called the Annals of Internal Medicine in which the authors evaluated the cost and quality of care for three common acute illnesses at retailer-based clinics. These are clinics at Wal-mart, Target, CVS, and other retailers. What did they find? That at least for these three conditions the costs are lower and the quality is at least as high as at physicians offices. In addition, the costs are much lower than at emergency departments.


So, if we can get good care from these types of providers (who are often nurse practitioners rather than physicians) at a lower cost with short waiting times, should we all skip care from our primary care provider the next time we need care and just go to the local drug store or discount store? Before I answer that question, let me point out that both the Washington Post and the original research report in the Annals of Internal Medicine were careful to point out that only three acute and common conditions were examined. So, we should not generalize this finding to all conditions.

Despite that, I would say that I'd be very comfortable going to a retailer-based provider or other similar provider the next time I need care. For me, the fact that I have not seen a physician in years, the short waiting time, and the fact that most things I am likely to have in the near future are acute conditions helps me to make that decision. My wife's had a recent experience with an internist's office that we'd been to years ago. They could not even find us in their system when she called. That was enough to demonstrate to me that our primary care system can be lacking in some cases.

Do we have any reason to pause? Yes. Obviously, we don't always know in advance whether the presenting condition is a common acute condition or something else. For example, we were almost certain my 13 year old had some type of influenza last week but tests came back completely negative. Fortunately, he recovered. Sometimes, things other than common acute conditions need to be considered. Retailer-based clinics may have a different level of quality in such cases. Also, for a patient who needs frequent care with a lot of follow up, the value of continuity of care has long been discussed. That may not be achieved easily in a retailer-based setting.

So, as usual in this blog, it is a matter of tradeoffs. Today's article in the Washington Post simply suggests that the tradeoff of convenience and cost savings with a loss of continuity may not be such a bad tradeoff. of course, if everyone reaches that conclusion, the shorter waiting times may not always exist. That's a matter for another day's discussion.

Inappropriate antiviral medications for influenza patients

Today, I received the September edition of AHRQ Research Activities. For one of the first times, an article I'd written was mentioned in this monthly publication—that articlewas on the burden experienced by women with dysfunctional uterine bleeding who are ready for surgery, but before they have surgery.

But that is not what I really want to mention today. Instead, I want to mention the piece highlighting an article written by Dr. Jeffrey Linder and colleagues that originally appearing in the Journal of General Internal Medicine. This highlight piece summarizes the article's findings. The authors studied 958 primary care visits with a diagnosis of influenza and found that at 58 percent of these antiviral medication was prescribed. Not so surprising. The key finding, however, was that only 62 percent of the prescriptions were deemed appropriate. Or, 38 percent of the antiviral prescriptions were inappropriate.

Why were they inappropriate? Most often, about 2 of every three inappropriate prescriptions, the person had already had symptoms for more than 2 days. The antiviral medications that are given for influenza are only effective if the symptoms have gone of for less than 2 days before the prescription is given.

Why would this happen--particularly when many people have to pay at least a part of the prescription price themselves so that it would seem logical that people should only want prescriptions when they are expected to be effective? And, more importantly, why would physicians or other primary care providers who should know better give the prescriptions?

First, people often just want to be able to feel as though they are doing something about being sick. Unfortunately, this desire can override the logic of the antivirals being ineffective.

Second, people don't always believe the medical evidence.

Third, providers want to maintain their relationships with patients and may give in if they want to maintain the relationship with a patient who really desires an antiviral.

Fourth, providers may not know better.

For most of these, it would seem like a potentially cost-effective solution would be to provide more education. That should not cost much. We’d hope that proper information should be sufficient to convince patients to spend less of their own money and to convince providers not to use unnecessary resources. Has anyone tried it? That wasn't mentioned in the issue of AHRQ Research Activities, but it would seem like a useful follow-up study.

Meat, weight, and money

A week and a half ago, the Johns Hopkins Bloomberg School of Public Helath news center posted a summary of an article by my colleague Youfa Wang.  Dr. Wang's article was about meat consumption contributing to various measures of obesity. 

The article noted that despite the fact that several diets promote high consumption of protein, this may not lead to weight loss as expected. I'm not a physician or a nutritionist. But I do know a thing or two about human nature. We may never know whether the diets applied as intended could actually decrease weight. It may just be that the diets applied less than perfectly do not work. That could be the subject of future randomized trials comparing people who use the diets (as imperfectly as the general public might) with those who do not.


It is interesting to think about the economics here. First, meats are generally more expensive in the grocery story. Not always, but generally. So, people might be able to save money by eating a diet with less meat.

On top of that, it takes the economy as a whole more money to produce and has the environmental impact associated with both the production of the feed for the animals and the production of the animals. So, the economy as a whole might have resources for things other than food production and environmental clean up if we switched away from some meats.

Am I saying we should all be vegetarians? No. Simply that, as with everything in life, we must consider the tradeoffs related to our decisions very carefully. Dr. Wang's article is just another piece of evidence to add to what we consider when making decisions about our diet.  People (including me) will go on eating meat--and not a small amount of it.  Preferences are a strong determinant of behavior despite all the information that may become available and all the constraints we may face.

Family policy

A Blogspot comment on yesterday's entry suggested that having both parents working outside the home become the norm may have been one of the worst things to become a reality in our society in the past half century.  I agree with the general thought.  I might give a little more nuanced interpretation.  In defense of yesterday's comment, it is far easier for me to comment on someone else's comment than to come up with a new one and I'm just elaborating.

Having both parents working outside the home full-time with schedules that permit very little time for parenting their own children and no allowance for interaction most of the hours of most days is how  I would phrase what is a bad thing for society.  Parenting children when there are two full-time workers provides parents with a limited ability to influence and raise their own children.  Despite this, there are plenty of parents who work full time and who are great parents because they are lucky enough to have very flexible jobs and have made a commitment to parenting.   Key question is how to make options like this available to more parents.

It is interesting to consider why we can't find better ways to make child care available in ways that more parents can still do a bit of parenting during the day even if both parents wanted to work outside the home.  What would be the economic costs of that?  What would be the economic benefits?

Yesterday, I noted that I thought it would be the last entry on the economics of breastfeeding in a while.  However, I think that I can relate this issue to breastfeeding too.  The argument for being able to breastfeed at work and for having children in work-place day care in which mothers could breastfeed children on site, focuses on the value to the child and the value to the mother.  The child will get the best source of nutrition.  The mother and child both get the bonding experiences.  The mother gets other health benefits from breastfeeding.  And the mother will get have some down time during the day that will offer a break and may be better for mental health too.  If we generalize this to the entire parenting experience, then we could think of the following.  Parents would have breaks.  Kids would get some time with their parents.  The parents' would have more chances to share their values with their kids.  The mental health and bonding of all may be improved.

Would it be costly?  Yes--starting work place day care programs to replace the many private and non-work-place-based programs would be expensive.  Allowing parents who don't have very flexible jobs at present more flexibility in their schedules would be costly.

Would the benefits outweigh the costs?  That is an open empirical question.  Should that be the only option available to parents?  No.

Without a mandate (always a problem in American society), it is interesting to consider what would happen. This brings me to a point I raised in response to yesterday's comment on a comment.  Our society is in a situation in which if we all made a similar decision to change (i.e. we all decided to act in ways that reflected a great value on parenting), we might be better off as a society.  However, as long as we do not all make that change together, those who don't change may have more financial resources.  Would those who decide to change then feel like they would have to go back to their present behavior?  Maybe.   That makes it hard to have a change unless we all change.  However, we are unlikely all to change.

A great policy challenge would be to find ways to make parenting as people want to more financially rewarding so that all parents would parent the way they wanted and still have the resources they need for other things.  Not an easy one, but something to think about.

The last post on the economics of breastfeeding for a while

So, I'm sitting at Chicago O'Hare for another post.  In another five hours (wait time, flight time, driving time in Baltimore), I'll be home.  Since leaving the Grange Hotel at 5:40 this morning and waiting at the train station for the 5:59 AM train and then the flight across the Atlantic, I've read half of a book that a fellow conference attendee passed along to me.  The book is entitled "The Politics of Breastfeeding: When Breasts are Bad for Business".  The author is Gabrielle Palmer who gave the one keynote at the conference that I missed.


I have noticed how closely the politics and economics of issues around breastfeeding go together--at least in Ms. Palmer's interpretation. The close link really does not surprise me given the discussion that she and I had after my presentation and throughout the last day of the conference.

Anyone who likes to think about how our nutrition production system arrived at its current state might find this book an interesting read. It is compared (in its publicity) to fast food nation.

I could share many quotes from the book. However, I'll limit myself to one. This is related to the comments the past few days about whether breast milk value belongs as part of the GDP and to a very personal issue--what is the time of a stay at home parent worth? Ms. Palmer had been talking about a trend toward women's place being in the home but not being part of production in the home (e.g. a self-employed seamstress) as much of production moved to factories during the Industrial Revolution. Talking about the census in England, "In spite of the lip service paid to domestic duties, in 1881 the Census excluded women's household chores from the category of productive work and, for the first time, housewives were classified as unoccupied." [I added the emphasis.] The key here is that there was a time when what mothers did at home was considered productive. They may not have put it in whatever they called the GDP calculation back then. They may not have valued breast milk, per se. But they at least acknowledged that mothers at home are doing a job. A very important job, no less. If it was still that way, when people ask me if my wife works, I wouldn't have to say "Well she works, just not outside the home."

Over the past several years, there have been numerous calculations of how much money it would take to purchase a stay at home parent's (usually mom's) services. It is not a small amount. The combination of tasks is important. And working parents like me would not have it nearly as easy to do our jobs. I would not be as easily able to go across the ocean to give presentations and consider ideas about ways to promote public health if it were not for my wife's choice to stay at home. Of course, my dual income friends can comment that they manage to do such things too. I'm just saying that I have great flexibility and have a huge "value added" from my wife's choice to stay at home. It is really too bad that we do nothing to reflect that in the reward system of modern society--when it comes to breastfeeding or other parts of the household production process.

Final Day at the Infant Nutrition Conference

Today, I gave my presentation. I received relatively few questions. Many people commented on the quality of the presentation. No one really questioned my presentation. Someone pointed out how it is harder to conduct a cost calculation when funds are not actually exchanged.

Someone did comment that it would be useful to add on several extra effects:

• Positive environmental effects of breastfeeding over formula production
• Positive bonding associated with skin-to-skin contact
• Including breast milk in GDP

Another person asked how to engage health economists on including the harder to value effects--my answer was to at least begin the discussion as early in the research planning as possible.

Someone afterwards suggested that an Australia researcher had tried to place a GDP-relevant monetary value on breast milk. The researcher is someone I've met, so I will follow up on that one. Click here to see an example of her work.

The rest of the day was also good. Talked about fathers some more, information needs, and targeted interventions.

It really got me thinking about breastfeeding as a research topic for new papers again.

It was so nice being in an environment in which people were genuinely interested in the tools I use and wanting to know about how they work rather than questioning whether the tools should be used at all. I often get questions about whether we should use economic tools at all in the US.

And, to my friend and colleague Steve Kymes, you'll be happy to know that I extensively quoted your response to me a few entries ago when we were discussing the moral and economic contexts of decisions.

Second day at the child nutrition conference

Started the day listening to an excellent presentation on organizational change. It was presented by a professor of social work who did not use an organizational framework but who made several comments very relevant to economics. In particular, economists (with our sense of rationality of resource allocation) are relatively favorably predisposed toward evidence-based policy and evidence-based practice. The presenter pointed out that the whole movement toward evidence-based anything assumes that there is some rationality and that systems are relatively stable. That can work for biology. It can work for mechanical systems. It rarely works for human systems. We can try to predict how changes in the environment will affect the changes in our interpretation of past evidence but that is not always easy.


Second was on self-efficacy and breastfeeding. The important things here are that health care professionals need to be trained to feel their own-self efficacy with respect to helping moms as well as moms needing to gain self-efficacy. That affects people’s ability to reach their goals (as an economist I would call it productivity). And, all learning—and ultimately all decisions—occur in a social context which shapes people’s perceptions and constraints. Again, all a part of the economic decision making.

Third session focused on training for health visitors and nursery nurses—two types of health care providers my American colleagues will not ever recognize. Key result—if everyone (providers, managers, and mothers) gains knowledge then the outcomes are likely to improve as everyone has better information and resources.

Fourth session was more about evidence. In this session a key finding was that group interventions work better for narrowly targeted rather than broadly targeted groups. This really should be no surprise. It reflects, I think that messages work better when they are for people who have similar information and face similar constraints. One-size-fits-all information sharing is not likely to be a winner.

Other sessions of the day—several have focused on the information that mother’s have available for making decision and how those decisions affect themselves and their families. A key perception is that breastfeeding keeps the father away from the child. While our culture seems to believe that the only way to bond is through feeding, there are so many things that a father can do for the combined well being of the mother and child and there are so many hours of the day that the baby is not feeding that a father should not feel excluded by the mother breastfeeding. Last session of the day talked all about all the things that dads can do. Great day.

One goal for tomorrow is to show that economists really are not so different in the way that we think about the world.

Blogging from Grange-over-Sands

Long entry today.

I made it safely to Manchester, England and was able to find my way on the train to Grange-over-Sands. It seems like a nice little town. Beautiful view of some body of water at the train stop (I have to figure out what it is), nice hotel, but very grey skies.

So, I am at the Nutrition and Nurture in Infancy and Childhood: Bio-Cultural Perspectives Conference sponsored by the University of Central Lancashire. As I said yesterday (and got a lot of responses on Facebook), I am talking about the economics of breastfeeding. I had indicated that I would share with readers what I heard that was in any way related to economics at this conference.

First, I missed the opening keynote on politics and breastfeeding. That was too bad because there is a lot of overlap between the economics of breastfeeding and the politics of breastfeeding. In fact, there is a lot of overlap between economics and politics in general. When do people tend to get politically active? One time is when there is something economic at stake. One of my favorite courses as an undergrad was taught by a wonderful political scientist named Jim Eisenstein--it was called the politics of scarcity. He nagged me about becoming an economist, but his course title clearly points to the interrelationship of the two.

Second, I saw a presentation about the information on breastfeeding in magazines and pamphlets in the UK. That was interesting. Made me think about seeing whether anyone has done a content analysis of breastfeeding messages on TV shows (particularly comparing by network) in the US. That is about economics because information (in combination with money and time and a whole lot of other stuff) clearly influences behavior.

Third, I heard a social anthropologist talk about breastfeeding. She was interesting because I ultimately think that anthropologists and economics are both very aware of constraints. She focused on culture as a constraint. I focus on time and money as constraints. We both focus on the fact that not everyone finds it to breastfeed to their child's heart's content.

Fourth, I saw a presentation about breastfeeding in Sweden. There it is the norm. The "starting up" cost may not be nearly so high when "not starting up" might actually be viewed more negatively.

Then, I saw a couple of presentations about breastfeeding pre-term kids. That was interesting because there was a discussion of an economic evaluation done by some people at the University of York in England (one of the top groups for doing this type of stuff) that suggested that more training of staff wouldn't cost a lot and could help mom's of preterm kids breastfeed more and sufficiently decrease the risk of sepsis and NEC to offset costs. Good argument. Special population.

Finally, I saw a play that has been presented to a couple groups of 8th-years in the UK. It is about making a choice about breastfeeding. Nice use of music, acting, and script. The choice of whether the expectant mom will breastfeed or not is not resolved at the end. Economics entered the script—and they said that boys commented on saving money more than girls afterward. Question for my American friends--do you picture something like this--not taking a position on whether to breastfeed but with some strong environmental and anti-formula messages expressed as opinions—would go over well in US public schools?

So, all in all, an interesting day setting the stage for my presentation on Thursday.

The economics of breastfeeding

Today, I am sitting at the BWI airport as I write this. A friend on Facebook asked where I was off to this time, and I shared a funny story from an end of summer party on a crisp late summer evening last night.

I'm standing in the kitchen at a friend's house speaking with a pediatrician around my age.
Hostess comes in and asks--"Were you the two talking about breastfeeding?"
We answer, innocently, "Yes."
Hostess, "Figures. Doc [one of the other guests] just came back out after stepping inside and said there were two people talking about breastfeeding but he didn't think either was planning on having more kids. You two explain it. He was a little concerned."

That may not be verbatim, but it was close to that. I suppose it is not every day that a pediatrician and economist get into an extended conversation about the incentives for different methods of child nutrition at an end of summer party...

So, what can I say about the economics of breastfeeding. A few basic things:

(1) There is a good amount of evidence that people really do respond to both money and time incentives when it comes to breastfeeding. On money, if you have the time, it certainly costs less to get enough calories to the mom to breastfeed than to use formula. On time, it can be hard, particularly for women who do not have flexible jobs. Although if the mom has the flexibility, what little evidence there is suggests that formula feeding and breastfeeding take nearly the same amount of time.

(2) We have limited evidence to suggest that a planned rapid return to work not only shortens the time that women who decide to breastfeed at all continue to do so but also may be associated with a lower likelihood of initiation. The best guess I have for that tone is that there is a perceived "getting going" (or startup) cost of breastfeeding. And some mothers may think that if they are only going to do it for a short time, why bother. Well, any is better than none, but there are real issues (like lack of family support in some cases) for getting started.

(3) When we think of policy changes, the humanitarian in me says we should do everything we can to make it easier for mothers and infants to be together. The economist in me asks--how much will behavior change. If a policy that would take a target population from 50 percent to 75 percent of mother's breastfeeding would it make sense to spend money on that. Sure, you change the behavior of one in four women. However, you also end up with a policy that benefits the two of four women who were making the choice to breastfeed already. Do they really need to receive any more incentive?

I don't have the answer for the last one. All I can say, as my friend and colleague Steve Kymes recently reminded me, is that economics gives us the tools to identify unintended consequences. This might be an unintended (and costly) consequence of what seems like a well intentioned policy change. I am not going to England to tell the maternal and infant nutrition meeting that policy to encourage breastfeeding does not make sense. Only that it should be evaluated carefully.

A moral issue or an economic one

This afternoon, one of my favorite local public radio talk shows had two guests talking about the advantages of a single payer system and the moral issues that accompany a discussion of health care reform.  I've commented a few times on single payer system options before.  Today I'll focus a bit more on the moral issue.  Here is an interesting question that was posed: is health care reform a moral issue or an economic issue? 

My answer: it is both.

If we try to deal with it only as an economic issue, we must ask what the objective is?  Profits for hostpials, physicians, and insurers?  Maximizing the health of the population (whatever that means) within a budget?  Providing a given level of health at a minimum cost?  There are many differnt possible objectives.  They invarialby have to do with money.

If we try to deal with it as a moral issue we can talk about who should have access?  If everyone has access, to what should they be given access?  Does everyone get the same access?  Should people be allowed to "buy their way to better access"?  These are interesting questions. 

I think it is both because we ultimately can make the moral focus points at least part of the objective but then decide how to get to that objective within the limits we have.  Let's try an example.  Maybe the goal is to give everyone at least minimal access.  If we adopt that as the objective we ultimately come to the economic question: how much is our society willing to spend on health care.  We can't provide all the care that everyone might want without choosing not to do some other things as a society.  We have to have limits.  The limits may be more than a lot of people are getting right now, but we have to make that decision as a society.

There has been a posting on Facebook the past few days "...no one should die because they cannot afford health care, and nobody should go broke because they get sick."  This is a wonderful goal at the individual level.  However, if we go to a system with more government influence (and there is already plenty of government influence) we will have to decide what care society can afford and at what point our entire economy might go "broke".  Ultimately, there will be people in the population who die becuase there are things that society as a whole cannot proivde and there is a risk to the economy as a whole if we do not have incentives to allocate resouces efficiently.  It is a question of the level at which we place the risk.

Rationing

Rationing.  Is it ever acceptable?

As has been pointed out before, we ration every day in the health care system--even if we don't call it rationing.  The market rations by having prices that some people cannot afford.  Private managed care plans ration when they deny claims.  Public plans like Medicare ration care when they make policy decisions on what to cover and what not to cover.  Despite this, Medicare generally is viewed as a program that people who are already enrolled do not want to lose.  So, it seems like existing rationing (even by the government) is accepted despite the fact that "rationing" has been given a very bad name in the debate over health care that is ongoing at present.

Even more interesting is that there may be "new rationing" that is still not directly called "rationing" but that would be viewed as acceptable.  The New York Times had a July 29 article that talked about prioritizing for swine flu vaccine.  This article clearly pointed out who would be given priority for the swine flu vaccine--health care workers, people with high risks of complications, and people caring for infants who cannot receive the vaccination.  The last group would be those over age 65 despite the fact that this group is one of the most important groups to vaccinate against the typical flu.

The New York Times article  pointed out how much the committee that made these recommendations struggled.  However, there was no uproar immediately afterwards. The fact that there are some people who are more at risk is accepted.  The fact that there are some people whose benefit affect others--like those caring for young infants--is accepted.  In other words, given the fact that the price of the vaccine is the same for all, we could say that it is more cost-effective to vaccinate some people than others.

This is interesting given the general outrage over the idea of rationing and the idea of making resource allocation decisions guided by cost-effectiveness.

More on comparative effectiveness

Today I received an email announcing the latest issue of the American Journal of Pharmacy Benefits and found the title of the "From the Editor" piece interesting: Has the Time Come for Comparative Effectiveness Research? This interesting piece makes a very important point: most of the public discussion about comparative effectiveness has focused on making sure that patients receive the most effective treatments. What the editor also points out (and there is a quote from the editorial in large red print on the page) is that "behind closed doors the financial conversations are occurring" (emphasis added).


What does that mean? The term comparative effectiveness has been portrayed to the public as something that is focused specifically on clinical effectiveness, more positive outcomes, and the patient-provider decision making process. Despite this, the main paying stakeholders in the health care system (other than patients who have been told it is largely for better clinical outcomes) are definitely thinking of this as dealing with cost-effectiveness. And, when they start thinking about costs, they are likely to be focused most strongly on their own financial interests. Will patients still benefit in that case? Maybe.

In general, more cost-effectiveness is a good thing. Having a more "rational" health care system is a good thing. The key, and this point is revisited often, is that not everyone shares the same "rationale" for what is "rational". Not everyone shares the same perspective in making decisions on what is most cost-effective. The fact that the paradigm for decision making affects stakeholders who do not all share the same interest must be recognized as a motivator for political compromise if this tool is to be used successfully in the long run.

Back to blogging

Now that it is the time of year in which I teach, I will be blogging a lot more.

Yesterday, I picked up the issue of American Journal of Public Health I had just received. I read through it and found an interesting editorial--"A Plea for Cost-Effectiveness". This seemed like an interesting editorial in a journal where I have always (perhaps unfairly) perceived the goal of most authors be to help as many people as much as possible--at any cost!

So, I read the editorial with interest. The author made a point about a young medical care provider who had raised a lot of money for cancer treatment for a child in a developing country. The reason to raise cost-effectiveness was that the author realized the difficulty of the contrast between "wanting to do the best for every patient and wanting to maximize health in society" when resources are very scarce.

If the author had simply said that the goal was to increase the use of cost-effectiveness in decision making, I'd have no concerns. However, there are a few things the author suggested that are part of what gives cost-effectiveness a bad name.

First, the author suggested that we should use cost-effectiveness exclusively as the decision criterion for health resource allocation. I can understand the desire to do that. It would make decision making "easier" in some ways--if everyone agreed that the outcome being valued was the right outcome. However, even if you can avoid death from one disease for $300 for each death avoided while it takes $500 to avoid death from another disease, that does not mean that we should ALWAYS take the option that costs less per death avoided. There are a lot of things that cost-effectiveness cannot consider--like the distribution of outcomes among the population.

Second, the author suggested (without any reflection) that disability adjusted life years are a more humane measure than deaths averted. Disability adjusted life years are a concept that focuses on a person's disability and age when assigning a value to avoiding disease. While some people might find this more humane, others may find the notion that a person's disability determines their "worth" repugnant. Others might question the decision to differentiate the value of life and disability based on a person’s age. Finally, the notion that health now is worth more than health in 10 years for the same person also is something that not everyone agrees is humane. While disability adjusted life years may be considered by some to be a reasonable way to represent outcomes, that feeling is not shared universally. That lack of universal agreement on the best outcome feeds back into my first point--if not everyone agrees on the value of the outcome being studied, that makes it very difficult to use cost-effectiveness as the only criterion for making decisions.

Finally, the statement that prevention is more economically efficient than cure is a nice thought. Historically it may have been correct. However, there is no guarantee at this point that every type of prevention is more efficient than every type of cure. While my compassionate side may want to always prevent disease in as many people as possible rather than waiting to see who gets a disease without intervention and treating, there are plenty of times when waiting to see who gets a condition and then treating is the more economically efficient approach.

So, thinking more about the economics of a decision is probably a good idea. Using economics as the only rule without questioning assumptions that are being made will not help economists convince others of the usefulness of their tools or really help society in the end.