The problem of overdiagnosis

Aaron Carroll has a good post on over-diagnosis. The paper in the BMJ about which Aaron is writing defines over diagnosis this way:

Narrowly defined, overdiagnosis occurs when people without symptoms are diagnosed with a disease that ultimately will not cause them to experience symptoms or early death. More broadly defined, overdiagnosis refers to the related problems of overmedicalisation and subsequent overtreatment, diagnosis creep, shifting thresholds, and disease mongering, all processes helping to reclassify healthy people with mild problems or at low risk as sick.

The problems of over diagnosis include health impacts of treatments, stigma from labeling, worry and cost. The essence of the problem is that these costs (monetary and intangible) are increasing while the benefits of any treatment available are not (mortality reduction, morbidity decline). The figures from the paper provide examples in which death rates from certain Cancers are stable over time, while cases are increasing, typically due to improved ability to detect disease and/or more attempts to do so via broader screening. Below I reproduce just one of the 5 graphs demonstrating this phenomenon with Thyroid Cancer:

Increased diagnosis suggests an explosion of cases, while death from this cause are flat. This epidemiology can produce different survival rates across nations, for example, as Aaron clearly describes in his post if different nations diagnose disease earlier; but early diagnosis only helps if it provides the route to an effective treatment. Thus, in many cases, differences in survival do not really provide a means of capturing any net benefits of treatment. However, our cultural default is to assume that more is better, and to wonder how any information from a test hurt? And even asking the question of whether some efforts to detect and/or treat disease are worth it will bring howls of protest and accusations of your wanting to kill someones grandmother in the U.S. political context.

There is no technical way to address this problem. What is needed most is cultural change, that first and foremost leads each of us, and us collectively, to ask the following questions about any test or treatment:

• Does it extend life?
• Does it improve quality of life?
• How much does it cost? (with a very broad notion of costs, not only financial)

Only by answering these 3 questions can you have a hope of determining whether something is “worth it.” It is often hard to answer these questions well, or clearly, and I don’t mean to minimize this. However, the first step is to learn to even ask them.

Op-Ed in Raleigh, News and Observer

I have an op-ed in the Sunday Raleigh (N.C.) News and Observer offering a bipartisan way forward on health reform that I think makes sense regardless of what the Supreme Court says about the Affordable Care Act. If you are a reader of this blog, it will be familiar fare.

If you are coming here from the op-ed, here are some related posts:

• Laying out general compromise with a bit more detail
• The ACA actually allows high deductible plans
• Comparing my catastrophic ideas with those of Martin Feldstein
• Post with overview of all the health policy suggestions from my book
• My book Balancing the Budget is a Progressive Priority frames health reform as central to ever having a balanced budget; a necessary, but not a sufficient condition to getting there. The other thing that must occur is a tax increase given any plausible level of federal spending. Many other things are covered in the book, but without health reform and a tax increase over the long run, we will never have a balanced budget.

The ‘net cost’ of college

Brad Plummer notes that the net cost of college is not as high as the sticker price. Duke’s cost of attendance is around $59,000 for next year, but how many students can expect to pay that? About half of the undergrads paid full freight during the 2010-11 school year:

About 45% of the undergrads received need based financial aid, and a small number of students attended Duke on a full ride merit, or an athletic scholarship.

The breakdown of how much need based aid was received by the median need based financial aid recipient in 2010-11 looked like this:

Note: I believe that the average total aid received by income includes the merit aid awards as well as need based financial aid.  I am also not sure if the figures above include the zeros of the half of students not receiving any aid. One of the issues that could arise is that you end up with a mean amount of aid that actually does not really describe many students if you have some paying the full price, while others receive a large amount of aid. The worry might be the crowding out of the “middle” which would likely represent a higher income than most uses of the term middle income.

Recent posts on related topics: here and here.

Sen. Coburn: for unelected health boards before he was against them

Ezra Klein has an interview with Senator Tom Coburn that focuses on health care reform. Lots could be said about the interview, but I want to focus on what I see as the hypocrisy displayed by Sen. Coburn in his criticism of the Independent Payment Advisory Board (IPAB) that will be created if the Affordable Care Act is implemented. In the interview with Klein, Sen. Coburn says:

The reason I object to IPAB is you’ve got someone between the patient and the physician, and that can never be in the best interest of the patient.

The most shocking thing to me about Sen. Coburn’s consistent demonization of IPAB as a “rationing board”  is the fact that a bill (Patients’ Choice Act) that he co-sponsored and introduced on May 20, 2009 contained two unelected boards (IPAB is also quite weak; another post). That means that key Republicans supported unelected health boards a full month before the first House committee reported out HR3200. I have written tons on this issue specifically, and about Sen. Coburn’s Patients’ Choice Act generally (here, here,  here, here,  here, here, here, here), including some favorable things. I guess I am just naive, but this level of hypocrisy still shocks me.

Below is a post I wrote in May 2011 that focused on Rep. Paul Ryan, another co-sponsor of the PCA; just insert Sen. Coburn’s name as you read; they have behaved similarly on this issue.

Part D Structure

Avik Roy’s recollection of how the structure (donut hole) of Medicare’s prescription drug benefit (Part D) was devised doesn’t match mine (a 2005 Health Affairs paper on the topic). I located lecture notes from my Intro to the U.S. Health Care System class that I was teaching at Duke at the same time Congress was debating its passage to recall how I framed the benefit design question at the time. I described the choice as being between two competing policy goals:

• Address the problem of poor seniors being unable to afford prescription drugs. Such a policy motivation played out in the Part D discussion of the day would lead to a program that subsidized private coverage for low income Medicare beneficiaries.
• Address the problem of catastrophic costs. Such a policy motivation would target subsidy toward persons with high drug expenditures.

Then I framed the final structure decided upon for the class as a political calculation designed to provide all Medicare beneficiaries with access to Part D coverage, but with the odd “donut hole” benefit structure arising due to a desire to hold total federal costs of the plan to a set level (noted as $400 Billion over 10 years at  the time; it actually ending up costing ~$1Trillion over 10 years).

Fast forward to the present, and my most most vivid experience with the program has been helping my mother in law pick a Part D plan when the firm that had been providing retiree benefits (from her deceased husband’s job) stopped doing so. When I tried to explain the donut hole concept (her prior coverage was much better) she said “that makes no sense” is it due to Obamacare? I said no, the donut hole notion comes from one of President Bush’s main policy achievements. I then explained that there were some reductions in the cost outlay for her in the donut hole, that are due to Obamacare.

She didn’t believe me on either account….

update: I edited the post for clarity; commenter was correct, it was not clearly written and I apologize for sloppiness.

The elusive Goldilocks principle

CBO reports on options to address the fiscal cliff that looms on January 1, 2013 as numerous tax provisions are set to increase. Not too cool, not too hot, just riiiiiiiiight is an elusive standard to address the number one policy priority of 2012 (not harm the economy, move toward a credible long range plan to stabilize the deficit/debt). Many have said do nothing and the deficit problem is fixed, but that ignores the timing of the fix and how it will impact the economy.

So, what we need is a reasoned deal that does not harm the economic recovery, but that takes credible steps to raise taxes over time, and reduce spending as compared to default levels over the next several decades (particularly health care costs). From the prologue of my book:

As we head into the 2012 election, the task remains the same: we need to undertake policies to improve our economy in the short run, while seeking a long-run plan to move slowly toward a balanced budget in the future. To achieve the latter will require some profound reform of our health care system and an increase in the proportion of the economy collected in taxes. There are other issues to be gotten straight, but without addressing those two realities (taxes are too low given any plausible level of federal spending and projected health care costs too high absent reform) we will never again have anything near a balanced budget.

We will get started next week….

Skin in the game at Pizza Hut!

This morning I read Aaron Carroll’s nice piece on AcademyHealth’s blog noting that prices and not consumption are primarily to blame for the high health care costs in the U.S.

Fast forward a few hours later, and I am eating at Pizza Hut with the other chaperone’s for one of my kid’s school field trip and they ask what I do and I tell them. Immediately out of one dad’s mouth is “the problem with the health care cost problem is all the parasites of the system who don’t have enough skin in the game!” Back when I was blogging for the Incidental Economist, and something went wrong Austin used to say “I can hear Aaron screaming now.”

I heard Aaron Carroll scream around Noon today in a Durham Pizza Hut.

I went on to chat with the nice folks at my table about health policy for about 5 minutes or so and I talked about out of pocket costs, even for persons in Medicare and other salient points. He just looked at me like I had three heads (we weren’t drinking, it was a field trip). As we talked a bit more about employer provided insurance, I came to realize that he didn’t realize that his employer had paid the vast majority of the costs of his families private health insurance premium; he seemed to think his share was the total premium. In one sense, that could be understood as a “skin in the game” problem, and that he didn’t have enough because he had been shielded from the true cost of his health insurance. In economic terms I am quite confident that he has paid for that via lower wages, but this perspective is surely one of the negative by-products of employment being the primary way non elderly persons get health insurance.

I confess to despair at times about how we will ever make reasonable, evidence based health policy. Maybe we won’t. The technical problems are nothing compared to the cultural ones. The notion that what I have I earned and deserve, and what others have is both better and not deserved seems endemic in our country. It is enough to make someone scream. Go ahead Aaron, let one out for me.

update: I fixed a typo.

More on is college worth it

OK, so this stuff is everywhere. Maybe a tipping point, or maybe just the recession has just made people pay more attention to what they got for their student loans, or maybe a simple sweeps month link to graduations.

• Mike Munger links to a two part Bloomberg series
• 60 minutes had a report last night on the value of college, and an alternative route; here is the vid.

Past stuff I have written on this down the path here.

The confluence of two factors made me start thinking about this: first, serving on the executive committee of the Sanford School of Public Policy several years ago during a period of budget cutting, and looking more closely at the the cost side of our academic enterprise. Second, having an 11th grader and helping (watching?) her think about where she wants to go to college, and listening to college tours through the ears of a parent. In doing this, I found myself say (silently, I value my relationship with my daughter) Bullshit! quite a lot.

When I wrote that college tuition was a bubble, I was (and am) mostly thinking of the cost side of the college equation. There are many key issues, but I think the bottom line is that there are many things that are being done by research universities that are cross-subsidized in non transparent ways. I am less sure about small, teaching-focused liberal arts schools, meaning I just don’t know much about the cost side of their equation. My bottom line to my friends and colleagues in the academy is that we had better get out front of this and take seriously the notion that there may not always be an unlimited supply of people willing to pay the full freight private University tuition, especially at lower ranked ones with less expansive financial aid than the Ivies, etc.

Taylor v. Feldstein: comparing catastrophic plans

(cross posted at samefacts)

I have been blogging about the path to a health reform deal that I offer in my book: universal catastrophic coverage implemented via Medicare. Martin Feldstein, chair of the Council of Economic Advisors under President Reagan, offered a universal catastrophic coverage proposal in October, 2009, that would:

• provide tax credits to purchase a catastrophic private health insurance policy, with catastrophic defined as costs above 15% of income (financed by ending the tax exclusion of employer paid insurance; people could purchase additional coverage with after tax dollars)
• issue each person/family a “health care credit card” that could be used to purchase care in the deductible amount

A few quick comments about Prof. Feldstein’s proposal and how it compares to mine.

• Defining catastrophic as a percentage of income makes conceptual sense, but introduces some technical challenges. All of the issues related to timing, what happens if your income changes, and perverse incentives related to loss of subsidy if your income increases that have been raised with respect to the income-based subsidies in the ACA apply to Prof. Feldstein’s proposal as well (and to just about any public policy that provides a differential government expenditure/subsidy based on income).
• Prof. Feldstein’s proposal provides a guaranteed means of financing needed care if someone makes a bad choice in choosing catastrophic coverage only, while mine does not. A huge concern under my proposal is what will persons who choose to only have catastrophic insurance, but who get sick, actually do? Will some avoid the care they need? If so, this will likely increase the catastrophic costs that Medicare will incur down the road if they spend through the catastrophic coverage amount.

Which of these approaches is preferable? It depends upon what aspect of our current system bothers you the most. My plan could provide true universal coverage. Prof. Feldstein’s op-ed claims his plan would create universal coverage, but that is unlikely without a mandate or auto-enroll procedure of some sort that he does not mention, leaving us with the question of what happens to people who didn’t sign up? Aggressive auto-enroll could likely get close to universal coverage. Medicare is the largest risk pool around, so would be the most efficient means of providing catastrophic coverage and would therefore be my preference as the catastrophic insurance vehicle, but others will prefer using private insurance. His proposal is preferable if you most worry about people making a bad choice in level of insurance coverage and being unable to finance care.

Achieving catastrophic health insurance coverage will not fix all of the inter-related problems of coverage, cost and quality of care. However, if we could manage an agreement to provide a clear route to how all persons could be guaranteed at least basic coverage, we could remove one variable from the mix and focus on other aspects of the health care system. A step like this seems politically impossible given the nature of our nation’s discourse, but at some point we will have to return to serious public policy making to address our many problems, and it will take compromise. The recent news stories about the lack of a coherent and unified Republican “replace” strategy shows they very much need a health reform deal and are unlikely to drive toward a plan on their own. Health reform remains a key interest for Progressives.

I continue to think the route to the needed deal goes through universal, catastrophic insurance coverage of some sort. If we could agree on that as a goal, the details should be tractable.

Does where you go to college matter?

Derek Thompson in the Atlantic has the story, at least if earnings is the standard:

Past posts riffing on the general topic of is college worth it/tuition costs are a bubble: here, here, and here.