Topic: General

Silly Patient, Power Is for Experts!

Yesterday, I lamented that market critics simultaneously (1) argue that information asymmetries mean that patients are too ignorant to control their health care dollars and decisions, and (2) argue for policies that keep patients ignorant.

As if on cue, Ezra Klein pounced on the same hook I used: a column by David Wessel that cited a study showing that elderly patients are often highly satisfied with their care even when the technical quality is sub-par. Klein argues the study is proof that “consumer-directed health care is a silly idea.” 

Or, perhaps, those findings show that the policies Klein supports (e.g., government-provided coverage) are keeping patients ignorant.

Klein writes, “patients have no capability to separate good medicine from bad…for all their good intentions, [they] are easily fooled by a firm handshake, a pleasant nurse, and a well-decorated waiting room.” Klein continues, “If doctors need watchdogs, then we need to empower institutions or individuals with the education and ability to actually watch over them.” 

Presumably, Klein thinks a free market would not do so. But if that means the government should monitor quality, how would Klein insulate that effort from the political influence of providers, whose incomes would depend on what the watchdogs decide? Are politicians never fooled by a ($2,000) handshake? Which is easier: to fool all of the people all of the time, or to fool 535 people at any given time?

Baby Steps

Yesterday, the DEA announced that it would allow doctors to write multiple, post-dated painkiller prescriptions for chronic pain patients. This is good news. The prior restrictions were odious, and heartlessly required people suffering from chronic pain to make multiple trips to doctors and pharmacists to get their medication.

This problem is worse than it sounds. Because the DEA’s witchhunt has scared physicians away from palliative therapy, many of these patients have to drive several hours to find a doctor who is willing to treat them. Doctors willing to administer the most promising chronic pain treatment — high-dose opioid therapy — are even harder to find.

But yesterday’s decision doesn’t go nearly far enough. And the DEA seems to be trying to use this one concession to show its “reasonableness,” thus heading off criticism over the larger, more important issue — it’s overly aggressive pursuit of doctors.

Here’s what won’t change: The agency will continue to substitute its own judgment for the medical opinions of doctors. It will continue to define some high-dose treatments as off-limits, and it will continue to use malpractice standards, meant for civil litigation, in criminal court. The DEA also still refuses to give doctors a set of guidelines they can follow to guarantee they won’t be prosecuted, thus giving the agency a great deal of leeway and leaving doctors who engage in the experimental high-dosage treatments in legal ambiguity. The agency will also continue to deny doctors a “good faith” defense to prosecution.

DEA administrator Karen Tandy, who has a history duplicity on this issue, made some misleading and downright false comments in a USA Today story yesterday on her agency’s change in policy:

The new policy statement does not include a specific list of do’s and don’ts, but the DEA Administrator Karen Tandy says doctors should be able to glean from the listing of prosecutions on the agency’s website what it takes to violate the law. 

This is ridiculous. Instead of actual guidelines to see if they’re complying with the law, doctors are instead being instructed to read up on a “rogue’s gallery” of DEA trophies to determine if their own prescription habits are potentially criminal. That would be like the IRS refusing to give any real guidelines on how much money we owe the government, but instead refering us to a list of the “20 biggest tax cheats of all time” for guidance.

More Tandy:

Out of more than 1 million doctors who are registered with the DEA to prescribe such narcotics, the agency prosecuted 67 last year for prescription abuse. Tandy says the DEA has targeted doctors who have strayed far outside accepted medical practice, including some who have prescribed medically unnecessary drugs for cash or sex, some who have demanded kickbacks, and invented patients or fed their own addictions. 

Tandy is hyperbolizing. Included among those she says “have strayed far outside the accepted medical practice” are William Hurwitz and Bernard Rotschaeffer. The case against each of these men is far from conclusive. Pain activists like Siobhan Reynolds and Dr. Frank Fisher regularly send out new examples of doctors prosecuted by the DEA. In a few cases, it looks like the doctors were clearly unethical. In most, the evidence is far from conclusive and appears to be more attributable to the DEA’s ignorance of how high-dose therapy works, or that its own policies are chasing doctors away from this treatment, causing the few doctors left in the field to have no choice but to see more patients and write more prescriptions.

Tandy’s “67 of one million” statistic is also misleading. The one million number is the total number of physicians, in any line of practice, who are licensed to prescribe narcotics. The number who specialize in pain treatment is far, far lower. And the number willing to engage in high-dose therapy — the only therapy that seems to work on chronic pain — is much lower still. That 67 comes from an already small and dwindling pool of doctors willing to administer this promising line of treatment. Given that the DEA makes a big deal out of each arrest, including holding press conferences and putting out statements to the media, it isn’t difficult to see how each arrest would make it yet more difficult for pain patients to get adequate treatment.

More Tandy:

The DEA investigates doctors “who knowingly and egregiously put drugs into the hands of traffickers and abusers,” Tandy says. “This isn’t just questionable behavior. There is no gray area here.” 

There most certainly is. See the case of Dr. William Hurwitz, one of the DEA’s most sought-after and hard-won trophies. An appeals court recently set Dr. Hurwtiz’s conviction aside, finding that the government was wrong to deny Dr. Hurwitz to mount a “good faith” defense against charges that he prescribed painkillers to drug addicts.

More Tandy:

Tandy says she doesn’t want to tell doctors how to treat patients. “The DEA does not belong in the practice of medicine. We want doctors to be able to prescribe drugs when people are in pain. We’re trying to give them a comfort level.” 

But if the DEA has its own definition of what is and isn’t “accepted medical practice,” and — worse — won’t tell doctors what that definition is when it comes to prescribing painkillers, thus leading doctors to err on the side of undertreatment, we have most certainly entered the realm of drug cops dictating medical practice.

The DEA has taken a lot of heat from pain activists, academics, media critics, and civil libertarians on this issue. Yesterday’s minor shift in policy should by no means be the end of the debate.

For more on this issue, see here and here.

Health Policy Straw Man

In today’s Wall Street Journal, David Wessel writes:

It’s fashionable these days, particularly in Washington, to argue that the best way to improve the quality and restrain the cost of health care is to make the market for health care more like the market for everything else.

It’s also fashionable for opponents of free-market health care to caricature the case for market-based reform. 

I don’t know where Wessel comes down in that debate.  But he does employ a favorite straw man of those who oppose market-based reforms: that the case for markets “rests on the belief that health care is – in most respects – like any other product.” In fact, the case for markets does not rest on that assumption. 

That assumption is obviously false.  As Charles Phelps writes in his leading textbook Health Economics, health care markets face challenges such as extensive government intervention, uncertainty, asymmetries of information, and externalities.  Also, health care is scary, involving life-and-death decisions.  Of course, each of these dynamics is present in many markets.  What makes health care unique is how many of these factors converge in one place.

The case for markets is that markets do the best job of dealing with all those sticky wickets.  Take asymmetric information.  Critics say that the knowledge gap between doctor and patient is so great that consumers cannot be assured of quality.  But information asymmetries occur everywhere; every day, I am positively besieged by them.  I don’t know how to sew, much less build a car or a computer.  But those information asymmetries between me and a seamstress or Subaru or IBM do not prevent me from driving to work fully clothed and blogging about health policy.  Markets thrive on informational asymmetries, which are an essential part of specialization. 

So why is it that when consumers need to close that knowledge gap, or at least obtain assurance that they’re getting a quality product, they have an easier time doing so when it comes to Subaru than their doctor? 

Part of the reason is probably medical professionals’ traditional reluctance to compete with one another on the basis of price and quality.  But the larger problem is that government has insulated patients from the costs of their medical decisions.  With patients asking fewer questions about cost and cost-effectiveness (i.e., value), the rewards for generating that information are smaller.  (And herein lies an irony:  Opponents of market-based reforms argue that information asymmetries are an enormous problem, and then turn around and support further cost insulation, which exacerbates that problem.) 

That largely explains the interesting study Wessel cites, which found that patient satisfaction does not necessarily correlate with what the experts deem high-quality medical care.  It should be noted that measures of patient satisfaction and recommended care should not correlate perfectly; patients often have good reasons for not wanting what the experts consider “the best” care.  But excessive insulation at once contributes both to patient ignorance and to providers being able to get away with delivering sub-optimal care.

Divided Government May Help Restore the Republican Party

For the moment, the Democrats are expected to win control of one or both houses of Congress in the congressional election this fall.  That may have two strongly beneficial effects on the Republican Party:

  1. More congressional Republicans will rediscover their commitment to fiscal responsibility when most of the proposals for increased spending originate in a house of Congress controlled by the Democrats.  For the past five years, in contrast, congressional Republicans approved almost all proposals for increased spending by the Republican president or their party colleagues. 
  2. More social conservatives will rediscover their commitment to federalism in order to protect the authority to address value issues by state governments when it becomes clear that there is no political opportunity for federal decisions on these issues.  With the first unified Republican federal government in 50 years, in contrast, social conservatives have been motivated to propose federal political decisions on these issues for which there is no national consensus.

The combination of a long unnecessary war, the fiscal excesses disguised as compassionate conservatism, and an intolerant social agenda has almost destroyed the traditional Republican political coalition, leaving many of us without any enthusiasm for the candidates and policies of either party.  The first step to restoring the Republican Party, ironically, may be a Democratic victory in the congressional election this fall.

Several years in the political wilderness may do much to clear the mind.

Federalism This Ain’t

According to Kaisernetwork.org:

Reps. Tom Price (R-Ga.) and Tammy Baldwin (D-Wis.) on Wednesday at a joint event by the Brookings Institution and Heritage Foundation encouraged lawmakers to back a bill (HR 5864) that would “allow states to act as laboratories where lawmakers could test methods to reduce the number of uninsured Americans,” CQ HealthBeat reports.

In an online debate with Stuart Butler of the Heritage Foundation (here, here, and here), I argued that this approach would favor government-expanding health care proposals.

Those in search of a free-market health care agenda should look elsewhere.

College Aid Calculations Don’t Measure Up

Every other year, the National Center for Public Policy and Higher Education (NCPPHE) – an organization run almost exclusively by politicians and higher education insiders – issues a report called Measuring Up, which typically declares that as a nation we provide far too little aid to students to help them afford college. Measuring Up 2006, released today, is no different.

Now, to be fair, the 2006 edition of the biennial woe-fest does make a good point about government-funded student aid, noting that it has increasingly targeted middle and even upper-class – rather than low-income - students. Of course, it fails to note the inevitability of that outcome given that aid to the poor must be accompanied by aid to the middle class to be politically viable.

Where Measuring Up 2006 deserves scorn, though – as have previous Measuring Up reports – is in how it calculates federal student aid, a critical part of the report’s determination of college affordability.

A reasonable person would, of course, consider federal aid to be any kind of financial assistance provided to students by the federal government. That would be both federal and aid, after all. But the folks at NCPPHE don’t see it that way. No, for them, only Pell grants count as federal aid. Why? Because, according to the Measuring UpTechnical Guide” – which is separate from the main report – “Pell grants are by far the largest component of federal grant aid.”

Oh, come on! According to data from the College Board, while it is true that Pell grants provide more aid than any other federal grant programs, Pell is still far from the only federal grant initiative, and not even close to the only federal aid program.

Here are the numbers: In the 2004-05 academic year, while the federal government doled out $13.1 billion in Pell grants, it provided an additional $6.3 billion through work study and grant programs other than Pell. Add to that the $8.0 billion that people received through federal higher education tax benefits, and the non-Pell total surpasses the Pell amount, hitting $14.3 billion. And then there are federal loans, which even when not technically subsidized (the feds pay the interest on the loans for a given amount of time) are still in reality subsidized because they are backed with taxpayer dollars, which helps keep their interest rates artificially low. Add those loans – a total of $62.4 billion – to the student aid pot and Pell grants are absolutely dwarfed, coming in at just 14 percent of all federal aid.

And so, the higher education establishment has struck again. Absurdly defining all federal student aid as just Pell grants, Measuring Up 2006 has ignored the vast majority of aid furnished by federal taxpayers and cried out for more money. It’s just the kind of accounting that could only measure up in a report intended to further rip off taxpayers and enrich the ivory tower.

So Should We Go Dutch, or Not?!?

A while back, Reason Magazine’s Julian Sanchez blogged about what he saw as an inconsistency in my position on the Dutch national school voucher program. Though I missed his post at the time, it’s worth responding to.

Julian pointed out that I have bemoaned the stifling regulatory encroachment  besetting private voucher schools in the Netherlands, while also touting the superior academic outcomes of those schools.

What gives?

The answer is relativity. While Dutch academic performance is among the best in the world, that does not mean it is anywhere near as good as it would be under actual market conditions. The Netherlands competes with nations (like our own) suffering from morbidly obese government school monopolies. Their own system, with its modicum of parental choice and competition, is merely fat and out of shape by comparison. When they race, the Netherlands invariably comes out at or near the front of the pack. That does not mean it is the Carl Lewis of school systems.

The same can be said of the Dutch school system’s impact on social harmony. While it has advantages in this area over state school monopolies, it still has shortcomings when compared to market systems that do not rely on government funding of private schools to ensure universal access.

So, when I talk about the Dutch voucher program, I try to point out its shortcomings while also noting that – even though it falls short of a true market – it outperforms our calcified centrally planned school systems.

As Julian no doubt saw, I wrapped-up my earlier piece trumpeting the academic superiority of the Dutch system with the following caveat:

All this might sound like a sales pitch for introducing a Dutch-style voucher program. It isn’t. As it happens, research suggests that there are even better ways to reintroduce the benefits of parental choice and competition in education.

When everyone else is moving backwards, the guy who’s standing still seems like a high-achiever.