Friday, August 28, 2009

Rationing health care

It’s a mistake to think of health care as a right. It is not a right; it is a good. ... There is an insufficient supply in this world to meet the demand of those who would have it. ...

Given the limited amount of health care that may be bought with the aggregate funds of the group, this untrammeled demand for it must always result in rationing. This is true whether the collective effort is a private insurance plan or a government program. Rationing is inevitable in all collective health care financing schemes.

Rationing must occur, but it need not be admitted. Denying the truth of rationing is more common in government-run health care schemes than private ones, because the government is reluctant to have the people know this ugly fact. Government-run programs, therefore, are more likely to disguise the rationing. This plausibly deniable form of limiting health care is called implicit healthcare rationing, and it assumes many forms. Rationing by termination occurs when patients are discharged from the hospital earlier than is medically optimal. Rationing by dilution occurs when second-best rather than first-best treatment is provided. Rationing by rejection or redirection involves healthcare providers turning away patients whose care will be inadequately reimbursed. This is commonly seen now in the Medicare and Medicaid programs, because those programs reimburse providers at a rate substantially lower than private insurance plans. Perhaps more common than those forms of rationing is rationing by delay, as exemplified by the outrageous amount of time patients in Canada must wait for hip replacement surgery or colonoscopy. The unifying theme in all these forms of implicit rationing is that, without admitting it, they force some patients to forego medical care that they want and are ostensibly entitled to receive.

Private insurance plans sometimes include an element of implicit rationing, but because they are, at heart, contractual agreements between the insurance company and the insured are more likely to ration health care explicitly. ... The advantage of explicit over implicit rationing is obvious: It gives potential customers of the insurance plan information to use when deciding which insurance plan to buy, and gives them clear expectations of services to be delivered. Implicit rationing, by contrast, may have the sweetness of a promise, but is usually succeeded by the bitterness of a promise broken. ...

Come, let us speak of unpleasant things. How is health care to be rationed? Who gets the short end of the stick?
--Medical oncologist Eric Chevlen, First Things, on the inevitability of rationing

Newspapers as actuaries

The vast majority of obituaries are written after someone dies, not before. But news organizations prepare so-called "advancers" in one of three situations: The subject is so famous that the paper would be embarrassed not to have an immediate package in the event of an untimely death; the subject is old or sick; or the subject is "at risk"—i.e., he's a drug addict or a stunt biker. ...

Into the third category fall stars like Michael Jackson and Britney Spears. When Jackson died at 50, the Los Angeles Times already had an obituary ready because he had a spotty health record. In 2008, when Spears' antics were regularly featured in the tabloids, the Associated Press prepared her obituary despite the fact that she was only 26 years old.
--Christopher Beam, Slate, on the Britney Spears deathwatch

Thursday, August 27, 2009

The usefulness of incompetence

"An unexpected result of my research on the mafia," [Diego Gambetta, author of Codes of the Underworld: How Criminals Communicate] writes, "was to find out that mafiosi are quite incompetent at doing anything" other than shaking down legitimate businesses and enforcing trade agreements among smaller-scale hoodlums. ...

Rather than getting involved in running a restaurant or dealing drugs, they joke about their cluelessness in such matters and simply collect payment for "protection." But this professed incompetence (evidently quite well-demonstrated on the rare occasions that a mafioso tries to go legit) makes them strangely "trustworthy" to those using their services: "If [mobsters] showed any competence at it, their clients would fear that they might just take over."

Gambetta argues that something similar takes place among the baroni (barons) who oversee the selection committees involved in Italian academic promotions. While some fields are more meritocratic than others, the struggle for advancement often involves a great deal of horse trading. "The barons operate on the basis of a pact of reciprocity, which requires a lot of trust, for debts are repaid years later. Debts and credits are even passed on from generation to generation within a professor's 'lineage,' and professors close to retirement are excluded from the current deals, for they will not be around long enough to return favors."

The most powerful figures in this system, says Gambetta, tend to be the least intellectually distinguished. They do little research, publish rarely, and at best are derivative of "some foreign author on whose fame they hope to ride.... Also, and this is what is the most intriguing, they do not try to hide their weakness. One has the impression that they almost flaunt it in personal contacts." ...

"Being incompetent and displaying it," he writes, "conveys the message I will not run away, for I have no strong legs to run anywhere else. In a corrupt academic market, being good at and interested in one's own research, by contrast, signal a potential for a career independent of corrupt reciprocity.... In the Italian academic world, the kakistrocrats are those who best assure others by displaying, through lack of competence and lack of interest in research, that they will comply with the pacts."
--Scott McLemee, Inside Higher Ed, on commitments to stay put. HT: Marginal Revolution

Wednesday, August 26, 2009

The gender math gap

Consistent with the prior literature, when children enter kindergarten, girls and boys are observationally equivalent in both math and reading. By the end of fifth grade, however, girls have fallen more than 0.2 standard deviations behind their male counterparts in math. The math gap is equivalent to 2.5 months of schooling. Girls are losing ground in math in every region of the country, every racial group, all levels of the socio-economic distribution, every family structure, and in both public and private schools.

Although teachers tend to rate girls more favorably than test scores would predict, girls lose nearly as much ground on subjective teacher ratings of math ability as they do on standardized tests, suggesting that the poor relative performance by girls is not simply an artifact of standardized testing. We attempt to test socialization hypotheses in a number of ways. Parental expectations regarding math are lower for girls than boys even after accounting for test scores, but controlling for these expectations does nothing to reduce the gender gap. We also find that girls with mothers working in math-related occupations lose just as much ground as those whose mothers are not in math-related occupations, making it unlikely that low familial expectations for girls in math lie at the root of the issue. Parents report spending equal amounts of time with boys and girls doing math-related activities. As a result, including these variables has no effect on the gender gap.

If broader societal forces are working to undermine girls in math, then one might expect to see females fall further behind in states with greater levels of gender inequality in wages, employment, or education. Again, including these variables as covariates does little to alter the gender gap. ...

Having exhausted our ability to explain the gender gap in math using ECLS and concerned about the appropriate level of aggregation to test socialization, we turn our attention to... comparisons of math achievement across countries. ...

We are able to replicate the findings of Guiso et al. (2008) using PISA data: there is a strong positive association between the WEF measure of female opportunity and the relative performance of girls in math. In stark contrast, however, there is no such relationship between gender equality (as measured by the WEF index) and female math performance in TIMMS. The difference in results across these two datasets is driven by the samples of countries included; when one restricts TIMMS to the same countries as PISA, the positive relationship reemerges. ...

In countries where same sex classrooms are common (countries which also tend to have limited opportunities for women to use math skills which would lead one to expect girls should do poorly at math), there is no gender gap in math scores. Note: the gap is eliminated in these countries because the girls achievement is higher, boy’s achievement is the same between countries with sex segregated classrooms and the rest of the sample.
--Roland Fryer and Steven Levitt on a reason to send your daughter to an all-girls school

Your boss thinks you're dumb and says so publicly

He’s not a Rhodes Scholar to begin with.
--Red Sox general manager Theo Epstein on Red Sox pitcher Jonathan Papelbon

Tuesday, August 25, 2009

Go to the top

But the strong impression that emerges from the documents, many with long passages blacked out for secrecy, is by no means one of gung-ho operatives running wild. It is a portrait of overwhelming control exercised from C.I.A. headquarters and the Department of Justice — control Bush administration officials say was intended to ensure that the program was safe and legal.

Any prosecution that focuses narrowly on low-level interrogators who on a few occasions broke the rules may appear unfair, since most of the brutal treatment was authorized from the White House on down.
--Scott Shane and Mark Mazzetti, NYT, on who authorized torture

The usefulness of guilt

Children typically start to feel guilt in their second year of life, says Grazyna Kochanska, who has been tracking children’s development for two decades in her laboratory at the University of Iowa. ...

In Dr. Kochanska’s latest studies, published in the August issue of The Journal of Personality and Social Psychology, she and colleagues found that 2-year-olds who showed more chagrin during the broken-toy experiment went on to have fewer behavioral problems over the next five years. That was true even for the ones who scored low on tests measuring their ability to focus on tasks and suppress strong desires to act impulsively.

“If you have high guilt,” Dr. Kochanska said, “it’s such a rapid response system, and the sensation is so incredibly unpleasant, that effortful control doesn’t much matter.”

But self-control was critical to children in the studies who were low in guilt, because they still behaved well if they had high self-control.
--John Tierney, NYT, on guilt as a substitute for self-control

Monday, August 24, 2009

Who multitasks?

The people who multitask the most are the ones who are worst at it. That's the surprising conclusion of researchers at Stanford University, who found multitaskers are more easily distracted and less able to ignore irrelevant information than people who do less multitasking.
--Randolph E. Schmid, Associated Press, on negative self-selection

Saturday, August 22, 2009

Potomac fever

What if you have an opportunity to serve in the government temporarily? The main observation I have is that you stand a good chance of permanent alteration from even a year or two in Washington. Potomac fever is contagious and incurable. I know one economist who deliberately hired an undocumented nanny as a commitment device to avoid the temptation of government.
--Robert E. Hall on a vaccine against government service

Ph.D. for sale

German prosecutors are investigating about 100 professors across the country on suspicion they took bribes to help students get their doctoral degrees, authorities said Saturday.

According to the two publications, students paid between euro4,000 to euro20,000 ($5,700 to $28,500) to the company [Institute for Scientific Consulting], which promised to help them get their doctorate degrees through its extensive contacts within university faculties.

The Neue Westfaelische newspaper reported that "hundreds" of students were involved, and that the company paid professors between euro2,000 to euro5,000 when their clients had successfully received their Ph.D.'s. It was not clear whether the students knew that bribes were being paid.
--David Rising, Associated Press, on lucrative fees I'm foregoing

Friday, August 21, 2009

Show me for money

In Liberia, the guys at our local partner and survey organization swear that the best hunters have the power to change themselves to animals.

Perhaps this is culturally insensitive of me, but I have a standing offer of $1000 cash to any of them if they can find one of these guys, bring him to me, and demonstrate. $2000 if I can film it.

Incentives matter.

I’m pretty sure my money is safe. But in the unlikely event I’m wrong, you will be treated to one of the best blog posts of all time, and I will consider it money well spent.
--Chris Blattman on upward sloping supply curves of the supernatural

Wednesday, August 19, 2009

Loving what you do

I can recall many a pleasant summer evening discussing consumption data and theory in front of a blazing fire.
--Milton Friedman

Who says North Korea is technologically backward?

The official North Korean news agency, in a statement released via Twitter, said the North “will closely watch” to see if the South Korean launching draws similar denunciations and sanctions from the Security Council.
--Mark McDonald, NYT, on the North Korean government's surprising adoption of a tech fad

Possession is nine-tenths of owning

For proof that Communism was bound to fail, pull a chair up to the table of a restaurant critic and his three guests. Then watch what happens after he tells them what to order, the food has been delivered, and everyone begins to take bites of everything, making a broad sample of the menu.

Jane tries some of the gnocchi Dick has passed to her, and curls her lip.

“My pork loin is much, much better,” she proclaims, with a resounding emphasis on the word “my” and no hint of recognition that the loin wasn’t her pick: the critic randomly assigned it to her.

“True,” Mary chimes in, affirming the pork, only to add, “My short ribs are the best thing on the table.”

“Well, I love my gnocchi,” Dick counters, possessive and prickly. He’s defending more than dumplings. It’s his very discernment that he’s standing up for, even though it never came into play. And he accentuates his pique by wresting the gnocchi from Jane. Like a kid in the schoolyard, he wants his ball back.
--Frank Bruni, NYT, on the endowment effect in restaurant reviewing. See the Wikipedia entry for endowment effect.

Sunday, August 16, 2009

Many not-so-tragic demises

The paradigmatic American newspaper, once its competition had been eliminated, settled down into a comfortable monopoly position in most cities; sometimes there was another paper around, but in most places one newspaper stood dominant and took home most of the ads, not to mention the money.

These monopoly positions created a dynamic by which the only thing a paper could do wrong was to offend or, God forbid, lose a reader. ...

The commentators most caught up in the romanticized notion of newspaper cite the potential loss of the newspapers’ “watchdog” function. Let’s be honest. Most newspapers in the U.S. aren’t watchdogs, and most of the rest don’t spend an inordinate amount of time being watchdogs.

I live now in one of the very largest cities in the U.S., but it’s in classic flyover territory, a sociological light year away from a major media center. Here’s a list of the headlines that appeared on a recent day on the front cover of the paper’s feature section, including both stories and news squibs:

“Wooden Memories”
“Test your hearing”
“Free burrito for teachers”
“Post office food drive”
“Fight Crohn’s and colitis”
“Mom and Estában”
“Healthful salsa non-guilty pleasure”
“Great gifts for teachers” ...

It’s obvious from reading down that list of headlines that there was nothing there of remote interest of just about any sentient being. But that’s not what the paper’s editors were aiming for. The point is that there was nothing there that could possibly offend anyone. ...

The web doesn’t reward blandness. It doesn’t really like the obvious, the inoffensive and the established. Today, if you published a web page with the headlines I just listed on it—you know, starting with “Wooden Memories” and going right on down to “Great Gifts for Teachers”—you wouldn’t get many readers. In this way, the web mercilessly exposes the flaccidness of the content of most papers. It creates a straightjacket for them: As they desperately bland themselves out on land, the material they have on hand to impress in cyberspace is correspondingly pallid.
--Bill Wyman, Splice Today, on why most newspapers suck. HT: Andrew Sullivan

No, not the grater!

Thank heavens we caught the robbers before they grated it.
--William Bizzarri, Italian cheese producer, on 570 stolen 80-pound wheels of parmesan cheese worth $426 each

Saturday, August 15, 2009

What's wrong with U.S. healthcare, and how to fix it

This article on U.S. healthcare in the Atlantic Monthly by media and technology executive David Goldhill is the best I've read to date. Please read it yourself. The below excerpts don't do it justice.

On the idiocy of first-dollar health insurance coverage:
But health insurance is different from every other type of insurance. Health insurance is the primary payment mechanism not just for expenses that are unexpected and large, but for nearly all health-care expenses. We’ve become so used to health insurance that we don’t realize how absurd that is. We can’t imagine paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance, but we all assume that our regular checkups and dental cleanings will be covered at least partially by insurance. ...

Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?

Is this really a big problem for our health-care system? Well, for every two doctors in the U.S., there is now one health-insurance employee—more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else—by ourselves.
On the false promise of government cost curve-bending:
Whatever their histories, nearly all developed countries are now struggling with rapidly rising health-care costs, including those with single-payer systems. From 2000 to 2005, per capita health-care spending in Canada grew by 33 percent, in France by 37 percent, in the U.K. by 47 percent—all comparable to the 40 percent growth experienced by the U.S. in that period. Cost control by way of bureaucratic price controls has its limits.
The real reason electronic medical records aren't widely used:
Why has adoption of clinical information technology been so slow? Companies invest in IT to reduce their costs, reduce mistakes (itself a form of cost-saving), and improve customer service. Better information technology would have improved my father’s experience in the ICU—and possibly his chances of survival.

But my father was not the customer; Medicare was. ...

Of course, one area of health-related IT has received substantial investment—billing. So much for the argument, often made, that privacy concerns or a lack of agreed-upon standards has prevented the development of clinical IT or electronic medical records; presumably, if lack of privacy or standards had hampered the digitization of health records, it also would have prevented the digitization of the accompanying bills. To meet the needs of the government bureaucracy and insurance companies, most providers now bill on standardized electronic forms. In case you wonder who a care provider’s real customer is, try reading one of these bills. ...

The Rand Corporation has estimated that the widespread use of electronic medical records would eventually yield annual savings of $81 billion, while also improving care and reducing preventable deaths, and the White House estimates that creating and spreading the technology would cost just $50 billion. But in what other industry would an investment with such a massive annual return not be funded by the industry itself? (And while $50 billion may sound like a big investment, it’s only about 2 percent of the health-care industry’s annual revenues.)
Why technological progress in healthcare doesn't work like technological progress elsewhere:
One of the most widely held pieces of conventional wisdom about health care is that new technology is relentlessly driving up costs. Yet over the past 20 years, I’ve bought several generations of microwave ovens, personal computers, DVD players, GPS devices, mobile phones, and flat-screen TVs. I bank mostly at ATMs, check out my own goods at self-serve supermarket scanners, and attend company meetings by video­conference. Technology has transformed much of our daily lives, in almost all cases by adding quantity, speed, and quality while lowering costs. So why is health care different? ...
Recall the MRI my wife needed a few years ago: $1,200 for 20 minutes’ use of a then 20-year-old technology, requiring a little electricity and a little labor from a single technician and a radiologist. Why was the price so high? Most MRIs in this country are reimbursed by insurance or Medicare, and operate in the limited-competition, nontransparent world of insurance pricing. I don’t even know the price of many of the diagnostic services I’ve needed over the years—usually I’ve just gone to whatever provider my physician recommended, without asking (my personal contribution to the moral-hazard economy).

By contrast, consider LASIK surgery... The surgery is seldom covered by insurance, and exists in the competitive economy typical of most other industries. So people who get LASIK surgery—or for that matter most cosmetic surgeries, dental procedures, or other mostly uninsured treatments—act like consumers. If you do an Internet search today, you can find LASIK procedures quoted as low as $499 per eye—a decline of roughly 80 percent since the procedure was introduced.
How to fix the system:
The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care. And a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. ...

First, we should replace our current web of employer- and government-based insurance with a single program of catastrophic insurance open to all Americans—indeed, all Americans should be required to buy it—with fixed premiums based solely on age. ... A typical catastrophic insurance policy today might cover any expenses above, say, $2,000. That threshold is far too low; ultimately, a threshold of $50,000 or more would be better. ...

How would we pay for most of our health care? The same way we pay for everything else—out of our income and savings. ...

Anyone with whom I discuss this approach has the same question: How am I supposed to be able to afford health care in this system? Well, what if I gave you $1.77 million? Recall, that’s how much an insured 22-year-old at my company could expect to pay—and to have paid on his and his family’s behalf—over his lifetime, assuming health-care costs are tamed. Sure, most of that money doesn’t pass through your hands now. It’s hidden in company payments for premiums, or in Medicare taxes and premiums. But think about it: If you had access to those funds over your lifetime, wouldn’t you be able to afford your own care? And wouldn’t you consume health care differently if you and your family didn’t have to spend that money only on care?

Friday, August 14, 2009

Chris Rock, social psychologist

Guys actually think that there are other fish in the sea, and if a guy introduces his boy to his new girlfriend, when they walk away, his boy goes, "Aww man, she's nice, I gotta get me a girl LIKE that." If a woman introduces her new man to her girlfriend, and they walk away, her girlfriend goes "I gotta get HIM..." Every girl in here got a girlfriend they don't trust around their man.
--Chris Rock, Never Scared

Now there’s experimental evidence that single women are particularly drawn to other people’s partners, according to a report in the Journal of Experimental Social Psychology by two social psychologists, Melissa Burkley and Jessica Parker of Oklahoma State University. ...

[Each] of the experimental subjects was told that he or she had been matched by a computer with a like-minded partner, and each was shown a photo of an attractive person of the opposite sex. (All the women saw the same photo, as did all the men.) Half of the subjects were told that their match was already romantically involved with someone else, while the other half were told that their match was unattached. Then the subjects were all asked how interested they were in their match.

To the men in the experiment, and to the women who were already in relationships, it didn’t make a significant difference whether their match was single or attached. But single women showed a distinct preference for mate poaching. When the man was described as unattached, 59 percent of the single women were interested in pursuing him. When that same man was described as being in a committed relationship, 90 percent were interested.
--John Tierney, NYT, on the endorsement effect of another woman

“I’m afraid I have a cavalier attitude about wives,” [former Cosmopolitan editor-in-chief Helen Gurley] Brown announced from the outset of her public life. To Scanlon—whose besotted encomium may constitute Brown’s final caress in this vale of tears—the attitude amounts to “she who keeps the man happy keeps the man,” a point of view the biographer hails, several times, as being fundamentally “libertarian.” By this, she means that when two women bid for a man, no advantage shall be given to the one who might have children with him, or an economic dependency built upon their marriage. There is only the marketplace of feminine wiles, in which a concubine’s feigned interest in a man’s workday trumps a wife’s quiet plea for help around the house, in which young is better than old and new is more exciting than familiar.
--Caitlin Flanagan, Atlantic Monthly, on feminine competition without boundaries

Explaining the lack of time travelers from the future

The notion that one version of time travel is more accurate than another might seem ridiculous on its surface, but physicists actually have rather a lot to say about how time travel should work. ...

The many-worlds interpretation provides a fertile basis for time fiction, via the ubiquitous Back to the Future model of alternate histories... Einstein's theory of general relativity­—the branch of physics that might make time travel possible—doesn't take kindly to the idea. Every solution to Einstein's equations involves just a single universe. ...

As a time traveler, you can't visit an era unless there's already a time machine when you get there—an off-ramp. This helps explain why we're not visited by time-traveling tourists from our own future. Futuristic humans don't drop in for dinner because we haven't yet invented time travel.
--Physicist Dave Goldberg, Slate, on time travel rules

Monday, August 10, 2009

Your professor's cookies

If you are looking for a sign of how strapped the University of California, Los Angeles, is for cash, consider that its arts and architecture school may resort to holding a bake sale to raise money. ... “We’re looking at more summer classes for high school seniors and bake sales,” [Dean of the School of the Arts and Architecture Christopher] Waterman said.
--Patricia Cohen, NYT, on the retreat of specialization in one's comparative advantage

Friday, August 7, 2009

Redheads' pain tolerance

Researchers believe redheads are more sensitive to pain because of a mutation in a gene that affects hair color. ... A mutation in the MC1R gene results in the production of a substance called pheomelanin that results in red hair and fair skin.

The MC1R gene belongs to a family of receptors that include pain receptors in the brain, and as a result, a mutation in the gene appears to influence the body’s sensitivity to pain. A 2004 study showed that redheads require, on average, about 20 percent more general anesthesia than people with dark hair or blond coloring.
--Tara Parker-Pope, NYT, on the curse of red hair

Thursday, August 6, 2009

Good vs. all-time great

[Amy] Adams is a lovely and subtle performer, but she is overmatched by her co-star and handicapped by the material. Julia Child could whip up a navarin of lamb for lunch, but Meryl Streep eats young actresses for breakfast. Remember Anne Hathaway in “The Devil Wears Prada”? Amanda Seyfried in “Mamma Mia”? Neither do I. ...

Julie [Powell] is an insecure, enterprising young woman who found a gimmick and scored a book contract. Julia [Child] is a figure of such imposing cultural stature that her pots and pans are displayed at the Smithsonian.
--A.O. Scott, NYT, on unflattering contrasts in Julie & Julia

Avoiding jet lag through fasting

Scientists have long known that our 24-hour "circadian rhythm" is regulated by a group of cells in the hypothalamus region of the brain. These cells, which represent the body's main clock, are sensitive to changes in light conditions registered through the optic nerve in the eye.

Researchers at Harvard Medical School and Beth Israel Deaconess Medical Center in Boston have now pinpointed a second clock that is set by the availability of food. Their study, published today in the journal Science, is based on research on mice. But they believe all mammals, including humans, possess an internal food clock, too. ...

Dr. Saper says long-distance travellers can probably use this food clock to adjust rapidly to a new time zone.

"A period of fasting with no food at all for about 16 hours is enough to engage this new clock," he said in a statement released with the study. Once you eat again, your internal clock will be reset as though it is the start of a new day.

Although more research is needed to confirm the findings, travellers could probably activate the second clock in the following way: On an overnight trip to Europe, fast before the flight and don't eat on the plane. After you arrive the next morning, eat a nutritious meal.
--Paul Taylor, Globe and Mail, on the tradeoff between hunger and sleepiness

Wednesday, August 5, 2009

Why British teeth are even worse than before

I come from a country -- America -- where your standard teeth-cleaning can last upwards of an hour and entails all sorts of extensive prodding, soaking and polishing. In the U.K., in contrast -- at least with the NHS -- you're in and out of a standard check-up in under 20 minutes. For kids, it takes less than five. ...

The heart of the problem appears to be the system of dental reforms introduced by the British government in 2006. Under the old contract system (in place since 1948), dentists were paid by the government for every NHS treatment carried out. The criticism of this system was that it encouraged a "drill and fill" culture in which dentists did a lot of purely cosmetic (non-clinical) work, with no emphasis on preventative care. ...

As of April 2006, everything changed. Contracts are now agreed upon with the local PCTs (primary care trusts), which have responsibility for overseeing NHS dental care in their area and guaranteeing access. The PCTs are allocated money each year by the government that must be spent on NHS dentistry, which is then divided up among dentists willing to carry out NHS work. And unlike the previous fee-per-treatment system, dentists are now paid a flat rate covering the amount of work they are contracted to do each year...

While these reforms were supposed to increase access to NHS dentists, in practice, they've had the opposite effect. NHS estimates suggest that nearly 1 million fewer people have access to an NHS dentist than they did three years ago. According to a citizen's advice survey carried out in early 2008, approximately 7.4 million people hadn't been to an NHS dentist since April 2006 because of difficulties in finding one. ...

The incentives set up by the new system also mean that dentists are more likely to "under-treat," i.e., to fail to provide complex (and costly) treatment, even if it's clinically necessary. ...

I witnessed this dilemma personally when I was in need of a root canal myself. My dentist told me that I had the choice of pulling the (otherwise healthy) tooth for the flat NHS rate of $76 or going private and paying 650 pounds (roughly $1,070) to do a root canal. He wasn't willing to run the risk of doing the root canal himself for the NHS fee. As he put it starkly, why risk a lawsuit doing a root canal that takes several hours to do properly when you could just pull the tooth and be done with it? I went private.
--Delia Lloyd, Politics Daily, on capitation in U.K. dentistry. HT: Freakonomics

Pwned on medical innovation

Virtually every progressive recommendation about health policy for the last 20 or 30 years that the drug industry felt might harm its bottom line has been met by the threat that if they don't make as much money before, innovation will cease and there will be no cures for new diseases. ... There are a couple reasons that this is a specious argument. One is that according to their filings with the SEC, the drug companies only spend about 15 cents of every dollar on research and development.
--Jerry Avorn, chief of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women's Hospital and author of Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs, on medical innovation

This makes about as much sense as saying that Dr. Jerry Avorn cannot be that smart because his brain only weighs about three pounds. Presumably, you can't be really smart--really innovative--unless your brain is at least 30 percent of your body weight! ...

So how big should a "brain" be? Hard to say. But let's look at some companies that are generally recognized as pretty innovative, and their R&D as a percentage of revenue:

Apple: three cents out of every dollar

Google: ten cents out of every dollar

Intel: fifteen cents out of every dollar

Genzyme (innovative biotech startup!): sixteen cents of every dollar

US Government: three cents out of every dollar

I can assure Dr. Avorn that any venture capitalist would be happy to invest in these hidebound laggards who haven't had a new idea in centuries. The first few, anyway.
--Megan McArdle, Atlantic Monthly, laying the smackdown

Master and servant

[New York junior senator] Gillibrand knows who her benefactor is, and acts accordingly.

During her introductory press conference as senator, she said, “Senator Schumer has been an inspiration to me,” and added that she hoped to “mirror” his performance in the Senate. She has referred to him on a number of occasions since then as a “mentor.”

The transactional meaning, to Congressional insiders, is clear.

“If he has to carry her forever, it is a resource strain,” said one aide to a Democratic member of Congress. “But he has a feeling that he will be able to carry her this one time and then own her for the rest of his God-given life. He’ll be two senators.”
--Jason Horowitz, PolitickerNY, on slavery in the Senate

Anecdotes of a journal editor

The job of theory editor at the AER is unique in one way. There are thousands of people who believe they have a Great Economic Idea that economists desperately need to know. Let us agree to call these people “kooks” for want of a better term. Pretty much 100% of kooks are theorists; you won’t meet a, say, physicist or physician with a Great Economic Idea that involved running regressions or doing lab experiments, although occasionally there is a table illustrating a correlation between some economic variable like lawyers or fluoridated water and per capita GDP. ...

As a final anecdote, I received a [referee] report from a respected economist, who said in the letter to me: ‘I have written a gentle report, because the author is obviously inexperienced and very junior, and I don’t want to discourage him. But make no mistake: this paper makes no contribution and you should not encourage a revision.’ The author of that paper, which I rejected, had already won a Nobel prize in economics.
--Preston McAfee on what editors see. HT: Marginal Revolution

3 A.M. breakfast

At breakfast, they took daily turns delivering prayers and reading letters from relatives in Korea. Breakfast meetings became an inviolate part of the family schedule: When their father began commuting on a 3:58 a.m. train, the children were expected at the table by 3 a.m.
--Sasha Issenberg, Boston Globe, on Howard and Harold Koh's upbringing

Monday, August 3, 2009

"I don't buy it"

Sure, you have your marital issues, but on the whole you feel so self-satisfied about how things have worked out that you would never, in your wildest nightmares, think you would hear these words from your husband one fine summer day: “I don’t love you anymore. I’m not sure I ever did. I’m moving out. The kids will understand. They’ll want me to be happy.”

But wait. This isn’t the divorce story you think it is. Neither is it a begging-him-to-stay story. It’s a story about hearing your husband say “I don’t love you anymore” and deciding not to believe him. And what can happen as a result.
--Laura Munson, NYT, on the power of denial

What does microcredit do?

Academics have been trying to work out from the evidence whether microcredit does actually raise people's incomes.

But it's been hard to do a proper scientific survey, since you need to compare those who do get a loan with a control group of similar people who don't.

Dean Karlan, professor of economics at Yale University, has managed to do it - with a control group - in the Philippines. His results raise some serious questions about the effectiveness of microcredit in reducing poverty.
--BBC on microcredit

Hear Dean Karlan's BBC interview here.