Archive for the ‘Health’ Category

This is the feeling we learn to live with in North America

I guess it’s just the day for it.

(put NOFX and Fooly Cooly together – I’m happy).

The New England Journal of Medicine (I’ve really taken to the idea of Wednesday being NEJM Day) has three terrific editorials starting it off, this week – all related to (hand)guns. It’s hard, for example, not to be mightily impressed by the likes of how “Handgun Violence, Public Health, and the Law” kicks off:

Firearms were used to kill 30,143 people in the United States in 2005, the most recent year with complete data from the Centers for Disease Control and Prevention. A total of 17,002 of these were suicides, 12,352 homicides, and 789 accidental firearm deaths. Nearly half of these deaths occurred in people under the age of 35. When we consider that there were also nearly 70,000 nonfatal injuries from firearms, we are left with the staggering fact that 100,000 men, women, and children were killed or wounded by firearms in the span of just one year. This translates into one death from firearms every 17 minutes and one death or nonfatal injury every 5 minutes.

By any standard, this constitutes a serious public health issue that demands a response not only from law enforcement and the courts, but also from the medical community.

A very interesting perspective – that handguns and handgun violence represent not only a public health issue, but such a one that we are obliged to respond from within our profession. Remember the excellent book/site Understanding the USA?

understanding usa

The two editorials proper are “Guns, Fear, the Constitution, and the Public’s Health” and “” – the former the more relevant (which is not to suggest the latter is not interesting in its own right, focussing specifically upon the issue at hand: District of Columbia v. Heller, a case challenging handgun-control statutes adopted in 1976 in Washington, D.C., and currently being heard by the Supreme Court):

Gun violence is often an unintended consequence of gun ownership. Americans have purchased millions of guns, predominantly handguns, believing that having a gun at home makes them safer. In fact, handgun purchasers substantially increase their risk of a violent death. This increase begins the moment the gun is acquired — suicide is the leading cause of death among handgun owners in the first year after purchase — and lasts for years.

The risks associated with household exposure to guns apply not only to the people who buy them; epidemiologically, there can be said to be “passive” gun owners who are analogous to passive smokers. Living in a home where there are guns increases the risk of homicide by 40 to 170% and the risk of suicide by 90 to 460%. Young people who commit suicide with a gun usually use a weapon kept at home, and among women in shelters for victims of domestic violence, two thirds of those who come from homes with guns have had those guns used against them.

Handguns, like cars, like fatty food, like a great, great many things, simply kill way too many Americans. If only it were acceptable to use “9/11” as a unit of comparison – handgun-related-fatalities being around 10 of them every year. What’s insane is that the same lunatics (say, the GOP) who defend such a thing go around insisting that abortion is the reason the US economy is in trouble – because all of those potential American Workers were killed in the womb. Go figure.

Huckabee called abortion a holocaust because he says “we have aborted more than a million people” in the last 35 years. I’m willing to bet guns have killed more than that. Worse, they’ve probably killed plenty of women who could have given birth! (my cheap shot).

Personally – and I realise full-well that I’m a foreigner with no claim to any sort of up-bringing within the 2nd Amendment – the idea that the 2nd Amendment protects individual rights to bear arms is a little crazy. For a start there’s a “the” before “people”, clear as day. It’s written down, for Cliff’s sake – it isn’t like it’s Neal Armstrong, or anything.

Back to regarding the title of this post (and the song of the link of the youtube clip at the top):

It’s like seeing a car crash from inside the car
The driver’s got his head craned back he’s telling you a joke
You see the bus on collision course
You point your arm and turn your head and wait for the impact
This is the feeling we learn to live with in North America
The morning headlines always accompanied with sweat and nausea
Every week another puzzle piece gets permanently glued into place

We see the iceberg from 15 miles away
The captain orders the ship to “stay the course”
“Full speed ahead” shouts the accursed
The next thing we heard was, “Rich women and children first”
The ship is listing, the captain’s placing blame on the iceberg
“That berg attacked us, I am declaring war on the Arctic”
Who could ever have predicted the greatest ship could so easily sink (duh)

Lifeboats are useless without rescue
The only ships show up for salvage
When setting sail on the St. Louis
We all knew what consequences could be
With the crew we had at the controls

Dear Sir: We believe we can cure your diabetes. However, we may also have given you HIV…

A mixed-bag kind of a day for the US health care system.

US scientists have managed to rid diabetic mice of the effects of the disease using a cocktail of drugs.

The mice, who had type 1 diabetes, started producing their own insulin after taking a mixture of four drugs.

Previously the same team at Harvard University had only been able to stop the destruction of the cells which make insulin, not regenerate them.

This is good – this is flippin’ fantastic. The ability to make broken bodies regulate their own insulin? It’s an incredible discovery (and will hopefully continue to be successful through human trials).

This, however, was not-so-good:

US officials Thursday said 40,000 people may have been infected with HIV and hepatitis in a major health scare after a Las Vegas clinic was found to have re-used syringes and medicine vials.

Authorities in southern Nevada said they were notifying some 40,000 patients who received anesthesia injections at the clinic’s endoscopy center between March 2004 and January 11, 2008 about potential exposure to hepatitis and HIV.

No cases of HIV or hepatitis B infections related to the clinic’s practices have been detected yet, authorities said.

After an investigation, “the health district determined that unsafe injection practices related to the administration of anesthesia medication might have exposed patients to the blood of other patients,” it said.

“The joint investigation identified the re-use of syringes (not needles) and the use of single dose vials of anesthesia medication on multiple patients as the potential sources of contamination.”

Action has since been taken by the clinic to end such practices.

“It appears the injection practices that can lead to the transmission of hepatitis C and other bloodborne infections have been occurring at this clinic for several years,” said chief health officer Lawrence Sands.

As near as I can determine the practice hasn’t been found to be unsafe – it was always unsafe, and should not have been occurring at this or any other clinic.

The consequences certainly ought to be interesting – class-action-wise-speaking, etc.

The NEJM discusses why the government can’t do …anything?

Quite a cool editorial in this week’s New England Journal of Medicine:

The conflagration over the reauthorization of the State Children’s Health Insurance Program (SCHIP) offers a compelling example of Washington’s current inability to address even seemingly uncontroversial matters such as improved health care coverage for children.

Why would the President veto bipartisan legislation that does precisely what he insisted on — namely, aggressively enroll the poorest children? One might blame the poisonous atmosphere that pervades Washington these days, but other important social policy reforms have managed to get through.

One answer lies in a far larger dimension of SCHIP that is basic to any health insurance legislation — namely, the legislative architecture of the reform plan, its structural and operational approach. Viewed from this vantage point, the SCHIP battle turns out not to have been about family-income assistance levels or the mechanism for financing coverage subsidies (although both the Medicare managed-care industry and the tobacco companies weighed in noisily on the latter question).

Instead, the issue became the role of government in organizing and overseeing the health care marketplace (see graphs). SCHIP uses the power of government to form insured groups, select qualified plans, oversee plan operations, and measure results. It is this architecture to which the President was referring when he said that the legislation would move the health care system in the wrong direction.

The graphs in question are quite useful:

nejm graphs

So enrollment (the number of children being helped) is capped out and declining, while the cost is increasing. The problem? Not health insurance at all, but health care costs themselves.

So the identification that the architecture of government intervention/support, ideologically, is the sticking point, is quite correct. The real problem, in terms practical – meaning actually helping poor kids – isn’t insurance, but costs. As previously discussed, SCHIP is the wrong method by which to achieve this outcome, when it is unnecessarily cost-increasing.

Of course, this runs into the problem of letting the government manage such a thing as hospitals. Given how well they performed on something like the mere legislation towards such an end, how much do we trust them to do anything competently at all?

Post-script: a colleague and I had been discussing an interesting piece of analysis, which neither of us will ever find the time to undertake. It is this:

  1. How much money/resources were employed by the US government in pursuing this legislation? This means paper, ink, admin support, debating/voting hours – costing in entirety the politics played to get this legislation up and down the monkey-bars of “government”
  2. How much health-care-for-children could actually have been provided for that money?

The idea is that actually doing something was the opportunity cost of governmenting the thing into being. We believe the numbers would – very, entirely, rightly – thoroughly embarass this or any other body of politicians.

Subjecting technical efficiency to cost-benefit analysis

While I was at the Wall Street Journal:

In a small, damp factory here, blood-smeared men wring pulp from pig intestines, then heat it in concrete vats.

The activity at Yuan Intestine & Casing Factory is the first step in the poorly regulated process of making raw heparin, the main ingredient in a type of blood-thinning medicine that in recent days has come under suspicion in the deaths of four Americans.

More than half the world’s heparin comes from China. The chemical is often extracted from pig entrails in small factories — many as rudimentary as this one, which also manufactures sausage casings from intestines. The heparin eventually ends up in drugs used world-wide by patients having surgery or who need dialysis.

The growing concern over heparin’s safety brings to the forefront the question of whether the raw materials from which it is made — for that matter, the raw materials for any drug derived from animals — should be more tightly controlled. The FDA’s position is that the purification steps in the drug-making process are sufficient to produce a pure product from pig tissue, and that “companies are responsible for sourcing the materials” and “appropriately processing the material.”

The health of the animals from which heparin is extracted can be important to the safety of the drug. Drug makers in the U.S. and Europe stopped using cows — a once-common heparin source — after the discovery of bovine spongiform encephalopathy, or “mad cow” disease, amid concerns that the illness could be passed on.

In China, not all heparin makers answer to drug regulators. That’s partly because some are registered as chemical makers, not drug producers. It’s a legacy of a regulatory system that focuses on finished drugs, not their ingredients, says Shen Chen, a spokesman for the State Food and Drug Administration in Beijing.

This part was interesting:

Mr. Yuan, the owner of the heparin and sausage-casing factory in the village of Yuanlou, is a gregarious man who takes pride in the business he has built. Now 57 years old, he has earned enough money from heparin to send his two sons to university. Mr. Yuan himself never graduated from high school because his family was too poor to pay for school.

He launched the original business in the mid-1980s making sausage casings from intestines. Later he added heparin production.

Funnily enough (sort of), I was being asked, by colleagues, about a related matter just the other day. As a vegan, how do I respond to prescribed pharmaceutical treatments when those drugs may come from animals (the intestines of about 3,000 pigs are required to produce a kilogram of heparin)?

Honestly, I just didn’t know. I don’t know whether drugs are vegan. My guess is that I would ask, and try to find vegan, yet effective, alternatives. At the end of the day if I needed that antibiotic, I’d take it. I’m vegan – but I’m not an idiot. For now, I think I’ll just keep hoping I stay healthy as a (healthy) horse.

More generally, this is our issue: how do we weight technical/productive efficiency (producing things for the lowest possible cost/price/resource use) with, say the risk of harm being caused by the corners cut? For me, this is an issue relating to the value of information.

The known risk of negative side-effects (say, Adrenal, Ovarian or Retroperitoneal hemorrhage, if you’re taking heparin) can be, and are, built into the model for cost-effectiveness employed by health-care systems the world over (risk-adjusted adverse events are negative benefits).

However, there’s this issue: if we agree that a drug is cost-effective, then go and manufacture it (efficiently, productively) in a weird farmhouse in China (for example) and, as a result, suffer four deaths and around 350 allergic reactions among heparin consumers in the US, that is something not a part of the original information set or decision-making.

How, then, do we proceed? It would seem that complexity needs to be considered more fully. When we say “the cost-effectiveness of this compound is this much”, we should be adding “…if it is made for this much in facilities of this quality in these countries.” Pursuing the lowest costs of production overseas has the potential to devalue the information we already had gathered on the benefits vs. the risks of any given pharmaceutical intervention.

Does Preventive Care Save Money?

Yes and no. Yes, because prevention is often worth a pound of cure, and no, because often preventive care can identify problems that are expensive to fix (as opposed to not spotting them, after which the patient’s death is less expensive. Look, I’m not a dick – that’s just the way the costs work).

That’s the short version of this quite well-argued piece in the latest New England Journal of Medicine, Does Preventive Care Save Money? Health Economics and the Presidential Candidates.

With health care once again a leading issue in a presidential race, candidates have offered plans for controlling spiraling costs while enhancing the quality of care. A popular component of such plans involves greater promotion of preventive health measures. The first element in Hillary Clinton’s plan is to “focus on prevention: wellness not sickness.” John Edwards has stated that “study after study shows that primary and preventive care greatly reduces future health care costs, as well as increasing patients’ health.” Mike Huckabee has said that a focus on prevention “would save countless lives, pain and suffering by the victims of chronic conditions, and billions of dollars.” Barack Obama has argued that “too little is spent on prevention and public health.”

Indeed, some evidence does suggest that there are opportunities to save money and improve health through prevention. Preventable causes of death, such as tobacco smoking, poor diet and physical inactivity, and misuse of alcohol have been estimated to be responsible for 900,000 deaths annually — nearly 40% of total yearly mortality in the United States. Moreover, some of the measures identified by the U.S. Preventive Services Task Force, such as counseling adults to quit smoking, screening for colorectal cancer, and providing influenza vaccination, reduce mortality either at low cost or at a cost savings.

Sweeping statements about the cost-saving potential of prevention, however, are overreaching. Studies have concluded that preventing illness can in some cases save money but in other cases can add to health care costs.[PDF] For example, screening costs will exceed the savings from avoided treatment in cases in which only a very small fraction of the population would have become ill in the absence of preventive measures. Preventive measures that do not save money may or may not represent cost-effective care (i.e., good value for the resources expended). Whether any preventive measure saves money or is a reasonable investment despite adding to costs depends entirely on the particular intervention and the specific population in question. For example, drugs used to treat high cholesterol yield much greater value for the money if the targeted population is at high risk for coronary heart disease, and the efficiency of cancer screening can depend heavily on both the frequency of the screening and the level of cancer risk in the screened population.

The focus on prevention as a key source of cost savings in health care also sidesteps the question of whether such measures are generally more promising and efficient than the treatment of existing conditions. Researchers have found that although high-technology treatments for existing conditions can be expensive, such measures may, in certain circumstances, also represent an efficient use of resources. It is important to analyze the costs and benefits of specific interventions.

I agree. I think the authors are a mite too involved with efficiency-based arguments (as opposed to equity-based arguments) and, as a result, run right past the fact that unversal health care (for example) is an intervention – possibly the intervention.

Their solution? A meta-analysis! Possibly useful, possibly not. Meta-analyses are often of little worth. The result:

NEJM chart

Our findings suggest that the broad generalizations made by many presidential candidates can be misleading. These statements convey the message that substantial resources can be saved through prevention. Although some preventive measures do save money, the vast majority reviewed in the health economics literature do not. Careful analysis of the costs and benefits of specific interventions, rather than broad generalizations, is critical. Such analysis could identify not only cost-saving preventive measures but also preventive measures that deliver substantial health benefits relative to their net costs; this analysis could also identify treatments that are cost-saving or highly efficient (i.e., cost-effective).

The chart is interesting. I’m not so sure this is way to go: we are interested in the cost-effectiveness of preventive care, relative to palliative (or curative). This has dis-aggregated the studies along identified cost-effectiveness thresholds, but that is not what is of policy interest, surely. Moreover I see, in this, a big risk of Simpson’s paradox. Looking at the table they provide of “selected” studies, I also see a mis-match in the conditions to which preventive vs. palliative/curative care are being sorted. Can we compare colonoscopy screening with anti-retroviral treatment for HIV? ‘Cause I have a suspicion that is what might have occurred.

This is standard for systematic reviews: one is pulling together mis-matched data for retrospective analysis for which the data was never designed. This generates value-of-information problems across the board, and we ought to remember this as we ponder the results. Ultimately, too (and more importantly), I think this piece really mis-reads the point of so-called “socialised medicine”.

That said, the authors are up-front about their motive not being to solve the problem: they are commenting upon less-informed debate by Presidential candidates. Now, one (say, me) could easily reply that this is pointless: Presidential candidates are selling us themselves, not a policy – there is a big agency problem and we really shouldn’t take them too seriously. If a candidate trotted out his/her future cabinet and invited the country to openly and knowingly elect the lot of them, then I’d pay attention.

Market failure in US Health Care

Back to the costs of the US Health Care system. From the New England Journal of Medicine:

U.S. health care expenditures rose 6.7% in 2006, the government recently reported. According to the Centers for Medicare and Medicaid Services, total health care expenditures exceeded $2.1 trillion, or more than $7,000 for every American man, woman, and child. Medicare costs jumped a record 18.7%, driven by the new privatized drug benefit. Total health care spending, now amounting to 16% of the gross domestic product, is projected to reach 20% in just 7 years.

Relentless medical inflation has been attributed to many factors — the aging population, the proliferation of new technologies, poor diet and lack of exercise, the tendency of supply (physicians, hospitals, tests, pharmaceuticals, medical devices, and novel treatments) to generate its own demand, excessive litigation and defensive medicine, and tax-favored insurance coverage.

Here is a second opinion. Changing demographics and medical technology pose a cost challenge for every nation’s system, but ours is the outlier. The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization. The dominance of for-profit insurance and pharmaceutical companies, a new wave of investor-owned specialty hospitals, and profit-maximizing behavior even by nonprofit players raise costs and distort resource allocation. Profits, billing, marketing, and the gratuitous costs of private bureaucracies siphon off $400 billion to $500 billion of the $2.1 trillion spent, but the more serious and less appreciated syndrome is the set of perverse incentives produced by commercial dominance of the system.

Our author is correct: the US is an outlier when it comes to the cost of care:

NEJM pic

Although the problem is – necessarily – more complex than that. Having higher expenditures on health is not surprising. The US also has more bloody money – I’m sure their expenditures on everything from vehicles to fancy soap. The key is, does the US get better health outcomes for that money? No, no it doesn’t.



This is the market failure – the US system is structured in a cost-inflating manner. Cost containment is just not adequately instituted.

The private insurance system’s main techniques for holding down costs are practicing risk selection, limiting the services covered, constraining payments to providers, and shifting costs to patients. But given the system’s fragmentation and perverse incentives, much cost-effective care is squeezed out, resources are increasingly allocated in response to profit opportunities rather than medical need, many attainable efficiencies are not achieved, unnecessary medical care is provided for profit, administrative expenses are high, and enormous sums are squandered in efforts to game the system. The result is a blend of overtreatment and undertreatment — and escalating costs. Researchers calculate that between one fifth and one third of medical outlays do nothing to improve health.

Many U.S. insurers do reward physicians for following standard clinical practices, but these incentives do not aggregate to an efficient national system of care. After more than three decades of managed care — and the same three decades of studies by Wennberg and colleagues identifying wide variations in practice patterns — consistent practices are still far from the norm. Commercial incentives are not fixing what’s broken.

Instead, cost-containment efforts have fallen heavily on primary care physicians, who have seen caseloads increase and net earnings stagnate or decline. A popular strategy among cost-containment consultants relies on the psychology of income targeting. The idea is that physicians have a mental picture of expected earnings — an income target. If the insurance plan squeezes their income by reducing payments per visit, doctors compensate by increasing their caseload and spending less time with each patient.

This is among the reasons why nationalised/socialised/universal (call it what you will) Health Care/Insurance makes so much sense: only a government is big enough to achieve national agency on behalf of consumers of health care. The problem, then, isn’t market failure per se – it’s that we have a tonne of markets, haphazardly stitched together nation-wide, when what is required is a national market. Whether a national market with monopsony purchasing power or not is another issue.

Here’s a third opinion. Back up in the figure/tables, the Rest of the World is getting equivalent or better health outcomes, for far less money. How are they able to keep their technology costs so low, relative to the US? Because the US spends all the money on technological change. The rest of the world can keep its costs down by relying upon the US system to reward new technologies, which we then use. In effect, US patients are subsidising patients in pretty much every other country on earth.

I’m not suggesting this is either “right” or “wrong”, nor am I suggesting that this phenomenon somehow makes the US structure for cost-containment “good” – because it certainly is not, nor is it efficient, nor is it in any way contributing positively to US patient safety. It’s a perspective to bear in mind, though. Every/anytime you suffer a non-American giving you shit about the expense of health care in the US, remind them that it is thanks to that expense that they can enjoy less-costly care.

Just remember that your system is still wildly inefficient and overly costly, though, and that you’re being thoroughly ripped off with respect to your health outcomes.

Factors that cause shifts in demand: convenience, income

You will bear a vegan’s conceit, today, while I consider this openly (while going to war against an American standard):

Sales of boxed macaroni and cheese, a product category led by Northfield, Ill., based Kraft Foods, have experienced a significant rise.

The product, which debuted 70 years ago, posted 10 percent growth in 2007, due in part to soaring sales of single-serve microwaveable Easy Mac cups, which experienced a 50 percent rise in sales for the year, the Chicago Sun-Times reported Tuesday.

Harry Balzer, vice president of consumer research firm NPD Group, said about one-third of the U.S. population and half of the country’s children will feast on macaroni and cheese at some point during the next two weeks. That number marks a significant increase from 1984, when about 30 percent of the U.S. population and 40 percent of children in the country would have snacked on the popular pasta dish in a two-week period.

The factors affecting demand (i.e. causing, in this instance, an outward shift in the demand curve for macaroni and cheese) are convenience – given the pinning of the increase in popularity on the “Easy Mac” single-serve deal. Tastes, more broadly: I’ve seen more and more such products, for a range of brands, on our supermarket shelf. For all I know Kraft, in fact, may have started that trend.

The other factor, looking forward, is income. I would expect – honestly – something like macaroni and cheese to be an inferior good. I welcome correction on that, though. An inferior good is one with a negative income elasticity of demand: as incomes rise, demand decreases (because the good is inferior, yeah? People buy better/more expensive things instead).

So, facing recession (or facing proof that we’ve been in one since before Christmas), one would expect declining American household fortunes to boost demand for Kraft Mac and Cheese further.

So much for the basic economics. Let’s discuss nutrition (i.e., the part that bothers me). Wandering around the internets, I found nutritional information for the Easy Mac cups:

Easy mac cup

Which earns a “C” from Also the standard boxed (pre-maid) product:

Boxed mac and chees gives that one 2/5 for things like “health”.

Now, back at Universal Press, Harry Balzer, vice president of consumer research firm NPD Group, offered this:

“It’s almost always a main meal,” he said.

Ah. Now, I’m skinny and probably don’t eat the average amount for an adult American male (which, of course, I’m not, but (a) here I am, and (b) I imagine the same holds for comparison with Australians). There’s no way I’m going to eat 60 grammes of powdered cheese sauce and instant noodles and call it dinner.

The times that I’ve had to eat microwavable food, I’ve found that standard meals (around 280g) are way too little – 432g (the weight of a lentil soup I keep in the office) isn’t too too bad (allow me to point out that, as a vegan, I read these things as a matter of course: grocery shopping can take a while). Suppose I made an Easy Mac dinner. I’d be looking at about the same.

Conservatively, let’s say I need 420g of the stuff – that’s 6 to 7 Easy Mac cups. Now put that multiplier up against, say, the saturated fats and sodium found in Mac and Cheese. That’s a day’s carbs, a day’s saturated fats, and you just ate a dose of diabetes. All while picking up bugger all in whole grains, dietary fibre, natural minerals or vitamins.

Back at,


And this would be where the social gradient in diabetes and obesity comes in. Poor people eat energy-rich, high-caloric, cheap foods. Binding budget constraints and poor education (meaning public health educational interventions) mean that nutrition, for example, does not enter the criteria. Which is why the less-expensive juices (as in fruit juices) in my local supermarket all contain High Fructose bloody Corn Syrup. As do all the family breakfast cereals, all the processed breads – all the basic family foodstuffs.

There is a social gradient to what people eat and call food, and it isn’t pretty.

Interestingly, I found this stuff being sold at, where the comments contain the likes of:

With kids in the house you have to fix Mac & Cheese, it’s just a fact. The regular old mac & cheese takes too long to fix when a starving toddler is having a hunger induced meltdown. A few minutes in the microwave then *voila* warm food to feed the savage toddler. It’s not bad for grown ups either.

Yes, this person recommends feeding a toddler this stuff. Because making the boxed version takes too damn long. And, apparently, opening a jar of Gerber pureed vegetables just makes too damn much sense.

This is great for hungry kids to heat up anytime. My two are only 10 & 11 and they have been using the microwave for a couple of years. This is also great to send off with your college student. They might need a quick meal on those late study nights.

a) if your growing child is hungry, give them food. Give them nutrition; (b) your kid in college is not going to be able to perform well, studying, with this clogging his/her system. Teach them how to eat properly, and stay hydrated, throughout a day. You can’t just give them Mac and Cheese and a bottle of Adderall, and expect them to make it.

And this is a vegan’s conceit. I’m sorry, but there it is. I read all my ingredients, and I’m a Health Economist with a PhD. I earn enough to shop and eat properly, and know enough to do so, and how to do so. I enjoy a rare priviledge, I know. This doesn’t mean that seeing a toddler in a stroller holding crisps in one hand and lucozade in the other doesn’t send me spare.

You want to understand where American competitiveness has gone? This sort of thing will be a reason. These diets make shorter, fatter, sicker, dumber people. It isn’t kind to say so, but that doesn’t make it any less true.

The effects of cigarette costs on BMI and obesity

Two obesity posts in one day. This is another paper from the Health Economics RSS feed. The effects of cigarette costs on BMI and obesity, by Charles Baum (Middle Tennessee State University).

About 30% of Americans are currently obese, which is roughly a 100% increase from 25 years ago. Public health officials have consequently become alarmed because recent research indicates that societal costs of obesity now exceed those of cigarette smoking and alcoholism. Cigarette taxes may have exacerbated the prevalence of obesity. In 1964, the US Surgeon General issued its first report relating smoking and health, and since that time, federal and state governments have increased cigarette taxes in a successful effort to reduce cigarette smoking. However, because cigarette smoking and obesity seem inversely related, cigarette taxes may have simultaneously increased obesity.

This paper examines the effects of cigarette costs on BMI and obesity and finds that they have significant positive effects. This paper attempts to reconcile conflicting evidence in the literature by controlling more carefully for correlation with state-specific time trends using panel data.

Results indicate that the net benefit to society of increasing cigarette taxes may not be as large as previously thought, though this research in no way concludes that they should be decreased to prompt weight loss.

That’s some caveat (the italics are the author’s). I’d like to write a paper requiring that sort of defence mechanism, one day.

The problem:

Baum figure 1

Baum figure 2

USA Today’s coverage of the Mississippi Dumb Obesity Bill even had a map:

cdc pic

That’s the geo-location of obesity in the US, according to the CDC. What isn’t already phenomenally expensive for the State is mopped up by you – Americans are spending some USD30bn (USD41bn in today’s dollars) on weight-loss wastes of time.

So to Charles Baum and his paper (BYO Orchestra – sorry). His paper argues that taxation on cigarettes contains a heretofore hidden opportunity cost/unintended consequence: cigarettes, as diet-suppressants, are a pathway to non-obesity (for want of a better description). There is a social gradient to cigarette-smoking (poor people do it more) and to obesity (poor people are it more, for a variety of income-related reasons). Increasing cigarette prices (Healthy People 2010, for example, wants taxation to be USD2 per pack – a nearly 100% increase) will therefore have some effect on decreasing the quantity of cigarettes demanded – it will also (according to Baum) have a subsequent effect on obesity.

Controlling for a bundle of covariates (not reported: click for a larger image):

Baum table 3

We see our outcome. The models, spread across several tables, are, however, quite unstable (in that the results are very sensitive to specification), so there is a significant residual question over the value of the information we’re receiving here. Frequentistedly (I made that up) we observe statistical significance, but my Bayesian switches all flipped with these results. I’m not convinced even by the descriptive statistics that suggest heterogeneity amongst obesity and cigarettes prices/taxes: there are just too many state and environmental variables (I think – although he does control for these in the regression analysis).

One of the things that I didn’t see mentioned in this paper was the effect on smoking intensity. The impact of cigarette taxation not only on consumption but on intensity is known – it is the intensity, for example, that contributes a great deal to the carcinogenic effect of smoking.

I would expect, then, that the compensating increase in smoking intensity would also have an affect on BMI and obesity according to the Baum models, but such a confounder was not mentioned. It seems that, instead, a linear relationship is assumed between the consumption of cigarettes and the intensity with which they are smoked, rather than the more likely concave function.

Amongst other things this, if significant, negates the entire argument that Baum is trying to make. The kindness of tax increases is questioned precisely because the increase in intensity is more harmful: would the same increase in intensity not also leave BMI either unchanged, or at least changed in an unkown direction? Getting back to the sensitivity of the results to model specification – this would explain a lot of that. The actual intake of nicotine, etc. per smoker is simply not being measured, but we know that it is not constant; nor is it linearly-determined by either cigarette consumption or cigarette prices.

It’s an interesting idea. I think the paper is missing some critical pieces, but it’s certainly an interesting policy angle to examine.

Obesity, nanny states and closing the barn buffet after the fat horses have bolted

Originally spotted at Environmental Economics: House Bill 282 from the Mississippi legislature.

(1) The provisions of this section shall apply to any food establishment that is required to obtain a permit from the State Department of Health under Section 41-3-15(4)(f), that operates primarily in an enclosed facility and that has five (5) or more seats for customers.

(2) Any food establishment to which this section applies shall not be allowed to serve food to any person who is obese, based on criteria prescribed by the State Department of Health after consultation with the Mississippi Council on Obesity Prevention and Management established under Section 41-101-1 or its successor. The State Department of Health shall prepare written materials that describe and explain the criteria for determining whether a person is obese, and shall provide those materials to all food establishments to which this section applies. A food establishment shall be entitled to rely on the criteria for obesity in those written materials when determining whether or not it is allowed to serve food to any person.

(3) The State Department of Health shall monitor the food establishments to which this section applies for compliance with the provisions of this section, and may revoke the permit of any food establishment that repeatedly violates the provisions of this section.

So, to recap:

1) Restaurants can feed you shit until you become obese, and the State will do nothing to intervene, or fix the insane obeseogenic environment that prevails in the US,

2) Damage done, restaurants will stop feeding you.

3) Rather than legislate (if legislation was felt to be that necessary) in favour of, say, smaller portions (known to be a prime cause of obesity in the US), the State will also leave the environment in place in order to make more obese people,

4) Those obese people will, in turn, not get served.

Your tax dollars at work (I mean, if you live in Mississippi). You’ll note that the legislation also includes no mention of what to do about the socioeconomic gradient to the high-caloric diets people have. Me, I envisage a fat unemployed person (statistically likely to be a minority) with no car, unable to get to better nutrition and now not being served in the eateries that contributed to their obesity in the first place (although the mechanism of the obesity is left unchanged). I guess I’m just pessimistic, like that.

Coping with health-care costs: implications for the measurement of catastrophic expenditures and poverty

A new paper came down the Health Economics RSS feed (what of it? I’m a Health Economist. It’s perfectly normal), by Gabriela Flores (not that one), Jaya Krishnakumar, Owen O’Donnell and Eddy van Doorslaer.


In the absence of formal health insurance, we argue that the strategies households adopt to finance health care have important implications for the measurement and interpretation of how health payments impact on consumption and poverty. Given data on source of finance, we propose to (a) approximate the relative impact of health payments on current consumption with a coping-adjusted health expenditure ratio, (b) uncover poverty that is hidden because total household expenditure is inflated by financial coping strategies and (c) identify poverty that is transient because necessary consumption is temporarily sacrificed to pay for health care.

Measures that ignore coping strategies not only overstate the risk to current consumption and exaggerate the scale of catastrophic payments but also overlook the long-run burden of health payments. Nationally representative data from India reveal that coping strategies finance as much as three-quarters of the cost of inpatient care. Payments for inpatient care exceed 10% of total household expenditure for around 30% of hospitalized households but less than 4% sacrifice more than 10% of current consumption to accommodate this spending.

Ignoring health payments leads to underestimate poverty by 7-8% points among hospitalized households; 80% of this adjustment is hidden poverty due to coping.

They present an argument in favour of distinguishing the different impacts of catastrophic health expenditures, defined thus (and using a rural household as exemplar):

Figure 1

“Coping” consist of non-income financing of health care: savings, borrowings, selling assets. Specifically such expenditures can generate transient poverty, for households that finance such costs using household income, as well as identifying hidden poverty, for households that finance such costs with coping strategies:

Figure 2

“Hidden poverty” is defined thus:

Households that are poor on the basis of their sustainable level of consumption are not recognized as poor by conventional measures because their use of savings, assets or borrowing to pay for large healthcare costs temporarily raises their total spending above the poverty threshold.

It is more of a welfare measure of the loss of household utility/welfare, created by having to finance catastrophic care using short-term sacrifices of wealth that leave the household vulnerable to future shocks.

“Transient poverty” is short-run household poverty that could be eliminated with insurance for catastrophic care (such that households did not need to pay Out-Of-Pocket): it is the (or a heretofore non-measured part of the) opportunity cost of not having such insurance.

Why the distinction?

In the context of low-income populations with limited formal health insurance coverage, this paper argues that the strategies households adopt to finance health care have important implications for both the measurement and the interpretation of how health payments impact on household consumption, welfare and poverty. Given the availability of cross-section data containing information on the means of financing health payments, we propose that the relative impact of those payments on consumption of other goods is best approximated by payments financed from income as a proportion of that income.

Measures based on the ratio of health payments to total household expenditure, which have been used previously, overestimate the risk to current consumption induced by health payments and so exaggerate the scale of catastrophic payments. Failure to take account of the extent to which health care is financed from running down savings, borrowing and depleting assets leads to the oversight of the long-run opportunity cost of health payments.

We show how information on the source of finance can be used to uncover poverty that is hidden by conventional measures because total household expenditure is inflated by payments for health care that are financed from coping strategies. We propose that the impact of health payments on transient poverty be approximated through assessing poverty on the basis of current income both gross and net of health payments financed from income alone.

The authors consider India. Given the nature of the appreciation in health care prices here in the US, it’d make for a great study for the opportunity cost to the US economy of not having such insurance across the board.