Voluntary health insurance, it's role and regulation

Voluntary health insurance in Europe: Role and regulation
Voluntary health insurance in Europe: country experience

A long time has passed since WHO published a book on voluntary health insurance, just a decade (!). Therefore, there are many reasons to review again what's going on, and this is precisely what you'll find in two recent books.
Before any recommendation, it is good to have a good analysis. And the best analysis comes from reliable data. Somebody should check the published data in the book. In the case of Spain it says 10% of suplementary insurance, while it is around 16% (!) (p.50) (and it is duplicate really according to OECD classfication). And beyond that, it says that there is 3% of voluntary health insurance that is substitutive, while it is exactly 0% (!). Therefore take care. I'll not comment anything else.

Why is it useless to predict future health expenditures?

National spending on health by source for 184 countries between 2013 and 2040

The Lancet has just published a new estimate of the size of health expenditures in the future up to 2040. Too often nobody looks backward and check what predictions said before. If somebody does it, it will get a surprise for the first time, however the following ones he will convey that predictions are useless, because there are too many uncertain situations to take into account. Basically most of the hypothesis are flawed. Take this statement from the article:

Despite remarkable health gains, past health fnancing trends and relationships suggest that many low-income and lower-middle-income countries will not meet internationally set health spending targets and that spending gaps between low-income and high-income countries are unlikely to narrow unless substantive policy interventions occur. Although gains in health system efficiency can be used to make progress, current trends suggest that meaningful increases in health system resources will require concerted action.

Is there anybody that can tell me what "internationally set health spending targets" are?.  Who sets them?. If anybody wants to check what I'm saying, have a look at the cutbacks from the great recession and the estimates by OECD or EU. Everybody was saying that technology innovation and aging would boost health expenditures forever, and now we know that this is not true. Forget the article. Distrust the fortune-tellers.

Is there room for healthcare in blockchain? (2)

THE BUSINESS BLOCKCHAIN: Promise, Practice and Application of the Next Internet Technology

Last month I was saying that business strategy à la Porter required a new perspective, the platform view. Beyond that, blockchain represents a potential disruption of current business and information and communication technologies as of today.
My suggestion is to have a look at the crucial book by Mougayar on The Business Blockchain. You'll get a clear understanding that a deep transformation is in process.

Some key concepts from the book:

• How to think holistically about the blockchain as a meta technology, a business model disruptor, and legal/regulatory policies challenger.
• The 10 properties exhibited by the blockchain (beyond its most popular one, as a distributed ledger)
• Blockchains as a new Internet layer, comprised of the new breed of decentralized applications.
• The unbundling of trust and how a new form of trust inserts itself between peer-to-peer relationships, and brings a new level of transparency, trust and truth.
• The rise of New Intermediaries. Just as the Internet replaced some intermediaries, now the blockchain is replacing other intermediaries, while simultaneously creating new ones.
• Industry cases in healthcare, energy and government, including an in-depth review of financial services.
• Practical recommendations for implementing the blockchain within the enterprise.
• The blockchain as the operating system that enables decentralization, and its technological, political and societal implications.
• The birth of a crypto economy that creates its own wealth via new business models, and peer-to-peer transactional relationships between producers and consumers.
• A new flow of value, with the blockchain acting as the digital leveler that moves value across a new variety of markets.
• 47 blockchain predictions about a not-so-distant future, when blockchain technology permeates our world and creates new companies and new services.

Promising contributions to healthcare:

The theory is attractive: publish your medical record safely on the blockchain and be assured that you or an authorized person can access it anywhere in the world. That is what the government of Estonia has done—a good case of blockchain technology in healthcare. Using Guardtime’s large scale keyless data authentication, in combination with a distributed ledger, citizens carry their ID credentials which unlock access to their healthcare records in real-time. From that point forward, the blockchain ensures a clear chain of custody, and it keeps a register of anyone who touches these records, while ensuring that compliance process is maintained.

Other healthcare usages might include:

• Using a combination of multisignature processes and QR codes, we can grant specific access of our medical record or parts of it, to authorized healthcare providers.
• Sharing our patient data in the aggregate, while anonymizing it to ensure privacy is maintained. This is helpful in research, and for comparing similar cases against one another.
• Recording and time-stamping delivery of medical procedures or events, in order to reduce insurance fraud, facilitate compliance and verification of services being rendered.
• Recording the maintenance history of critical pieces of medical equipment, for example, an MRI scanner, providing a permanent audit trail.
• Carrying a secure wallet with our full electronic medical record in it, or our stored DNA, and allowing its access, in case of emergency.
• Verifying provenance on medications, to eliminate illegal drug manufacturing.
• “CaseCoins:” originating specific altcoins that create a cryptocurrency market around solving a particular disease, such as FoldingCoin, a project where participants share their processing power to help cure a disease, and get rewarded with a token asset.

Definitely, this is a key book to understand blockchain and again, there is room for healthcare. Wether the promise will become a reality, it's uncertain today.

Is there room for healthcare in blockchain?

BLOCKCHAIN REVOLUTION: How the Technology Behind Bitcoin is Changing Money, Business, and the World

Blockchain, the technology behind bitcoin, the virtual currency, could be the new tool that could change the current state of health records and healthcare information. Up to now we have been discussing about interoperability between systems. What would happen if the citizen is the owner of the information and he has all data available everywhere anytime?. This is what certain initiatives try to define right now. Something like this initiated by the physician would be the data owned by the patient:

 

We are at the begining of a great transformation. I don't now if the appropriate word is revolution. Anyway, if you are interested in the topic you may check som details here.

However if you want a deep review of whats going on in 12 critical disruptions, read chapter 6 of the book "Blockchain revolution". You'll find there the potential impact on health:

In the health care sector, professionals use digitization to manage assets and medical records, keep inventory, and handle ordering and payments for all equipment and pharmaceuticals. Today, hospitals are full of smart devices that oversee these services, but few communicate with one another or take into account the importance of privacy protection and security in direct patient care. Blockchain-enabled IoT can use emerging applications to link these services. Applications in development include monitoring and disease management (e.g., smart pills, wearable devices to track vital signs and provide feedback) and improved quality control. Imagine an artificial hip or knee that monitors itself, sends anonymized performance data to the manufacturer for design improvements, and communicates with a patient’s physician, “Time to replace me.” Technicians will be unable to use specialized equipment if they haven’t taken prerequisite steps to ensure their reliability and accuracy. New smart drugs could track themselves in clinical trials and present evidence of their effectiveness and side effects without risk of modified results.

If you are interested in innovation and want to follow the next wave, the internet of value, then you need to read such book. Definitely, there is wide room for health in blockchain.

Clinicians' wisdom of crowds

The Wisdom of Crowds of Doctors: Their Average Predictions Outperform Their Individual Ones

The book on "Wisdom of crowds" became popular claiming that  the aggregation of information in groups achieved decisions that are often better than could have been made by any single member of the group. Now in Medical Decision Making you'll find an article that applies such reasoning to clinicians. And it says:

Little research has been done on whether the average of clinicians making predictions is more accurate than the individual clinicians themselves or whether their average prediction compared favorably to statistical predictions. The purpose of the present study is to examine the predictive accuracy of the average of individual clinician predictions and to compare this average to the accuracies of individual clinicians and to a published statistical model.

And the four conclusions are:

First, it would appear that the averages of the clinicians perform better than clinicians individually. All the clinicians on their own performed with a concordance index of 0.628. However, averaging the predictions of just a pair of clinicians had better performance. Second, the performance tends to improve as more clinician predictions are averaged. Interestingly, at least in this study of a limited number of clinicians, although performance was seen to continually improve as clinicians were added, there was decreasing marginal return for increasing group sizes. Third, as the group size increased (see Figure 2), the performance of the averaged clinicians approached that of the best individual clinician (from Figure 1), suggesting that much larger clinician groups are needed for the performance of the average to be better than that of the best clinician. And fourth, even averaging all of the clinicians’ predictions was inferior to that of the statistical model.

The authors recognise their study limitations, however some insights are useful to take into account. Let's ponder on how many "second opinions" would be approppriate.

This Wednesday at Saló del Tinell in Barcelona, great concert by Capella de Ministrers on Ramon Llull,the last pilgrimage

What's health and wellbeing?

Empirical redefinition of comprehensive health and well-being in the older adults of the United States

Once again, we do need a comprehensive definition of what is health and wellbeing,  and the current issue of PNAS provides us with an interesting approach:

The dominant model of health is a disease-centered Medical Model (MM), which actively ignores many relevant domains. In contrast to the MM, we approach this issue through a Comprehensive Model (CM) of health consistent with the WHO definition, giving statistically equal consideration to multiple health domains, including medical, physical, psychological, functional, and sensory measures. We apply a data-driven latent class analysis (LCA) to model 54 specific health variables from the National Social Life, Health, and Aging Project (NSHAP), a nationally representative sample of US community-dwelling older adults.

Although public health campaigns, such as “Choosing Wisely,” rightly emphasize the need to decrease unnecessary health interventions (52), they still accept the basic health conception of the MM as resting on organ system disease. Instead, the CM instantiates comorbidities and the equal importance of mental health, mobility, and sensory function in health and should inform policy redesign. For example, including assessments of sensory function, mental health, broken bones in middle age, and frailty in annual physician visits would enhance risk management. In addition to policies focused on reducing BMI, greater support for preventing loneliness among isolated older adults would be effective. In place of additional (expensive) new medicines for hypertension, helping older adults find social support through home care services or alternative living arrangements could be developed. In summary, taking a broad definition of health seriously and empirically identifying specific constellations of health and comorbidities in the US population provide a new way of assessing health and risk in older adults living in their homes and thereby, may ultimately inform health policy. 

And these are the results:

 The CM of health with six distinct health classes based on 54 health measures across six dimensions (listed in column 1). The column US population (US Pop.) reports the prevalence in 2005 of each disease or condition in the older US Pop. ages 57–85 y old (definitions and validation are in Fig. S1). Within each health class (columns), the prevalence of a given disease or condition indexes the likelihood that any member of the class has that particular disease [rows; n = 54 health measures ordered by prevalence within each health domain (column 2)] and shares similar constellations of disease and health.

We should reckon on something similar with our data, just to check if it fits with the final goal of measuring health and wellbeing. As you may imagine, there are many implications. If we agree on a comprehensive model of health, then we have to focus on how decisions and priorities should be made.

PS. The return of the big questions. JM Colomer opinion;:

The achievement of a human-made plan depends 1/4 on resources, such as money, education or physical strength; 1/4 on skill and decisions; and 1/2 on unpredictable circumstances, usually called luck. A student asked me how luck can be improved: well, I said, if you keep pursuing your goal with perseverance, the probabilities to get it increase (like if you keep playing the lottery, the probability to get the prize also increases)

Infinity Exhibition

Giving the priority to the worse off

Egalitarianism

Finally I've found a book that explains the concept of egalitarianism and its implications with a clear message.

Distributive justice is an area not only of philosophy, but also of several other academic disciplines. For example, the formal analysis of economics is extremely important and valuable for understanding the structure of egalitarian theories of distributive justice. However, it intimidates some people. I believe that the most fruitful way to present theories of distributive justice is to integrate the results of economics and political theory into philosophical analysis.

The concept:

Egalitarianism: a class of distributive principles, which claim that individuals should have equal quantities of well-being or morally relevant factors that affect their life.

What it is not egalitarianism, but maybe you are not aware of:

There are at least four well-known distributive principles that are not egalitarian in the sense I defined above, yet some people think that these are egalitarian in some sense.

The first example is utilitarianism. Utilitarianism can be defined in various ways. Take classical utilitarianism. Classical utilitarianism contends that an act is right if and only if it maximizes the total sum of people’s well-being in a given society. When we calculate the total sum, we assign equal weight to each person’s well-being and simply add up different people’s well-being. Classical utilitarianism endorses assigning equal weight
to every person’s well-being, and it might be claimed that it is egalitarian. However, it is not concerned with how people’s well-being is distributed. Thus, I do not consider it as a form of egalitarianism.

The second example is libertarianism.

The third is the Marxist principle of justice or communism

The fourth is the proportionality principle.

The book reviews several perspectives on egalitarianism with concrete descriptions and comments:

1 Rawlsian egalitarianism
2 Luck egalitarianism
3 Telic egalitarianism
4 Prioritarianism
5 Sufficientarianism

And two specific chapters:

6 Equality and time
7 Equality in health and health care

The chapter on health is specially welcome and is a required reading for health economists, and for supporters of QALYs:

It is obvious that the principle of QALY maximization is utilitarian in spirit. It adds up different people’s good, and claims that we should choose the allocation that maximizes the total good. In the context of health care resource allocation, the good is QALY, which measures health benefit. QALY is added up across individuals to estimate the goodness of different outcomes. Then, the alternative that maximizes the goodness of outcome is chosen. It is not surprising that, according to QALY maximization, it does not matter how QALYs are distributed across individuals. Needless to say, all sorts of objections leveled against utilitarianism are raised against QALY maximization.

Usually, QALY maximization is understood as the unweighted sum of QALYs. However, it does not need to be so.We can make it a weighted sum and give priority to the worse off. If we give priority to the worse off, then it is possible to bring egalitarian concerns to bear on the allocation of health care resources.

One chapter is not enough to disentangle the complexities of QALYs, but it is worth reading.

At the end the author explains his position:

My preferred distributive principle is the aggregate view of telic egalitarianism. I am not
willing to support Rawls’s difference principle, because I agree with Harsanyi(1975) that the difference principle in practice ignores the benefits to the non worst off groups and therefore fails to secure the stability of the basic structure of society. This stands in opposition to Rawls’s claim that the difference principle, together with other principles of justice, guarantees a satisfactory minimum, and therefore secures the stability of the basic structure.

My view is coincidental with the author.


PS The concept of telic (telelological) egalitarianism:

There are two main ways in which we can believe in equality. We may believe that inequality is bad. On such a view, when we should aim for equality, that is because we shall thereby make the outcome better. We can then be called Teleological – or, for short, Telic – Egalitarians. Our view may instead be Deontological or, for short, Deontic. We may believe we should aim for equality, not to make the outcome better, but for some other moral reason. We may believe, for example, that people have rights to equal shares. (Parfit 2000: 84)

Taxing the rich to feed the leviathan

Taxing the Rich: A History of Fiscal Fairness in the United States and Europe

In deep endebted states, the endless debate about direct taxes finally relies on one thing, where is the money to raise more resources?. Nowadays, you'll notice a different formulation, focused on redistribution: we want to raise more money to redistribute to those with unfulfilled needs.
A new book is specially welcome to clarify all the concepts in a politicaly troubled moment:

We argue that societies do not tax the rich just because they are democracies where the poor outnumber the rich or because inequality is high. Nor are beliefs about how taxes influence economic performance ultimately decisive. Societies tax the rich when people believe that the state has privileged the wealthy, and so fair compensation demands that the rich be taxed more heavily than the rest.

When it comes to thinking of what tax policy is best, few would disagree with the notion that governments should be-in part guided by fairness. It is a term used frequently by those on both the political left and right.1 How can this be? History suggests that the concept of fairness is up for grabs. Standards of fairness in taxation vary greatly across countries, over time, and from individual to individual.

If we believe that

 Political support for taxing the rich is strongest when doing so ensures that the state treats citizens as equals. Treating citizens as equals means treating them with "equal concern and respect".

Then, we'll agree that the current debate on taxing the rich in our country is absolutely biased and intentionally partisan. With this approach we can't build a new country.

What a country decides about taxes on the rich has profound consequences for its future economic growth and the distribution of economic resources and opportunities

Therefore, this is the book to read for those that have to prepare the next public budget, and for any citizen, a must read.

PS. A good comment on the book.

Trade-offs between publicity and secrecy in drug regulation

Secret-Public Voting in FDA Advisory Committees
Secrecy and Publicity in Votes and Debates

Most of us can remember the withdrawal of antiinflamatory drug Vioxx in 2004. And some of us still wonder about the FDA responsibility and its experts committees on that sad affair.

Criticism reached a peak in February 2005 following the work of a committee set up to determine whether or not two of Pfizer’s anti-inflammation medicines, CelebrexR and BextraR , should remain on the market and whether Merck’s anti-inflammation drug VioxxR could be approved again for marketing. The vote – a close one, slightly in favor of the highly controversial BextraR and VioxxR – surprised the informed public and raised suspicions, leading The New York Times to commission a study on committee members’ financial ties. It turned out that ten members (out of thirty-two) had financial ties with one or more drug companies, most with Pfizer (Harris and Berenson 2005; CSPI 2005). As the critics saw it, this was a sign that advisory committees themselves, like FDA’s top management before them, had come under the influence of the drug industry.

After that, the FDA changed its rules for voting to simultaneous and visual methods rather than oral. This option avoids the anchoring effect of first voters. But secret voting was never contemplated.
This is exactly the issue that is addressed in a chapter of the book Secrecy and Publicity in Votes and Debates and now that everybody backs transparency, it's a good moment to stop and read this chapter at least.

So although public voting may be preferred because it allows external actors to monitor expert behavior, secret voting may appear desirable as a means of preventing conformism among experts. Thus, the value of the voting method may depend on of the audience considered: other voters or external actors. There is, however, one procedure that reconciles the benefits of publicity and secrecy, and that is to vote secretly but reveal who voted how after the vote count has been recorded. This method, used in Dominican monasteries in the thirteenth century in a process called the scrutinium (Gaudemet 1979, p. 326) and recommended by Bentham (1999, p. 106), may be termed, following Jon Elster (2013), “secret-public voting.”

 The FDA 2007 reform replaced public voting with secret-public voting, but it also  replaced oral voting, which left ample opportunity for individual members to express
themselves, with “manual” followed by digital voting, which precludes all such expression.

These statements prompt many questions about how our close advisory committees are taking decisions. I don' know any detail about it. And details are important, specially if there are lives at stake.

Clap your hands

This is exactly what we have to do after reaching 150.000 visits to this blog!. Thank you so much for your interest!

Today just listen to Parov Stelar: Clap your hands

Clap your hands!
And you swing out wide.
Stomp your feet!
You swing out wide.
Do a bump!
And you swing out wide.

Truck a little bit.
Beat it out and
make it!
Everybody's happy when they're doing the jive.



Platforms, a business model (2)

A long long time ago Michael Porter wrote Competitive Strategy a book that has been used as the bible of strategy.

Porter’s model identifies five forces that affect the strategic position of a particular business: the threat of new entrants to the market, the threat of substitute products or services, the bargaining power of customers, the bargaining power of suppliers, and the intensity of competitive rivalry in the industry. The goal of strategy is to control these five forces in such a way as to build a moat around the business and thereby render it unassailable.
Thus, when a firm can erect barriers to entry, it can keep competitors out, and entrants with substitute products cannot storm the castle. When a firm can subjugate suppliers, competition among them weakens their bargaining power so the firm can keep its costs low. When a firm can subjugate buyers by keeping them relatively small, disunited, and powerless, the firm can keep its prices high.
In this model, the firm maximizes profits by avoiding ruinous competition for itself but encouraging it for everyone else in the value chain. Advantage is found in industry structures that create a protective moat—one that enables the firm to segment markets, differentiate products, control resources, avoid price wars, and defend its profit margins.
For decades, companies have studied the five forces model and used it to guide their decisions about which markets to enter and exit, what mergers or acquisitions to consider, what sorts of product innovation to pursue, and what supply chain strategies to employ.

Now platforms add a new perspective,

Enter platforms. Many of the insights embodied in the five forces, resource-based, and hypercompetition models remain valid, but two new realities are now shaking up the world of strategy.
First, firms that understand how platforms work can now intentionally manipulate network effects to remake markets, not just respond to them. The implicit assumption in traditional business strategy that competition is a zero-sum game is far less applicable in the world of platforms. Rather than re-dividing a pie of more-or-less static size, platform businesses often grow the pie (as, for example, Amazon has done by innovating new models, such as self-publishing and publishing on demand, within the traditional book industry) or create an alternative pie that taps new markets and sources of supply (as Airbnb and Uber have done alongside the traditional hotel and taxi industries). Actively managing network effects changes the shape of markets rather than taking them as fixed.
Second, platforms turn businesses inside out, moving managerial influence from inside to outside the firm’s boundaries. Thus, a firm no longer needs to seize every new opportunity on its own; instead, it can pursue only the best opportunities while helping ecosystem partners seize the others, with all partners sharing the value they jointly create.13
These two new realities add a dramatic layer of complexity to business competition. Platform strategy resembles traditional strategy much the way three-dimensional chess resembles the traditional game.14 Within the ecosystem, the lead firm negotiates dynamic tradeoffs involving competition at three levels: platform against platform, platform against partner, and partner against partner.

These are excerpts from the book "Platform revolution" a must read if you want to understand what's going on in value creation in a connected world. In chapter 12 you'll find some comments on health sector, very succint and general.

A prescription for pharmaceutical expenditure, is there any one?

Pharmaceutical Expenditure And Policies

If you want to know what's going on in OECD countries on pharmaceuticals, just read this paper. The challenges are huge, and policy answers are delayed. My impression is that beyond the standard approach (the one in the paper), somebody should start talking about priorities for research and innovation according to health needs and potential benefit from recent advances in basic science. There is a need for a dialogue between firms and governments about it. Just a signaling game, saying how much are willing to pay for new innovations if they fit with health needs and potential benefit.

PS.Drug prices: Tweaking the formula excellent article in FT

Income and longevity, almost all you need to know

The Association Between Income and Life Expectancy in the United States, 2001-2014 

The estimates of impact of income on longevity are now available for US. And the results are clear. The summary of the article in 4 statements:

First, higher income was associated with greater longevity throughout the income distribution.The gap in life expectancy between the richest 1% and poorest 1% of individuals was 14.6years (95% CI, 14.4to 14.8years) for men and 10.1 years (95% CI,9.9 to 10.3 years) for women.

Second, inequality in life expectancy increased over time. Between 2001 and 2014, life expectancy increased by 2.34 years for men and 2.91 years for women in the top 5%of the income distribution, but by only 0.32 years for men and 0.04 years for women in the bottom 5%(P < .001 for the differences for both sexes).

Third, life expectancy for low-income individuals varied substantially across local areas. In the bottom income quartile, life expectancy differed by approximately 4.5 years between areas with the highest and lowest longevity.Changes in life expectancy between 2001 and 2014 ranged from gains of more than 4 years to losses of more than 2 years across areas.

Fourth, geographic differences in life expectancy for individuals in the lowest income quartile were significantly correlated with health behaviors such as smoking(r = −0.69,P < .001),but were not significantly correlated with access to medical care, physical environmental factors, income inequality, or labor market conditions. Life expectancy for low-income individuals was positively correlated with the local area fraction of immigrants (r = 0.72, P < .001), fraction of college graduates (r = 0.42, P < .001), and government expenditures (r = 0.57, P < .001). 

Differences are huge. Confronting the issue from a policy perspective is not that easy. Individual health behaviors are the key to understand what's going on.

PS. Inequality on income or wealth?. This could be the next article...

Josep Segú
Encants Nous, oli sobre tela, 80 × 220 cm

European health regulation on lab tests, the final round? (2)

Last week, Theranos clinical lab has received more bad news. Though the final resolution is still pending, all available informations raise concerns about the acuracy of such lab.Could this happen in Europe? My feeling is that the outdated and obsolete regulation could replicate the story.
In Europe, in vitro diagnostics regulation was decided 18 years ago!. The last proposal debated two years ago in the Parliament got no final agreement. I have explained the inefficiency of european parliament formerly. Health care safety and quality deserves better regulation and specially in lab tests.
Beyond safety issues, the value of lab tests require deeper assessment. Current proposals are not taking into account properly this issue. Now is the moment to introduce it in the final proposal, otherwise it will forgotten for the next two decades.

PS. Have a look at this article: A Systematic Review of Health Economic Evaluations of Diagnostic Biomarkers

Manhattan i Queens (Fragment), oli sobre tela, 60 × 150cm

Next week Josep Segú starts its exhibition at Sala Parés