How much does healthcare cost during your life?

Estimating lifetime healthcare costs with morbidity data

We don't know when we can get an illness, how much it will cost to treat and how much time will last. Thats the rationale for being  insured. However, if you were born in 2007 your lifetime healthcare costs in Baix Empordà were 111.936 € for women and 81.566 € for men (on average and without any additional assumption about changes in unit costs). As far as this is the average, mandatory insurance allows for compensating those in ill health by those that are healthy. This is an unique efficient result, any departure from such option would require individual savings and potential debt when having an illness.
We have just published such estimation in BMC Health Services Research, those of you that follow this blog will remember this 2011 post. Lifetime health trajectories is a challenge for research, our contribution is just one of the first steps in such direction.

PS. Must read (as usual), Uwe Reinhardt blog on Angus Deaton.

PS. Economic and financial conditions are again "bubble-like.". WSJ dixit today. I agree.

PS. Toni Catany, exhibition at Galeria Trama.

Incentives and physician specialty choice

Specialty choice in times of economic crisis: a cross-sectional survey of Spanish medical students

Two opposite trends coincide, on one hand Health Policy is strengthening primary care, and on the other hand the number of students that apply for it is decreasing. The shortage of primary care practitioners should be an issue of concern for any regulator. However, current professional incentives are set up in a different opposite direction.
You'll find the details in this article. Key messages:

Results: 978 medical students (25% of the nationwide population of students in their final year)
participated. Perceived job availability had the largest impact on specialty preference. Each 10% increment in the probability of obtaining employment increased the odds of preferring a specialty by 33.7% (95% CI 27.2% to 40.5%). Job availability was four times as important as compensation from private practice in determining specialty choice (95% CI 1.7 to 6.8). We observed considerable heterogeneity in the influence of lifestyle and work hours, with students who preferred such specialties as Cardiovascular Surgery and Obstetrics and Gynaecology valuing longer rather than shorter workdays.
Conclusions: In the midst of an ongoing economic crisis, job availability has assumed critical importance as a determinant of specialty preference among Spanish medical students. In view of the shortage of practitioners of FCM, public policies that take advantage of the enhanced perceived job availability of FCM may help steer medical school graduates into this specialty.

Meanwhile, you can check today some details about  the salaries in the public sector. An this link shows how physicians are really paid in one region. The summary is that all you thought and presumably knew about it (average salaries and complements), is completely wrong when you have detailed information about individual salaries. I strongly suggest to have a look at it, and find the first primary care physician salary.

Undermining agency theory

The Rhetoric of the Economy and the Polity

Two statements from an excellent article by D. McCloskey:
 
A criticism on agency theory:

The Great Recession gave us all some perspective on how agency theory works. The deepest problem in agency theory in any of its forms (public choice, law-and-economics, finance, whatever) is the same as the problem in prudence-only political theory, subject to the Nussbaum Lemma. The theory declares that one has an “obligation” tomake profit (and further that the economic analyst has an obligation to articulate such a theory, always, and has an obligation not to talk about the ethics of  managerial or scientific obligation, since these are matters of value about which one has an obligation not to dispute). But where does the obligation come from? It comes in fact from the ethical responsibilities of a manager to her professionalism, her stewardship, her stakeholders’ interests, or her promotion of the common good. The agent is not a pure prudence-only, Max U creature after all, just as the Hobbesian selfish individual is not. In the very theory that
denies ethics to the agent, she is imagined to be driven by an ethic, albeit a tacit and abbreviated one. Kant fell into a similar self-contradiction when he claimed to base ethics on reason alone, yet gave no account of the reasons an agent would want to act on reason.

About the crisis:

If we have a crisis, it is one of ethics. Bad People (mainly Bad Men) did it. But the baddest men are the political theorists and business-school professors who recommend an approach to the politics of life that omits the virtues. Is that you, looking at yourself in the mirror?

My understanding is that we have emphasized agency teory beyond its initial purpose. The combination of agency and utilitarism forgets professionalism. I share the view of McCloskey.

PS. 30 years after Fama-Jensen famous article on separation ownership and control.

PS. Another article against agency theory.

PS. Nussbaum Lemma:  I think it implausible to suppose that one can extract justice from a starting point that does not include it in some form, and I believe that the purely prudential starting point is likely to lead in a direction that is simply different from the direction we would take if we focused on ethical norms from the start.
McCloskey interpretation: You have to put the rabbits into the hat if you are going to pull them out.

Courts as market makers

Recent decision invalidating Myriad patents has had immediate results. The market of genetic tests on breast and ovarian cancer has new entrants. The price of the test has decreased 40% (!) in just four months after the resolution. More entrants are expected in the next future for more tests.
The question is still the same, is there any clear cost-effectiveness analysis available for such tests? Why homebrew tests (LDT) are beyond any regulation? Does any regulator care about all this issues?. The answer is: up to now, we can't see any efforts. Patents create artificial monopolies, courts may create markets when invalidate patents,  but patients are concerned about health improvement and value. In an asymetric information environment, the regulator can't take permanent holidays. Overdiagnosed population doesn't necessarily mean healthier population.

 Forbes Healthcare Summit 2013

Insurance Companies Enter A New World

A cause and consequence of progress (2)

The Great Escape: Health, Wealth, and the Origins of Inequality

Although Angus Deaton qualifies himself as cautiously optimistic in the book, some paragraphs may help to understand his caveats:

Our children and grandchildren cannot possibly expect a unique exemption from the forces that brought down previous civilizations. In Europe and North America we have grown to believe that things will always get better. The past 250 years have seen unprecedented progress, but 250 years is no great span of time compared with the long-lived civilizations of the past who doubtless thought that they were destined to last forever.

On growth:

Economic growth is the engine of the escape from poverty and material deprivation. Yet growth is faltering in the rich world. Growth in each recent decade has been lower than in the previous one. Almost everywhere, the faltering of growth has come with expansions of inequality. In the case of the United States, current extremes of income and wealth have not been seen for more than a hundred years. Great concentrations of wealth can undermine democracy and growth, stifling the creative destruction that makes growth possible. Such inequality encourages the previous escapees to block the escape routes behind them.
Mancur Olson predicted that rich countries would decline like this, undermined by the rent seeking of an ever-growing number of focused interest groups pursuing their own self-interest at the expense of an uncoordinated majority. Slower growth makes distributional conflict inevitable, because the only way forward for me is at your expense. It is easy to imagine a world with little growth but endless distributional conflict between rich and poor, between old and young, between Wall Street and Main Street, between medical providers and their patients, and between the political parties that represent them.

The inevitability of distributional conflict is the issue to take into account. This is in my opinion the greatest concern for the future, unless we are able to build firewalls to protect the foundations of social welfare.

 “The Kennedys” at Galería Loewe by Mark Shaw until Nov 15th

A cause and consequence of progress

The Great Escape: Health, Wealth, and the Origins of Inequality

I have spent this long weekend reading the last book by Angus Deaton. It appeared in the list of FT business books of the year, although was not shortlisted. You may find a short reference at The Economist and an article by the author at Foreign Policy. As you know, I'm a follower of his works. You'll find references in previous posts 1, 2.
The book is worth reading. The topic and the author deserves spending time on it. And specially right now, with dubious prospects about economic growth and how it will affect to inequality.
Let me highlight some paragraphs from the book.
On inequality paradox:

Inequality is often a consequence of progress. Not everyone gets rich at the same time, and not everyone gets immediate access to the latest life-saving measures, whether access to clean water, to vaccines, or to new drugs for preventing heart disease. Inequalities in turn affect progress. This can be good; Indian children see what education can do and go to school too. It can be bad if the winners try to stop others from following them, pulling up the ladders behind them. The newly rich may use their wealth to influence politicians to restrict public education or health care that they themselves do not need.

On efficiency and the economists:

Economists—my own tribe—think that people are better off if they have more money—which is fine as far as it goes. So if a few people get a lot more money and most people get little or nothing, but do not lose out, economists will usually argue that the world is a better place. And indeed there is enormous appeal to the idea that, as
long as no one gets hurt, better off is better; it is called the Pareto criterion. Yet this idea is completely undermined if wellbeing is defined too narrowly; people have to be better off, or no worse off, in wellbeing, not just in material living standards. If those who get rich get favorable political treatment, or undermine the public health or public education systems, so that those who do less well lose out in politics, health, or education, then those who do less well may have gained money but they are not better off. One cannot assess society, or justice, using living standards alone. Yet economists routinely and
incorrectly apply the Pareto argument to income, ignoring other aspects of wellbeing.

On inequality and what to do about it:

Inequality can spur progress or it can inhibit progress. But does it matter in and of itself? There is no general agreement on this: the philosopher and economist Amartya Sen argues that even among the many who believe in some form of equality, there are very different views about what it is that ought to be made equal. Some economists and philosophers argue that inequalities of income are unjust, unless they are necessary for some greater end. For example, if a government were to guarantee the same income for all of its citizens, people might decide to work a lot less so that even the very poorest might be worse off than in a world in which some inequality is allowed. Others emphasize equality of opportunity rather than equality of outcomes, though there are many versions of what equality of opportunity means. Yet others see fairness in terms of proportionality: what each person receives should be proportional to what he or she contributes. On this view of fairness, it is easy to conclude that income equality is unfair if it involves redistributing income from rich to poor.

On Aid and Politics, (chapter 7).

The arguments about foreign aid and poverty reduction are quite different from the arguments about domestic aid to the poor. Those who oppose welfare benefits often argue that aid to the poor creates incentives for poor behavior that help to perpetuate poverty. These are not the arguments here. The concern with foreign aid is not about
what it does to poor people around the world—indeed it touches them too rarely—but about what it does to governments in poor countries. The argument that foreign aid can make poverty worse is an argument that foreign aid makes governments less responsive to the needs of the poor, and thus does them harm.

Aid is a controversial issue, and Deaton was criticised for it at NYT .  You may find here a recent example that supports anecdotically the argument of Angus Deaton. It's up to you, the final view on this difficult topic.

PS. On inequality in our days, at NEG.

Waiting guarantee(d)

International comparisons of waiting times in health care – Limitations and prospects

Waiting times are the natural barrier for access to health care in non-market health systems, where willingness to pay it is not the criteria to allocate resources. Regulators know it and they set up some guarantees, a maximum time for access, otherwise there is a need to find an alternative. While this system may appear an improvement, it may produce some distorsions in incentives.
In my opinion, waiting times should be reviewed on a prioritisation criteria, and may be after some guaranteed should be applied. General guarantees distort the aim of such process.
Anyway, we are still waiting for a regulation on prioritisation of waiting lists. Long time ago was anounced, and long time ago was blocked. There is no reason to delay it indefinitely.
If you want to have a look at international data, read this article and its methodological considerations:

The study shows the need for a more coherent approach to waiting times measurement, if  international comparisons are to be made. Currently, there are wide differences in what  countries measure and how they measure it, were they start the measurements and what measures are presented. Few international comparisons of waiting times have been published and none has solely relied on official national statistics.

 

With The Changing Lights, Stacey Kent attains an even higher level of accuracy 

of tone and delicacy of expression.

 Don't miss this concert!

Mounting evidence about sugar-obesity link

Sugar: Consumption at a crossroads

Should the government and health officials do more to reduce consumption of sugar, and will they in your opinion? The answer is yes, 90% of the European population consider that governments need to act,  but only 52% believe the governments will do it, according to the Credit Suisse Equity Research Nutrition Survey, 2013. You'll find the details in this report.
Why so many people consider that right now something should be done about sugar intake?. Basically because everybody is increasingly convinced about the relationship between excessive sugar consumption and obesity.
The report is a good guide for all the implications and potential governmental regulation and industry self-regulation.
Definitely, something should be done, asap.

The value of clinical pathways

Beneficis de l’organització de l’atenció sanitària a les persones amb ictus: mortalitat evitada i impacte econòmic

The size of efficiency improvement that stems from wide application of clinical pathways is huge.The stroke case has shown a reduction in 7,1% of deaths between 2005 and 2012. The study adds some estimates about benefits for society of saved years: 540 m euros. I'm not so sure about this figure, since it doesn't adjust for quality. The issue deserves a larger research, we need to understand the outcomes and quality of such protocol, known as "ICTUS Code".
Anyway, these are promising results and a good reason to strengthen clinical pathways on a general basis.

The rights and wrongs of headlines

Imagine that you see this headline in the newspaper: "Private health insurance has new 100.000 members". You may think, that's quite a lot. And you forget to read that this news reflects two years, not only one. And you go inside the report and you see that in 2011 there was an artificial jump because 4 companies had not reported previously.
And finally you are looking desperately for the right number. How many people have really bought a voluntary insurance policy in 2012? The answer is 47.370 new members, that's the right figure.
The duplicate coverage ratio is up 0,20 percentage points, to 24,6% of the population (1.842.121) p.22.
And that's all. Forget the newspaper, go straight to the report. This is the advantage of internet access and the reason why some journalists should rethink their work, they should avoid press releases and verify data.

PS.You'll not be able find the original press release on the internet, it has been removed.

ED Crowding

Informe de l’activitat notificada al Registre del conjunt mínim bàsic de dades d’urgències

How many visits to the emergency department are really urgent?. Up to now we hadn't a clear answer. A recent report says clearly that according to triage data, 13,3% of visits at hospitals ED are non-urgent. Is this figure accurate?. Well, if we look at the US, 12% of visits are non-urgent. We know that triage data is the only possible source for this evaluation right now. Other approaches are possible, but require larger effort.
From the data, we can conclude that reducing non-urgent care at ED is always important, but may have low impact on ED crowding.
In p.13 of the report I find that 3,9% of visits have uncertain funding. I can't understand why. Only 4.681 visits were performed under international social security agreements, it seems that there are very few cases.
Anyway, it is the first release of the report, and this is good news. We need such information to understand what's going on.

Behavioural economic-informed regulation

From Nudging to Budging: Using Behavioural Economics to Inform Public Sector Policy

Is it possible to design a regulatory mechanism to budge the private sector away from socially harmful acts?. Adam Oliver, from LSE offers his view at the Journal of Social Policy:

The role of government is not, for the most part, to interfere with personal lifestyle choices unless those choices present harms – or negative externalities – to others, although the government may be warranted in enforcing some behaviours designed to protect people principally from themselves if the intervention is considered openly and explicitly and supported widely, such as seatbelt legislation. The most effective way of preventing people or organisations harming others is to regulate their activities. Nudge is anti-regulation, but behavioural economics is not.

An awareness of the main behavioural economic findings – for example, present bias, reference points, loss aversion and nonlinear probability weighting – can help to inform decisions on where and how to regulate (for instance, traffic light food labelling), and may also ensure that public officials gain a better understanding of their own decision making limitations.

As I have said before, the idea sounds appealing, its implementation remains uncertain.

The size of the loss

Estadística dels centres hospitalaris de Catalunya, 2011

We live in difficult times. Economic downturn continues, although some politicians say the opposite. If we take 2011 hospital data, the size of the loss of private acute hospitals was 4,9% of income (33,7 m euro), for public utilization hospitals: 1,3% (71,7 m euro). Two different patterns emerge, in private hospitals income and expenditure increases, while in public hospitals income and expenditure drops (p.32). Public beds per 1000 inhabitants falls in 14 basic points, while in private is quite the same (+1 basic point).
Let's wait for 2012 report.

Charting a new territory: health systems vulnerability

Learning from Economic Downturns How to Better Assess, Track, and Mitigate the Impact on the Health Sector

Regarding the measurement of country-specific health system vulnerability to economic crises in comparison to peers and over time, the WB new report says:

Compared to other fields, such as food security (Food Price Watch 2012; Messier et al. 2012) and environmental vulnerability (SOPAC 2010), the health system lags behind in providing standardized definitions, metrics, and applied tools that would help assess crisis-related vulnerabilities. There are no descriptive tools that would allow for retrospective comparison, let alone predictive tools that would enable early warning signals.

The vulnerability assessment that they propose sounds of interest at a first glance. Spain, Cyprus, Italy and Greece are at the top of european ranking of vulnerability (p.60). Data come from 2010, rigth now the position would be a different one, even worse than before. The problem is that variation within each country is huge, comparing countries is an easy way to forget such differences.

Fundamental misconceptions about health economists and economics

Economics: the biggest fraud ever perpetrated on the world?

Twitter is a risky tool. Your short messages are seen worldwide, be careful. Richard Horton, editor of The Lancet, sent 10 tweets about economics and economists. Ten misconceptions, one behind the other. Certain people consider that such sentences doesn't deserve an answer, they only reflect the personality and knowledge of the author. Others, like David Parkin, John Appleby and Alan Maynard think the opposite and they decided to write a comment this week in The Lancet. This is an article for the files. And it fits perfectly as a recommended reading for those that share these controversial views of Richard Horton:

Panel: Tweets from @richardhorton: “Economics, second only to ‘management’, may just be the biggest fraud ever perpetrated on the world.”
The case against economics:
1 The promise economics offers is seductive: how to allocate scarce resources in society.
It’s a false promise.
2 Economists write as if the economy=society, and societal problems=economic problems. The confl ation is false too.
3 Once there was political economy = economics, ethics, politics. Economists have stripped morality from economics, leaving an arid science.
4 The high points of economic thinking are theories, not data. Reliable experimentally derived data are anathema for most economists.
5 Economists see health as an economic good. It is an opportunity cost, with zero intrinsic value.
6 Rationality, for the economist, means subjecting every thought/decision to a cost-benefit analysis. A wholly narrow view of humanity.
7 The big idea in economics is the market. The assumption is that human beings make cost-benefit decisions based only on self-interest.
8 The essence of economics is price. For those in health who argue for access free at point of delivery, we kill the soul of the economist.
9 Economists deny the existence of citizens. They see only consumers.
10 Finally, it’s acceptable to worsen the lives of some provided the gains of others compensate. Economists institutionalise inequality.A sum of nonsense sentences, one behind the other. 

After reading the comment to each of these tweets, it will be difficult to maintain the same position.
And the authors' conclusion:

What motivated Horton’s critical outburst about economics and economists is not clear. More than 40 years ago, an essay by Alan Williams to defend economic evaluation admitted its imperfections, but concluded with Maurice Chevalier’s view on old age: “Well, there is quite a lot I don’t like about it, but it’s not so bad when you consider the alternative!”Economics, like medicine, is imperfect. The challenge for practitioners of each is to ensure that the perfect does not drive out the good. Our practices may at times be imperfect, but that should not inhibit our drive to improve clinical practice and economic activity for the benefit of all our patients and citizens. We all must strive to avoid confused analysis in displays of modest understanding of each other’s work.

Becoming a physician in your country

Once again I have to explain that we live in a weird country. Imagine for a while that you are at the moment of taking the difficult decision about your future professional career. Imagine that you would like to become a physician. You live in a country that still needs new physicians and in the near future a lot of them will retire. If you succeed on that challenge, then you belong to one third (37%) of those that this year have entered into the profession.
The question is why are we not able to fill the remaining 73% with candidates coming from our towns and cities?. There is a perfect messy regulation that blocks any posibility that the students interested in medicine, with excellent curricula and grades, can enter university.
This is a way to constrain career and life development for new generations and restrict access to close professionals for the population. A complete human made disaster. There is only one possibility to survive in such situation, a quick disconnection.

A transactional patient experience

When Seeing The Same Physician, Highly Activated Patients Have Better Care Experiences Than Less Activated Patients

Patient engagement with the treatment of the disease is increasingly relevant. It seems that we have rediscovered that successful outcomes not only depend on the health care system, the patient behaviour may change the course of the disease. The conceptualisation of this trend has come up with a new term: patient activation - a term referring to the knowledge, skills, and confidence a patient has for managing his or her health care-.
A recent article at HA highlights the issue:

Patients at higher levels of activation had more positive experiences than those at lower levels seeing the same clinician. The observed differential was maintained when we controlled for demographic characteristics and health status. We did not find evidence that patients at higher levels of activation selected providers who were more patient centric. The findings suggest that the care experience is transactional, shaped by both providers and patients. Strategies to improve the patient experience, therefore, should focus not only on providers but also on improving patients’ ability to elicit what they need from their providers.

Easier said than done. Anyway, this is not an excuse to put efforts in such direction.

 In addition, a recent study found that patients at higher levels of activation have lower health care costs than those at lower levels.

There is no reason for procrastination, given the current state of resource scarcity.

For another day

The Actress, the Court, and What Needs to Be Done to Guarantee the Future of Clinical Genomics

The introduction of new technologies and benefits in health care is always a perfect chaotic process. It starts with the creation of great expectations that have to be fulfilled (and publicly funded!). In some sense it could be understood as a remake of the Nintendo story of undersupply and artificial scarcity creation. Some genome based biomarkers fits partly with this paradigm.
The case of Angeline Jolie -double mastectomy after BRCA testing positive- was broadcasted worldwide in the weeks before the ruling against gene patenting. Creating uncertainty and scarcity artificially is a heavier combination. And in this situations is when common good has to be protected, and government has the key role.
Two selected messages from this week in PLOS Biology:

If clinical genomics is about to move forward at a more rapid pace due to broader public awareness and a more favorable legal climate then there is still work to be done on the ethical, regulatory, and legal fronts.

Celebrities are now drawing public attention to the utility of genetic testing. With the Supreme Court decision opening the door to more and perhaps cheaper entry into the testing market, the requisite infrastructure for managing risk and the rules for handling risk information must be strengthened. Making testing more widely available will only be morally acceptable if there are rules of the road in place.

 Meanwhile, our regulator is just waiting for another day, then it may be too late.

Music video by Nikki Yanofsky performing For Another Day. 

(C) 2010 Decca Label Group

Neither manipulated, nor influenced

Nudge and the Manipulation of Choice
A Framework for the Responsible Use of the Nudge Approach to Behaviour Change in Public Policy

When thinking on health behaviour change, the nudging approach is the trending topic. Let's remember the origins:

The contribution of Thaler and Sunstein’s Nudge, however, is not that of conveying novel scientific insights or results about previously unknown biases and heuristics (something that Thaler has championed in his academic publications. Instead, it is the notion of “nudge” itself, and the suggestion of this as a viable approach in public policy-making to influence citizens’ behaviour while avoiding the problems and pitfalls of traditional regulatory approaches.

A recent article explains details about two types of nudging:

Type 1 nudges and type 2 nudges. Both types of nudges aim at influencing automatic modes of thinking. But while type 2 nudges are aimed at influencing the attention and premises of – and hence the behaviour anchored in – reflective thinking (i.e. choices), via influencing the automatic system, type 1 nudges are aimed at influencing the behaviour maintained by automatic thinking, or consequences thereof without involving reflective thinking.

And both can be transparent or non-transparent.  An example of a transparent type 1 nudge is one used by the Danish National Railway agency. Speakers in city trains are used to announce “on time” when trains arrive on time. This nudge has been devised in order to get people to easily remember not just the negative, for example, when a train is delayed, but also the positive, when trains are on time. Non-transparent is closely related to manipulation of behavior and choice.

The authors conclude:

The characterization of nudging as the manipulation of choice is too simplistic. Both classical economic theory and behavioural economics describe behaviour as always resulting from choices, but the psychological dual process theory that underpins behavioural economics, used by Thaler and Sunstein, distinguishes between automatic behaviours, and reflective choices. Nudging always influences the former, but it only sometimes affects the latter. The conceptual implication of this is that nudging only sometimes targets choices.

That's a good point. More details inside the article.

PS Understanding the differences between:  Clinical Categorical vs. Regression Based patient classification systems.

PS. Waste vs. value by U. Reinhardt. Must read.

Investing heavily

Global Healthcare Private Equity Report 2013

Healthcare represents about 10% of global private equity in general. Since this is more or less the proportion of health expenditures on the GDP would sound normal. However, since more or less two thirds of this expenditure is public in western countries, we can say that currently private equity may be overweighted in health sector, compared to others. The reason is that private equity may expect better returns in healhcare than in other parts of the economy.
Anyway, if you are interested in the details of what's going on, I suggest you to have a look at: Global Healthcare Private Equity Report 2013.
A key message about who is investing and where:

One clear theme that emerged in 2012, however, was the growing level of private equity firms’ interest in healthcare in China, India and across the Asia-Pacifi c region (see Figure 3). With opportunities abounding and restrictions on foreign direct investment relaxing to some extent, Western funds are building up their presence in Asia-Pacifi c by opening new offi ces, especially in China and Southeast Asia. Over the next several years, deal activity is likely to continue heating up in new geographies as it stabilizes in traditional ones.
Despite the allure of new markets, Western investors face a healthy dose of competition from local investment firms that have already taken root in the regions and strategic players searching for new outlets for growth. At the same time, investors based in the Arabian Gulf region (including sovereign wealth funds) are also investing heavily in emerging markets, with the long-term goal of bringing much-needed healthcare solutions back to their home countries. Given their unconventional investment theme, such investors are often willing to accept lower returns, consequently bidding up valuations across the board.

I always say that if you want to know about the future, it is helpful to have a conversation with a private equity investor and a headhunter. Capital and talent drive the economy, and both are interested in the appropriate allocation of risk and reward.

Quo vaditis?

Resource allocation in health care is a nightmare for any regulator. Since competitive prices are unavailable, payment systems have to be designed in order to achieve a greater efficiency, better quality and access. Two decades ago a chapter in a book on that topic summarized the knowledge and potential applications. The title was: Hospital Groups and Case-Mix Measurement for Resource Allocation and Payment, and the authors: Pere Ibern, James C. Vertrees, Kenneth G. Manton,Max A. Woodbury. This was the result of my stay as a visiting researcher at Duke University, Center for Demographic Studies. I had the unique opportunity to share knowledge with extraordinarily talented people.
For many years, things moved smoothly. A summary of the state of the art in 2007 is provided in a chapter of this book (p.259).
After twenty years, things have changed, quo vaditis payment systems?. Right now we focus on incentives for integrated care, and accordingly payment systems have to follow a different path. Bundled care and episode of care, these are the crucial topics right now.
However, regulator's inertia and risk avoidance are the greatest constraints for change. It is difficult to leave the confort zone. Although we know that current payment systems require a new design, decisions are being delayed. The latest words of Seamus Heaney, recently passed away, fit perfectly as a key message: Noli timere, don't fear.

A central dilemma

Reconsidering the Politics of Public Health

These are difficult times for public health regulators. JAMA highlights the issue:

A central dilemma in public health is reconciling the role of the individual with the role of the government in promoting health. On the one hand, governmental policy approaches—taxes, bans, and other regulations—are seen as emblematic of “nanny state” overreach. In this view, public health regulation is part of a slippery slope toward escalating government intrusion on individual liberty. On the other hand, regulatory policy is described as a fundamental instrument for a “savvy state” to combat the conditions underlying an inexorable epidemic of chronic diseases. Proponents of public health regulation cite the association of aggressive tobacco control, physical activity, and nutritional interventions with demonstrable increases in life expectancy

The article presents 5 ways towards a solution. The fifth says:

Physicians may bear particular responsibility in addressing the problem that psychologists call “hyperbolic discounting”— the human tendency to discount the value of future conditions bya factor that increases with the length of delay. Physicians bear witness to regrets about prior unhealthy choices in poignant moments— for example, the ex-smoker who wheezes in trying to keep up with grandchildren—and work to prevent other patients from experiencing avoidable fates.Perhaps physicians and other health professionals, as a result, have a special duty to weigh in on how society mitigates the social and environmental conditions that lead toward unhealthy choices

Wishful thinking again?.
Why should physicians bear such huge responsibility? "Nanny physicians"? What about citizens?. As you know, my focus is on shared decision making. Unfortunately the article doesn't mention it.

PS. What's goign on in Catalonia? Have a look at WSJ today. This is not a dilemma, it's a fact.

PS. Are you willing to pay 12.380€ for an additional survival of 36 days -progression free in breast cancer- ?. NICE considers that cost per QALY of Eribulin is 91.778 €. Are you willing to pay this cost? Forget the question,  there is no dilemma, the social insurance will pay it for you as from today. We are rich enough to afford it.

PS. If somebody wants to know how neuromarketing is being applied, have a look at the following documentary: "Don't think, just buy". Public health regulators can learn a lot from this experience to counter commercial efforts on junk foods and beverages.

Humanity cannot be owned

Gene Patenting — The Supreme Court Finally Speaks

In light of recent resolution of US Supreme Court on gene patenting, beyond technicalities, the most important is the final decision. All nine Justices of the Court agreed that the segments of DNA that make up human genes are not patentable subject matter. The Myriad case has raised expectations, now the business model is more clear than yesterday, at least in US. However, nobody talks about those patents already acknowledged and what it happens.
The best summary is in the NEJM article:

The Myriad decision will be an important symbol for those who seek to foster scientific discovery by protecting and expanding the public domain. It also has symbolic resonance with the ideal that our common humanity cannot be owned. The Universal Declaration on the Human Genome and Human Rights declares the human genome to be “the heritage of humanity” and that “the human genome in its natural state shall not give rise to financial gains.”

In Europe the patentability of genetic materially is legally protected by the EU's Biotech Directive, which holds that "biological material which is isolated from its natural environment or produced by means of a technical process" may be patentable "even if it previously occurred in nature." FP says: European firms may now have a lot more leeway than their American counterparts.
Does this make any sense? We should start a review process of genetic patents legislation immediately.

A picture is worth a ...

The World Bank HNP Data

Health expenditure as a share of GDP around the world

Drivers of health cost variation

Variation in Health Care Spending:Target Decision Making, Not Geography

Variations in medical practice are well known and documented. Variations in costs, not so much, at least in our country. Now you can check what happens to geographic cost variations in US. Have a look at IOM report and you'll get the right approach to the issue:

Geographically-based payment policies may have adverse effects if higher costs are caused by other variables like beneficiary burden of illness, or area policies that affect health outcomes. Further, if there are substantial differences in provider practice patterns within regions, cutting payments to all providers within a region would unfairly punish low cost providers in high-spending regions and unfairly reward high cost providers in low spending regions.

A clear alert for any designer of payment systems. The Economist adds more details on this topic and finishes with an additional alert:

The transition from fee-for-service will inevitably be slow. In the meantime, it would help if the millions of Americans with private insurance had any idea what hospitals charge. In May CMS published hospitals’ price lists, showing huge gaps from one hospital to the next. But few patients pay these charges—it would be more useful to know the rate negotiated with their insurers. This transparency does not require restructuring the health system. It just requires hospitals to lift the veil on prices. If they don’t, a regulator may do it for them.

PS. For those that claim that our tax pressure is low. Have a look at taxes over labour costs (41,4%)  OECD average 35,6% (2012), why this figures are not broadcasted? The medium is the message? Who controls the medium? Does anybody consider that competitivenes is possible with such rates?

Where is the problem?

Rafael Nadal said in a recent article:

En el llibre Els mandarins explico que un dia, referint-se als ciclistes, Mariano Rajoy em va dir: "A veure, si tots es dopen, ¿on és el problema? Al final, el que guanya segueix essent el millor".

You'll find the right answer in an excellent article in The Economist: Doping in sport Athlete’s dilemma
The analogy between sports and doping fits quite well with politics and corruption. What next?

Evidence-based market failure

The market may fail to provide the right answer to some citizen's needs. We all know that. If we talk about long term care insurance, the failure is well documented. You may have a look at two NBER academic papers ( A and B ). If you want recent news on the US situation, WSJ provides you a detailed description of this big failure. Still waiting for the right public policy, here and there.

Difference in differences

We all know that the state as a unit of analysis for comparative health policy distorts the whole picture. It forgets that within the country there are huge differences in many key indicators. If you are not still convinced, have a look at the regional european statistics. For sure you'll avoid to achieve any conclusion about health care comparisons without taking into account such data.

A picture is worth a ...

Underestimation of health status

I am strongly convinced that health surveys used to estimate morbidity differ from objective measures. Such large differences are unknown and too often health policy and planning is exclusively based on self-assessed measures. A recent chapter in the book "Active ageing and solidarity between generations in Europe: First results from SHARE after the economic crisis" confirms my impression. Why is this so?. The authors say:

"Being female, older or highly-educated implies a lower probability to underestimate health, and this probability is higher if people are wealthier and have confidants in their social network. Besides, people are more likely to overestimate their health if they are older or wealthier; on the contrary, this probability is lower if they are homeowners or have someone in entourage to talk to."

Knowing how it works

Informe de la Central de Resultats. Àmbit hospitalari. Juliol 2013

Informe de la Central de Resultats. Àmbit sociosanitari. Juliol 2013

If there is a unique feature of catalan healthcare organization is the specific design for subacute, palliative and long-term care. This has been a strong effort to develop a network and capabilities that has taken many years. Now you can see details on the Central de Resultats related to "socio-sanitari"- care. The success is really high and patient satisfaction indicators reflect it.

Doing what works

Rediscovering the Core of Public Health

An update on the focus of public health is welcome. The article in the annual review is a good starting point:

Public health needs to transition from a twentieth-century model grounded in a biomedical model and categorical funding of disease-specific interventions to emphasize changes in the greatest determinants of health: our social and physical environments. Although improvements to date from public health need to be sustained, new perspectives and capabilities are essential to address contemporary and projected disease and injury burdens effectively.

The suggestion to analyse life trajectories sounds interesting. 

Are you satisfied?

If we take into account the results of the health barometer, the answer is YES, and now more than ever!. It sounds weird since the current debate about budget cuts would predict a decline in satisfaction with health services. Ctizens valued health care with 6.89 in 2012. We have right now slightly higher values than 2009, before the downturn. These figures require an explanation. It seems that there is a divorce between how people assess health services and how such situation is broadcast by the press? What's up?.

PS. Somebody has to fix this news.

 Remember, Katie Melua at Jardins de Cap Roig, this is the summer concert!

Genome sequencing mess

Since the world is more complex than it used to be, it is our duty to prevent any further complication. However sometimes some individuals forget it. The anouncement of sequencing genome for 100.000 citizens in UK last December raised controversy and BMJ right now publishes a head to head on this issue.
This blog has remarked many times that if effectiveness of any benefit is undemonstrated, then value is uncertain and potential harm of its application exists.
The summary of the position against sequencing is the following one:

If we sequence individuals’ DNA and tell them that they are genetically predisposed to be slightly more at risk of common diseases, we may be doing them a great disservice, demotivating them from behaving sensibly. And the private sector will see a marketing opportunity for all sorts of clinically unnecessary and potentially damaging screening, with further negative and unintended consequences. Possessing the technical ability to do something new is not an immediate justification for going ahead with it, especially in such an ethically complex area. Good medical practice requires tests to answer a specific question with a reasonable expectation of results being interpretable and useful. Currently, whole genome sequencing in healthy individuals has nothing to offer clinically because most of the data generated are meaningless; the maxim first do no harm still holds.

However, a subtile strategy has emerged recently. The Wellcome Trust will  finance with 3.2 m € a pilot study in London to analyse 97 cancer predisposition genes starting in 2014. It's not by chance, it coincides with Angelina Jolie double mastectomy recent news, and the patent expiration in 2014 of BRCA genetic tests. Is this a philantropic affair? or market access strategy?. The answer is yours.

PS. Beware of nonprofit foundations working for profit. This is a succesful strategy for market access when regulatory constraints have been set up and transparency rules apply. In such cases free lunches exist suspiciously,  but in the long-run they always disappear, and the social cost is enormous.

PS. A call to challenge "Selling Sickness"

PS. Save the date Sept 10-12 to prevent overdiagnosis.

Who pays and who benefits?

Lifetime Distributional Effects of Publicly Financed Health Care in Canada

A lifetime perspective on equity is needed. Short term analysis introduce confounding factors. Fortunately, today we have good news. The Canadian Institute of Health Information has released an interesting research using this approach, and these are the key results:

• Health care costs are higher for low-income groups, but differences are not as pronounced when estimated over the life course instead of in a single year (2011 in this analysis).
- Average lifetime health care costs are $237,500 per person in the lowest income group and $206,000 in the highest income group—a difference of 15%. The difference is much larger (60%) when considering the effect on a single year (2011).
• Tax payments to finance health care are higher among higher-income groups but, like health costs, the differences between income groups are less pronounced when taking a life course perspective.
- Over a lifetime, average annual tax payments to finance health care costs are approximately 8.5 times as high in the highest income group as in the lowest income group. A more pronounced difference of 10 times between groups is estimated when looking at 2011 only.
• Patterns of health care costs and tax payments for different income groups have an effect on the distribution of income.
- Average annual health care costs represent 24% of the income of the lowest income group ($4,220 of $17,500) but 3% of the highest income group’s average income ($3,350 of $114,900).
Although the corresponding tax payment amounts are much higher in high-income groups, in an average year over a lifetime, the lowest income group pays 6% of its income toward publicly funded health care services; the highest income group pays just less than 8%.
Lifetime average after-tax income in the highest income group is 5.1 times the income of the lowest group; after adding the dollar value of health care costs, the gap was reduced to 4.3 times.

Hopefully one day we'll have something similar for our country.

PS. Fyi - from BBC News.
The European Commission is launching legal action against Spain over the refusal of some hospitals to recognise the European Health Insurance Card.
The EHIC entitles EU citizens to free healthcare in public hospitals.
But some Spanish hospitals rejected the card and told tourists to reclaim the cost of treatment via their travel insurance, the Commission says.
A BBC correspondent says the Commission is not accusing cash-strapped Spanish hospitals of trying to make money. The Commission, which checks compliance with EU law, has requested information on the issue from the Spanish government - the first stage of an infringement procedure which could eventually result in a fine.

PS. The course on Health for all through primary care at Coursera-Johns Hopkins has started. Free for all.

Navigating through data

The Health Data Navigator

Undertanding health system performance starts with the availability of data. Many sources are available, but beyond data you need a framework for the analysis. Since this week a new and healthful source is the Health Data Navigator, the outcome of the Euroreach research. The toolkit summarizes in one document the approach. It is a helpful resource. The institutional basis for performance is often a key neglected element in the analysis. They follow the WHO Building Blocks perspective, although there are other options.
Beyond OECD data, we have right now a new database to check. Unfortunately our country has not joined this initiative by now.

PS. The six building blocks:
• Good health services are those which deliver effective, safe, quality personal and non-personal health interventions to those that need them, when and where needed, with minimum waste of resources.
• A well-performing health workforce is one that works in ways that are responsive, fair and efficient to achieve the best health outcomes possible, given available resources and circumstances (i.e. there are sufficient staff, fairly distributed; they are competent, responsive and productive).
• A well-functioning health information system is one that ensures the production, analysis, dissemination and use of reliable and timely information on health determinants, health system performance and health status.
• A well-functioning health system ensures equitable access to essential medical products, vaccines and technologies of assured quality, safety, efficacy and cost-effectiveness, and their scientifically sound and cost-effective use.
• A good health financing system raises adequate funds for health, in ways that ensure people can use needed services, and are protected from financial catastrophe or
impoverishment associated with having to pay for them. It provides incentives for providers and users to be efficient.
• Leadership and governance involves ensuring strategic policy frameworks exist and are combined with effective oversight,coalition-building,regulation,attention to
system-design and accountability

Assesment and review

Disability weights in the Global Burden of Disease 2010: Unclear meaning and overstatement of international agreement

The Global Burden of Disease study is a huge effort to understand  worldwide population health. A former post explains some details and links. However, some calculations and estimates require and assessment and review. This is what Erik Nord explains in his article:

After a long history of changing concepts and methods in measuring ‘burden of disease’ the GBD 2010 has landed on ‘health’ as a unidimensional construct to be used forweighting multi-dimensional non-fatal health problems against each other and against death. At first glance this may look plausible. But the unidimensional health construct does not have a clear meaning. It likely also leads to biases in assessments of conditions that in everyday language are associated with ‘being ill’ as opposed to con-ditions which are not associated with ‘being ill’, namelystates of disability and the state dead. Furthermore, the transformation of ordinal data from paired comparisons into disability weights with purported ratio scale properties is not validated nor explained in a way that allows judgements of face validity.

And I would like to highlight this final consideration:

A value oriented burden of disease construct can either have a personal welfare content or a content that incorporates societal values in priority setting and resource allocation. Which of these would make the GBD enterprise most useful to decision makers is an important issue for further debate

I fully agree with this article. Aggregation without accurate metrics gives quick results, but uncertain for the implications we can derive, sometimes.

Death, taxes and fiscal deficit

Benjamin Franklin said: "The only things certain in life are death and taxes.". If he had lived here, he would have added "fiscal deficit" in its quote. And this is a constant since 1986, 8,1% of our GDP disappears and doesn't returns in services or infrastructures. And somebody is still interested in this money to use it for their preferences, and not for the tax-payers.
Yesterday we knew again that fiscal deficit was 16,543 million euros, a 8,5% of GDP of 2011. After 25 years, the accumulated amount of fiscal deficit is 306.267 million euros!!!. Can you imagine what represents this figure for a country of 7,5 million inhabitants?
Every year the fiscal deficit is equal to the sum of health, education and welfare expenditures. As far as a country can't survive with such bleeding, I'm convinced that we'll not discuss it again. Let's put it simply, time to say goodbye has arrived because it is socially unacceptable such discrimination and unfair relationship. Only one fourth of the fiscal deficit in one year would stop recent public budget cuts. The answer is only one: Goodbye.

Healthcare value chain, again

Redefining global health-care delivery

A remake of what you may already know has been published as article in The Lancet. It could be good as a reminder but something else is needed. The authors recognise:

Many individual elements we have described will be familiar to global health scholars and practitioners. Many lessons have been learned in discrete areas. What we lack is a true field. We need a clearing-house for information about programme design, best practices, lessons learned, synergies, policy constraints, environmental determinants, and other elements of global health-care delivery. In an age of information, the collection of data can run seamlessly from bedside to seminar room and back to the field.

 I'm uncertain about the outcome of such proposal. The details are so important and difficult to capture that the challenge is huge. On the other hand, I suggest to have a look at this Mckinsey Quarterly article that focus on the opposite: against benchmarking. After reading it, you'll notice that competition pressure in IT may not fit exactly with health care industry, and the message may not apply as straightforwarding.
Anyway, we need an evaluation effort to understand those strategies that are able to deliver more value. Now it's time.

PS. I wrote an earlier post about Porter et al.

Aprés tout (4)

An updated release of public health expenditure data has just been published. In 2011, the expenditure on health was 1,330 € per capita, you can check p.9 of the report. Total decentralised public expenditure: 10,120 m €, percentage of GDP: 5.1%. Why are these figures so different from my previous post with official data?
Now it seems that the deficit in 2011 was 932 m€ - a 10.1% budget deviation-, while formerly a lower figure was announced:586 m€. If it is a mistake, somebody has to fix it, otherwise it will remain in the statistics for the future. If it is true, then we have to ask why it was published incorrectly. Was it misinterpretation, negligence or making -up?

PS. Beware, this data comes from outside. Anyway, somebody has to confirm or dismiss it.

PS. Is it sustainable a public health expenditure variation from 4.4% of GDP to 9.9% of GDP between geographic areas with the same tax regime?

Wired Health

Eric Topol information into action, Wired Health conference


Eric Topol: Information into Action at Wired Health from WIRED on FORA.tv

Economics of genomics

The Economics of Genomic Medicine - Workshop Summary

Just imagine for a while that you are concerned about economic implications of genomics and you invite a distinguished professor of genetic medicine - James Evans- to the introduction of a workshop at IOM. Instead of more is better, he sends a cautious message to the audience. And beyond the potential and valuable applications for those that are already ill,  he openly critizises the current trend towards the use of genetic tests for the healthy:

Assessing the risk of common diseases through whole genome analysis of a healthy person has received the most attention, but this attention “is somewhat misplaced,” Evans said. Currently, assessment of genetic risk alleles has “rather feeble predictive power” because the increased risks tend to be small. “From a clinical standpoint I don’t know what to do with patients who are at a 1.3 relative risk for colon cancer,” said Evans. “Am I going to hurt them by doing more intensive screening, or am I going to help them?”

"I know what almost everybody in this room is going to die of,” said Evans. “We are going to die of heart disease or cancer. . . . We are all at high risk for these maladies regardless of our [genomically determined] risk. And many at decreased risk for heart disease will still die of heart disease. So we are all going to benefit from interventions that lower heart disease. We don’t really need to target people. It doesn’t do anyone much good to tweak our estimation of an individual’s relative risk for common diseases which we are all at high absolute risk of developing anyway."

 “The old adage that an elephant for a nickel is only a bargain if you have a nickel and you need an elephant applies here. I am not sure most of us need that elephant. Even if free, perceived low cost is an illusion, because the misapplication of medical tests—and make no mistake, whole genome sequencing is a medical test—is very expensive,”

A clear message for geneto-enthusiasts and marketeers. Cost-effectiveness of genetic testing starts with assessing if they are effective. If not, any economic analysis is useless . This is obvious, but we do need to repeat it, just in case.

PS. Must read, Reinhardt's blog.

PS. A report to understand the financial markets' mess and why recovery is far by now.

The right rate

International Variations in a Selected Number of Surgical Procedures

If you want to be astonished by the huge variation on the rate of surgical procedures in OECD countries, have a look at this report. It is difficult to find arguments for such a huge differences in health care. The key statement:

The data presented here provide contemporary assessments of the size of the clinical margins of uncertainty for the procedures studied. These may also in part be a consequence of varying legal constraints, methods of payment, availability of cover and patient preferences. They therefore provide basic evidence for research priorities in an increasingly evidence-based medicine paradigm. The only way to make proper judgements on the optimal level for a particular procedure is to have national longitudinal data linking individuals’ treatment (and deliberate withholding of treatment) to outcomes. Such data do not exist in most countries. This is a critical deficiency in health service delivery, which means current policy on which procedures to fund, for whom, is formulated in circumstances based more upon local custom and scientific tradition than empirical effectiveness data.

Meanwhile you can add this report to the folders with the Atlas VPM that you may already know.

Tackling obesity

Integrating Educational, Environmental, and Behavioral Economic Strategies May Improve the  Effectiveness of Obesity Interventions

On top of the priorities for the improvement of public health, obesity deserves a place. However, the tools and decisions to slice its impact on health are still dubious. A recent article may help to put together different approaches:

Obesity is a multifactorial problem impacted by access to foods (supply) and food choices (demand). Neighborhood environments constrain the food choices available to individuals, while complex dietary decisions are driven by taste, cost, nutrition, convenience, and weight concerns. The complex nature of dietary choices therefore requires informed educational approaches that are strategically combined with guided nudges, and environmental interventions that improve access to promote healthier eating. Moreover, multi-institutional  collaborations will likely be necessary to address the obesity epidemic.

Since a multi-institutional approach is needed, somebody has to lead this effort. Is the government able to do it?. If so, don't delay it.

PS. Let me suggest also this Lancet article, my key reference up to now with the OECD one and its update.

The stratified approach

How Health Systems Could Avert 'Triple Fail' Events That Are Harmful, Are Costly,And Result In Poor Patient Satisfaction 

While reading the latest HA, I've picked this article that intends to focus on implementation issues: how to improve health. A short statement:

 The stratified approach to the Triple Aim described in this article includes three phases. A planning phase would involve conducting an opportunity analysis, developing predictive models and impactibility (also known as intervenability) models.

More details in the article. Formerly in this blog, I've explained more or less the same. For instance, have a look at a post of last year on risk prediction in a population . We do need to focus on the basics using the most appropriate tools. This is what the article does, and what we have to do.

Aprés tout (3)

Publicly funded health expenditure reached 9,162m € in 2012, although the initial budget was 8,756m €. Therefore, the size of the budget deviation was  406m €(10% of total public deficit, health care is 38% of total public budget), and we have to remember that in 2011 the deviation was 582m€ .
Let's say it differently, in 2012 we have roughly accomplished the budget of 2011 (!) , or being more precise we have reduced the 2011 budget in 26 million .
The most interesting figure is always the per capita expenditure, in 2012 the final number is 1,205 € per inhabitant. A reduction of 2 € if we compare to 2011 budget (p. 45), or 77€ per capita of cutbacks in current terms.
The level of expenditure is right now close to what we were spending 5 years ago. Surprisingly, the size of population also went back to the figure of 5 years ago.(!)
Meanwhile, citizens wonder if there is a limit in the shrinking trend. The rumor these days is that the 2013 budget may be reduced by 9%. I can't imagine that this is possible to accomplish in 6 months, given that we have reduced 12% in two years(!!!).
And finally, don't forget that we are in a country that only 43% of our taxes come back, the remaining amount we'll retrieve it the day that we all agree in the creation of a new state. Then we'll not discuss again about cutbacks in the health budget, because we'll decide how much to devote to health services with our taxes.

PS. Video: Our politicians in the Parliament, a review of health policy in 2012.

PS. Today at 19:30 h. free broadcast of GET2013:  Genomics in the Practice of Medicine

PS. Otherwise at 22:00 h you may be interested in:  Genetics in Hollywood: Inspiring Writers and Producers to Create Storylines that Improve Health Worldwide 

PS. Recovery room from cutbacks: Must listen to Ben l'Oncle

Against patents

The case against patents

Some months ago, a WP blog hightlighted a paper by Boldrin and Levine with a straightforward title. Now you can read it at the Journal of Economic Perspectives. The summary is in the first paragraph:

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity. This disconnect is at the root of what is called the “patent puzzle”: in spite of the enormous increase in the number of patents and in the strength of their legal protection, the US economy has seen neither a dramatic acceleration in the rate of technological progress nor a major increase in the levels of research and development expenditure.

A risky statement unless there is a clear support from research. However, once you continue reading you'll have arguments to be convinced about it. The impact on pharmaceutical industry is analysed in detail:

There are four things that should be born in mind in thinking about the role of patents in the pharmaceutical industry. First, patents are just one piece of a set of complicated regulations that include requirements for clinical testing and disclosure, along with grants of market exclusivity that function alongside patents. Second, it is widely believed that in the absence of legal protections, generics would hit the market side by side with the originals. This  assumption is presumably based on the observation that when patents expire, generics enter immediately. However, this overlooks the fact that the generic manufacturers have had more  than a decade to reverse-engineer the product, study the market, and set up production lines. Lanjouw’s (1998) study of India prior to the recent introduction of pharmaceutical patents there indicates that it takes closer to four years to bring a product to market after the original is introduced—in other words, the fifi rst-mover advantage in  pharmaceuticals is larger than is ordinarily imagined. Third, much development of pharmaceutical products is done outside the private sector; in Boldrin and Levine (2008b), we provide some details. Finally, the current system is not working well: as Grootendorst, Hollis, Levine, Pogge, and Edwards (2011) point out, the most notable current feature of pharmaceutical innovation is the huge “drought” in the development of new products.

And the proposal is a controversial one:

we could either treat Stage II and III clinical trials as public goods (where the task would be financed by National Institutes of Health, who would accept bids from firms to carry out this work) or by allowing the commercialization of new drugs—at regulated prices equal to the economic costs of drugs—if they satisfy the Food and Drug Administration requirements for safety even if they do not yet satisfy the current (overly demanding) requisites for proving efficacy.

The last sentence sounds far from what should be a "fair" regulatory process in pharmaceuticals. Anyway, it seems that we have entered in a new perspective on patents and more scholars will be supporting it in the future.  I'm close to this perspective, but the details are important, as usual.

Full overhaul needed

A full-fledged overhaul is needed for a risk and value-based regulation of medical devices in Europe


This is exacty what medical devices regulation in EU needs: a full overhaul. The weaknesess of current process have been on the press for the case of breast implants. But this is only an extreme case that has shown the failures and conflicts of interest.
Carlos Campillo article in Health Policy shows clearly the details and examples of the current mess.

In Europe, the first step should be to understand thefull extent of the problem and bring it to public attention.Comprehensive, reliable and constantly updated registriescould play an important role in this endeavor. Secondly,all the improvement measures described in connectionwith both sides of the problem (assessment, appraisal andapproval, on the one hand, and postmarketing on the other)should be urgently implemented. The fact that we already know what these measures are would delegitimize any delay in implementation.

A clear alert for any politician with eyes to read.

PS. On non-profit boards

Paving the way

Default Options In Advance Directives Influence How Patients Set Goals For End-Of-Life Care

The end of life is obviously a difficult period. In such context, health care decisions have to be taken and our brain may not be able to perform as it should.

Most seriously ill patients value comfort and dignity over life extension, but routine care often leads to treatment oriented toward extending life. Deviating from this life-extending norm requires that someone actively request or suggest doing so.Specifying one’s goals of care in the living will component of an advance directive provides patients with an opportunity to counter this tendency. However, the text and structure of commonly used advance directives carry some of the same implicit biases that tend to favor life extension in the absence of advance directives.

Halpern et al. show that people are strongly influenced by default options in advanced directives. Without default, 66% prefer confort over life extension. With a default option, 77%  prefer not to extend life, even after reconsideration and being informed over the default.
Food for thought. Behavioral economics is paving the way for new understanding of choices that involve large amount of resources.