In search of the balance between government and market

THE LIMITS OF THE MARKET: The Pendulum between Government and Market

Thirty years ago I bought a book that was a key reference MARKETS OR GOVERNMENTS : CHOOSING BETWEEN IMPERFECT ALTERNATIVES. The focus was clear, the government should enter when there is a market failure and try to curb it. This was the message and has been the message for many years. Now we know that the approach was too simplistic. If you want to understand an updated approach to the same issue, check the new book by Paul de Grawe, THE LIMITS OF THE MARKET: The Pendulum between Government and Market. A well written and accessible book that helps to remake the arguments with the evidence of the past years. The chapters:

The Great Economic Pendulum
The Limits of Capitalism
External Limits of Capitalism
Internal Limits of Capitalism
The Utopia of Self-Regulation in the Market System
Who can Save the Market System from Destruction?
External Limits of Governments
Internal Limits of Governments
Who is in Charge? Market or Government?
Rise and Fall of Capitalism: Linear or Cyclical?
The Euro is a Threat to the Market System
The World of Piketty
Pendulum Swings between Markets and Governments

At the end of the book there are two issues that concern the author: inequality and the degradation of environment. The need for internation cooperation on taxation is critical for the first issue, and the functioning of democratic institutions for both. His final comment is a call for action:

The Myth of Sisyphus

Sisyphus was a Greek king who felt stronger and wiser than Zeus, and was punished for his hubris. He was sentenced to push a rock up a mountain every day, after which the rock would roll back down each evening. The following day Sisyphus had to start all over again, continuing for eternity. In his essay The Myth of Sisyphus Albert Camus gave an existentialist interpretation of this well-known Greek myth. Camus sees Sisyphus’s punishment as a metaphor for the absurdity of life. How should we deal with this absurdity, he wonders? One option is to commit suicide. Camus rejects this option. Instead he suggests that we should rebel against the absurdity of life by throwing ourselves into it, living intensely, and being creative. The revolutionary hero is the one who despite the absurdity and knowing that his rebellion will eventually achieve nothing, still sets the rock in motion and remains happy. ‘Il faut s’imaginer Sisyphe heureux’ (‘One must imagine Sisyphus happy’), Camus decided.
That is the position I would like to offer as a guiding principle for the end of this book. It will be extraordinarily difficult to prevent future catastrophes. It may even already be too late. (I am at least a little more optimistic than Albert Camus with his Sisyphus interpretation, which is very bleak indeed.) We have a small chance of preventing decline with the reforms I outlined above. But even if that does not work, we are left with the option of doing as Sisyphus did, of starting again each day. It is the only way of giving meaning to our existence. If we do not take action, our grand children will not forgive us for failing to try to save them. That in itself is sufficient motivation to persist.

Transforming the practice of care in the most inefficient and wasteful health system

The Smart-Medicine Solution to the Health-Care Crisis

Eric Topol provides clear insights for a wide range of life sciences issues, and some days ago he insisted once again on the need to reform US health system. Everybody is talking about financing and acces, and he focuses on organization. That's good to hear. I suggest a close look at the WSJ article. Although the scope is US, you'll find many comments that are absolutely useful for our health system (the public and specially the private one).

Our health-care system is uniquely inefficient and wasteful. The more than $3 trillion that we spend each year yields relatively poor health outcomes, compared with other developed countries that spend far less. Providing better health insurance and access can help with these problems, but real progress in containing costs and improving care will require transforming the practice of medicine itself—how we diagnose and treat patients and how patients interact with medical professionals.

And he backs a smart medicine practice:

Smart medicine offers a way out, enabling doctors to develop a precise, high-definition understanding of each person in their care. The key tools are cheaper sensors, simpler and more routine imaging, and regular use of now widely available genetic analysis. As for using all this new data, here too a revolution is under way. 

And the key integrative tool:

At the Scripps Research Institute, we are working with the support of a National Institutes of Health grant and several local partners to develop a comprehensive “health record of the future” for individual patients. It will combine all the usual medical data—from office visits, labs, scans—with data generated by personal sensors, including sleep, physical activity, weight, environment, blood pressure and other relevant medical metrics. All of it will be constantly and seamlessly updated and owned by the individual patient.

Good news (US only):

 Fortunately, serious ventures in smart medicine are well along. My colleagues and I at the Scripps Research Institute are leading the Participant Center of the NIH’s Precision Medicine Initiative, which is currently enrolling one million Americans. Volunteers in the program will be testing many of the new tools I have described here. The recently formed nonprofit Health Transformation Alliance, which includes more than 40 large companies providing health benefits to 6.5 million employees and family members, intends to address the high cost of health care by focusing on, among other things, the sophisticated use of personal data.

I have to say that his position is well grounded, it is not a fascination for technology. The true health reform starts with the practice of medicine. Completely agree.

Fotopres

Critical thinking in medicine

Testing Treatments
Els Tractaments, a prova

If you are interested in critical thinking about treatment claims, then now it is the time to read this book in english and catalan. You'll understand:

Why do we need fair tests of treatments?
What are fair tests of treatments?
What can be done to improve tests of treatments?
How can YOU help to improve tests of treatments?

And you'll find a review by Xavier Bonfill at Annals

Health as the capacity for action

The Patient as Agent of Health and Health Care.

Autonomy in Patient-Centered Care for Chronic Conditions

Currently the concept of health as the absence of disease is absolutely outdated. The goal of clinical care has moved towards health-related quality of life. I have to admit that this is more an aim than a reality, but many professionalos share this view. If this is so, then considering health as capacity for action becomes critical. Mark Sullivan explains this view in an outstanding book, specially on part 3 and 4.

The turn to HRQL arose from the recognition that observable characteristics of the body could not provide an adequate account of the overall burden of chronic disease on individual patients or on the population as a whole. But the HRQL concept merely tried to add the experience of the patient to a notion of health defined by observable damage to the body or objective disease. It is not adequate to talk about the subjective experience of objectively defined health states. Health is not an objective state because neither death nor disease are always bad for patients. Most patients now choose to limit the medical care they receive at the end of life because they do not see death as the worst possible outcome. Similarly, it is possible for older adults to live well despite multiple chronic diseases. HRQL has not provided a fundamentally new metric for health and has not succeeded in redirecting clinical trials or activity to a more patient centered set of goals.

Any adequate, comprehensive, and valid approach to health must focus on personal agency, or the capacity of the person to achieve his or her goals. This is the only way we will understand and achieve individual well- being. This personal agency is both a means to well- being and an intrinsically valuable component of it. We conceptualize health and well- being as capabilities rather than as objective or subjective states: “our capability to lead the kind of lives we have reason to value.” To explore and define a new sense of health as agency, we will need to understand the various ways in which health and action are related.

A deep view of bioethics and the concept of health, all together. Good read for this summer.

The value of lab testing in precision medicine

The Value of Diagnostic Testing in Personalized Medicine

Before Jevons, economists were unable to think on marginal terms. If price should be related to marginal utility, then cost pricing nowadays is outdated. However, when someone suggests value pricing, you must ask immediately about what is value for him, and maybe it is not the same than for me. A paper on lab testing and its value suggests the following:

The value of a diagnostic arises not because of its direct effect on a patient’s health but because of the information it provides on a patient’s likely response to a particular therapy. Personalized diagnostic testing reduces – though does not eliminate – the trial-and-error associated with empirical medicine, where physicians and their patients try an initial set of therapies and decide to continue or discontinue them on the basis of realized efficacy and side effects. In this manner, personalized diagnostic tests transform medical care from what economists call “experience goods,” whose quality can only be determined through consumption, to “search goods,” whose quality can be learned before  consumption

Personalized diagnostic testing offers several advantages over an empirical, trial-and-error approach to medicine. These benefits include the avoidance of side effects, potentially reduced financial costs of therapy (e.g., if a patient is identified as a likely nonresponder to an expensive therapy and the alternative is cheaper), potentially reduced opportunity costs of time – not just in terms of physician visits but also time lost on an ineffective or even harmful treatment, and improved or earlier access to effective care. Not only do patients receive value from personalized testing and treatment, but providers and health care systems benefit by avoiding ineffective, or wasteful, health care that accompanies less targeted, traditional treatment approaches. Specifically, a diagnostic test will be most valuable when the therapy being evaluated is expensive relative to alternatives, when side effects are frequent and severe (thereby making the empirical approach relatively less safe), and when delay from an alternate therapy can severely harm an individual’s health (e.g., metastatic cancer)

The concept is clear, its measurement is still uncertain.

Is there any justification for interventions that aren't cost-effective?

Ethics, priorities and cancer

This is one of the most challenging questions nowadays. Anthony Culyer sheds light n this difficult issue in a recent article applied for cancer care. These are his nine  arguments:

Argument 1: the whole health maximisation assumption underlying the approach is misconceived. health care is about more than just promoting health. Other objectives commonly include financial protection (e.g. from the out-of-pocket expenseof costly interventions), innovation, and all those listed earlier
Argument 2: innovation is stifled by the strict application acost-effectiveness threshold that is too low
Argument 3: the use of standard outcome measures, like theEQ-5D QALY or averted DALYs, underestimates the health benefits of cancer treatments
Argument 4: the assessment of benefit excludes the beneficial effects that treatment and its consequences have on those who care for cancer patients
Argument 5: the opportunity cost argument is weak. There are always efficiency savings that can be found in any systemwhich mean that the alleged sacrifice of health represented by the threshold is spurious. the actual sacrifice is much smaller
Argument 6: cancer is a scary disease and people who suffer from it deserve to have access to treatments that would fail aconventional cost-effectiveness test
Argument 7: for some cancer patients a costly and not very effective treatment may offer a “last chance” to someone in despair. such a situation might exist if no intervention of any kind existed for these patients or if the patient suffered from a rare form of cancer
Argument 8: cancer is a “severe” disease and should accordingly be given a higher priority than less severe diseases
Argument 9: many cancer patients have a short life expectancy even with treatment. a quasi-utilitarian argument might cite the law of diminishing marginal value: even small gains for such people are to be valued more highly than the same gains of equivalent quality of life for people with an already long expectation of life. alternatively, there is the more direct emotional appeal “Our moral response to the imminence of death demands that we rescue the doomed proof"

These arguments fall into two broad groups. Some are questionsof social value: how should we value health gains of particular kindsand should we value them differently according as they accrueto different people? Others are questions of fact: would informa-tion about the quantitative size of the effects in question lead us to conclude that cancer is indeed a special case? The burden of proof in both cases lies with those making the assertion that cancer is, indeed, special. That burden of proof is not impossible to bear.

Is cancer a special case? The question may apply to many diseases and will provide more difficulties than answers. In the end any analysis relies on distributive justice principles and according to different views you'l apply different prioritisation criteria.

PS. The article was published in a cancer journal. I was surprised by the new perspective by Tony Culyer.

PS. What do you think about a new cancer inmunotherapy service that may cost $750.000???

Le Corbusier Guitariste (1960)

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The farce of confidential drug prices (2)

Payers’ experiences with confidential pharmaceutical price discounts: A survey of public and statutory health systems inNorth America, Europe, and Australasia

Some months  ago I posted on confidential drug pricing. I said that this was the end of cost-effectiveness as we have known. Now a new article reflects the evidence of my words:

Confidential price discounts are now common among the ten health systems that participated in our study, though some had only recently begun to use these pricing arrangements on a routine basis. Several health systems had used a wide variety of discounting schemes in the past two years. The most frequent discount received by participating health systems was between 20% and 29% of official list prices; however, six participants reported their health system received one or more discount over the past two years that was valued at 60% or more of the list prices. On average, participants reported that confidential discounts were more common, complex, and significant for specialty pharmaceuticals than for primary care pharmaceuticals.

If confidential discounts are huge (>60%), as they are, any cost-effectiveness analysis is adhoc and its obsolescence undermines any result. This fact is the recognition that the pricing system is not working and we are under a procurement system. As I said some months ago:The time to finish such farce has come.