EclectEcon

I recently read about a place called Zenni Optical, where you can order eyeglasses for unbelievably low prices over the internet. How unbelievable? as low as $8 for a pair of prescription glasses including both the lenses AND the frames. The company appears to be based in California, but that site merely takes the orders and transmits them to China, where the glasses are actually produced.

When I mentioned the place to Jack, he did some searching and found seriously bi-modal reviews of the place. Many people loved them. At the same time, many people hated them. The major complaint is that if the glasses didn't have the right prescription, it is nearly impossible to get glasses with the correct prescription sent in their place; you're just out the money.

Also, they do not produce lined trifocals (though they do produce both progressives and lined bifocals).

Since it is time for me to update the prescriptions in some of my glasses, I decided the potential saving would outweigh the risk of placing an order with them. Also, they charge the same total amount for shipping, regardless of how many pairs of glasses you order at one time. I ordered four pairs of glasses; three different types for me and one for my older son, David Ricardo Palmer. Shipping time was about what they had said it would be — three weeks or a bit less.

1. My son says his glasses are fine. He is not as happy with the style of the frames as he had hoped he would be, and this is one disadvantage with buying glasses online. The site has considerable detail about sizes, colours, and styles, but it is not the same thing as trying the frames in the showroom of an optician.
2. I ordered one pair of glasses with just my distance vision prescription. I refer to these as my "bedtime glasses" because I wear them in bed so I can see the tv, something wearers of bifocals and trifocals cannot do easily because the bottom portion of their lenses is usually for close-up, not distance vision. These glasses were $8, including some frames with spring-loaded temples, and seem just fine. I had nothing special done to the lenses, so these were the very basic model, and they seem like a fantastic bargain. The new prescription is certainly better than the old one that I had been using for over a decade.
3. My intermediate vision glasses (for when I play French horn in the band) are fine, too. The focal point is about 5” closer to me than I might have liked, but that’s a (very minor) problem with the prescription, not the glasses. For these glasses, I ordered thinner lenses, transition lenses (photo-gray) and anti-reflective coating for when we play outside; I also selected some slightly more expensive ($20, not %8) unusual rimless frames. Because I got more expensive frames and extras with the lenses, the price of this pair was about $55. The price for my first two pairs of glasses at even a discount optician in London, ON, would easily have been around $300 - $400 or more. My son's would have been about $350.
4. I also ordered a pair of full progressive glasses, just like the ones I had ordered from a London optician [see my previous posting about shopping for eyeglasses]. As I said earlier, I am not terribly keen on progressives because they have too narrow a field of vision. I ordinarily would get tri-focals, but Zenni doesn’t do trifocals, so I decided to try their progressives. The actual clear-vision “post” is still too narrow to suit me (I have to move my head to read this small computer screen when wearing those glasses), with some intriguing distortions outside the post. But the field of vision with the Zenni progressives is, if anything, a bit wider than that of the progressives I ordered locally. Progressives, transitions, thin lenses, anti-reflective, neato rimless frames - $97. These will become backup glasses.
   
   My local monopolist optometrist would probably charge about $900 - $1200 or more for the same three pairs of glasses; I paid about $170 for all three. So overall I’m pleased. But please note that I have no idea how good the lense material is, and I realize that not everyone has been happy with their orders from that outfit.

I have worn tri-focals for about a decade. My eyes aren't all that bad (I can pass the driving test without glasses), but they don't adjust to different distances all that well; hence the trifocals.

After my most recent eye examination, both my optometrist and Ms. Eclectic suggested that I should re-consider getting progressives — trifocals that have no lines on them; they don't have three distinct viewing areas but instead have a progressive change from top to bottom. The two advantages of this type of lens are that (1) there is no line or abrupt change in the prescription from one portion of the lens to another, and (2) by slightly tilting your head up or down you can always find an angle at which things are in focus, regardless of how far they are from you.

The major disadvantage of progressives is that because of the physics/optics, it is impossible to make the lenses so that you can see much to the sides of what you are looking at; the field of vision is very narrow. I had tried progressives when I first got bifocals and hated them because I had to pivot my head from side-to-side to read a newspaper. I was assured, though, that newer designs meant that the field of vision is much wider now.

My local monopolist optometrist initially quoted me a price $530 just for new lenses (I like the rimless titanium frames I'm using and see no need to replace them). They also said that lined trifocals would cost about the same amount. And they guaranteed that if I didn't like the progressives (with transition lenses that go darker in the sunlight and and and, etc.), I could change to trifocals at no charge.

I was about to place the order with them when they called and said they'd made a mistake: the price would be $630, not $530. Okay. That seemed a bit steep, but mistakes happen. [I must say, though, that most businesses that give you a quote honour it even if they make a mistake like this.]

I then asked whether, if I didn't like the progressives, I would get a $100 refund if I switched back to the lined trifocals. The person I was speaking with said she'd never been asked that before, but she checked with others and said that yes I would.

The next day I received ANOTHER phone call from their office telling me that she was new there and had answered incorrectly (despite having checked with others) and that if I ordered progressives, the price would $630 even if I switched back to lined trifocals.

By this time I was beginning to feel jerked around. This optometry company has about five optometrists working in it with offices in two of the local towns. I don't know of any other dispensing opticians within a 20-mile radius of where I live. Due to their locational advantage and their aggressive expansion [shades of Alcoa? or perhaps this is a better reprise of the Alcoa case.], they have some degree of market power. But not so much that they can irritate me as much as they did.

So I went to an optician in London, ON, with my prescription [London is about an hour's drive from the small town where we live, and I go there maybe once every week or two, even when I am not teaching at the university there.]. Their price? $420, with the same guarantee that I can switch back to lined trifocals at no charge if I don't like the progressives. So I placed the order.

I now have the progressives. I'm not thrilled with them. When I get a chance, I will probably return them and get lined trifocals. With these new progressives, not even the entire 12.1" screen on my small laptop is in focus from side to side. The field of vision is still too narrow to suit me.

Next week: Other options when there appears to be a local monopoly: ordering glasses from China.

What if it were covered by your health insurance plan?

From Health Leaders Media (h/t to Acad Ronin):

South Carolina-based Companion Global Healthcare added three Singapore hospitals to its network. The deal now allows Americans access to medical and surgical services at ParkwayHealth operated hospitals at pre-negotiated, in-network rates lower than those of U.S. hospitals.

The deal between ParkwayHealth and Companion Global Healthcare is a step in the maturation of the medical travel industry, notes David Williams, consultant and cofounder of MedPharma Partners LLC.

“Conceptually, hospitals halfway around the world will now have the same status to members as those just down the street, so that’s a big step,” he said. “It may be a bit of a wake-up call to the local hospitals in South Carolina, putting them on notice that they are facing a broader set of competitors.”

Upon reflection, if the gubmnt insurance in Canada used the savings to pay my way for a holiday in Singapore, I might consider going there for many procedures....but not for such things as lithotripsy, where the flight itself could be pretty agonizing.

Of course this will never happen in Canada, where the gubmnt insurance would face political backlashes if they started shipping patients to Singapore. Educating politicians and voters about comparative advantage seems like an impossible dream, as we witnessed with Obama and Clinton during the Pennsylvania primary.

But in the private sector, look for more of this type of health care in the future, especially among insureres who offer their clients some flexibility in their health care plans.

A very touching post by Arnold Kling, describing his frustrations in trying to look after his father.

I am not expecting any miracles. ... [W]hat I want for my father is the best possible combination of dignity, lucidity, and absence of pain. The operative word is possible, because what is attainable is limited. Moreover, there are trade-offs among these goals.

... For [this] larger goal of trying to do the best with his remaining life, nobody is in charge and nobody is empowered.

I'm old enough to remember this ad:



And my dad used to get these for Christmas:



[h/t to Jack]

Did Canadian Medskools admit too many females over the past few decades? Yes, in some ways, it can plausibly be argued that Canada does have too many female doctors. This conclusion is based on several important observations (courtesy of discussions with colleague Brian Ferguson):

• Canadian Medskools limit enrolment with the result that, at current wages and prices, we have far fewer physician services provided than customers would like to "buy".
• Time and again, the evidence from fee-for-service data is that female physicians opt for more leisure in the work-income-leisure trade-off; on average, they provide fewer services per year than do male physicians.

Given these two pieces of evidence, it looks as if we would probably have more physician services and fewer shortages in Canada if medskools had admitted only male medical students.

Of course, a better solution might have been and would certainly be to admit more of both males and females to medskools.

I am no longer in my mid-thirties. I am no longer in the same physical condition that I was in in my mid-thirties. I must learn to accept that fact.

Recently, Ms. Eclectic and I decided to buy a treadmill (this one, which receives pretty good reviews, for the price — many thanks to BenS for all his helpful advice).

The problem? The bloody thing weighs 220lbs in the box. Just moving it into the house from our van was a struggle. I strained muscles in my back and leg. Even if/when we get some friends to help us put it in place and set it up, I'll probably have to wait at least another week before trying it out.

The idiotic thing is that I just cannot understand/internalize this aging process thing that is happening to me. I used to be able to carry 100, 150, or even 200 pounds all the time. I seem unable to get it through my thick skull that I can no longer do those things. As I said,
What a Doofus!

Here is something I wrote nearly two years ago after Owens recovered very quickly from an injury. It is just as apt today:

Is Terrell Owens on Steroids?
I just Googled "Terrell Owens" + "on steroids" and got nothing. Then I Googled "Terrell Owens" + steroids. That got lots of hits, but nothing discussing the question of whether Terrell Owens is on steroids. This seems odd to me, since

1. Steroids have a big effect on promoting healing, and
2. Terrell Owens recovered very quickly from some serious damage.

How else did he make such an amazingly fast recovery? Was it steroids or was it God?
Or was it something else?

When an athlete is injured, I'm all in favour of their using steroids if doing so promotes healing. And for major-league athletes, I suspect the negative externalities of their doing so are pretty minor.

A few days ago, I wrote that to deal with the excess quantity demanded for health services at low or zero prices, we should,

... make it illegal for companies of any sort to provide health insurance without at least a 10% co-payment for the first $1000 of services. My suspicion is that many of the demands on physicians' time would fall dramatically if people had to make even a 10% co-payment. I have no studies to cite here, but I guess I'm saying the price elasticity of demand is pretty high for many of the services sought by many patients in this zero-price and near-zero-price portion of the demand curve.

Let me begin by correcting what I wrote. What I meant to say was "a 10% co-payment for the first $10,000 of services (i.e., the insured would pay up to a maximum of $1000) per year. I would also expect this co-pay limit would roughly be indexed to the rate of inflation.

It looks as if the evidence from Singapore's health care system is consistent with this recommendation. From Bryan Caplan at Econolog,

I've heard a lot of smart people warn that co-payments are penny-wise but pound-foolish, because people cut back on high-benefit preventive care. Unless someone is willing to dispute Singapore's budgetary and health data, it looks like we've got strong counter-evidence to this view: Either Singaporeans don't skimp on preventive care when you raise the price, or preventive care isn't all it's cracked up to be.

More details on how Singapore's system works:

• There are mandatory health savings accounts: "Individuals pre-save for medical expenses through mandatory deductions from their paychecks and employer contributions... Only approved categories of medical treatment can be paid for by deducting one's Medisave account, for oneself, grandparents, parents, spouse or children: consultations with private practitioners for minor ailments must be paid from out-of-pocket cash..."
• "The private healthcare system competes with the public healthcare, which helps contain prices in both directions. Private medical insurance is also available."
• Private healthcare providers are required to publish price lists to encourage comparison shopping.
• The government pays for "basic healthcare services... subject to tight expenditure control." Bottom line: The government pays 80% of "basic public healthcare services."
• Government plays a big role with contagious disease, and adds some paternalism on top: "Preventing diseases such as HIV/AIDS, malaria, and tobacco-related illnesses by ensuring good health conditions takes a high priority."
• The government provides optional low-cost catatrophic health insurance, plus a safety net "subject to stringent means-testing."

These sound like worthwhile steps toward improving the healthcare systems in North America. Remember, too, though, as I argued in my previous posting: working on the demand side will almost surely not be enough. We must also implement plans to increase the supply of physicians and medical capital. Two good ways to do so would be to increase enrolments in medskools, and privatize the provision of many lab services such as MRIs, etc.

Medicare and Medicaid and similar universal health-care programmes will NOT help us deal with the expected medical shortages of the future that are certain to mushroom as baby boomers age and face increasing health problems. In fact all that those programmes, all that similar health programmes in Canada or the UK or elsewhere, and all that increased private insurance programmes will do... no surprise here... is increase the demand for health care.

But what is being done to increase the supply? After all, the supply side of the market plays a major (if not THE major) role in determining how much medical care is available. Sure, it is possible to build more hospitals and more medical clinics. Sure, it is possible to fob off a bunch of medical care onto para-physicians (nurse practitioners or "sisters" as they are referred to in the UK [query: what are male sisters called?]). Sure it is possible to implement some capital-labour substitution. So the supply curve of medical services is not perfectly inelastic. But that supply curve is probably pretty steep.

And if the supply curve is pretty steep, then increasing the demand will not induce much of an increase in the quantity supplied.... especially if the increased demand is not transmitted into higher prices and wages/salaries for physicians working in administered-price, regulated markets.

Worse, as my present colleague Brian Ferguson has been arguing for decades, the supply curve of physicians has been artificially kept way too far to the left. Medical schools have not been allowed to admit as many promising students as they would like, and so there just aren't enough doctors to provide all the services that people would like to buy today at the low (often zero) gubmnt-set prices. And it will get even worse in the future.

One part of the solution: let/encourage medical schools increase enrolments even more than they have in recent years. If they start doing this now, maybe the shortages of physicians will have diminished substantially within a decade or so.

Of course this plan will create additional shortages in the short-run as medskools fight to attract more physicians out of private practice and into teaching careers. That's an inter-generational transfer I'm willing to make even though it could easily affect Ms. Eclectic and me detrimentally.

Another part of the solution: make it illegal for companies of any sort to provide health insurance without at least a 10% co-payment for the first $1000 of services. My suspicion is that many of the demands on physicians' time would fall dramatically if people had to make even a 10% co-payment. I have no studies to cite here, but I guess I'm saying the price elasticity of demand is pretty high for many of the services sought by many patients in this zero-price and near-zero-price portion of the demand curve.

These are just two possibilities; the first one even has some political feasibility. When I look at all the MRI and other clinics in the US and the contrived shortages in Canada, though, I'm convinced that allowing/encouraging more private competition and entry into the markets will also have to be a part of the solution for Canada. Failing that, using our health care system to pay for trips to the US might be a stopgap measure for Canadians, but of course it will only increase the demand in the US.

A couple in Australia went for in vitro fertilization. The doctor implanted two embryos instead of one, purportedly against the express wishes of the couple.

His reasoning? Apparently for a birth mother of this age and for embryos in this condition, he wanted to guarantee that at least one would develop into a healthy child. Here is the story from the Melbourne Age [h/t to Brian Ferguson]:

They wanted to have a child together. Instead, they got two. Some might call it a blessing. But to this couple, the unexpected addition to their family was devastating. So devastating, that the unnamed ... couple are now suing Canberra obstetrician Dr Sydney Robert Armellin for more than $400,000. Most of it is to cover the cost of raising one of their twin three-year-old girls.

The couple allege they had made it clear that they wanted only one embryo transferred during the IVF process. Instead two were transferred, leading to the twin birth. The impact on their relationship and indeed their lives, according to evidence given in court this week, has been considerable.

"She always said that she had a big heart filled with love," ... said of her partner in the ACT Supreme Court yesterday. "I find (now) that she doesn't have the same ability to love that she used to and the same capacity to, I guess, embrace differences and issues as a couple or as a team."

Unfortunately the rest of the article discusses, in very vague terms, the social mores and the standard practices of the IVF labs of Melbourne. But it appears that the standard practice is NOT for the attending obstetrician to play god and make decisions for the couple. I.e., if they specify one embryo, that is what the doctor is to transfer.

I don't know whether the doctor committed a tort or a breach of contract in this case. But it does seem pretty clear that the doctor was the least-cost bearer of the risk that the couple would have twins when they wanted only one child. The only question is what is meant by "one": should it mean "no more than one" or should it mean "at least one" or should it mean "exactly one". Given the discussion in the original article,it seems that in this case "one" means "exactly one" embryo.

btw, for this case it should be irrelevant that the couple is lesbian.

If the only thing that matters is whether someone has a strong support network, what's the use of physicians? From the Globe and Mail (via Ms. Eclectic):

Doctors routinely consider factors such as tumour size, stage of the disease and other measures to predict how long a patient with cancer will survive.

But factors that make up a patient's quality of life — overall health, mobility, emotional stability, social support and financial resources — may make the most difference, Dr. Nicolaou and colleagues found.

... Researchers at Fox Chase and Henry Ford Hospital in Detroit studied 239 patients with lung cancer enrolled in a treatment trial involving both radiation and chemotherapy.

The study was designed to evaluate the role of quality of life as a prediction for survival. Questions included things like: "Do you have trouble taking a long walk?" or, "In the past week, did you feel irritable? Did you feel depressed?"

The researchers also analyzed classic predictors of survival such as gender, race, age, marital status, state of disease and tumour location.

Some 91 per cent of patients completed a standardized quality of life survey before treatment. All patients were followed for at least 17 months.

What they found is quality of life emerged as the most significant predictor of overall patient survival.

"We conducted two different statistical analyses including all the usual prognostic factors and either way, quality of life remained the strongest predictor of overall survival," Dr. Benjamin Movsas of Henry Ford Hospital said in a statement.

"What's more, if a patient's quality of life increased over time, we saw a corresponding increase in survival," he said.

Holy mackanoli! "Quality of life" was more important than whether they received any treatments at all? I really doubt that. And I really doubt that the marginal product of physicians and cancer treatments is zero. Rather, I suspect, it was the case that among those patients who received similar treatment protocols, those who responded as having a better quality of life had higher survival rates.

It seems plausible to me that, ceteris paribus, quality of life as measured in this study would have some positive correlation with cancer survival at the margin. Whether that is causal or just correlational is another question; though the evidence that changes in quality of life are correlated with increased survival rates makes the variable seem to have causal impact on survival rates.

My take: people who have close friends and family members monitoring their behaviour (and caring about what happens to them) and making sure they show up for treatment are more likely to survive.

[with thanks to Jack, JB, Ms. Eclectic, and Brian Ferguson]

Analogous to the (in)famous RateMyProf website, there is a site on which people rate their physicians. I love it. Here is the link for US doctors. Here is the link for Canuck Docs.

Some observations:

• With a few notable exceptions like this one, nearly all physicians get high marks for everything except punctuality.
• I would be surprised if the punctuality ratings in the U.S. were worse than the ones in Canada, where we have more shortages and more rationing due to our universal health queue insurance programme. (a testable hypothesis for someone in health economics).
• For the physicians I know, the ratings all seem just a tad high, but the comparative scores, or rankings, seem about right.
• Many of the ratings seem to be a measure of "bed-side manner" — as the old saying goes, "Sincerity is everything. If you can fake that, you've got it made."

I've noticed that this site gets numerous visits from people looking for pictures of kidney stones. I posted one such picture back in July, but here is perhaps a better photo of two more stones that I got rid of a couple of weeks later:



Several people suggested that we have them set into matching rings for Ms. Eclectic and me... You know, sharing a bit of myself as a symbol of our togetherness. For reasons that escape me, both she and the jeweler refused.

I posted last week about the shortage of primary-care physicians in both the US and Canada. Since then, Brian Ferguson has sent me an article from the NYTimes that tells how increasingly major pharmacy chains are creating in-store clinics that many people are using for primary care.

The concept has been called urgent care “lite”: Patients who are tired of waiting days to see a doctor for bronchitis, pinkeye or a sprained ankle can instead walk into a nearby drugstore and, at lower cost, with brief waits, see a doctor or a nurse and then fill a prescription on the spot.

With demand for primary care doctors surpassing the supply in many parts of the country, the number of these retail clinics in drugstores has exploded over the past two years...

Patients ... have flocked to the clinics, according to a new industry group, the Convenient Care Association.

“I think it’s great you don’t have to make an appointment. That could take weeks,” said Ezequiel Strachan, 33, who lives in Manhattan and walked into the clinic at the Duane Reade store at 50th Street and Broadway on a recent morning for treatment of a sore throat. “People here value their time a lot.”

The average waiting time for an exam at such clinics nationwide is 15 to 25 minutes, according to the Convenient Care Association.

The association estimated that 70 percent of clinic patients have health insurance and are using the clinics because of convenience. For them, costs may not be much different from those at doctors’ offices, because the same insurance co-payments apply. But uninsured patients could reap substantial savings....

New York law requires that nurse practitioners work closely with a physician, who oversees the practice but is not required to be at the clinic, and that the clinics operate as independent practices or professional corporations. In other states, the medical providers can work directly for a drugstore company, a practice that has touched off concern that the providers might place the interests of their employers above those of patients.

This looks like a classic setting for someone to be accused of engaging in illegal tie-in sales. The argument, though, would have to come from other pharmacies, alleging that having an in-store clinic ties patients to the pharmacy and blocks other pharmacies from the ability to compete fairly with those that have clinics.

But that is not what is happening. Rather, the objections are coming from medical associations, who object to the increased competition for their services (presumably the objection comes primarily in areas not suffering from a shortage of GPs). Nurse practitioners might not be as well-educated as GPs, but people are willing to take a chance with them for the sake of convenience -- short waits and no required appointments. This is an understandable reaction to the artificial shortages of GPs.

We know why there are shortages of physicians of all types in Canada: The gubmnt banned extra-billing, thus keeping the price below the equilibrium price for all physicians, and at the same time medical schools cut back on admissions and graduations (in an ill-designed attempt to cut health-care costs) in the 1980s.

But why is there a shortage of GPs in the US? A facebook friend wrote to my son (Adam Smith Palmer) back in April,

Things aren't much better south of the border. The plethora of machines makes access readily available, but the number of exams being done has gone up exponentially as a result. That's led to imaging centers buying more machines to make sure there are absolutely no wait lists in an effort to compete with their neighbors. You can imagine what this does to insurance premiums in and of itself. ...

And what does the average American get for the high premiums? A shortage of family docs that parallels our own [in Canada].

He also wrote that when he and his family went to a large urban area for a year, they were advised to sign up immediately to get a family physician. They were put on a 6-month waiting list!

What he wrote was later laid out in an article in the WSJ referenced here [h/t to Brian Ferguson].

A "critical shortage" of primary care physicians [PCPs] in Massachusetts has led many doctors to stop accepting new patients, according to a report released Tuesday by the Massachusetts Medical Society, the Wall Street Journal reports [EE: led to? how about "resulted from"?]. According to the Journal, the lack of PCPs "threatens to undermine" the Massachusetts health insurance law, which took effect July 1 and requires all state residents to obtain coverage or face tax penalties.

The study found that 49% of internists in the state are not accepting new patients and that 95% of the 270 general practice physicians at Boston's top three teaching hospitals have stopped accepting new patients. The Journal reports that "some providers say they have no idea how they will accommodate an additional half-million patients seeking checkups and other routine care." The average wait time for Massachusetts residents who make an appointment with their PCP is more than seven weeks — a 57% increase over last year, according to the medical society.

It appears the demand has increased as a result of the health insurance law (in Massachusetts, at least) without a concomitant increase in the supply.

So why is there a shortage of GPs in the U.S., where markets are allegedly so free? I always tell my students, "You cannot say there is a shortage; you must say there is a shortage at the current price!"

My guess is that because of health insurance, specialists earn buckets of money, but GPs are much less lucratively recompensed (especially true for Medicaid cases, I'm told). If so, people might very well begin medical school intending to become family physicians, but the salary differential is so huge and raises the opportunity costs of becoming a GP so much, they are drawn into some specialty. But that still doesn't explain why the market hasn't adjusted. Why, even in Boston, is there a shortage of GPs? Are they not allowed to raise their fees? Is it not possible to find a GP who will take you on as a patient by offering to pay more? Is that an equilibrium? As the WSJ ($, no link) says,

... [P]rimary-care doctors, including internists, family physicians, and pediatricians, are in short supply across the country. Their numbers dropped 6% relative to the general population from 2001 to 2005... . The proportion of third-year internal medicine residents choosing to practice primary care fell to 20% in 2005, from 54% in 1998.

A principal reason: too little money for too much work. Median income for primary-care doctors was $162,000 in 2004.... Specialists earned a median of $297,000, with cardiologists and radiologists exceeding $400,000.

At the same time, is it possible the markets are in the process of adjusting? If so, look for compensation for GPs to rise relative to that for specialists. But if that doesn't happen, look for continued shortages of GPs (at the current relative prices) so long as health insurance and gubmnt programmes keep the compensation for GPs fixed below market-clearing prices.

Once the gubmnt gets involved, look out!

There is a shortage of physicians (at P=0) in many places in Canada. In New Brunswick, the gubmnt decided to offer physicians a bounty of $150 for each new patient they took on. Sounds like a good idea for getting physicians to work a bit longer and sandwich in a few more patients, doesn't it. Here are the bizarre results:

New physicians receive a bounty for each new patient they take on. Hence, they are unwilling to buy the built-up good will in the practices of retiring physicians. So as a physician retires or leaves the province, that doctor's patients must scramble to try to find a new family physician. At the same time, new physicians do not fill their practices instantaneously. Consequently, if anything, the match between patients and physicians is imperfect and there remain many patients without a family doctor.

Current physicians nearing retirement age are upset because they have invested so much in building up their practices and now are unable to sell them. Also, taxpayers recoil when they learn that the bounty is not going only to those who have nearly full practices.

As Brian Ferguson is quoted in the article as saying,

Doctors' decision-making is affected by financial incentives to a greater extent than many think, according to a 2002 AIMS report. Dr Ferguson looked at a number of Canadian and international examples and concluded that physicians respond to market forces, including cash bonuses, the same as any other professionals.

But that's a view not universally shared in government circles. "Much confusion and bad policy follows from the inability of many policy analysts to handle the techniques of an elementary economics course," wrote Dr Ferguson in a scathing commentary that now appears prescient.

As Brian has said, if he is so prescient, he is going to start picking stocks.

The kidney stone that sent me to hospital a few weeks ago was originally reported to be 6mm x 8mm, but after lithotripsy (a non-invasive sonic process to smash up kidney stones), I was told,

"It is very hard, but it is beginning to break up."

That procedure lasted about 15 - 20 minutes, whereas some sources say the procedure should take as long as an hour. No wonder a hunk this size (5mm x 4mm) was left inside me.

It finally made its appearance yesterday afternoon. We're thinking of having either a christening or a coming-out party.

It would have been nice had they broken this up a bit more, along with the biggie that's still in there somewhere, but it is good to have this piece gone.

For the background, should you be interested, see this, this, and this.

• Question: do you have any allergies?
  
  Yes, I'm allergic to chicken liver. One of the physicians caught on and agreed that he was, too.
  
  
• Question: are you presently taking any drugs?
  
  Yes, I take about ten placebos -- vitamin C, a multivitamin, ....

The food at Eastbourne General was the worst I have ever tasted in a hospital. It might have been me, but I don't think so. It was perhaps on a par with the food I remember from having been hospitalized 50 years ago in Michigan, and it was certainly worse than what I remember from University Hospital in London, Ontario, in the late 1970s. I question whether it was very nutritious.

e.g. Breakfast was a choice from one of two cold cereals or white toast, plus juice.

e.g. Supper was an alleged ham sandwich with the thinnest slice of ham I've ever seen, again on white bread, with soup (which I wasn't in the mood for) and ice cream that had been melted and refrozen several times.

blech.

When I arrived at the hospital last Monday morning, I was treated immediately. The on-call urologist explained things to me carefully and performed what seemed like logical tests to identify the problem and speed a diagnosis and treatment plan.

Later that day, I was informed that they (I never quite knew who, I was so doped up) had decided to blast the kidney stone to break it up so it would pass easily, and that I would be discharged until they could bring me in as an out-patient to do the blasting.

Hmmm. That didn't seem like such a great plan to me. First, I was planning to return to Canada the next Wednesday and would need an appointment well before then. Second, I wasn't too eagre to be walking around with this stone if it was likely to cause that much agony time and again.

It turns out that blasting time is a VERY scarce commodity, either because of a shortage of time on the blasting machine or because of a shortage of time with the consulting urologist. However, they managed to squeeze me in the next day for a blasting. I was grateful for that.

As I was being prepped for a preliminary electro-cardiogram on Tuesday afternoon, suddenly a doctor I'd never seen before (he turned out to be the chief/consulting urologist) came rushing into the ward and started ripping off the patches that had just been stuck onto my hairy chest. He said,

No ECG. We just have time on the machine now, and we'll lose it if we don't get down there right now.

So we went barreling through the halls, and they rushed me up onto the table. Then I overheard them say there were two stones: one in the kidney, which was causing no problem at the moment and the other, which they were going after. I raised a bit of a stink that they weren't going after both while I was there, but they said they simply didn't have time to do them both.

Wow. Acute care is fine, but preventive care isn't. The consulting urologist then told me I should get back to Canada as soon as possible. I felt as if he was feeding me a line about several things, mostly just to get me patched up enough to travel and then out of there.

A colleague at the castle complained to me yesterday that he has had kidney pain for several months and that the NHS doctors consistently try to give him a pill and send him away. He says he asks for kidney tests, and they say that he doesn't need them yet because his problem isn't serious enough to warrant them!

He was given the names of some private clinics that would do the tests if he really wanted them, but the tests would cost over $1000. He was quite upset, arguing that his taxes should cover the tests. My reaction: at least you have a private option; in Canada I'm not sure we do.

Overall, I was pleased with the initial treatment and diagnosis. Also, admission and discharge were extremely quick and simple -- no forms to fill out, no endless string of questions about who my insurer is, etc. But I was disappointed with the lack of follow-up and explanation as time went on.

And upon reflection, I am not so sure that this is a completely horrible way to run a "social safety net" kind of health care system. In effect, it says, "We will look after you if the condition is really desperate, but otherwise you're on your own." The incentives are a little screwed up, though, in that some people choose to wait until they're really desperate ("Hey, I paid my taxes and the NHS had better look after me!") rather than pay out of their own pockets for earlier care in the private market. Surely there must be private insurance available to cover the private segment of the market, but I didn't hear anything about it from my colleagues.

For more on health economics and insurance, see Brian Ferguson's blog, A Canadian Econoview. His recent postings here and here are well worth reading.

Last month, the Trono Globe and Mail reported that teens are still having as much sex as they ever had, but that teen pregnancies and teen abortions have declined dramatically.

The number of unwanted pregnancies among adolescents and young adults has fallen principally because they are using birth control, said Alex McKay, research co-ordinator at the Sex Information and Education Council of Canada, and author of the study.

"It's due to greater contraceptive use, not teens having less sex," he said.

... The research, published in today's edition of The Canadian Journal of Human Sexuality, shows that the teen pregnancy rate in Canada fell to 32.1 per 100,000 population in 2003 from 53.9 per 100,000 in 1974.

During the same period, the teen abortion rate increased to 17.1 per 100,000 from 13.9 per 100,000. However, the number of teens having abortions has fallen steadily since 1994.

I have to wonder how much of a role welfare reform played in these trends. If teens knew that raising infants on welfare would not be easy, it must have deterred some of them from becoming pregnant.

I don't know what started my thinking about this question, but it was probably this article in TownHall by Mary Grabar, which decries the lack of freedom for women under Islamic fundamentalism (and, I would add, much other religious fundamentalism)[h/t to Judith]. I was picturing Muslim women not leaving the house much; and, when they did, being covered from head to toe and hence unable to use their bodies to produce vitamin D from exposure to the sun.

Shortly after reading that article, I read this posting from Craig Newmark, which points to potential evidence that vitamin D plays a major role in reducing the risk of cancer, and I wondered whether Muslim women (or anyone else for that matter) who wear clothing that covers all but a slit for their eyes any time they are outside have a higher risk of, or show more signs of, the symptoms associated with vitamin D deficiency. Or do they adjust for the lack of sunlight by altering their diets to get more vitamin D?

In essence we have prices set equal to zero for health care services in Canada. Couple those zero prices with a policy-induced reduction in the number of physicians trained in the 80s and 90s, and we have a typical shortage. We could reduce the size of this shortage if we allowed physicians to extra-bill, if we trained more physicians, and if we encouraged more physician immigrants. [digression: When I made this last argument 35 years ago, a physician called my home and yelled, "Do you really want some Korean working on you?" My response, "Yes, if she's any good. I'm not a racist, are you?"]

Since the price system is not being used to ration who receives medical services, other rationing schemes must be put in place. The most obvious one that we seem to think is in place is "first-come, first-served." We call for an appointment, we see a general practitioner, we get put on a list, we wait our turn.

But of course it is possible for more serious, needier cases to be moved up in the queue. Apparently the following things will help move one ahead of others in the queue:

Become a major-league professional athlete. Have you ever noticed that they seem to be able to get MRIs in no time flat while the rest of us wait months in the queue? Failing that I have been led to believe the following might help.

1. Go through the emergency room (i.e. wait for something to become serious enough that it is considered an emergency??). But maybe not on weekends if that's when the new recruits are put on duty.

2. Do not downplay your symptoms. Stoicism will only hurt you in the long run.

3. Get to know the various physicians in your area. They have a harder time turning down people they know once they are already in the emergency room.

4. Know your symptoms and ailments. Research things on-line. Be prepared.

From WSJOpinion a couple of years ago,

Politicians can't wave a wand and provide equal coverage for all merely by declaring medical care to be a "right," in the word that is currently popular on the American left.

There are only two ways to allocate any good or service: through prices, as is done in a market economy, or lines dictated by government, as in Canada's system. The socialist claim is that a single-payer system is more equal than one based on prices, but last week's court decision reveals that as an illusion. Or, to put it another way, Canadian health care is equal only in its shared scarcity.

When I moved to Canada, these things were not a concern. We had provincial health insurance in Ontario, but we also had extra billing: physicians who wanted to charge more than the provincial standard were allowed to do so, and many (especially specialists) did so. The idea of not having a family doctor or of waiting hours or months for treatment was beyond our comprehension.

I loved having a safety net for those who didn't have supplementary health insurance. But the extra billing meant that we had a supply effect: more physicians providing more services in total. Would that we could return to those halcyon days of yesteryear.

It is a simple fact that scarcity means society must devise a mechanism or set of mechanisms to determine who gets the goodies. The primary mechanism that we use for most goods and services is the price system, but gubmnt intervention has crippled the effectiveness of that mechanism considerably in the health care industry in Canada.

So other mechanisms must be designed to ration health care. In Canada, we nominally use "first-come, first-served" or queuing, but there are numerous ways that people can and do jump the queue. I wrote about those yesterday.

Today, though, I want to point out a more pernicious form of rationing. A close friend was expressing being upset with some treatment provided by a nurse and was told something to the effect that,

You should watch yourself. You know, your doctor has plenty of patients and plenty of patients waiting to get on the list and doesn't need patients with an attitude.

This example highlights that when rationing occurs, it must be according to some criterion or criteria. The gubmnt-contrived shortages we observe in Canada mean that people who control the doling out of services sometimes get to pick and choose according their own tastes and wishes. This system opens the door for increased discrimination and reduced responsiveness to patients' wishes (or, dare I say, "needs").

Overall, favourtism, discrimination, and the incentives for getting to know the right people are among the more pernicious effects engendered by gubmnt-contrived shortages.

Six years ago, I met a man who had survived a tragic automobile accident. He also had survived a gruesome attack by the Australian medical establishment.

After his SUV crashed, he was hospitalized in a coma. After a short period of time, his parents were informed that he was brain dead and that they should sign the organ-donor papers so that their son's organs could be transplanted to other people who needed them.

Despite relentless pursuit by the medicos, his parents steadfastly refused to permit the harvesting of organs from their son. I have no idea why his parents had this reaction, but it turned out they were correct. Their son recovered and eventually finished his education to become a metallurgist. He even carried the Olympic torch during a portion of its journey through Adelaide in 2000.

I was reminded of this meeting when I read this in Slate, summarized from the LATimes.

A man whose family agreed to donate his organs for transplant upon his death was wrongly declared brain-dead by two doctors at a Fresno hospital, records and interviews show.

Only after the man's 26-year-old daughter and a nurse became suspicious was a third doctor, a neurosurgeon, brought in. He determined that John Foster, 47, was not brain-dead, a condition that would have cleared the way for his organs to be removed, records of the Feb. 21 incident show.

I am concerned about such incidents. They tend to make others very cautious, perhaps even reluctant to agree to organ donation from a brain-dead relative. They also raise very dicey questions about costs and benefits in the health care system:

What if Foster's daughter had had to pay, out of her pocket or expected inheritance or insurance benefits, the full costs of keeping her father alive? What if, at the same time, she had been offered, say, $50,000 for her father's organs? She might not have responded to these incentives, but you can bet that some people would.

It turned out that Foster, unlike the man I met in Australia, died 11 days later, and after the delay his organs no longer useful for transplant. Some people will say that ex post fact justified the physicians' attempts to get legal permission to harvest the organs when they did. Others will balk at both this justification and at the thought that people in this situation might respond to financial incentives in the future.

Me? I am really torn. It is easy to take a moral position, as I have most of my life, favouring keeping people alive on life-support systems, when it involves spending other people's money; if, for example, it were one of my children or grandchildren here in Canada, I would fight tooth and nail to have all the taxpayers' support used to keep them alive.

But when the opportunity costs of using medical resources are considered (not even thinking about the opportunity costs of how specific organs are used), I have much more difficulty maintaining this position, from both a moral perspective and as an economist considering opportunity costs. In low probability of survival situations, a strong argument can be made for redeploying scarce medical resources to other patients -- that's what triage choice is all about, and it must persist in all aspects of health care, whether we like it or not.

BenS sent me this:

Two patients limp into two different medical clinics
with the same complaint:

Both have trouble walking
and appear to require a hip replacement.

The first patient is examined within the hour, is
x-rayed the same day and has a time booked for
surgery the following week.

The second sees his family doctor after waiting a
week for an appointment, then waits eight weeks to see a
specialist, then gets an x-ray, which isn't reviewed
for another week, and finally has his surgery
scheduled for six weeks from then.

Why the different treatment for the two patients?

The first is a golden retriever.
The second is a senior citizen.

Of course if this had happened in Canada, the senior citizen would still be waiting...

Update: Former student, Mike Moffat has some issues with this, but I disagreed with him in the comments to his posting. He extrapolates from one scenario to claim that the price elasticity of demand is low, and he implicitly assumes a low price elasticity of supply.

The United Arab Emirates, concerned about the health, weight, and obesity of its nationals, is considering slapping price controls on health foods to induce consumers to buy more health foods. Unfortunately, the UAE Health Ministry is only half right: Yes, lowering the price would lead to an increase in the quantity demanded, but they are ignoring the supply side. John Chilton points out that price controls will actually lead to less consumption of healthy fruits and vegetables, contrary to the intentions of the price fixers:

Introducing a price ceiling to lower the price of healthy foods would give consumers the incentive to seek to consume more healthy food, but it will also give suppliers less incentive to provide healthy foods. Consumers will find the amount or quality of healthy food decline. Consumers will end up consuming less, not more healthy food - exactly the opposite of the good intentions of the Health Ministry.

If the ministry wants to spur consumption of healthy food it needs to either convince consumers to buy more at given prices, or subsidize healthy food in the marketplace.

Follow the link to read his take on the distinction between "nationals" and "residents" and on the expansion of Krispy Kreme donuts into the UAE.

There is some evidence that taking an afternoon nap reduces the risk of heart attacks or other heart disease.

In the largest study to date on the health effects of napping, researchers tracked 23,681 healthy Greek adults for an average of about six years. Those who napped at least three times weekly for about half an hour had a 37-per-cent lower risk of dying from heart attacks or other heart problems than those who did not nap.

At the risk of being econo-geekish, let me point out that just because napping reduces the risk of heart disease, that does NOT mean that napping is efficient.

First, napping may be correlated with better eating, exercise, less stressful jobs or something else that might be more directly and causally connected with heart disease, as the article goes on to mention.

Still, it is possible that study participants who napped “are just people who take better care of themselves,” which could also benefit the heart, said Dr. Marvin Wooten, a sleep specialist at Columbia St. Mary's Hospital in Milwaukee.

“The guy ... who doesn't take time out for a siesta in their culture is probably the guy who is extremely driven and under a lot of pressure,” which could increase heart risks, he said.

Second, even if napping reduces the risks of heart disease, who is to say that (1) this is the best or most efficient way to reduce the risk, or (2) that it is efficient to reduce this risk at all. There are lots of risks we choose to accept in life, as in driving, etc.; who is to say it is inefficient if someone chooses to avoid naps and take the additional risk of suffering from heart disease, along with all the other risks they choose not to reduce?

Digressions:

1. James Buchanan, economics nobelist, used to nap on a regular basis in the afternoons.
2. I find napping something that is increasingly unavoidable as I age.

Yesterday, Ms.Eclectic visited a large dental clinic north of our home town. While she was being examined, I suddenly heard a very loud drilling sound. It turns out there was some remodeling being done in the offices.

I tried to convince the dentist to take one of the construction drills into the waiting room and ask "Who's next?" but he didn't think doing so would be good for his business. [He did tell me, though, "It's a lot faster!"]

This clinic keeps packets of cookies in their waiting room! Talk about supply-induced demand (see this, for example).

Here is a sign/sculpture they keep on the window ledge there:

I have been pretty healthy over the past couple of decades. Instead of having at least one serious cold per year (and sometimes more), I have had many years during which I have had no serious colds at all. I attribute this good health to loading up on fad placebos, such as extra vitamin C, Cold-FX, other vitamin and mineral supplements, etc.

There have, however, been three years in which I have developed serious colds shortly after Christmas. Each of these colds occurred a few days just before I attended the Allied Social Science Associaton [ASSA] conference. Do you think there might be an expectations causal relationship here?

Via Newmark's Door:
1. eat a big breakfast
2. get good sleep
3. exercise your body
4. exercise your brain

From this site.

JB, my favourite drug dealer, sent me this information after an e-mail discussion about the possibility of virtual colonoscopies:

"The National Committee further recommends that, based on current evidence:

a. Screening be offered to a target population of adults aged 50 to 74 years of age, using unrehydrated Hemoccult II or equivalent as the entry test.

b. Individuals be screened at least every two years, recognizing that annual screening would have slight improvement in mortality reduction over biennial, but require increased resources [EE note: nice recognition of the trade-offs.].

c. Positive tests be followed up by colonoscopy, with options of barium enema and flexible sigmoidoscopy where appropriate (e.g. patient preference/availability of services)"

I was reminded of this information at Snopes by Judith:

This e-mail describing a segment on the evening news about bacteria found on women's purses reached us in May 2006. It describes the news piece done on this topic by a Fox affiliate TV Handbag station in Cleveland on 3 May 2006 and re-broadcast by numerous Fox stations in the U.S. on 3 May 2006 (including Fox 5 in Atlanta, the station named in the e-mail).

In that news story, swabs from 50 purses were sent to a lab for analysis. While a few of the samples did not show evidence of bacterial growth, most did, and nearly 1/4 of the handbags tested proved to have E. coli on them.

... [W]hile a great many folks do remember to wash their hands after being out in public and handling a variety of items, they tend not to think about sanitizing the handbags, briefcases, and backpacks they tote with them. Given how often such carry-alls get handled by their owners and how seldom they are washed with soap and water or wiped with an anti-bacterial solution, it's surprising more contagions aren't passed this way.

Here are some things you can do to decrease the likelihood of spreading illness with your pocketbook:

* Clean your purse or tote bag regularly. If your handbag is not the sort of item that can be tossed into the washing machine with any hope of its surviving the process, scrub its outside with a soaped-up wet facecloth or take an anti-bacterial spray or disposable wipe to it. Don't forget to tend to its handle or strap as well as to its sides.

* Keep in mind that bacteria and viruses latch on far more readily in wet or damp environments than they do in dry ones (see our article about the supposed 5 second rule governing dropped food for more information about that conclusion) — if you set down your carry-all on a damp or wet surface, clean it once you're home, even if you only just washed it recently.

* Don't set down your purse on any surface where food will be prepared or eaten. That means keep it off tables and kitchen or break room counters. If you are in the habit of eating at your desk, don't place your handbag there.

* Remember that your purse comes into contact with most every surface your shoes tread on, and treat your handbag accordingly. If you wouldn't eat a hotdog after running your hand across the sole of your shoe, don't eat one after handling your purse. If you wouldn't place your sandals on the kitchen counter, don't drop your pocketbook there either.

* All the advice just given about handbags applies to briefcases and backpacks too. Your briefcase should also get a soapy wipe-down on a regular basis, as should your backpack. Both should also be kept off all surfaces where food is likely to be prepared or eaten.

Do a brief estimate: what are the incremental costs of keeping such bags off the kitchen counters and tables? What are the expected incremental benefits? This piece makes it look as if the expected benefits probably outweigh the expected costs.

I have some personal opposition to early-term abortion, though my opposition is very confused and incomplete. However, I think late-term abortion should be illegal. And those who advocate, much less practice, infanticide should suffer some consequences. Here, from the Daily Telegraph, is what I'm referring to [h/t to Tom Hanna]:

BRITAIN'S Royal College of Obstetricians and Gynaecology is reportedly calling on doctors to consider euthanasing "the sickest of newborns" which it says can disable healthy families.
The Sunday Times newspaper said today the proposal was in reaction to the number of such children who were surviving because of medical advances.

The college argued "active euthanasia" should be considered for the good of families, to spare parents the emotional burden and financial hardship of bringing up the sickest babies.

The proposal is contained in the college's submission to an inquiry into ethical issues raised by the policy of prolonging life in newborn babies.

Euthanasia of newborns is illegal in Britain.

"A very disabled child can mean a disabled family," the submission says.

"If life-shortening and deliberate interventions to kill infants were available, they might have an impact on obstetric decision-making, even preventing some late abortions, as some parents would be more confident about continuing a pregnancy and taking a risk on outcome.

"We would like the working party to think more radically about non-resuscitation, withdrawal of treatment decisions, the best interests test and active euthanasia as they are ways of widening the management options available to the sickest of newborns."

The newspaper reported that the college was not formally calling for active euthanasia to be introduced, but wanted the mercy killing of newborn babies to be debated by society.

In the interests of freedom of discussion I can accept this latter position — that the topic merits discussion. And, yes, I understand that the actual, pecuniary, medical costs of keeping people alive has sky-rocketed, in part due to medical advances but also in part due to socialized medicine). Would this really be, and has this really been, an issue in economies that do not or did not provide taxpayer-supported health insurance?

My friend, BenS, visited the ophthamologist last month. Here, in his words, is what happened:

After bringing tears to my eyes with a sad story along with some liquid yuk, he told me to first look at his right ear and then his left ear while blinding me. When he was done, I told him, “Your right ear is fine. I should check the left one again in a few months. My bill will be in the mail.”

He doesn’t have much of a sense of humor and shoulda been an economist or accountant.

I didn't realize I had written so much on medical tourism in the past, but there have been three or four postings on the topic (see here, here, and here for example). But the fact remains that at current, gubmnt-set prices (mostly zero), we have a shortage of physicians in Canada. The result, of course, anytime a price is set below the market price, is that some of those potential purchasers who would otherwise be rationed out of the system or who do not wish to join the seemingly interminable queue, look for quasi-market solutions; they look for some other way to receive the services, even if they have to pay for them. And in health economics, one very attractive solution is medical tourism — travel to some exotic locale during a season when the weather there is much better than in Canada and as an aside while you're there, have a medical procedure carried out.

After my most recent posting, which listed some links for medical tourism, Lauren H sent me a message with several more links:

I have been working on the wikipedia page on medical tourism lately:
http://en.wikipedia.org/wiki/Medical_tourism

CBS News did a very informative story on medical tourism in 2005:
http://www.cbsnews.com/stories/2005/04/21/60minutes/main689998.shtml

Another great article was from the University of Delaware's UDaily:
http://www.udel.edu/PR/UDaily/2005/mar/tourism072505.html

Time Magazine wrote an article just this year:
http://www.time.com/time/magazine/article/0,9171,1196429,00.html

I expect I am being unduly risk averse, and I have no idea how I would respond if I really wanted to have a medical procedure but would otherwise have to wait two years or spend tens of thousands of dollars, but no matter what Lauren and Jack have told me, I might tend to be somewhat hesitant. But at the price differentials listed in some of the above articles, and if the length of the queue continues to grow in Canada, who knows?

Perhaps this is an efficient alternative to all the spam promising penis enlargements. Brian Ferguson sent me this article a couple of days ago [reg req'd, if it is even still available]; he didn't tell me how he came across the story:

Doctors remove penis after a 'successful transplant'
DOCTORS in China who carried out the world's first penis transplant claim that the operation was a success even though the organ had to be removed two weeks later.

A 44-year-old father of three children was left with a 0.4in stump and was unable to urinate or have intercourse after being involved in a car accident.

Surgeons at Guangzhou General Hospital, in China, spent 15 hours attaching a 4in organ taken from a brain-dead 22-year-old man after his parents gave their consent. The surgical team claimed that, after 10 days, blood was flowing into the transplanted penis, that there was no sign of the patient's body rejecting it and that the man was able to urinate normally.

However, Dr Weilie Hu, transplant medic, reported they had to remove the organ because of "a severe psychological problem of the recipient and his wife". (C Daily Telegraph, London)

Query: Is it adultery if you have sex with your wife but with a different man's penis?

[Alex replies, "Certainly not. It's the wife who's committing adultery by letting another man's penis [have sex with] her."]

Over a year ago, I posted this about medical tourism, in which I said,

Medical tourism is a response to two important forces:
1. Comparative advantage. It is possible that some medical procedures can, even in the absence of myriad regulations and restrictions in North America, be more efficiently performed in other places.
2. Restrictions and regulations. Especially in Canada, we have too few physicians emerging from medical schools, and patients are not allowed to pay more to attract additional resources into the medical profession. So they do so elsewhere. It is not at all surprising.

At about the same time I also wrote this about medical tourism. Last week I received some e-mail spam that said, in part,

respected sir,
namaste,
we are a medical tourism company based in mumbai india.
our doctors are world renowned associated with the state of the art
hospitals in mumbai.
we provide excellent medical and hospitality services.
please view our site: *****
we are keen to associate with you for long term services.
hope to hear from you at the earliest.
thanking you,

My favourite drug dealer, JB, says, "Have hypochondria; will travel."

Jack, my favourite retired socionomologist-physician, sent me e-mail saying,

Actually this is a legit and growing enterprise with several Canadian based contact businesses. South Africa boasts superb plastic surgery for a fraction of American costs.

http://www.cbc.ca/news/background/healthcare/medicaltourism.html

... Other sites of interest include:

http://www.medicaltourism.ca/medical-tourism-canada.html

http://www.burnabynow.com/issues05/124105/news/124105nn3.html

http://www.travellady.com/ARTICLES/article-surgery.html

http://www.surgeon-and-safari.co.za/

http://www.plasticsurgery.co.za/

Surgeon and Safari?

Toronto, Ontario, is hosting 24,000 delegates to a conference to discuss why conservative, uncaring gubmnts around the world are prolonging the AIDS epidemic. One of the signs commonly displayed asked for more money for health care workers.

The major theme captured by the media has been that Canadian Prime Minister, Stephen Harper did not attend the conference but sent the Minister of Health to attend. Wonderwoman has a terrific response. Key points:

• Kofi Annan didn't attend. Why no media or other outrage about his absence? What about Chirac? Where's Putin? How much was Bill Clinton paid to show up?
• The crowd booed Bill Gates (who funded the entire conference [and I used to think he was smart]) when he started talking about the ABCs (abstinence,...., condoms) of AIDS prevention.

But of course the CBC is a media sponsor of the event and is carrying all the anti-Harper rants (while NOT showing the booing of Bill Gates!)

If it tastes good, spit it out.

source unknown [thanks to cmt].

It appears that, now that the term has ended, Brian Ferguson, who writes A Canadian Econoview, is back just as strong as ever.

A couple of news items that seem to support the view that in medical care, as in all other sectors of the economy, demand curves slope down and supply curves slope up.

The demand side illustration comes from the US. According to this article from the New York Times ($ subscription required), the demand for certain types of medical care among auto workers has increased sharply in recent times.

The demand for knee replacements, for example, among retired GM workers seems to have skyrocketed. Brian points out that because auto workers (particularly those who are retired), like those at GM, face a risk of having to pay more for durable treatments if/when GM goes bankrupt, it makes sense for them to get the treatments done now, while they are covered by their insurance.

The supply side example comes from here in Britain, where the National Health Service [NHS] has suddenly found itself paying much more in total than it expected for physicians' services.

Part of the reason the NHS has managed to keep costs low over the years has been the rate it has paid its staff at. And the government didn't just hand large sums of money to doctors, it instituted something called the Quality and Outcomes Framework, which basically raised the price paid to physicians for supplying certain services.

But in the process,

...they seriously underestimated the price elasticity of supply of the services covered by the QOF. Normally when we talk about elasticities and expenditures we're looking at the elasticity of demand, but here the NHS has positioned itself as a quantity taker, announcing a price it will pay for certain services and saying that it'll buy all the services it's offered at that price. So when supply proved a lot more price elastic than expected (i.e. the increase in price resulted in a larger increase in quantity supplied than had been anticipated) the pressure on trust budgets was significant, to put it mildly.

So we've got two stories - one of which says that consumers of medical care do respond to price changes and another which says that suppliers also respond to price changes. They come from two different countries and two different health care systems, but the basic laws of supply and demand are universal.

Something which probably should be given greater weight than it currently is in Canadian health care planning.

China provides health insurance for its citizens, but it is minimal insurance with the equivalent of huge deductibles and massive co-payments [h/t to Jack]:

The health care burden on Chinese households is rising as the government dismantles its cradle-to-grave welfare system. The state began cutting hospital subsidies in the early 1980s, and by the mid-1990s it covered just 20 percent of urban state hospitals' costs, said Hana Brixi, an adviser to the United Nations' World Health Organization.

In China, the majority of the uninsured - most of them rural residents - avoid going to hospitals for treatment because they cannot afford it, said Brixi. Most treat themselves with over-the-counter drugs, she said.

About 130 million people in China have health insurance, leaving almost 90 percent of the population without coverage, said Guan Ling, an executive secretary at the China Insurance Regulatory Commission's health and life insurance department. About 16 percent of the U.S. population lacked coverage in 2004, according to U.S. census figures.

Chinese patients paid an average of 56 percent of their own medical costs in 2003, up from 21 percent in 1980, according to the Health Ministry.

The use of co-payments and deductibles is a common way to reduce the costs arising from sliding down the demand curve when prices are zero. That seems to be the hope of the Massachusetts plan, as well.

It is being trumpeted by all the major news sources (NYtimes, Glob & Mule):

Prayers offered by strangers had no effect on the recovery of people who were undergoing heart surgery, a large and long-awaited study has found.

And patients who knew they were being prayed for had a higher rate of post-operative complications like abnormal heart rhythms, perhaps because of the expectations the prayers created, the researchers suggested.

Quite likely some people have expectations for prayer that differ substantially from other people's expectations.

Back in the mid-1960s, a number of us had the opportunity to attend a series of seminars with that great flaming socialist, Paul Tillich, at the University of Chicago Divinity School. I don't remember much from the seminars other than that we felt honoured to be there. At one point, we asked him how he would respond to someone who asked, "Teach me to pray." I'm certain that he did not think that prayer would help cure someone of heart disease. Rather, he said something to the effect that prayer meant becoming more aware of life, yaddah, yaddah, yaddah, whatever. It all seemed so very deep at the time.

If, indeed, patients who knew they were being prayed for suffered more complications because they had unrealistic, elevated expectations, perhaps a more efficient strategy is to be more realistic with patients rather than give false hope.

BenS suggests the research was sponsored by pharmaceutical companies.

From the CBC, courtesy of Ms. Eclectic:

Of 223 frequent fainters aged 16 to 70, muscle-tensing exercises reduced the risk of an episode by more than one-third, found the study, presented by van Dijk at a meeting of heart specialists in Atlanta on Sunday.

... In the 14-month study, half of the subjects were taught three exercises for preventing fainting. The rest were given conventional advice, such as avoiding triggers.

The three exercises were:

• Crossing the legs at the ankles while squeezing the thighs together and tensing the abdominal muscles.
• Hand-gripping moves, where the fingertips are laced and arms are pulled in opposite directions.
• Arm-tensing, squeezing a ball while again tensing the thighs and abdominal muscles.

The exercises are simple, cheap and carry no known sign-effects [sic], said van Dijk.

Policy making is so much easier when you simply assume your conclusion, isn't it?

That's the conclusion of Brian Ferguson, of Canadian Econoview, presenting yet another convincing case that demand curves are downward-sloping.... even for medical procedures and prescription drugs.

• He quotes from The Wall Street Journal about laser eye surgery:

  The WSJ points out that LASIK laser eye surgery is generally not covered by insurance, meaning that most patients having it have to pay the whole shot out of pocket. the result is that the market is open and competitive, in the microeconomic textbook sense, and that competition has been driving the price of the procedure down - one of the few cases in which the price of a medical service has actually fallen.

• and he quotes Nancy Pavcnik about prescription drubs:

  producers significantly decrease prices after the change in insurance. Price declines are most pronounced for brand name products. Moreover, branded products that face more generic competitors reduce prices more.

• And he adds information about Dutch pharmaceuticals:

  A few years ago the Dutch cut the reference price on a whole range of drugs, so that, if the price of the prescription remained unchanged, the amount the patient had to pay out of pocket would increase. In fact, drug companies cut their prices, something they would only do if the market was very competitive.

Brian Ferguson's summary:


Now, one of the loudest claims made by opponents of increased market involvement in Canadian health care is that increased market involvement will drive the cost of health care up - just look at the US, right? So does this evidence give them a moment's pause? Of course not.

I won't name names, since I wouldn't want to embarass the University of Toronto by pointing out the type of logic employed by faculty in their medical school, but anti-market types have been faced with the LASIK evidence before, and their response has been that the fact that competition drives the price of care down is bad because it encourages people to have unnecessary care (by which, of course, they mean care that the individual patient thinks is worth sacrificing purchasing power to obtain but which the experts think he should just do without). So, markets are bad because they drive costs up except when they drive down costs in which case markets are bad because they drive costs down. Got that?

It's much clearer if you start from the premise that whatever markets do must be bad. [emphasis added]

Policy making is so much easier when you simply assume your conclusion, isn't it?

One source of life-saving technology for people seriously hit by the flu is a ventilator. From Wikipedia:

A medical ventilator is a device designed to provide mechanical ventilation to a patient. Ventilators are chiefly used in intensive care medicine, home care, and emergency medicine (as standalone units) and in anesthesia (as a component of an anesthesia machine).

In its simplest form, a ventilator consists of a compressible air reservoir, air and oxygen supplies, a set of valves and tubes, and a disposable or reusable "patient set". The air reservoir is pneumatically compressed several times a minute to deliver an air/oxygen mixture to the patient; when overpressure is released, the patient will exhale passively due to the lungs' elasticity. The oxygen content of the inspired gas can be set from 21 percent (ambient air) to 100 percent (pure oxygen). Pressure and flow characteristics can be set mechanically or electronically.

One problem we might very well face in the not-too-distant future is that if there is an Avian Flu pandemic, the quantity demanded of ventilators will greatly exceed the quantity supplied. From the NYtimes [reg. req'd, h/t to Jack]:

Right now, there are 105,000 ventilators, and even during a regular flu season, about 100,000 are in use. In a worst-case human pandemic, according to the national preparedness plan issued by President Bush in November, the country would need as many as 742,500.

Economists know what to do when there is a shortage: let the market price rise until the quantity supplied increases and the quantity demanded declines. Right?

Of course if/when the flu hits, the short-term price elasticity of supply will be really close to zero. Where will the additional ventilators come from?

And so the result of letting market forces determine who gets a ventilator would be that price would rise until some relatives told the doctor, "Forget it. We'd rather have a plasma HDTV than have Dad stay on the ventilator."

Or something to that effect. After all, in the spot market for ventilators, the sick person won't be negotiating for the ventilator, the sick person's relatives will be.

Consequently, spot markets will probably never be allowed to emerge. Instead we will sit back and blame various levels of gubmnt for not making sure more ventilators are available in our community. And we will let physicians and public health officials decide who gets to use a ventilator when. As one of my physician friends says, so typically,

Ideally, issues such as prospects for survivability, expected number of years to be lived, would apply. Then more important issues such as potential social contribution (e.g. education) , good-looking index, gender, hair color (no blondes) , and race, would enter the equation.

Tom Cruise no doubt has his own ventilator as well as a stand-by staff to run it.

When I asked him making life-and-death decisions, he followed up with:

This actually happens all the time with those on transplant lists. And folks who need a hospital bed are booted out of emergency and ward beds in ALL major hospitals here daily because a more 'seriously ill' person is the successful competitor.

This approach and attitude is unfortunate, in a way. This model for allocating scarce resources ignores the long-run benefits of using market forces.

If we were told now that the only way we could get the use of a ventilator is if we paid the going rental price, a lot of us would start taking more precautionary actions now [and encouraging our children and grandchildren to take more precautionary actions now: see this].

• To reduce the risk that we or our heirs might be forced to shell out for a ventilator [or that they might be forced to make a decision to let us die rather than be on a ventilator], we would wash our hands frequently and, when the pandemic hits, we might tend to isolate ourselves more.
  
• Insurance markets would develop. "Buy your ventilator insurance here!" I can just see the local newspaper ads. "We guarantee that if you pay us $X, you will have the use of a ventilator for at least a week and up to a month." I haven't found an insurance company that makes such an offer ... yet. But the providers of such insurance would already be placing more orders for ventilators, and the anticipated shortage would be much smaller as a result.
  
• Life insurance companies would have a large incentive to place orders for more ventilators for use by their own policy holders.
  Suppose you are hit by the avian flu. Your life insurance company would like to keep you alive, and so it sends a letter to all its policy holders: Go to ABC hospital or medical centre or warehouse or whatever if you are hit by the avian flu because we have extra ventilators and staff on hand there to care for you.
  
• The long-run price elasticity of supply of ventilators is probably very high. If the demand grows now, and/or if current and potential producers expect to receive a market price for their ventilators (rather than have them commandeered by gubmnt officials who decry profiteering during a disaster of their making), then there will be lots more ventilators around in the future.

And yet, you and I both know that people who didn't buy the ventilator insurance would successfully convince many politicians that those who have the ventilators must provide them to those who are sick and "need" them.

This is a good situation in which we can ask the two important questions from economic analysis of law:

1. What is the risk?
   
2. Who is the least-cost bearer of that risk?

What is the risk?
The risk is not just that avian flu will spread and become transmitted between humans; in this situation, the risk is also that there will not be a ventilator available when you or I would like to have access to one.

Who is the least-cost bearer of this risk?
The answer to this question has two components. First, who is the least-cost preventer of the situation? and second, if the situation cannot efficiently be prevented, who is the least-cost insurer of the risk?

Who is the least-cost preventer of the situation? If we left health care to markets, the answer would be consumers and ventilator producers. With reasonable information and expectations, the efficient number of ventilators would be available later.

The reality is, I expect, many people do not have reasonable information and reasonable expectations. We expect "someone" to make sure ventilators will be available; we do not assume responsibility for anticipating the risk or for doing anything about it. I.e., we assume that someone else is responsible for reducing the risk by making sure more ventilators are available.

In other words, we expect gubmnts to be providers and insurers of last resort, and we eschew private insurance. If I were a consultant with insurance companies, I would be lobbying, strongly, for hospitals and gubmnts to acquire more ventilators and provide training on how to use them to a lot of people. I'm not convinced this would be an economically efficient way to deal with avian flu (and it still doesn't answer the question of who would have priorty access to them), but it seems like a realistic way that politicians and insurers will deal with the potential problem.

Update:For more on ventilators, see here for a brief discussion of the rationing [aka "triage"] decisions to be made.
[h/t Emirates Economist]

Ontario has raised the tax on a carton of cigarettes by $1.25. If the price of cigarettes increases, most smokers suck it up and keep smoking. For them, in the current price range, the price elasticity of demand is not easily distinguishable from zero.

But this information must be used carefully if it is to form the basis of public policy on taxes and smoking.

The price elasticity of demand is much higher for young people than for people who have been smoking for longer periods of time. Raising the taxes will have a much more noticeable effect on them. As Revenue Minister Dwight Duncan said,

"Young people are especially sensitive to price increases, and anything we can do to get them to stop — or not start in the first place — is a good idea."

This is a small tax increase, probably small enough that it will not induce much interprovincial, international, or other smuggling. However, for such a policy to be really effective, the tax must be increased considerably, and contiguous provinces must negotiate to raise taxes together by roughly the same amount. Otherwise, as Ontario learned a decade ago, high taxes in one province may lead to a large reduction in sales in that province primarily because people smuggle the cigarettes in from nearby jurisdictions.

I have seen estimates that when one province raises the tax so that the price of cigarettes increases by 10%, the quantity demanded drops in that province by about 5% in the short run. Most of this effect is due to smuggling, though some of it is due to people quitting or cutting back on their smoking. The longer-run effect is larger, especially among young people.

Like many/most people my age, I used to be a smoker. When I first started teaching, many of the students and I smoked in class and butted the cigarettes out on the floor. I recall several times bumming cigarettes from my students when I was out. It all seemed so casual and normal.