Arnold Kling  

A Diabetes Legend

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Giffen's Paradox of Health Car... Confirmation Bias confirmed...

From my latest essay


For me, it is a bit difficult to credit the notion that insurance companies induce people to choose foot amputations over preventive visits to podiatrists. Even if the podiatrist visit is not covered by insurance, it would seem that an individual diabetic would have a fairly strong incentive to go to the podiatrist, anyway. But apparently the folk Marxist appeal of putting the blame on the insurance industry overcomes any such skepticism.

I am criticizing a New York Times story, which blames the lack of preventive care in our society on the alleged fact that providers make more money with acute care. Economics tells you that providers make more money by providing what consumers demand.

Try to imagine writing the article with the focus on "why consumers fail to obtain preventive care." The same health issues could be developed. The incentives to choose preventive or acute care would still play a role. All that you would lose would be the sense of drama about the evil health care system and its victims. Which is why the story will never be written as if consumers were making choices.


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COMMENTS (7 to date)
meep writes:

My mother has worked for a podiatrist for 15 years, and they've had to perform many amputations. In most cases, it's not the lack of a podiatric visit that makes them end up needing an amputation - my mother told me of one gentleman who had come in often (and yes, he was on Medicare) and ended up losing one foot, then part of the leg, and then the other foot. The doctors did what they could, and the diabetic guys tried what he could, but diabetes does have a "point of no return" after which it's really difficult to undo the damage the disease has done over years.

I have both Type I and Type II diabetes in my family, and I've seen the damage it does even when you meticulously follow doctor's orders. I've also known plenty of people with diabetes who don't check their blood sugar, take their meds regularly (not because of lack of money), and don't watch their diet (which really doesn't cost anything, and might save them money on food) and then wonder why they don't feel so well. No system of health care is going to keep these people well short of sticking them in an institution and taking over their lives.

Mark Horn writes:
I am criticizing a New York Times story, which blames the lack of preventive care in our society on the alleged fact that providers make more money with acute care. Economics tells you that providers make more money by providing what consumers demand.
Should I conclude from this that the New York Times produces such stories because that's what consumers demand?

My basic question is this: if there's a media bias, how does it survive in a marketplace abundant with competition? Shouldn't "markets as discovery procedures" lean towards discovering what's true instead of presenting the bias?

Arnold Kling writes:

Mark, see my next post on confirmation bias.

People want to feel good. They don't want objectivity.

rakehell writes:

Didn't you read Kenneth Arrow? Insurance companies are overriding doctor's professional opinions nowadays. Sure you could write it based around "why consumers fail to obtain preventive care." My new insurance company is charging me for all sort of tests. I was mystified at first when my docs were asking me "do you want me to test for this?" He's the doctor, why is he asking me? Turns out I get a bill for it later.

I was jacked around by my past insurance company that overrode my doctor's recommendations. Turns out I have a serious condition. Sure would have been nice to have had it treated a year ago.

Fazal Majid writes:
Economics tells you that providers make more money by providing what consumers demand.
That's only true if the providers don't have a way to restrict supply with licensing requirements and numerus clausus in Med School. In a way, amputation could be considered a Giffen good vs. preventive care.

I seriously doubt amputations are due to either physicians' or insurers' malevolence, but it is less economically implausible than think.

Gary Rogers writes:

Mark Horn’s question is a good one. Why do news programs continue to survive in a competitive environment?

I believe these programs are saying what people think and are rewarded for it. Most people are more than ready to latch onto a simple concept like folk Marxism because it is easier to blame an oppressor than understand the complex interactions that really influence their lives. And, there is no doubt that economics is complex. The amount of disagreement between economists is an indicator of the complexity, which leaves journalists with a dilemma. Do they try to explain what they probably do not understand themselves and confuse their audience or do they explain what most of their audience thinks they understand and appear knowledgeable to the majority. Since looking smart is what they get paid for, they go for the simple explanations.

Gossip has also become a staple of most journalists and is something else audiences reward. It is way too common to see news commentators discussing some point without any facts and finally coming up with some seemingly well thought out answer. This is nothing but gossip, but it attracts audiences. Examples of gossipy news have been seen recently with both Katrina coverage and the Sago mine explosion. A specific example was the discussion of safety violations at the Sago mine and whether the mine should have been closed before the miners lost their lives. As I watched three CNN reporters discuss this, they basically had no facts. The only information was an unconfirmed number of safety violations over the last year and a general impression that it was more than the number cited for other mines in the area. No one mentioned that it might be good to determine the cause of the explosion before trying to determine whether any of the safety violations had any bearing on the situation. No one mentioned that some or all of the safety violations may have been for totally unrelated issues. No one suggested that knowing about trends in the data might make a big difference in the conclusion. No one warned that this was only speculation and that speculation before all the facts are in often leads to totally erroneous conclusions. After much thinking out loud and weighing the little bit of information they had, they came to the conclusion that the owner of the mine was definitely in the wrong and should have shut down the mine before lives were lost. It was a folk Marxist conclusion, but you could that they were all proud of themselves for intelligently analyzing the situation and the proof of their wisdom was the fact that miners were dead because other less intelligent and more greedy people had not followed the same logic.

I applaud Dr. Kling’s essays, both for identifying the patterns of folk Marxism and folk Keynesianism and for pointing out the dangers of making arguments without truly analyzing the data. Education is the only solution to some of the really bad journalism that exists today and it is refreshing to see good ideas communicated so well.

CC writes:

Of course there are people who won't go to the podiatrist. Its not because of the cost, its because they are poor/depressed/stupid/don't take responsibility for their lives.

In the U.K. even though health care is free this still happens...so no, free medical coverage isn't goting to help.

What do we do about such people? What SHOULD we do?

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