Arnold Kling  

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Not Junk? A Question for Arno... Economics non-junk Science...

My reader-blogger Joe Kristan spots this WSJ story

Interest is growing in the digital version of the breast-cancer screening test, driven in part by a study last fall in the New England Journal of Medicine that said digital was better for some women...

The study found that digital was better at detecting cancer only for premenopausal women, those under 50 years old, or those who have dense breasts. The majority of women who get mammograms are over 50, and looking at the 40,000 women in the study as a whole, the new technology was found to be no better than film overall.

As Joe points out, this reinforces my thesis about premium medicine, or as I put in the Cato forum, "Americans make extravagant use of medical procedures that have very high costs and low benefits." At the margin, digital mammography has low benefits relative to traditional mammography. But women have no incentive to take that into account if insurance is footing the bill.

Is America's health care spending a good thing, or not? Is it a sign that we are wealthy (an income effect), or a sign that we are deceived by third-party payments (a substitution effect, based on a price to the consumer of zero)? I have a discussion forum on this topic at the Crisis of Abundance web site. Go there and weigh in on the issue. (Or weigh in here, but it's lonely over there right now)

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COMMENTS (3 to date)
Robert Schwartz writes:

Canon announced today that they will begin to phase out film photography equipment. They are following Nikon and Konica/Minolta in that. Meanwhile silver is spiking a fever. It is over $12.50/oz after years of sitting at $4.50. Beyond that x-ray films are really heavy and hard to transport and store.

Digitization has lowered costs in other industries and it will in x-ray diagnostics also.

Eli writes:

Wait... Does "digital" in this case mean "electronic using ones and zeros" or "using fingers"? Because the latter is pretty cheap.

Victor writes:

Digitization has lowered costs in other industries and it will in x-ray diagnostics also.

Eventually, perhaps. But Nikon doesn't have the FDA around to prevent Canon or other companies from making digit photography equipment. It also doesn't have a humongous customer (i.e., the government) who uses a crude and relatively inflexible pricing schema.

I suspect that you are correct, and in 20 years, everything will be digital and there will be lower costs as a result. But our medical reimbursement system almost seems designed purposefully to maximally stretch the length of time until that will happen. In the meantime, this is going to increase costs because of all of these artificial rigidities.

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