David R. Henderson  

Data on Canadian Medical Care

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"The plural of anecdote is data."
(attributed to George Stigler)

My wife had breast cancer in 1986 and is an active consumer of information about breast cancer. A few days ago she gave me a link to a web site in which breast cancer survivors, almost always women, discuss their experiences. A number of the participants are Canadian. Here's a recent such discussion.

I find at least 3 things interesting about this.

1. Notice how informed the participants tend to be about their own situation. Each woman who participates gives the specifics of her case: size of tumor, treatment, etc., often in a shorthand that each expects the other readers to understand. This makes me wonder about the claim that even many health economists make that people don't understand enough about health care to be thoughtful consumers.

2. The Canadian woman who introduces the topic got essentially no after-surgery treatment from an oncologist. Notice how surprised by that are the American women who comment.

3. One Canadian woman, Connie, doesn't just tell anecdotes but gives data. Specifically, she claims "Do you realize that OHIP [Ontario Health Insurance Plan] puts a cap on what some surgeons and specialists make in a year and if they want to operate after that - they get paid 25 cents on the dollar?" My quick search failed to find support for this statement, but it's checkable.


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COMMENTS (18 to date)
Bob writes:

[Comment removed for supplying false email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog.--Econlib Ed.]

Tom West writes:

This makes me wonder about the claim that even many health economists make that people don't understand enough about health care to be thoughtful consumers.

I don't think there is any question that a good number of people have enough time, education, inclination, and money to be thoughtful consumers. The question is does *everybody* (or almost everybody)?

Personally, I suspect about 5-10% of the population might qualify as 'thoughtful consumers'. For the rest of us (myself included), regulation protects us. Obviously you weigh the freedom to choose for the minority higher than the freedom from 'having to care' for the majority. Understandable. You aren't Libertarian if you don't value freedom highly.

The Canadian woman who introduces the topic got essentially no after-surgery treatment from an oncologist.

Indeed. There is no free lunch. The question really should be is the increased survival rate due to after-surgery treatment by expensive oncologists the best expenditure of scarce resources.

Or is your point that Canadians should change their health-care expenditures to American levels?

Do you realize that OHIP...

While the real justification is obviously to save money, may I point out that this also removes the incentive for Doctors to crank through as many patients as quickly as possible simply to maximize income rather than giving the patient the time they may need.

Saving the government money may be getting Ontarians better quality health care!

scott clark writes:

Tom West
"Saving the government money may be getting Ontarians better quality health care!"

Saving the government money may be getting SOME Ontarians better quality health care by getting SOME other Ontarians worse quality health care.

Fixed it for you

Bill writes:

"Personally, I suspect about 5-10% of the population might qualify as 'thoughtful consumers'. For the rest of us (myself included), regulation protects us."

So, could you say that regulation is a wealth transfer from the responsible to the irresponsible?

Jeremy, Alabama writes:

Tom West says: "Indeed. There is no free lunch. The question really should be is the increased survival rate due to after-surgery treatment by expensive oncologists the best expenditure of scarce resources."

The question really should be, can YOU, with your vote, make the determination that oncologists are expensive for the increased survival rate that they provide, and so deny them to thoughtful consumers?

Active, educated people will always get better health outcomes. Good health outcomes do not simply parachute out of the sky, even for those with insurance. There is a class of people who will always have worse health outcomes, no matter what free services you give them. It would be nice if there were an affordable way to equalize health outcomes for such people, but surely not by denying services that thoughtful consumers can afford and want.

John Jenkins writes:

@Tom West: alternatively, the physician might work as fast as he can to get to the cap in May and do virtually nothing the rest of the year.

That's what I'd do if I had capped earnings.

John writes:

"Each woman who participates gives the specifics of her case: size of tumor, treatment, etc."

I’m not sure that having a high level of knowledge about the product or service you need is tantamount to being an informed consumer. Every cancer sufferer with which I’m acquainted had become a subject area expert on their specific affliction. Is that the same as mastering the market for cancer care? An engineer who knows the inner-workings of an automobile in every detail, including preventative and correct maintenance actions in every conceivable condition is not an expert shopper. They may be able to tell you the relative merits of one brand over another, but that’s not the same as carefully considered utility, cost benefit, and outcome analysis.

CK writes:

Looking at online discussion boards is going to introduce selection bias. It would be like reading the comments here and concluding that people are actually somewhat well-informed about economics.

That being said, the Web offers the potential for consumers to be much better-informed about medical matters than before. However, there is also a stupendous amount of misinformation out there, a lot of it quite misleading. The Web has dramatically increased the volume of information available but the signal-to-noise ratio does not appear to have improved.

RL writes:

"Personally, I suspect about 5-10% of the population might qualify as 'thoughtful consumers'. For the rest of us (myself included), regulation protects us."

Well, I'm not well informed about grocery purchases, but I assume the fact the grocer is going after the 5-10% of the population that is allows me to free ride.

"...selection bias. It would be like reading the comments here and concluding that people are actually somewhat well-informed about economics."

Assuming the conclusion...:-)

Badger writes:

Tom West, would you agree with this statement?

"I don't think there is any question that a good number of people have enough time, education, inclination, and money to be thoughtful *VOTERS*. The question is does *everybody* (or almost everybody)?

Personally, I suspect about 5-10% of the population might qualify as 'thoughtful *VOTERS*'. For the rest of us (myself included), *AN ENLIGHTENED DICTATOR* protects us. Obviously you weigh the freedom to choose for the minority higher than the freedom from 'having to care' for the majority. Understandable. You aren't Libertarian if you don't value freedom highly."

You're right, I value freedom highly. It means on the other hand that you don't.

I would love to see the day when liberals would be less incoherent or less hypocritical and assume their true political beliefs in public.

FatTriplet3 writes:

@ John:

You say:

"They may be able to tell you the relative merits of one brand over another, but that’s not the same as carefully considered utility, cost benefit, and outcome analysis."

First, why wouldn't your engineer be an expert "shopper". He would have great expertise on the technical merits of various automobiles. Now he may not be a very good shopper for me because I may value "coolness" more than quality, etc.

Which leads me to this question: Are you suggesting that a board of bureaucrats can determine the best care for me? Maybe you're not. If not, how would you make our technically educated patient a better "informed consumer"?

Steve

Mr. Econotarian writes:

Ontario lifted the pay cap in 2006:

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20061004/ont_doctors_061004

"The Ontario government allowed the number of doctors earning more than $476,000 annually to jump 56 per cent last year -- some averaging salaries upwards of $718,000 -- in order to ease the pressure of a shortage of physicians, Health Minister George Smitherman said Wednesday...

...Smitherman said the statistics indicate an 11 per cent increase in doctor productivity since the salary cap was lifted.

Premier Dalton McGuinty also defended the increases.

"We had heard time and time again that the (salary) cap was suppressing the numbers of services, surgeries, procedures that we could provide,'' he said...

...The province allowed a Cambridge hospital to hire a private company last week to run its emergency room, while a hospital in nearby Kitchener came very close to closing its emergency room doors because of a shortage of doctors."

David writes:

Quebec re-examining breast cancer study

Medical specialists are double-checking a new study indicating as many as 30 per cent of breast cancer tests conducted in Quebec may have produced faulty results, the province's health minister said Saturday.

http://www.cbc.ca/health/story/2009/05/30/breast-cancer-quebec.html

ab writes:

"1. Notice how informed the participants tend to be about their own situation. Each woman who participates gives the specifics of her case: size of tumor, treatment, etc., often in a shorthand that each expects the other readers to understand. This makes me wonder about the claim that even many health economists make that people don't understand enough about health care to be thoughtful consumers."

Cancer can be diagnosed with a higher level of certainty than other conditions because it has obvious physical signs such as tumors. I dare to argue that other conditions that are not as easy to diagnose could be of concern to this premise. Food allergy for example is hard to diagnose at times(gluten, sugar, etc...) and could have quack tests (electro-dermal stimulation, or vegatest, for example) and quack treatments that follow.

"For the rest of us (myself included), regulation protects us."

As much as I disagree with Tom's statement, could the proper regulations, and proper role of regulators be able to protect the consumer in cases like these? After all, snake oil salesman are a real threat.

RL writes:

Ab: "Cancer can be diagnosed with a higher level of certainty than other conditions because it has obvious physical signs such as tumors. I dare to argue that other conditions that are not as easy to diagnose could be of concern to this premise. "

As a physician, I have to say ab is absolutely right. Why just the other day, I had to tell a patient he was suffering from Stage III lung cancer, and he said, "Whew! For a second there, I was concerned it might be an allergy. Allergies confuse and frighten me. Cancer, now THAT I understand!"

Tom West writes:

Answering four posts here, so my apologies for length.

Bill:

So, could you say that regulation is a wealth transfer from the responsible to the irresponsible?

In my case, yes. (I have the education, I simply lack the motivation and time.) In most cases, no. They simply lack the language proficiency or mathematical background in statistics to make meaningful health-care decisions.

In both cases, it's irrelevant. All policies favor one group over another. That's where democracy comes in.

Jeremy:

The question really should be, can YOU, with your vote, make the determination that oncologists are expensive for the increased survival rate that they provide, and so deny them to thoughtful consumers?

Well, in Canada that's exactly what we've done and it seems to suit the vast majority of the voters. On the other hand, I am not a Libertarian and thus I don't see such freedom of choice as a moral issue but a utilitarian one. (i.e. I value freedom of choice as one of many factors that I value.)

In this case, I think the loss of choice (a bad) is outweighed by the better health outcomes for the vast majority (a good). Not unlike progressive taxes or product safety laws which also favor the many over the few.

John Jenkins

That's what I'd do if I had capped earnings.

Indeed you might. However, the set of doctors who might "short-change" their patients to gain extra income != the set of doctors who would do the absolute minimum to earn their income. Doctors influenced by one incentive might not be influenced by the other.

However, I'm not claiming this was the outcome for all or even most doctors. Just pointing out unintended consequences can work in different directions.

Badger

Personally, I suspect about 5-10% of the population might qualify as 'thoughtful *VOTERS*'. For the rest of us (myself included), *AN ENLIGHTENED DICTATOR* protects us.

You know, if enlightened dictators were in good supply, then maybe... :-)

Of course, reality is that no-one remains an enlightened dictator (if they ever started that way). The voters may not want to vote and may do it badly (as Bryan asserts), but the cost of not having the ultimate escape hatch (of the option of dumping the current government in an election) is eventually higher than the costs that democracy imposes on the electorate.

In other words, loss of freedom (a bad) + eventual catastrophic governance (a big big bad) is not outweighed by 'freedom from caring' (a small good) + less harmful policies that 'buy votes' (a good).

You don't need a moral attachment to freedom to realize that freedom is a good idea in and of itself. It's just not a good that automatically trumps all other goods.

John writes:

@ Steve:

My thinking is that mere technical expertise does not convey shopping savviness. From the information given, the cancer patients may or may not be good medical care shoppers (Connie maybe weakens my argument) – certainly having the technical information is better than not having it. However, in paragraph 1, David seems to me to be implying that knowing the pathology of your personal disease is the same as understanding health care. By this I think he means the delivery of health care.

In regards to the board of bureaucrats I certainly do not think they can determine the best care for me and for exactly the same reason the engineer doesn’t know my utility for coolness over any other quality. No original thinking here, but I think the way to make us all better shoppers is to peel back the layers of assumed entitlement that has swallowed the medical care markets (and most others). Probably a million words on this site that far better addresses this than I can.

FatTriplet3 writes:

John,

Thanks for clarifying your point. My point, and I think we agree, is that however imperfectly patients may be at understanding treatment options, they have very strong incentives to educated themselves and make the most informed decision. More so than any 3rd party whether that be an insurance company or the government.

Thanks for your civil reply,

Cheers,

Steve

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