Arnold Kling  

Shocking Views on Health Policy

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They come from Richard A. Cooper, a physician (not to be confused with Richard Cooper, the specialist in international economics).


Orszag has argued that if Medicare spending could be as low in Newark as it is at Mayo, the nation could save billions. But this theory doesn't hold up in practice. Consider: One-fourth of the folks in Newark live in poverty, compared with less than 10 percent of those in Rochester. And national surveys show that poor people consume more health-care resources -- 50 to 75 percent more than average. They are sicker and they stay sicker, despite the best efforts of physicians and hospitals. Mayo is a fine institution, but it isn't more cost-effective than other hospitals in its home region, nor are its operations in Jacksonville, Fla., and Phoenix more cost-efficient than other hospitals in those cities. So why would it be more cost-effective in Newark?

the president will have to give up on the Dartmouth suggestion and grapple with some painful truths. First, medical care is inherently variable in different regions of the country -- socio-demographic differences matter. Second, more is more and less yields less -- the best care is the most comprehensive care, and it costs more. Finally, poverty is expensive -- the greatest "waste" is the necessary use of added resources when coping with patients who are poor.

Prior to seeing this op-ed, I was not familiar with Dr. Cooper or his views. I am curious to find out more. Here is an interview. And here is testimony.

More follows. Very worthwhile--he even has a theory to explain Hansonian medicine!

From the interview:


health care expenditures for people in the lowest 15% of income are 50% to 100% greater than for people of average income. There's also a difference at the high end. The wealthiest 15% also consume more, but only about 20% more...

More spending at the high end improves outcomes, not simply for a specific condition but across the board, because the care consists of a broader spectrum of beneficial services. More yields more. But among the low-income patients, outcomes are poor despite the added spending. In fact, the added spending is because of poor outcomes - more readmissions, more care for disease that's out of control.

Thus, his explanation for the Hansonian medicine:

Now, when you blend all of this into "regional" studies, which average rich and poor, urban density and ex-urban comfort, racial and ethnic groups, you get just what you'd expect. High costs with average outcomes in urban areas (the average of excellent and poor outcomes at different ends of the income spectrum).

Here he slams someone's regression methodology:

Well, they never really measured how many specialists were in Mississippi or anywhere else. They did some statistical maneuver where everything was converted into residuals, and I guess that Mississippi has a lot of residuals. It just doesn't have a lot of doctors.


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COMMENTS (12 to date)
Floccina writes:

health care expenditures for people in the lowest 15% of income are 50% to 100% greater than for people of average income.

Wow it would be nice to know why that is. I can think of many possible factors:

More dangerous work
More accidents
They are poor because they are more sickly
Worse habits (alcohol and drug use)
Lower IQ (less ability to understand and avoid danger)
They might put less effort into caring for themselves
Lack of middle class morals
Lack of work
Free access to Medicaid
Doctors taking poorer care of them
Doctors taking advantage of them and Medicaid
Too much medical care (iatrogenic disease)
They are bigger risk takers

50%-100% is huge. I guess it would be a combination of a few of the above.

Then there is the question is that 50%-100% estimate correct?

quadrupole writes:

Floccina,

you ask precisely the right question. Why are costs so much higher for the poor? And why is it buying us so little?

Answering those questions have very clear potential for cost savings, and the answers could lead to radically different policy prescriptions.

Rimfax writes:

How does McAllen, Texas fit into this?

kingstu writes:

Black men get a more aggressive from of prostate cancer compared to White men. Black women get a more aggressive form of breast cancer compared to White women. Blacks have more strokes, a higher incidence of heart disease and are more likely to get diabetes.

Do you want to guess the percentage of Blacks who live in Newark vs. the percentage that live in Rochester?

Newark – 57%
Rochester – 5%

I suppose I will have to let Roland G. Fryer (Harvard Economist) study these issues because for some reason anyone else who chooses to discuss race and the genetic components of disease gets branded a “racist.”

Do you think Obama would favor cutting medical spending in Newark or should Orzag dust off his resume?

Joe writes:

Poor=Lack of Education
Poor (Esp Urban Poor)= Minorities and recent immigrants

Medicaid (in some states, not all) is a free pass for medical care; minor issues that mots would not go see a doctor for become an ER trip...what else would you do all day if you are unemployed?

How do make people with no money pay for care? In inner city hospitals they pay with outrageous wait times.

libfree writes:

Answer those questions might help us save costs in medical, but they would probably end up costing us a higher absolute amount. Wealthy people have more time to exercise (daycare), better diets (fresh fruits and vegetables), and education.

zanon writes:

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z writes:

As a physican working at a nationally known urban medical center, where we care for the wealthy from all over the world, as well as the local poor, I see the contrasts between the two groups daily.

More dangerous work - Yes. Lots of trauma and workplace related exposures/degenerative conditions.

More accidents - Yes. You'd be shocked at how many people get hit by cars.

They are poor because they are more sickly - chicken or the egg.

Worse habits (alcohol and drug use)- Yes. Huge factor in medical expenses. Hepatitis/alcoholism/tobacco related conditions chew up billions in expenditures annually.

Lower IQ (less ability to understand and avoid danger) - Certainly. They don't, and sometimes can't understand how to follow treatment orders or participate in managing their conditions.
They might put less effort into caring for themselves. Certainly. If you don't expect to live past 30, why bother (Been told various forms of this from innumerable patients).

Lack of middle class morals - To a point, but the rich run into some of the same medical problems related to 'moral laxity'

Lack of work - Idle hands are the devils workshop. From depression to trauma, nothing to do all day isn't good for your health.

Free access to Medicaid - Simple economics, if it costs less (or nothing, directly, to you), you'll use more of it.

Doctors taking poorer care of them - Probably could find examples. But, it's a two-way street. If you don't take the meds you're given, or follow-up when you're supposed to, how smiley the physician is doesn't really matter.

Doctors taking advantage of them and Medicaid - Medicaid pay is crap. Often times it's a money loser. Now, hospital systems may benefit with hospitalization/acute care reimbursement, but private physicians aren't making money here.

Too much medical care (iatrogenic disease)- Probably in some patients. See intelligence issue above. If you OD on your meds, that's bad.

They are bigger risk takers - See above, if you've got nothing to lose (i.e. no assets to be confiscated in a law suit, no job to lose, no fear of prison, not expecting to live to 30). Shoot, you can make a good argument that such behavior, such as drug dealing, is economically rational given the circumstances.

Of course, no one wants to touch any of these issues in public debate. Great article above.

Bob Calder writes:

Arnold,

There are other doctors whose usual occupation regularly examines these issues in the public health community.

It is their contention that if you make poor people more healthy they will be more productive. In order to substantiate this, they look at other countries' measures of child mortality and longevity versus productivity.

If the public health community is right, the US could do what other countries have already done.

It looks to me like Cooper's argument is that you can't make poor people better when they're sick. That's a strong social statement and reeks of the 19th century.

Cooper is also cherrypicking cost structures. Why not use costs from the top five countries in terms of health care outcomes? Going along with Cooper is like agreeing with Sean Hannity on the definition of a patriot.

z writes:

"It is their contention that if you make poor people more healthy they will be more productive. In order to substantiate this, they look at other countries' measures of child mortality and longevity versus productivity."

Child mortality statistics are misleading and of little value. Their reporting is neither standardized nor validated. People live citing that, "The US child mortality rate is higher than X (insert impoverished third world country)." Alright, plenty of holes can be shot in this.
-If the woman in a poor country doesn't make it to a hospital (frequent) and loses a baby, or the baby dies shortly after going home, and no one (official) knows about it or reports it, the numbers are off. (If a tree falls in the woods and no one is around...)
-What counts at infant, perinatal, and child mortality in various countries is different.
-Due to a host of societal constructs (ethical, moral, economic, social, etc.) we attempt heroic measures on kids that would be effectively left for dead in other countries that are 'superior' to us in such statistics. We have tons of medical resources to help a mother with a tenuous pregnancy reach viability, or later into the term of her pregnancy, when in other countries, these count as 'spontaneous abortions' and don't ding child/infant mortality statistics. If a pregnancy that would have been lost at 23 weeks in country x, through medical management, is extended to 28 weeks, but after a month in the NICU, the kid still dies, well, that's 0-for-1 for us, but 0-for-0 them. Our numbers look 'worse' but I can assure you, no mother with a high-risk pregnancy would rather be cared for in Cuba, Haiti, or whatever country is 'statisically' better than here.

As for longevity, c'mon. This has next to nothing to do with who pays for care, or access to insurance, or anything else addressed in current health 'reform' bills. This has everything to do with individual choice (societally influenced, and often government encouranged, but individual nonetheless). When 20 year olds get shot gang-banging or die in car-wrecks, when morbidly obsese diabetic smokers die at 45 or 50, and alchohlic drug users die at 50, etc, obviously that brings down the average life expectancy. Single payer, co-ops, or any other such proposals won't change the fact that millions of Americans make terrible health decisions daily. I would argue that third party payers, or anything else insulating American's from health care costs contributes to this, since the Medicaid/no-pay/Medicare population knows that won't bear the full burden of their medical care resulting from said poor choices.

phineas writes:

Bear in mind that the lowest 15% includes the lowest 1% who are homeless alcoholics, schizophrenics, etc. Then there's the lowest [__]% percent who have the misfortune to be chronically sick or longterm disabled or more generally have longterm incomes of Zero except for welfare payments. These are not the same sort of people as the usually-working lower income people, healthcare wise. Doctor Cooper is not comparing apples with apples when he compares the lowest 15% income with average income people; he's committing a misleading "statistical maneuver".

Marty writes:

Poorer people are usually in worse health due to poorer living conditions, bad work conditions and bad habits. 99% of lower income people are there by a lifestyle choice at one time or another. This of course doesn't include veterans or the disabled.

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