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When I had a wart as a kid I just bit it off after a week. Seeing how messed up USA healthcare was until 1980s. An argument in favour of avoiding USA Universal Healthcare was that ignoring the Division of Labour and going with uninformed consumer market choices, is that cutting edge medical machines are invented faster. This one bright side of the USA system is probably entirely undone by not covering some people. Forced insurance and low-income subsidies results in more inventions.
They had Case Managers referring the mentally ill. I wonder with records of a patient's history, if that means Case Managers are more or less needed for mental illness? CM's are friends. The same benefits we would've got by taxing tar for potentially expensive daycare (healthy kids where parents not oiley), you get by giving mentally ill a friend. But with good records might be easier to go right to a specialist.
The are cost savings, economies of scale, awaiting States and Provinces. Just gotta find best practises. Then pool together the best. 3rd world, slightly inferior/cheaper, doctors might be able to service in northern Reserves easily. A timeline for pandemics is made hard in that Recombatics R+D uses medical longevity/Q-of-L research as the prime upside. So you have to get an ROI of your future Health Canada or FDA schedule. And you have to determine how to regulate dual use. Two different types of bureaucracy. It is hard to solve this on $2-3/hr but I guess we are all Albertans for now. All dumb and rich. I guess?
For new unregulated health treatments, it might be better to let them be partially legal until Health Canada takes a look? Offenders used to get 2x while awiating trial. The idea was to Insite courts not to charge potheads and minor offences. So might want to encourage Health Canada to hurry up. AB market forces for dealing with padnemics are useless. Time for a new dream. Owning a car and raising kids in the suburbs waiting for unending heaven worked for 1950s. I suggest medical R+D and some other R+D. Tar CEOs will point out which medical technologies are WMDs? Their dumb kids will?

So, you're saying that.... Red Green was right?

The bigger question is, why do you assume you are in a position to judge what "effectiveness" means in the phrase "cost effectiveness?"

What I mean is, there are people who would pay millions - literally millions - to ensure they never get another wart as long as they live. Then there are people like me, who use duct tape and pocket the difference. Who's "right?"

Value is subjective. Cost effectiveness as economic policy is wrong and toxic because it ignores the fundamental law that value is subjective.

Any policy that attempts to force systemic valuation standards onto people from the top down is doomed to fail. Cost effectiveness research in Canadian healthcare is driving supplies down, and therefore prices up. The problem is getting worse, not better. I realize it is the current fad in health economics, but it is a false god.

Healthcare was an efficient system when people went to their doctors for advice, not for the implementation of standards. In those days, doctors could advise their patients to do all kinds of things - like exercise, or apply duct tape to warts - and people listened because a doctor's opinion was educated and trusted. These days, doctors merely read their prognoses out of the Therapeutic Choices book. This book has to be seen to be believed. Anyone who can read can treat themselves as well as a doctor can.

Rather than lamenting why doctors don't seem to appreciate official cost effectiveness standards, we should be working at decentralizing care and re-establishing what was once called a doctor-patient relationship.

Ryan, I don't know what kind of hospital you appear to work in, but it seems to be in an alternate universe. Perhaps you know a physician who is cranky about standards of practice or evidence-based guidelines, but it is a fantasy to think that medical error is something that was recently invented by administrators and policy analysts.

Frances: working on a reply. Meanwhile, Austin Frakt has also tackled this.

Shangwen, regarding your point about medical error being recently invented by people - I can understand why you would call it a fantasy, as I myself certainly made no such claim.

If people bore the marginal cost of their own health care, most patients would try duct tape first before spending $300 on cryotherapy.

Ryan, you should know better than anyone that doctors can be wrong, both individually and especially as a group. You have said you are a diabetic, as am I, and six years ago I attended an education session at new clinic. The nurse, who had been in the business as long as I have, said that the old system in vogue in Canada in the early 1980's, strict diet, carbohydrate restriction and not fitting the diet to the person but the person to the diet, was wrong. Lack of carbs and lack of fats led people to feel hungry and bulk up on protein, which doesn't contain much carbohydrate but has a great deal of fat. It led to cholesterol and heart problems. The nurse flat out said it was a bad system and had been abandoned. That was my childhood.

Now they fit the diet to the person, people's compliance is much better. I'm all for being critical of doctors. Once you've been in the system long enough, you see their foibles. My grandparents' generation loved and still loves to "be doctored", it's a relationship thing. Me, I want to solve a problem the fastest and cheapest way possible.

I don't think either public or private insurance should pay for the provision of a relationship. Insurance of any kind has to be about results. If you want that special relationship, you pay for it.

Ryan: "Value is subjective. Cost effectiveness as economic policy is wrong and toxic because it ignores the fundamental law that value is subjective."

There is nothing subjective about the following calculation: cost of treatment divided by number of warts that go away = cost per wart removal.

Sure, if you want to try to put a dollar value on the pain associated with being blasted with liquid nitrogen or lasers, or on being scarred by salicylic acid, that's subjective. But cost per wart, no. The much greater challenge is that we really know very little about the average success rate of various treatments.

Keystone Garter - I agree about the importance of figuring out what the best practices are.

Shangwen - will look forward to your reply.

Keystone Garter -

Frances - My point is that you can calculate the cost of a particular treatment, but that lone fact does not determine the better or preferable treatment. That latter decision is an entirely subjective decision that is better made by the patient in cooperation with one or several doctors than it is by economic models.

More importantly, we absolutely do *not* want to inject a conflict of interests into the healthcare system. When doctors are worried about saving "the system" money or adhering to central policy, it clouds their judgment. I'm sure Determinant and I can regale you with tales of doctors who preferred to fit us into the CADTH treatment recommendations/models rather than pay attention to the uniqueness of each individual body.

Determinant - I must have made my point very poorly, because first Shangwen thought I considered medical error to come entirely from policy, and next you (seem to?) have the impression that I don't think doctors make mistakes at all. I apologize for having confused everyone. Of course doctors make errors - so do twenty-something CADTH health economists. As per Dr. Woolley's previous point on competition, these things tend to get better when there are more choices available to the consumers. In the healthcare space, I take that to mean that greater physician autonomy and fewer federal cost effectiveness models results in more and better competition. You're right, though, for people like us, if we want a good doctor-patient relationship, we have to pay for it.

Ryan: " we absolutely do *not* want to inject a conflict of interests into the healthcare system"

If you think there aren't conflicts of interest in the medical system now - between doctors' desires to maximize their income/minimize their effort and doctors' interests in the patients' well-being - you've got another think coming.

Frances: I think the salient question in your post is, "Why do we persistently provide/demand low-effectiveness treatments, or low cost-effectiveness treatments?" There are several (not mutually exclusive) answers to this:

1. We don't have a good treatment yet, but we really want something. We will do ineffective things until something really effective (sildenafil, Botox, cognitive-behavioral therapy, killing off h. pylori) comes along, because faint hope is better than feeling passive. So, in the case of warts, we are in an unenviable phase of history, as we once were with polio or cancer. But your pricey duct tape may be just around the corner.

2. We have a treatment, but either it does not appeal to many people who would benefit from it (cognitive behavioral therapy, smoking cessation) or we overestimate the condition’s prevalence or seriousness (carpal tunnel syndrome, otitis media, “urgent bladder syndrome”).

3. We have something that is useful X% of the time in Y% of patients, but regulatory distortions in production and pricing diminish either its appeal or its outright availability. Private psychotherapy, at $175 per hour, is not a rational choice for most people, especially given its reliability; it is reasonable for most people to opt for anti-depressants over therapy in that context (Ryan: I am not condemning private care; I will get to that). And we have the rising problem of drug shortages and the longer-term problem of drug prices, which can be at least partially blamed on unnecessary regulatory oversight, notably the FDA’s.

4. In health care, there is no transparent mechanism for price formation that is based on a competitive market. We currently have an insane mix of government price controls, Marxian labor theory of value, occupational licensing and hence oodles of rent-seeking, and high personal incomes that in most industries would be structured as corporate profits (and hence bigger political targets). This is not a recipe for efficient pricing.

Ryan: There is a big difference between institutional controls that attempt to flout the Hayekian local-knowledge problem (rationing), and those that attempt to bring empirical evidence into play as a quality improvement measure. Health care is so weak in the overall implementation of empirical knowledge, that its extremely poor productivity is partly due to institutional traditions that impede effectiveness. I disagree with (what I assume to be) your preference for traditional physician autonomy: in the context described above, lone practice is a huge risk factor for medical error. I chair a national committee on evidence-based health care, where we have been examining the issue from philosophical, economic, and medical angles. My primary view is that effective health care is an institutional problem, not a technical one. Independent practice is as bad as occupational licensing in keeping health care in a state of mystical low effectiveness. An optimal health care institution is essentially a corporation dealing with a free labor market, and competing against other corporations: a management structure with incentives to maximize consumer welfare; liability for employee conduct that is not diluted by licensing boards; and pressure to innovate in order to survive, rather than to accumulate prestige. (Sadly, that is just my view and will not be a public statement of the committee.)

And yes, health care ("private" or "public") is riddled with conflicts of interest that are counter to the interests of patients.

And here's Arnold Kling this morning, with a line that is about electrical utilities but may as well be about healthcare:

I am concerned by two factors that insulate Pepco from facing market discipline concerning reliability. The first is that Pepco is a regulated monopoly. The second is that there is no price indicating the benefits of reliability.

You can see a psychiatrist for 20 sessions of useless psychotherapy. Cost: $4000. You can also see a psychiatrist for 20 sessions of CBT. Cost: $4000.

Frances - I readily concede that conflicts of interest already exist in healthcare. My point is that we don't want to add more to the mix. Having been victimized more than once by this particular conflict of interest, I am of the opinion that it does more harm than good.

My reasoning is that my body has individual needs that don't fit the mold of the statistically average patient, and therefore my treatment will require an individual prognosis, not one designed for the statistically average patient.

Actually, it's a stronger position than that: I don't believe that the statistically average patient actually exists in the real world. Biometrics is an approximate science, as is health economics and cost-effectiveness models. I know because I've produced them myself. I also know because the treatments they recommend don't always work on me.

But, I would rather deal with the conflicts of interest that pertain to competing medical products and procedures - which I can inform myself on - than the conflicts of interest that pertain to bureaucracy, which is completely Kafkaesque and impenetrable for the average person. Once CADTH rules, the system adheres. No argument, no follow-up. That is only an acceptable outcome for the (non-existent) statistically average patient.

Shangwen - As a repeat victim of so-called "evidenced-based healthcare decisions" and a former health economist, I am not just critical of your kind of work. Canada's push toward CER and what one colleague of mine called "The Evidence-Based Mafia" literally drove me out of the country so that I could protect myself against what such things are doing to the Canadian system. I consider it dangerous and morally wrong.

I also think it has more to do with politics than healthcare, and every experience and CADTH Symposium presentation I've ever been through has confirmed this notion to me.

You will find me rather skeptical of your arguments, unfortunately. As as you can see, I don't just believe this in the abstract, I believe it to the point that I would expatriate myself because it caused such a significant threat to my personal health. Your mileage may vary.

Shangwen - thanks for taking the time to write down the thoughts, insightful as always. Only one minor quibble: " and high personal incomes that in most industries would be structured as corporate profits"

Actually, because most physicians are self-employed, they are able to enjoy many of the tax advantages of the corporate structure, including the ability to shelter investment income in the business (like a limitless RRSP). So, yes, those high personal incomes are - to the extent that physicians incorporate - structured as corporate profits.

Ryan - as Shangwen points out, we don't even know what treatments work and which ones don't work. Physicians aren't omniscient gods, they can't be expected to know the effectiveness of, say, freezing v. freezing supplemented by patient-applied salicylic acid in the absence of clinic trials. And those clinical trials are few and far between. Many are conducted on children, and children and adults have quite different skin/immune systems.

Evidence-based health care has its problems, but evidence-free health care is worse.

And here's Arnold Kling this morning, with a line that is about electrical utilities but may as well be about healthcare:

I am concerned by two factors that insulate Pepco from facing market discipline concerning reliability. The first is that Pepco is a regulated monopoly. The second is that there is no price indicating the benefits of reliability.

You can see a psychiatrist for 20 sessions of useless psychotherapy. Cost: $4000. You can also see a psychiatrist for 20 sessions of CBT. Cost: $4000.

As a person who has experienced the mental health system, I am going to be a pendant. Have at the problems, they are ample, but first, please get the problems right.

Psychologists are not psychiatrists. Psychologists are talk-therapy people and do not prescribe drugs. They are also not paid for by provincial plans. Psychiatrists do prescribe drugs and to get to one you need to be pretty bad in the first place. In Ontario the first line of treatment for mental health is your family doctor. Mine is in a Family Health Team and has a Social Worker attached. The Social Worker does CBT and helped a lot because my life was coming apart at the seams socially at that point.

If your antidepressant levels aren't enough to pull you out of your depressive spiral and you still have things like suicidal thoughts, then your family doctor may refer to you to psychiatrist. They work in hospitals, have a full range of drugs at their disposal and the hospital clinic I go to does CBT in a group setting. The classic trio of Depression treatment today is anti-depressants, CBT and exercise. Some lifestyle changes also help like getting rid of stressors.

The meds cut through the brain fog and help a patient focus, the CBT helps them realize what it going on and manage their feelings more effectively and the exercise increases endorphin levels and juices the other two strategies. Psychiatrists are conscious of costs and effects and do strive to be effective and not waste resources, especially in hospital settings where effective resources management is a must.

Now mental health does not have the reliability of outcomes of anti-biotics but still.

Frances - But what evidence do you have that "evidence-based" healthcare is superior?

First of all, one thing should be clear: As long as health care has been a science, it has been evidence-based in the literal sense of the term. So if this is what you mean by "evidence-based" is better, then not only do I agree, but so does every human being on earth.

Unfortunately, that's not exactly the issue here. In this case, we are talking about "Evidence Based" healthcare, i.e. using models endorsed by people who run "Comparative Effectiveness" research groups to steer public healthcare policy. Now, if this second thing is what you mean by "evidence-based" being better, then we really do have a disagreement.

I can offer my personal medical charts as evidence against "evidence-based" healthcare. It sounds good, but there is major industry insider subtext involved here, and it's really not a question of who is using scientific research to validate healthcare policy and who isn't. Everyone is using scientific evidence. The real question is who is using bad models to steer public policy. This last question is the one I have been tackling in my comments, and it's not at all clear that the parties involved are truly objective or have the most robust "evidence" on their side.

"Actually, because most physicians are self-employed, they are able to enjoy many of the tax advantages of the corporate structure, including the ability to shelter investment income in the business (like a limitless RRSP). So, yes, those high personal incomes are - to the extent that physicians incorporate - structured as corporate profits."

Agreed, often medical professionals establish a professional corporation to run the medical services side of the practice and a regular corporation to run the "business" side of the practice(i.e., to hire the receptionist, to own/lease the office space, etc., as a way of engaging in income splitting (i.e., spouses can't hold shares of the professional corporation, but they can hold shares in the other corporation, providing an incentive to shift income to that corporation). There isn't really a way of engaging in a "limitless" RRSP, though. Although business income (i.e., income from the practice) will generally be taxed at a lower rate in the corporation than it would be in the doctor's hand (providing a deferral advantage to keeping the income in the corporation) any investment income is taxed in the corporation and, generally, at an effective rate at (or close to) the top marginal rate (some of that tax is refundable, but only when its distributed to the shareholder).

In any event, to Shangwen's point, the political invulnerability of doctors is probably less a function of their business organization, and more a function of the fact that people have a relatively intimate relationship with their doctor that they don't have, for example, with their banker. The political vulnerability of equally wealthy people in other industries is, I suspect, a function of the fact that Joe Q Public doesn't have the same relationship with bankers, CEOs, lawyers, etc.

Ryan: I have no idea what you are talking about. If you have an argument against current, real EB medicine efforts, please share them. But you can't just keep referencing anecdotes or pulling the "socialist tyranny" trigger.

As evidence of how desperate people clearly are with verucca vulgaris, and of what would not pass muster as scientific, I offer the following:

Published, controlled studies of the use of hypnosis to cure warts are confined to using direct suggestion in hypnosis (DSIH), with cure rates of 27% to 55%. Prepubertal children respond to DSIH almost without exception, but adults often do not. Clinically, many adults who fail to respond to DSIH will heal with individual hypnoanalytic techniques that cannot be tested against controls. By using hypnoanalysis on those who failed to respond to DSIH, 33 of 41 (80%) consecutive patients were cured, two were lost to follow-up, and six did not respond to treatment. Self-hypnosis was not used. Several illustrative cases are presented.

Shangwen - thanks for that example.

Ryan - "Everyone is using scientific evidence". Take a look at the various studies I've quoted. If you add up all of the studies on the effectiveness of duct tape v. other therapies, the total number of patients treated is, at most, in the hundreds. The same two or three studies get cited over and over again. That, to my mind, is not decisive scientific evidence.

@Phil: "If people bore the marginal cost of their own health care, most patients would try duct tape first before spending $300 on cryotherapy."

People would behave differently for sure (even setting aside the issue of how prices form). The concerns are always these: What is the $300 cryotherapy is a whole lot better? What if it's snake oil? What if nothing works?

There is extensive empirical evidence that individual cost-bearing in health are has very unreliable effects. Some people--those who are relatively healthy and educated--can make relatively good adjustments to planned consumption, and avail themselves of information helpful for making such decisions. Most people cannot. They will put off or reduce consumption without reference to expected benefits, increased risk, or estimates of future health care consumption.

I am always loathe to make yet another "health care is special" argument, but bearing marginal costs does not always lead to increased health, rational decisions, or more efficient use of the health care system.

Ryan, I like CER. Problems appear to be some treatments stimulate cost-savings (if the technology is Moore's Law-ish deflating, would want to over-prescribe the expensive lung-cancer BBQ lighter sized sensor device to get a future cheap chewing gum sensor. And some people are worth more; of course are ethical arguments here: tough to measure who is being utilitarian with what they got.
I rail against Harper and AB because I genuinely gave up their good dreams, house career family, to make the world better. I'd like to design a computer program or tissues that can be used to safely speed up FDA and Health Canada approval. But I'm stuck studying peat moss and metal tri-layer utility-sized battery prototypes, and wind-turbines, and CNT powerlines. They could use their natural gas to CVD some green power grids if not such morons with money.
For future pandemics, we need outpatient (or whatever residential care is called) services as well as more local clinics instead of hospital ERs; need maybe a teleconference triage before admitting. Then a communicable disease ambulance? CPC killed the UN's (or someone's) request to research salt. Why?! I can eat healthy and cheap using tomatoes and beans but is high in salt. Eliminating most mental illness prevents pandemics. I'd like to know (in non-distress circumstance)which leaders are tired, as well as which surgeons. Probably we really should consider aborting some mental illnesses in a world of WMDs. The USA's cost-minimization imparative imparts costs to prisons, etc.

Emerging from my annual-pilgrimage-to-an-awesome-aviation-museum-preparation bunker to make a not-completely-pedantic point. In as much as it works, that is not much, you must use duck tape not duct tape, an entirely different product...Which shows how easily we can try inefficient treatments.

Jacques Rene - "In as much as it works, that is not much, you must use duck tape not duct tape" Why do you say that? Almost all of the clinical trials that I could find used duct tape.

Frances & Shangwen - I repeat, the "correct answer" is the one the patient prefers, not the one that endorses a model. That's how market preferences work. In the case of CER and "evidence-based" malarky, we have models telling doctors and patients what they "should" prefer and statisticians scratching their heads as to why people don't prefer those things. It's silly.

Ryan - if you take the time to read some of the work of leading health economists, you'll find that many advocate providing information to patients about the advantages and disadvantages of various treatments, and letting the patient decide.

But patients can't make informed choices if they are not provided with information on the effectiveness, costs (scarring, pain, monetary costs) of various treatments. In the case of warts, information about the comparative effectiveness and costs of alternative treatments is sadly lacking.

Frances: Yes but people write duct when they mean duck. Duck is a packing material that won't withstand heat. Of course, hardware store clerks will gauge if you are a plumber or a civilian and will give you what you need. But physicist in me is always slightly discomfited when people use the wrong terms. Like journalists writing kilowatt/hour instead of kilowatt-hour. Means they don't know what they're talking about. Got a tongue-lashing from a guy from a major daily last year when I pointed that out...

Shangwen: Of course I'm right! It's always the race between me and my good friend Determinant about who will bring up the obscure but essential facts. That's our role in this blog ecology.This blog is an infinite source of knowledge. Like PK for indie rock each Friday.
Back to the cave.

...when I google around about FDA testing, alot of the really cutting edge stuff, the early Phase FDA Trails for gene therapy and stuff, they are all having trouble with funding 2006-2011. Most trials were stopped.
It would be better if we had a carbon tax or FTT or some GST pts, to pay for human volunteers to be employees, and for these tests to continue. Before AB came to power, we were 3rd on Earth when it comes to biotech. The States had W, and UK had banksters, so we might've gained on them a bit but I doubt we are still 3rd, even though Harper has funded a brain diseases programme $150M. We could just tax banks and petro and make a whole bunch of research hospitals and researchers and volunteers. But I guess if god is giving us heaven it doesn't matter. Reading about the middle ages: I would've like the Catholic Church a millenium ago. Was pantheistic and clerics were down to Earth drunks like Friar Tuck.
I just think whether or not we make this world good, we will get an afterlife if there is a god. He doesn't need the chants and the RW retardism., I don't think.

I'm not really too sure where to discuss health economics. Certainly primitive on USA blogs. Here, we are fighting the future: http://gigaom.com/cleantech/khosla-joins-bill-gates-total-to-back-liquid-metal-battery/
Total isn't cdn nor enjoys our low corporate taxes. Here, and for all eternity it seems, we get finance and petro. The FDA is sending mixed signals on regulating a personalized genome anaylsis. Maybe even if our governments are captured petro, and even some of our profs are deniers, our Crowns can still provide the USA some guidance? Sequencing a personalized genome is too expensive to cover now, but if it were covered in some limited way, this would help costs rapidly come down. Our medical companies are too small to be helped by top-tier corporate tax cuts...I don't want tar and since Martin left office my personal career path has left me little use for banks, despite my metals heavy monopoly portfolio outperfoming. I want medical services universally available without WMDs. Without the tar the CPC might've had something to offer about limiting WMDs. How will the provinces that aren't AB pay for medicine?!

...for the USA circa 2010, their hospital GPOs (like wheat pools and co-ops) are funded by medical equipment manufacturers, says MDMA. This prevents cheap generic equipment from trying to prove its worth. Is a blatent conflict-of-interest. So, how do we manufacture more generic equipment to make up for their market failure? In general, = populations of people should pool resources. Idiot Texas and Idiot AB should be buying pills and gunshot bandaids and sunblock, together. Russia should pool with S.Africa.
All these Phase Trials could be data-mined to look for obscure correlations and the cost of more Trials could be presented as a political platform. What we need to do in value our citizens and our species high. Higher than bank and tar profits. Can I immigrate to EU with a forklift license? My mind is mocking me for paying attention to this rednecked nation.

...boy 5 other cdn econo-blogs I've tried are dead and no political blogs about health recently. I guess the MSM is good:

I think I figured out a healthcare wait time compromise that would appeal to 1960s SK and pre 1957 AB (who are just wasting their $$ wanting to be a have-not province unlike Norway, soon enough:

The problem is to cost wait times. This is why A.Coyne wrote about road tolls recently. He has in the past said a person is defined by their car and he does not want his life to be in a rut...
You make sure the private clinics give out crappier healthcare than the public ones!!
If it is gross, cataracts surgery (a field that quickly got revolutionized) in MB costed $175 and $25 in ND; probably thwe AB model of sending people to USA is efficient. Though with travel costs and insurance I dunno...
But in general, I don't know if you use crappier immigrant doctors, or crappier via performance stats staff, or cheaper facilities, or non-cdn University staff, or cdn University staff that have to pay USA rates of tuition first....if the priovate clinics are crappier than the public ones, you can choose to reduce wait time at the expense of quality!
Reading a contrast between UK USA and Cdn healthcare before fleshing this out further. But I think it is the solution.

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