Worthwhile Canadian Initiative

Harmless remedy or dangerous pharmaceutical?

In Canada, melatonin is deemed to be a "nutritional supplement." It's sold in most pharmacies and health food stores as a natural and healthy way of overcoming jetlag or ensuring a good night's sleep.

In the UK, melatonin is a harder to come by. In 1995, its designation was changed from nutritional supplement to "medicinal product", which meant that it could no longer be sold alongside vitamins in the health food store. Yet - in a classic Catch-22 -  because melatonin was not licensed to be sold as a medicine, was hard to obtain on a prescription basis also (this article describes the late 1990s through to late 2000s system).

Chalk Up Another for the Economics of Google Searches

The Google search engine continues to demonstrate its use as a tool for predicting human behaviour and activity based on the frequency of topics searched by its users.  Google data has been used to track flu activity and even fertility behaviour.  A Banca D’Italia November 2012 working paper by Francesco D’Amuri and Juri Marcucci is the latest installment on using the predictive power of Google searches and applies it to forecast US unemployment.  As the authors note, such an approach has already been examined for unemployment in Germany, Italy and Israel.

Who is the caregiver?

In the picture on the right, who is the caregiver, the man or the woman?

(To find out the answer, click "Continue reading...").

Value for Money in Health

The Conference Board is having a Summit on Sustainable Health and Health Care October 30^th and 31^st in Toronto featuring a plethora of media, industry, health service and academic experts who will focus on the need to refocus the health system “from treating acute illness to preventing and managing chronic disease so governments, healthcare leaders and businesses need to combine forces to help all Canadians lead healthier lives.”  They will discuss the transformation of health care, inequalities in health care, workplace wellness initiatives, health management, intelligent funding, end of life decisions and health and the social media revolution.  It all sounds like a really swell time.  There will probably even be a couple of nice meals and lots of social networking. Here what they should also be discussing – where is the value for money in Canada’s health care system? 

What Does Health Spending Buy You?

Last WCI post, I used the OECD 2012 Health Data spending statistics to examine the growth of total health care spending.  The question I want to look at this time is what does increased spending yield a health care system in terms of the health care resources available?  While we are concerned with the cost and sustainability of a health care system, the fact is that in some sense you should also get what you pay for.  If you are spending more, over time is this associated with more doctors, nurses, equipment, etc…? Moreover, based on our international ranking in terms of health spending, how does Canada rank on these resources?

Health Spending Update: Into the 21st Century

The OECD released its Health Data 2012 statistics several months ago and they are certainly worth a glance given that rising health spending is still a big international policy issue, and the capacity to pay has taken a recessionary hit during the first decade of the 21^st century.

Why Medicare Vouchers Are Inefficient

The little-known microeconomics textbook Zowning and Bupan does an excellent job of presenting the case against medicare vouchers:

Game of Premiers: The Premiers, Health & Public Policy

Well, Canada’s premiers and territorial leaders are gathering in Halifax this week engaged in their version of the Game of Thrones with hurt feelings and fiscal uncertainty rather than beheadings, swordplay and pillaging the most likely dire consequences. Among the issues planned for discussion are energy and health care. Not on the official agenda will be the fact that a number of provincial elections loom. Health care is expected to be at the front of the agenda at the summit in Halifax this week but it may surprise even the premiers to learn that after adjusting for inflation and population, growth rates of real per capita public health spending in Canada have recently declined. Data from the Canadian Institute for Health Information shows over the period 2000 to 2011, real per capita public health spending grew at an average annual rate of 2.8 percent. However, recent annual growth rates have declined – from 3.6 percent in 2008, to 2.3 percent on 2009, and to estimates of 1.9 and – 0.7 percent in 2010 and 2011 respectively.

Modern medicine, warts and all

Warts epitomize the dilemmas of modern medicine. They are pervasive - Verruca Vulgaris is called "the common wart" for a reason. They're not life threatening, but they diminish life quality. They can be treated with the latest high tech laser weaponry - or left to their own devices, as warts not infrequently go away without treatment.  

Conditions such as warts - and depression, irritable bowel syndrome, obesity, and the common cold - are tests for our health care system. Effective treatment improves people's quality of life, while ineffective treatment is a waste of scarce resources.

Is the Health Care Cost Curve In Canada Finally Bending?

While public health care spending in Canada has been growing, what has not received a lot of attention is that after adjusting for inflation and population, growth rates of real per capita public health spending in Canada have actually been declining.

Meetings with Meaning

As we all head into academic conference season, here is some food for thought with a guest post by Steve Morgan. Enjoy. Livio.

Drugs heal, drugs hurt.

There are those who use drugs, and there are those who could, potentially, benefit from drugs. The two groups do not always coincide:

Ontario and its Physicians: Richer Than They Think No Longer

Ontario’s health minister Deb Matthews is moving into a major battle with the physicians in the process of trying to get health care costs under control as part of the provincial deficit fighting agenda.  Deb Matthews has on a number of occasions remarked that Ontario’s physicians are the best paid in the country.

Is a Constitutional Challenge Public Health Care's Next Arena?

Many Canadians believe that the Canada Health Act is the bulwark that is supposed to be protecting public health care and that it should ensure comparable levels of coverage across the country.  Yet, if one examines per capita provincial government health spending, the evidence shows that there are major differences.

Dealing with the Baby Boom: You Only Die Once

It has been a week of immersion in health economics for me.  Last Friday, we had Herb Emery from Calgary visiting Lakehead and he gave a seminar presentation on generational balance and public health care spending in Canada.  I also just got back from a workshop on health expenditure forecasting and along with last Friday’s speaker’s presentation it has certainly provided me with much food for thought. There were a number of issues that came up at the health expenditure workshop I attended but the most intriguing ones dealt with the effect of an aging population on health spending. 

Stein’s Law and Canadian Health Spending

Health economist Uwe Reinhardt in a recent Economix Blog posting noted the recent rates of U.S. health spending growth for 2009 and 2010 reported by the Centers for Medicare and Medicaid Services were marked as the lowest rate in the 51-year history of the National Health Expenditure Accounts.  Indeed, the growth rate for 2009 was 3.9 percent.  Reinhardt examines the question if this development is evidence that we have finally “broken the back of the health care inflation monster.” 

The cruel consequences of moral hazard in health care

Our health care system devotes too many resources to prolonging life, and too few to improving its quality.

A case described by Lisa Sanders vividly illustrates what I have in mind:

A couple of years earlier she started “walking like a drunk,” [the patient] told the slender, middle-aged doctor. Her legs were weak and her feet were numb. The only feeling she had in them was a pins-and-needles sensation, as if her feet had gone to sleep and never woke up. A few months ago she started falling. She broke her ankle in a particularly bad fall; the ankle got better, but she didn’t. Now she was in a wheelchair.

Her internists referred her to a neurologist, who sent her to the hospital for an M.R.I. After the test she was so weak that the doctors were reluctant to send her home, and she was admitted to the hospital. And here she was, hoping for an answer.

After tests and more tests, one observant doctor hit upon the right diagnosis: the patient's dentures didn't fit properly. To keep the dentures in place, she had been using a tube of denture adhesive a day. But her brand contained zinc, which led to zinc poisoning, nerve damage, and a host of other medical problems.

Pigou and Paternalism

Here is a question from the final exam for my public finance course:

A typical person’s demand for potato chips is given by p=5-q where q=the number of packages of chips purchased, and p is the price of chips in dollars per package. The marginal cost of producing potato chips is $1 per package. The potato chip market is competitive, so p=MC. Dr. Economides estimates that each package of potato chips consumed creates marginal damage of $0.50. 

1. Illustrate these facts with a diagram.
2. Define the phrase “Pigouvian tax”
3. Show how a Pigouvian tax could be used in this example to improve efficiency.
4. Calculate the revenue raised by the Pigouvian tax. Show on your diagram, and calculate, the efficiency gain created by the tax.
5. Opponents of the tax on potato chips take a careful look at Dr. Economides’ study. It turns out that the only people harmed by potato chip consumption are potato chip eaters themselves, as potato chip consumption is associated with bad skin, weight gain and depression. Does this strengthen or weaken the argument for taxing potato chips?

Solutions to parts 1 to 4 are here. The interesting part is question 5: if potato chips only harm potato chips eaters, does that strengthen or weaken the case for taxation? Vote here to express your opinion (only the first 200 answers will be counted).

Could periodontal competition make root canals more expensive?

On the right, the evil representative of the dental industry, seeking to maintain dentists' monopoly on the provision of all dental services. On the left, the noble entrepreneur, who only wishes to make the world a brighter place by providing safe, affordable teeth-whitening services. 

This image is taken from a video created by the libertarian public interest law firm the Institute for Justice, which is backing a lawsuit challenging dental monopolies. As I put it in today's Economy Lab post:

What is actuarially fair insurance?

Actuarially fair insurance has an expected net pay-off of zero. From a consumer's point of view, an insurance contract is actuarially fair if the premiums paid are equal to the expected value of the compensation received. This expected value is, in turn, defined as the probability of the insured-against event occurring multiplied by the compensation received in the event of a loss.