Friday, February 11, 2005

The Future of Medical Economics

Yesterday, while looking for something unrelated, I came across an article that discussed a genetic test that could predict the occurrence of Stevens-Johnson syndrome (SJS) in persons being treated with a prescription drug, carbamazepine (Tegretol).  This is not a subject of general interest, really, since carbamazepine (CBZ) is being used less often now, and the condition occurs only 8 times in 1,000,000 patient-years of exposure. 

It got me to think about the economics of the testing.  Genetic testing tends to be very expensive.  I wondered if it ever would be feasible to do such testing routinely, before starting treatment with a medication.  How much would it cost to prevent one case of Stevens-Johnson syndrome?   What is interesting here is not so much the specific case of CBZ and the risk of SJS.  Rather, what if we someday have a panel of genetic tests that could be used to predict both positive and negative responses to medications in individual patients?  That would be great, but it would cost an awful lot.  This kind of thing is one of the reasons that the cost of medical care keeps going up, and obviously, we have to draw the line somewhere.   And why is it that these things always seem to drive costs up?  In the computer industry, innovations always seem to drive costs down.  Why can't that happen in medicine? 

Actually, it does happen.  It happens a lot.  It's just that the moment you free up some money by cutting costs somewhere, a new demand eats up all you just saved, and more.  For example, the cost of treating psychosis has been reduced greatly through the development of atypical antipsychotic medications.  Many persons who used to have no hope of living outside of a hospital now are able to live in the community.  Some of them have fairly normal lives.  In fact, it is possible that you have spoke with some of them today, without realizing it.  These drugs are expensive, typically costing several hundred dollars per month.  Compare that to several hundred dollars per day for a hospital, and it's obvious that the savings are considerable. 

Back to the comparison with the computer industry.  In the 80's, the purchase of a computer was a major capital investment.  Now, a computer is a commodity, not unlike a television set.   That happens with prescription drugs, too.  Today's multibillion dollar blockbuster is tomorrow's aspirin.  In the computer industry, there is a lingering question: will it ever happen, that computing power is so cheap, that there will be no point in developing a new personal computer that is faster than last year's model?  If so, a lot of people at Intel will be looking for work.  And consumers won't be buying computers at CompUSA.  They'll pick them up at K-Mart or Meijer, at least here in Michigan.  Other places have their own megastore chains.

"Honey, could you get a loaf of bread and some tofu on the way home? And while you're there, how 'bout getting one of those 10 gigahertz, quad-CPU computers, with 16 gigabytes of RAM?  They're on sale today, and Betty has to edit some digital video for school tomorrow."

This raises an interesting, unanswerable question: will there ever come a time when the vast majority of medical practice can be conducted without resorting to a branded medication? 

In psychiatry, it does seem feasible.  I don't think it is likely that we will get to the point that we will use no branded products, but I easily could imagine a day in which 90% of the prescriptions are for generic products.  Similar situations could arise in other specialties, such as gastroenterology, or even cardiology.  It probably will not happen for infectious disease or oncology, at least in this millennium.  Still, it is entirely possible that we may see a day when the annual cost of prescription medication starts going down, at least on a per capita basis. 

Will that lower the cost of medical care overall.  No.  We'll just spend the money on other things, like heart-lung transplants. 

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Tuesday, February 08, 2005

CSM Commentary on Climate Change;
Corpus Callosum Clarifies

Finally, the Truth About Global Warming

The Christian Science Monitor sometimes has stories that are written like good, well-researched blog entries, complete with hyperlinks.  Today they have one about climate change.  The author does not really seem to advocate any particular position; rather, he collects bits of information from a variety of sources and puts them together.  That particular style of writing is effective.  I found the article to be rather disturbing, because it is convincing without coming across as preachy or argumentative.  For example:
Global warming: a threat to world security?
posted February 8, 2005, updated 12:00 p.m.
| csmonitor.com

Last week in England, a group of top scientists, experts and government officials gathered at the behest of Prime Minister Tony Blair to discuss global warming, and the news they heard there was not optimistic. [...]

In early January, Dr. Rajendra Pachauri, the chairman of the official Intergovernmental Panel on Climate Change (IPCC), told an international conference of 114 nations gathered in Mauritius that the world has "already reached [a] level of dangerous concentrations of carbon dioxide in the atmosphere" and called for immediate and "very deep" cuts in the pollution if humanity is to "survive".

The statement was interesting because Dr. Pachauri was put in place in 2001 at the behest of the Bush administration. Oil giant Exxon had asked the Bush administration to replace his predecessor because he was too "aggressive" on the issue.

The blog Daily Kos reported two weeks ago that Pachauri's recent comments were very much a "blow" to the US position, especially since they saw him as a supporter of their "go slow" approach to battling global warming. [...]

Their main point was to show how climate change can become a national security issue.  This is somewhat analogous to my earlier point about how public health can become a national security issue.  In the case of climate change, the problem will stem from mass relocations of people, combined with a rapid decline of available resources. 
Former UN chief Boutros Boutros-Ghali has long said that the next Middle East war will be fought for water, not oil.
Now, I don't consider myself to be an expert on the subject.  I know enough about science in general, though, to be able to tell that the climate change issue is complex, difficult to understand, and easy to misunderstand.  Most pundits appear to take the easy route, and think of it as a single-issue topic.  It is not.  There are at least five questions; they are related, but distinct.  One: Is the Earth warming? Two: Is the warming caused by human activity? Three: If the Earth is warming, will the trend continue?  Four: If the Earth is warming and the trend continues, how serious will the effects be?  Five: Can we alter the course of climate change by altering human activity? 

There is ample evidence to answer the first question.  The Earth is getting warmer.  Science Magazine published an essay, in December 2004, entitled The Scientific Consensus on Climate Change
The Scientific Consensus on Climate Change
Naomi Oreskes

Policy-makers and the media, particularly in the United States, frequently assert that climate science is highly uncertain. Some have used this as an argument against adopting strong measures to reduce greenhouse gas emissions. For example, while discussing a major U.S. Environmental Protection Agency report on the risks of climate change, then-EPA administrator Christine Whitman argued, "As [the report] went through review, there was less consensus on the science and conclusions on climate change" (1). Some corporations whose revenues might be adversely affected by controls on carbon dioxide emissions have also alleged major uncertainties in the science (2). Such statements suggest that there might be substantive disagreement in the scientific community about the reality of anthropogenic climate change. This is not the case.

[...] That hypothesis was tested by analyzing 928 abstracts, published in refereed scientific journals between 1993 and 2003, and listed in the ISI database with the keywords "climate change" (9).

The 928 papers were divided into six categories: explicit endorsement of the consensus position, evaluation of impacts, mitigation proposals, methods, paleoclimate analysis, and rejection of the consensus position. Of all the papers, 75% fell into the first three categories, either explicitly or implicitly accepting the consensus view; 25% dealt with methods or paleoclimate, taking no position on current anthropogenic climate change. Remarkably, none of the papers disagreed with the consensus position.
From a "backgrounder" published by The Economist:
Global warming
Feb 8th 2005
From Economist.com

Global temperatures and sea levels seem to be rising, but whether this is mankind's or nature's fault is unclear. Environmentalists point to a build-up of greenhouse gases caused by the burning of fossil fuels, deforestation, dairy farming and other human activities. Whatever the causes, the effects are felt most keenly at the Arctic pole. [...]
Questions Two and Three are more difficult, because the answers are based upon interpretations of a vast quantity of data from a variety of scientific disciplines.   Based upon a cursory, nonexpert review of the reports, I tend to think the answer to the second and third questions is: yes.  The fourth and fifth ones, of course, are the really interesting ones, and are inherently more difficult to answer.  As to the severity, it could range from a serious problem to a catastrophic problem.  From the CSM article:
Also last week, another group of scientists from the British Antarctic Survey (BAS) reported that "a massive Antarctic ice sheet previously assumed to be stable may be starting to disintegrate ..." Such an event could "raise sea levels around the world by more than 16 feet."
That would make the recent tsunami look like a glass of spilt milk. 

Given the findings from the UK meeting (the one Tony Blair called for) and the results of the world's largest environmental modeling study (published in Nature;  720KB PDF of report here), we can see that a range of outcomes is possible.  From a summary of the report:
The figure shows the change in globally averaged surface temperature with time after carbon dioxide values in the atmosphere are doubled. The black lines show the 15 years of phase 3 from 2579 climateprediction.net runs, and the red lines show comparable results from 127 30-year simulations completed by the Hadley Centre on the Met Office's supercomputer.

The illustration is rather small, as presented here; click on it to go to the original.  At first glance, the illustration seems uninformative.  It shows a huge range of possible outcomes.  Each line represents the impact of carbon dioxide accumulation on mean global temperature in one particular scenario.  Since there are so many variables, they had to run the simulation thousands of times.  Reading the original report in Nature doesn't clarify much.  It is written in such a technical manner that only a specialist could have any hope of deciphering it.  That being the case, I could see how someone might glance at the scientific reports pertaining to climate change, and jump to the conclusion that there is too much uncertainty for us to draw any meaningful conclusions. 

So what is the curious nonspecialist to do?  We have data that show a wide range of possible outcomes, varying from awful to really catastrophic.  We have a pile of data that is too complicated for most people to understand, and we have experts who are speaking out on both sides of the issue.  Some feel there isn't much to be alarmed about; others genuinely are worried. 

Generally, when there is a complex issue of great public importance, we turn to the experts to tell us what to think.  But if the experts disagree, then what?  First, try to find out what is causing the disagreement. 

It turns out that much of the disagreement comes from a surprising source: economics.  You see, the predictions of the impact of CO2 are based upon predictions of CO2 output, which, in turn, are based upon predictions of economic growth.  If the economists cannot agree on how much economic growth there will be, it is impossible to form a full consensus on the probable impact of climate change.  This is discussed in the February 4, 2005 issue of The Economist
One chief sin is the reliance by IPCC modellers on market-based exchange rates instead of purchasing-power parity, which adjust wealth according to domestic purchasing power—which many economists believe is more accurate. That, says David Henderson, an economist at London’s Westminster Business School, leads to unrealistic projections for economic growth and therefore emissions growth.
Personally, I don't find that to be very reassuring.  What it tells us is that there is disagreement over the future rate of global warming.  So, maybe it will take ten years, maybe twenty, possibly thirty, before serious consequences begin.  A lack of consensus on that point does not change the basic argument: climate change is likely to occur, and when it does, it will be bad. 

Much of the rancor over the climate change issue has to do with economics.  Specifically, would it be worth the investment now, to try to curb CO2 emissions?  The Economistmight be thought of as an authoritative source of information of that issue.  To them, the time frame makes a very big difference.  Obviously, if you invest X dollars now, to get Y payoff in Z years, the value of the investment is going to be related inversely to the size of Z.  The smaller Z is, the better the investment. 

If you are interested enough to have read this far, you may recall that I started out be talking about a different aspect of climate change: it is a matter, not just of economics, but of national security.  That, it would seem, puts things in a different light.  Although economists will disagree about the specifics of various models, at least they all agree on one thing: if the investment gives a good enough return, then it is a good investment.  Matters of national security are not so simple.  Once you introduce that question, things really get murky. 

Some people, apparently, think that a hint of possible "weapons of mass destruction related program activities" justifies spending $200+ billion dollars, and loosing 1,300+ lives.  Yet those same people do not think that a wealth of hard data -- about something as unglamorous as carbon dioxide -- justifies spending much of anything. 

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Sunday, February 06, 2005

New Budget Numbers

National Security Takes Big Hit, and
What We Can Do About It

The New York Times reports todayon some details of the budget that is being proposed for the country in 2005.  The budget calls for a 4.8% increase in military spending, not including the five billion dollars per month for military operations in Iraq and Afghanistan.  However, it also includes a cut of 9% for the Centers for Disease Control and Prevention. 

I know I've harped on this string before, but it is an important point, and it also helps to have actual numbers to illustrate a point. 

The point is this: the war in Iraq has not saved any American lives; in fact, it has led to at least 1300 deaths and about seven times that number in serious somatic injuries.  No one knows the actual number of psychological injuries, but the New England Journal of Medicine has published three articles on the subject; the first two listed are available on an open-access basis. (1  2  3)  The third will be openly available six months after publication, which will be in late April 2005.

The second article informs us that the incidence of clinical depression, post-traumatic stress disorder, and generalized anxiety, is about 16% for Iraq veterans, and 11% for veterans returning from Afghanistan.  Most of those are cases of PTSD.

There is no evidence that the war in Iraq has saved any American lives.  If you define a threat to security as a threat to life, limb, or mental health, then it is clear that the Iraq war has not improved security at all, at least in the short run.  Admittedly, we cannot know today what the long-run effects of the war will be.  Indeed, there probably never will be any way to know whether the war made us safer in the long run.  May have argued that it has not. A Google search on the string, 'has Iraq war made us safer' yields about 632,000 results.  I haven't read them all, but here are some excerpts:
Has the War Made Us Safer?
By Christopher Dickey and John Barry
Newsweek 4/12/2004

Controversial former counterterrorism coordinator Richard Clarke likens the aftermath of the Afghan war to "smashing a pod of seeds that spread round the world," allowing bin Laden and his deputies "to step back out of the picture and have the regional organizations they created take their generation-long struggle to the next level." The Iraq war, Clarke insists, was an enormous distraction and a drain on resources. Worse, "we delivered to Al Qaeda the greatest recruitment propaganda imaginable," Clarke writes.
Bush's Lost Year
By James Fallows
Atlantic Monthly Oct 2004

"Are we better off in basic security than before we invaded Iraq?" asks Jeffrey Record, a professor of strategy at the Air War College and the author of the recent Dark Victory, a book about the Iraq War. "The answer is no. An unnecessary war has consumed American Army and other ground resources, to the point where we have nothing left in the cupboard for another contingency-for instance, should the North Koreans decide that with the Americans completely absorbed in Iraq, now is the time to do something." [...]

"Let me tell you my gut feeling," a senior figure at a military-sponsored think tank told me recently. "In my view we are much, much worse off now than when we went into Iraq. That is not a partisan position. I voted for these guys."
Of course, there are some persons who have argued that the Iraq was has made us safer, but they don't seem to have much to offer in the way of evidence, or even an organized, logical line of reasoning. 

So, we have evidence that the war has not made us safer (dead soldiers being the evidence); but no way to know what would have happened if the war had not taken place.  We have essays written by experts, who argue that the war has not made us safer.  On the other hand, there are a few people who say the war has made us safer, but the only evidence they have is to say "It's true because it seems true to me." 

Furthermore, we now have evidence that the Administration is proposing budget cuts for health care programs, cuts made necessary, in part, by the cost of the war in Iraq.  There are plenty of studies that show how spending for health care programs can save lives.  (Try Google 'investment public health save lives'.)  The cutting of public health programs probably will lead to deaths that could have been prevented.  This is another way to demonstrate that the war actually has created a danger for Americans. 

The budget proposal shows just how much our national security has suffered, if we have to cut the budget of the CDC in order to pay for a war.

One might argue: "So what? The fact is, we are in Iraq now, we've made a mess, and now we have to clean it up.  That being the case, there is no way to avoid all that spending."

Fair enough, but that does not mean there is nothing we can do.  First, get out of Iraq as quickly as possible.  Force the contractors to accept the same magnitude of budget cuts that the American people have to accept.  After all, if the war is less profitable, it just might go away quicker.  Second, ban US oil companies from signing contracts for Iraq's oil.  We've said all along that we were not going into Iraq for the oil, so lets prove it.  American oil companies are making record profits right now, so it's not like they're going to suffer.  Third, make the health-related budget cuts temporary.  Force congress to renew the cuts every year.  No free rides on this one.  There are congressional elections coming up next year, so make them get up in front of the country and justify these cuts year after year.  Don't just sweep it under the carpet and let everyone forget about it. 

The final recommendation: when it comes to homeland security, we may as well accept the fact that we cannot necessarily prevent every terrorist attack.  That bing the case, what we need to do is restructure our economy so that any subsequent attack will have less impact.  That means decentralizing the government and the financial centers, diversifying energy sources, and diversifying the food supply. 

Right now, we are terribly dependent upon foreign oil.  Drilling in ANWR is not the answer; it is at best a short-term solution.  The answer is to develop solar, wind, hydrogen, biodiesel, gasohol,  and geothermal energy sources.  Have people put up their own solar panels and windmills, to supplement the energy grid.  A distributed energy system is less vulnerable to point attacks.  But don't move all our manufacturing off the continent.  That makes us too vulnerable.  Encourage people, gradually, to eat less beef, more vegetables.  That will lessen our exposure to disruption of the food supply.  None of these things will lessen the risk of an attack, directly, but they could dissuade some attackers, if it appears that whatever attack they are contemplating will not be devastating to us. 

So there are things we can do, to make ourselves safer, there are things we can do to get our budget back on track, and there are things we can do to hold politicians more accountable.  What we cannot do, though, is find a way to justify the war in Iraq. 

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