“A Payment System that Rewards Everybody for Staying Busy”

 

  Source of map:  online version of the NYT article cited below. 

 

(p. H6) WHY does health care for the average Medicare patient cost nearly twice as much a year in New Jersey, at $8,076, as it does in Hawaii, at $4,529?

The differences are one example of perplexing geographic variations in medical expenses and quality. And in a study that has important implications for the nation’s $2 trillion health care tab, researchers have found that more intensive and expensive care does not necessarily mean better outcomes. In fact, the opposite may be true.

The Dartmouth Atlas of Health Care, a research group that studies variations and costs in medical care, sums it up like this: Geography is destiny. It means that your chances of undergoing certain surgical procedures, visiting the doctor often or even dying in a hospital or at home are related to where you live.

For example, Medicare patients living in Rhode Island undergo knee replacements at a rate of 5 in 1,000 people. In Nebraska, the number rises to 10 in 1,000. Female Medicare enrollees who receive a diagnosis of breast cancer have nearly seven times the chance of having a mastectomy in South Dakota, where the rate is 2 in 1,000, as they do in Vermont, where the rate is .3 in 1,000.

. . .

In communities with surplus hospital beds, research shows, patients do not necessarily get more elective surgery, but they have more hospital stays, more frequent doctor’s visits and are more likely to be referred to specialists.

Dr. Elliott S. Fisher, who studies health care economics and is a member of the Dartmouth research group, said that part of the problem was the way doctors and hospitals were paid.

“In a payment system that rewards everybody for staying busy, every bit of capacity you have, whether it’s the number of specialists or the number of intensive care beds or the M.R.I. scanner, has to stay fully occupied because they bought them already and they have to keep paying for them,” Dr. Fisher said in a telephone interview.

. . .

Paradoxically, the Dartmouth research, which confirms some similar studies, shows that patients in high-cost areas are not necessarily getting better care. Dr. Fisher said that he and his colleagues found higher mortality rates in higher-spending regions.

. . .

Extra care without better outcomes translates into waste in the health care system. Some experts say that waste accounts for as much as if not more than 30 percent of the national spending on health care. Such spending now totals 16 percent of the gross domestic product.  

 

For full story, see: 

STEPHANIE SAUL.  "TREATMENTS; Need a Knee Replaced? Check Your ZIP Code."  The New York Times  (Mon., June 11, 2007):  H6.

(Note:  ellipses added.)

 

     Source of map:  online version of the NYT article cited above.

 

An Innovative Way to Reduce Global Warming, If We Need One

 

(p. B1) What if we wait too long to act on global warming? What if nothing we do is enough? Already, scientists are working up plans of last resort: stratospheric sprays of sulfur, trillions of orbiting mirrors and thousands of huge off-shore saltwater fountains.

Each is designed to counteract global warming by deliberately deflecting sunlight, rather than by retooling the world’s economy to eliminate carbon-rich oil, coal and natural gas.

Some scientists argue that such actions might be easier and relatively cheaper. Until recently though, whenever University of Maryland economist Thomas Schelling, recipient of a 2005 Nobel Prize, raised such geo-engineering ideas, "half the audience thought I was crazy and the other half thought I was dangerous," he said. As global temperatures rise and greenhouse-gas emissions accelerate, however, even wild ideas are becoming respectable.

. . .

Earlier this month, researchers at the Carnegie Institution of Washington, D.C., released the most precise computer studies yet evaluating the controversial sunshade idea. Their findings, reported in the journal Proceedings of the National Academy of Sciences, revealed that a last-ditch engineering effort to block sunlight could reverse global warming — at least temporarily. Indeed, it could lower average temperatures to levels not seen since 1900. "Every study we do seems to indicate it would work," said Carnegie climate modeler Ken Caldeira.

. . .

For Nobel laureate Schelling, the political advantages of geo-engineering outweigh its technical risks. It may be easier to launch a climate-control project than to persuade people all over the world to stop using fossil fuels. "It drastically converts the whole subject of climate change from one of regulation involving six billion people to a simple matter of a budgetary agreement about how to manage the modest cost," Prof. Schelling said. "I think geo-engineering is going to be the deus ex machina that will save the day."

 

For the full story, see: 

ROBERT LEE HOTZ.  "SCIENCE JOURNAL; In Case We Can’t Give Up the Cars — Try 16 Trillion Mirrors."  The Wall Street Journal   (Fri., June 22, 2007):  B1.

(Note:  ellipses added.)

 

“We’re Not Looking to Achieve Incremental Advances”

 

LevinsonArthurGenentechCEO.jpg   Genentech CEO Dr. Arthur D. Levinson.  Source of image:  online version of the WSJ article cited below.

 

(p. B1)  WSJ: You have multiple blockbuster biotech drugs on the market and more on the way. In such an uncertain business, how do you manage scientists to achieve that kind of success?

Dr. Levinson: We are first and foremost committed to doing great science. If a drug can’t be the first in class or the best in class, we’re just not interested. We’re not looking to achieve incremental advances or extend patents or do X, Y, Z unless it is going to really matter for patients. That allows us to bring in phenomenal scientists and encourage them to do the basic and translational research.

We decided 15 years ago that we would be committing (p. B2) to oncology, which at the time for us was new. We are now the leading producer of anticancer drugs in the United States. We took a lot of risks. In many cases, those risks paid off. We are now also in immunology. Again, the role of management here is to set the broad direction and then hire absolutely the best scientists and bring them in and say, ‘Do your stuff.’

 

For the full interview, see:

MARILYN CHASE. The Wall Street Journal "How Genentech Wins At Blockbuster Drugs CEO to Critics of Prices: ‘Give Me a Break’."   The Wall Street Journal  (Tues., June 5, 2007):  B1 & B2.

 

 GenentechStockPrices.gif   Source of graph:  online version of the WSJ article cited above.

 

A Competent, Caring, Ultimate Authority Needed for Open Source to Work: Linux and Wikipedia

 

The excerpt below is from a WSJ summary of an article from the Summer issue of the journal Strategy + Business.

 

Linux’s success isn’t as egalitarian as it seems, says Mr. Carr. In 1997, Mr. Raymond praised Linux’s founder, Linus Torvalds, for realizing that "given enough eyeballs, all [software] bugs are shallow." However, Linux has always had a central authority — originally, Mr. Torvalds himself; later, a small group of engineers — that synthesized the work of the volunteers.

Similarly, the expansiveness of Wikipedia’s entries lies in its contributors’ wide range of interests. However, the encyclopedia is slowly putting together a management team to identify and improve poorly written articles and correct imbalances like the one where the "Flintstones" entry is twice as long as the one on "Homer."

 

For the full summary, see:

"Informed Reader; TECHNOLOGY; Small Teams Advance Open-Source Effort."  The Wall Street Journal  (Weds., June 6, 2007):  B5. 

 

Perverse Incentives in Medicine

 

   Source of graph:  online version of the NYT article quoted and cited below.

 

(p. A1)  Stark evidence that high medical payments do not necessarily buy high-quality patient care is presented in a hospital study set for release today.

In a Pennsylvania government survey of the state’s 60 hospitals that perform heart bypass surgery, the best-paid hospital received nearly $100,000, on average, for the operation while the least-paid got less than $20,000. At both, patients had comparable lengths of stay and death rates.

And among the 20 hospitals serving metropolitan Philadelphia, two of the highest paid actually had higher-than-expected death rates, the survey found.

Hospitals say there are numerous reasons for some of the high payments, including the fact that a single very expensive case can push up the averages.

Still, the Pennsylvania findings support a growing national consensus that as consumers, insurers and employers pay more for care, they are not necessarily getting better care. Expensive medicine may, in fact, be poor medicine.

“For most consumers, the fact that there is no connection between quality and cost is one of the dirty secrets of medicine,” said Peter V. Lee, the chief executive of the Pacific Business Group on Health, a California group of employers that provide health care coverage for workers.

. . .

(p. C4)  And the survey found that good care can go unrewarded. One Philadelphia area hospital, Main Line Health’s Lankenau center, which performs a large number of bypass surgeries and has a high success rate, according to the survey, was paid an average of $33,549 by private insurers. That was less than half the nearly $80,000 in average payments received by the other hospitals, with poorer track records.

. . .

“The current reimbursement paradigm is fundamentally broken,” said Dr. Ronald Paulus, an executive with Geisinger, who says there is no current financial incentive for a hospital to provide the kind of care that leads to better outcomes and lower payments.

. . .

The problem, according to some health policy experts, is that the hospitals may, in fact, be rewarded for poor care:  keeping patients too long because they caught an infrection or had a complication.  That, they say, could be the main lesson of the Pennsylvania survey.

"What this highlights is the assumption that more money means better care is flat-out wrong," said Mr. Lee, the chief executive of the California employer group.  "It’s easy to pay for bad quality, and we pay for it every day."

 

For the full story, see: 

REED ABELSON.  "In Health Care, Cost Isn’t Proof of High Quality." The New York Times  (Thurs., June 14, 2007):  A1 & C4. 

(Note:  The last three paragraphs, and the last sentence of the fourth from the last paragraph, of the print version of the article, are missing from the online version.)

(Note:  ellipses added.)

 

Hugh Laurie’s Wonderful Protest Song

 

   Source of image:  screen capture from the first link below.

 

Hugh Laurie hosted Saturday Night Live (SNL) on a show re-broadcast on Sat., Aug. 11, 2007.  (I am not sure if the original broadcast was in 2006, or earlier in 2007.)

In one hilarious bit, Laurie announces he is going to sing a "protest song" and proceeds to sing one of those earnest-sounding, pompous, self-righteous save-the-world-with-a-cliché songs that were so common in the late 1960s and the 1970s.

The hilarious bit: whenever Laurie gets to the part of the song where he is going to tell us the "answer"—- he mumbles. 

After showing the clip to my principles students, I told them that to fill in the mumbling with something effective, you need to know some economics.

 

Here is a link to the SNL version:

http://myspacetv.com/index.cfm?fuseaction=vids.individual&videoid=3591518

 

The song was apparently first performed as part of a show called "A Bit of Fry and Laurie" that was broadcast in the early 1990s in Britain. Here is a link to the earlier version of the song:

http://myspacetv.com/index.cfm?fuseaction=vids.individual&videoid=14405597

 

Arctic Species Readily Adjust to Big Climate Swings

 

  "White arctic bell-heather (Cassiope tetragona) in the remote Svalbard archipelago of Norway."  Source of caption and photo:  online version of the NYT article quoted and cited below.

 

(p. A12) Many Arctic plant species have readily adjusted to big climate changes, repeatedly recolonizing the rugged islands of the remote Svalbard archipelago off Norway’s coast through 20,000 years of warm and cool spells since the frigid peak of the last ice age, researchers report in today’s issue of the journal Science.

Their finding implies that, in the Arctic at least, plants may be able to shift long distances to follow the climate conditions for which they are best adapted as those conditions move under the influence of human-caused global warming, the researchers and some independent experts said.

Some experts on climate and biology who were not involved with the study, which was led by scientists from the University of Oslo, said it provided a glimmer of optimism in the face of generally bleak scientific assessments of the vulnerability of ecosystems to the atmospheric buildup of greenhouse gases.

Terry L. Root, a biologist at Stanford who has been involved with many studies concluding that plants and animals are measurably feeling the effects of human-driven warming, described the Svalbard research as “great news.”

. . .

Norwegian and French scientists analyzed the DNA of more than 4,000 samples of nine flowering plant species from Svalbard, a group of islands between the Scandinavian mainland and the North Pole. They said they found genetic patterns that could be explained only by the repeated re-establishment of plant communities after the arrival of seeds or plant fragments from Russia, Greenland or other Arctic regions hundreds of miles away.

 

For the full story, see: 

ANDREW C. REVKIN.  "Many Arctic Plants Have Adjusted to Big Climate Changes, Study Finds."   The New York Times  (Fri., June 15, 2007):  A12. 

(Note:  ellipsis added.)

 

For the original Science article, see: 

Alsos, Inger Greve, Pernille Bronken Eidesen, Dorothee Ehrich, Inger Skrede, Kristine Westergaard, Gro Hilde Jacobsen, Jon Y. Landvik, Pierre Taberlet, and Christian Brochmann.  "Frequent Long-Distance Plant Colonization in the Changing Arctic."  Science 316, no. 5831 (2007):  1606-09.