INK DOES NOT WORK AND TASTES AWFUL. TERRIBLE PEN 1/10 WOULD NOT BUY AGAIN.

Mylan Pharmaceuticals has altered its price schedule for epinephrine auto-injector EpiPenⓇ. The wholesale price is now $365.16, up from around $50 this time last year. Naturally, this price change, unconnected as it is to the unit costs of production, has prompted a bit of moral outrage.

viz:

There's no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600. https://t.co/rVWUlMxD0Q

— Bernie Sanders (@SenSanders) August 18, 2016

Quite true. Anaphylactic shock is as terrifying as it is swift. In cases of severe allergy, the windpipe clamps shut and if you're alone, you have to hope that your vision doesn't fade before you can reach your dose. I have been assured by competent, trustworthy health care professionals that lethal suffocation can be somewhat uncomfortable. One shot of epinephrine can relieve the worst of the symptoms almost immediately, and another administered 30 minutes later can relieve lingering issues. Consult a physician before use, and seek medical attention if an attack occurs.

Point is, for some folks, a single bee sting or a couple of peanuts is all that's required for permanent residence with John Cleese's infamous Norwegian Blue, but for the EpiPenⓇ. And it would indeed be a travesty if families had to pay up to a grand for the mistake of a kid accidentally getting a mouthful of Uncle Mike's pad thai. So is this the case? Is Mylan CEO Heather Bresch actually asking bog-standard customers to pony up a car payment per dose?

The short answer: yes, if.

The long answer: no, but.

The MY EPIPEN SAVINGS CARD™ is available to customers under the following restrictions (from the link; emphasis mine):

This SAVINGS card can be redeemed only by patients or patient guardians who are 18 years of age or older who are a resident of the United States and its territories. Not valid for cash paying patients (except for commercially insured patients without coverage for EpiPen® Auto-Injector) and patients who are covered by any state or federally funded healthcare program, including but not limited to any state pharmaceutical assistance program, Medicare (Part D or otherwise), Medicaid, Medigap, VA or DOD, or TriCare. This SAVINGS card is not health insurance. The SAVINGS card is not transferable and the amount of the benefit cannot exceed the patient’s out-of-pocket expenses. Cannot be combined with any other rebate/coupon, free trial, or similar offer for the specified prescription. Program expires 12/31/2016. Program managed by McKesson Corporation on behalf of Mylan Specialty L.P. Product dispensed pursuant to program rules and federal and state laws. Void where prohibited. The parties reserve the right to amend or end this program at any time without notice.

So if your insurance company covers EpiPen, your insurance company picks up the tab. If you pay by cash, you pick up the tab—unless your shiftless commercial insurer doesn't cover it, in which case Mylan has your back. It's a bit confusing, isn't it? Perhaps the wording is too difficult for journalists and politicians to parse, leading to all the pitchforks and the torches. I understand.

At any rate, it seems to me that what we have here is classic price discrimination. The savings cards means that insured patients who are still unable to pay can get their life-saving emergency epinephrine injections at (roughly) zero price, with institutional payers (insurance companies, states, the federal government, &c) absorbing the residual production costs. Put another way, it's precisely the same approach taken by the PPACA: end customers pay next to nothing, and the costs of care are socialized. Only now it's a hated pharmaceutical firm doing it, so we make all suitable preparations to punish the wicked heretic.

Then again, auto-injectors are not strictly bound by patent law, and epinephrine is a generic drug, so you can always just go shopping for alternatives. There's no law that says you have to buy the name-brand product.

Yet.

Behind The Times

Imagine if you will a small community. In this community live three dudes named Ned, Ted, and Jed. Ned, Ted, and Jed each have a measure of competence in medicine. Ned's the best of the bunch. He graduated at the top of his class at Johns Hopkins and landed himself a prestigious chair at the Mayo Clinic. Ted wasn't quite so good. He always had trouble with written exams, so he washed out before earning his MD. Still, he's got steady hands and keen eye for detail. Jed is a slimeball. Jed got a "medical degree" in the mail from the Universidad de Tierra Bomba, an institution that will send you your very own piece of paper suitable for framing embossed with the word "diploma" for the discount price of $1500 US.

Consider two states of the world.

1. Under a highly regulated regime, golden boy Ned runs neurosurgery at Mayo, Ted finds work as a chartered accountant, and Jed runs a meat chop shop in a poorly lit dungeon on the wrong side of the tracks.
2. Under an industry-regulated regime, Ned's still at the Mayo clinic, Jed's can't do any better than making high octane nightmare fuel, but mediocre Ted perhaps can find a way to make a living helping patients in need.

Recall your Bastiat. Ted is the unseen cost of heavy regulation in medical provision. The stated purpose of a medical license is so that we don't have a bunch of Jeds running around sloppily amputating limbs all willy-nilly without the sanction of peers. But a dedicated Jed will flaunt license requirements the same way he'll flaunt basic sanitation. Licensing crowds out Ted, not Jed. And the slack is picked up by Ned. Hence the repeated cries of "there's a desperate shortage of nurses."

Why do I bring this up? Well, click this report from Maryland at your own risk. A botched elective butt surgery ended up fatal for 34 year old Kelly Mayhew. "Mayhew and her mother drove from Maryland to the surgeon’s office, which is a basement apartment in a two-family home in Queens." Classic Jed, right guys?

It'd be facile of me to claim that a more competitive pricing arrangement under eased licensing requirements would have forced this Queens basement surgeon out of business, but perhaps Ms. Mayhew would have reconsidered her choice of health care provider with lower out-of-pocket expenses. On the margin, perhaps it's more ethical to permit intermediate medical provision. And that's what it's all about, right? Ethics in medicine? #ButtGate

Alternative Kidney Advertising

Spotted in Fresno.

In the absence of a properly-functioning market, people will go to extraordinary lengths to get what they want.

De Gustibus non est Disputandum

I lack the moral authority to tell strangers how they should modify their appearance.

Something tells me this gentleman may regret his decision someday (NSFW?).

He can surgically alter his face to resemble a comic book villain, but he may not sell his kidney.

Interesting.

Tortious Non-Vaccination

E.V. in WaPo on making the refusal to vaccinate a tortious offense.

I think Prof. Volokh is probably right about the liability frustrations. Defining the class of defendants creates bad incentives. If your property taxes are going to go up because you don't want to vaccinate your kids, one of the margins will be for citizens to go full-bore off-grid, evading birth certificates, dodging primary education, and that sort of thing. I'm not sure that's an improvement.

But it's probably not utterly crazy for insurance firms to pick up some of the coordination problems. They're very practiced at actuarial science, and if you have large firms dedicated to monetizing something, you can bet they'll put some time and treasure towards expanding the scope of their industry.

What does that mean here? Well, if you can sell anti-vaxxer policies, insurance companies will have strong financial incentives in producing brand-new vaccines.

As long as we have non-compliant parents, why not have them pick up some of the cost of advancing medical science for the rest of us?

Choice Architecture and Medical Reform

New from Cass Sunstein.

Behaviorally Informed Health Policy? Patient Autonomy, Active Choosing, and Paternalism

What do you think? An error in a health care decision (including the decision to abstain) could carry with it a pretty sizable downside risk. Time and attention are valuable, so sticking with the status quo is a very quick, and often reliable way of economizing on these scarce resources. Except when it fails, as well it might in medical decisions. Can't centrally-planned default rules help to minimize these downside risks while still preserving the fundamental right to choose?

When it comes to medicine, I admit to a pro-Sunstein bias. Unless folks can find a decent way to once and for all sever the unproductive, anachronistic link between employment and health insurance, there will continue to be unseemly distortions in health delivery systems. It would be much easier and more economically efficient to ditch the current system and much more humane to go full-blown single payer (but not single provider!). The chimera system is nearly as stupid as it is cruel and wasteful. The PPACA for all its good intentions, maintains the un-negotiated bundling of your job with your health coverage.

Medicine isn't euvoluntary. Which is exactly why it shouldn't be treated as if it were a rent-seeking contest. Gosh.

Soft Sell: Tainted Love

...for your fellow citizens.

MIT professor Jonathan Gruber finds himself in increasingly hot, increasingly deep water as videos of his admissions of public deception and his contempt for either opponents of the PPACA or the public at large (depending on how you elect to interpret his comments) continue to surface. I think the count is somewhere around five now. Instead of commenting on the pillorying (or pointed lack thereof), I want to consider what some of the alternatives would have looked like ca. 2009. At the time, there were many roads to reform. I suspect that the very large, very confusing bill ("we have to pass the bill to know what's in it") emerged as the result of years of planning, plastering, packaging, and preparing by its proponents. A thousands-page document does not spring unbidden overnight nor without considerable input from a substantial constituency.

Suppose instead that civic-minded reformers had pursued other overhauls. Here are a few possibilities:

1. Anarchists' Paradise. A fully free market in medicine. Abolish the FDA, abolish the Department of Health, break the AMA cartel, end medical licensing. Let the market sort it out, an even more extreme laissez-faire approach than what we see for veterinarian services, elective cosmetic surgery, or laser vision correction.
2. Single Payer (A). This is the NHS model, the one lambasted in the conservative media, in which the government both funds and provides health services.
3. Single Payer (B). This is the Baltic model, where there is government funding and provision of health services, but there is no ban on private provision. Private hospitals and clinics can still operate in this model, but patients may not be eligible for subsidies at these clinics.
4. Single Payer (C). This is public funding with private provision. Essentially, this is universal Medicare expansion. This may or may not accompany the reform of severing the link between employment and coverage.
5. Menu Pricing. Medical billing is... confusing for the typical patient. Stories of sticker shock are not uncommon, and it's still something of an industry secret that a lot of the line item pricing on medical bills is part of a negotiation dance between providers and third party payers. Prices contain information so long as buyers and sellers agree about the rules of the negotiation.

Add to the list as you see fit. Now take a moment and consider carefully who the stakeholders are in the status quo medical services game. By way of a large regulatory, industrial, professional, and legislative apparatus, incumbent interests have a great deal to lose should any truly radical reforms stand a chance of passing. Even the pork-laden, special-interest-payoff-ridden PPACA took a heroic effort to wend its way through perhaps the most favorable Congress in the past half century. Do you think—honestly think—that a more disruptive bill would have even gotten out of committee? Medicine isn't euvoluntary: neither voters nor politicians are willing to slay the juggernaut that wields the national scalpel.

In my comet utopia, we'd have some combination of single payer B-C, with transparent prices, low barriers to drug development, few restrictions on practice (with private quality certification), and no link whatsoever between employment and insurance. Insurance would be what it says on the tin, and folks would have free access to health savings accounts. I do not live on a comet. I live in an America flush with transitional gains traps and wealthy interests with a great deal of access to political influence. I cannot imagine a present-day America populated with present-day Americans that could have possibly produced outcomes that would please me or fit what I fancy in my armchair daydreams.

Did Gruber and Pelosi give us a hard sell? Sure, but no other reasonable option could have possibly made the cut. A soft sell just wasn't in the cards, folks.

Man, that video is horrible. I must have missed it on the MTV rotation the first time round. Yikes.

IRB SchmaiRB

via The Peej, paying transients for Phase 3 (or earlier!) drug testing.

ATSRTWT

A slice:

The main ethical issues here, of course, are the competence and judgment of the prospective subjects. “When you say ‘money,’ everything else goes out the window,” said Hanif Jackson, a former program supervisor at the Ridge Avenue shelter in Philadelphia, which recently closed down. I heard the same thing from Harvey Bass, a chaplain who has worked at the Sunday Breakfast Rescue Mission shelter for 15 years. He said drug study recruiters often park outside the shelter and approach residents on the sidewalk. Although Bass didn’t think it was his place to warn residents away from the studies, it was clear that he was not exactly a fan. “These guys have no job, no home, and a habit,” he said. “You have people at their lowest state, and they’ll say yes to anything.”

Much of the piece is an indictment of the accuracy of tests involving indigent subjects. Many of them are schizophrenic and therefore resistant to anti-psychotic medication, but:

Volunteers are typically paid $40 to $50 per visit. “The payments are low enough to not be coercive, but they’re enough to supposedly compensate them for the time they’ve spent here, and give them an incentive to come back,” Sfera said. Still, Walters, who has since left South Coast, added that money is what motivates most subjects. “I’d say at least 85 to 90 percent of clients, that’s why they do studies.”

These subjects are cheaper than enlisting, say, college students, and considerably more ethical than, oh... say, exposing Soldiers to treatment without their knowledge or consent (to pick a totally off-the-wall hypothetical example). More subjects for the same price means more precision, following quite naturally from the statutory requirements imposed by the FDA.

Another good quote:

Concepts like “coercion” and “undue influence” are poorly suited for economic transactions, however. Offering desperate people money to take risks to their health may be wrong, but nobody is being coerced. No one is threatening to harm people if they refuse to become test subjects. One parallel would be sweatshop labor. The ethical problem is not that people are coerced into working in sweatshops—people are desperate to work there, under horrific conditions, for pennies. The ethical problem is whether it is acceptable to take advantage of their desperation.

Agreed. This is an ethical problem. Like most (all?) problems, there are no solutions, only tradeoffs. Should the legislature ban testing on transients? Would that make them better off? Is it even true that, "[o]ffering desperate people money to take risks to their health may be wrong," when the alternative is panhandling, exposure, or starvation? Does not their alternative situation already pose risks to their health?

And is the price wrong? Offer them too much money and it's taking advantage of their desperate situation. Offer them too little and it's... taking advantage of their desperate situation. Remove them from consideration at all, and it's forcing them to accept their next available alternative, which by their own economic calculus is worse.

But the real brine this pickle soaks in is one of compos mentis. Whatever the ethical dilemmas of sweatshop labor, at least folks who work in factories in less-developed countries aren't any more (or less) prone to mental illness than the general population. Homeless people have made it through a rather selective filter to land in a bin marked 4F, and are often characterized by debilitating mental disorders. Under the UCC, people with debilitating mental illness don't have capacity, which is legalese for you can't generally enforce a contract (over $500 yadda yadda) against them. In other words, the common law recognizes that mentally ill people aren't suited to make responsible decisions.

And that leaves alternative institutional arrangements still to be considered. For Phase 1 and 2 testing, the manufacturer is still trying to establish safety, which even if you're as skeptical as I am about the charter of the FDA, safety testing is still important prior to a general release. What other population would you target? The elderly? Children? College students? Housewives? Business executives? Longshoremen? Would you ban all testing in humans? Is there a superior path to getting drugs to market? Describe it.

It might be a tragedy that America's homeless population ends up being a collective pincushion for the pharmaceutical industry, but does that speak louder to the collusion of big pharma and the FDA or to the manifold tragedies that lead to homelessness in the first place? There are good ways to advocate on behalf of the indigent. Denying them opportunities is probably not as helpful as exposing the mundane corruptions that are ordinary transfer payments: massive bailouts to well-connected constituents, and payola by the truckload to middle class voters. Given the choice between helping vulnerable populations and securing votes in the next election, politicians tend to act in their own best interests.

I do sometimes wonder if it's ever ethically possible to hire an exceptionally poor person to do anything. Doesn't paying them to any kind of work, even ostensibly honest work, take advantage of their desperate situation? Is there any way to break the Catch-22?

Of Medical Kayfabe

The Hippocratic maxim primum non nocere, "first, do no harm" is a fine pleasantry that offers little practical bioethical guidance. After all, the surgeon's scalpel harms the patient, so does chemotherapy, so does dialysis, and so does the insertion of a Foley catheter. If you've ever seen a code, there's no way you can conclude that no harm is done to a patient when rescuing from supraventricular tachycardia.

Medicine as she is practiced inflicts a little harm to produce a greater benefit. Physicians crack ribs asunder to insert stents, dice flesh to excise tumors, and pump cancer patients full of poison to shrink tumors. The sick and injured are necessarily poked, prodded, pricked, and punctured on the road to recovery. Yet that little phrase lurks in the wings, a wee moral beacon to help with the extremely tough trade-offs faced by doctors and their patients. First, do no harm.

Do no net harm is the easiest rescue of the nostrum. Yes, you may saw off a limb, but it's to prevent the spread of gangrene to the rest of the body. A little harm here to prevent a much greater harm there. Everybody knows that. It's obvious. What may be less obvious is that medicine is always and everywhere a matter of conditional probability. The harm suffered by a patient on the path to wellness is personal and subjective. Likewise, the benefit of improved health, the marginal contribution of a treatment, and the probability of effectiveness are all idiosyncratic, limited to the the best estimates a patient can summon, and always weighed against the opportunity cost of an intervention.

So here's my question. Does primum non nocere perversely influence the delicate economic calculus of medical intervention? If so, how does it bias intervention decisions? Most medical professionals I know opine that diagnostics are oversupplied (too many MRI scans, eg) and drugs are undersupplied (the FDA traps new drugs in approval hell for years while patients suffer and die waiting for a cure that may never come at all). Is the Hippocratic maxim a near-mode guide to help patients and their physicians agree on a course of treatment that almost always by necessity involves at least some harm, or is it a far-mode policy guideline for regulatory bodies imposing a strict precautionary principle?

Which interpretation leads to a greater flourishing of euvoluntary exchange?

Kidnapped at Needlepoint

Medicine is not euvoluntary. If you're sick and you don't get a doctor, the consequences could be severe. Single-payer/single-provider systems like the UK's NHS avoid  the implied rent extraction by fixing prices. Third-party-payer/multiple-provider systems as in the US purportedly rely instead on market competition to keep prices reasonable. Naturally, that isn't exactly what happens. Instead of a reasonable bill for services rendered like you'd get at the dry cleaner's, you get a massive laundry list of meticulously detailed line items, from blood panels to MRI scans to a dose of Advil for your achy breaky knee.

Of course, everyone who's either been a patient long enough, or who works in the medical services industry knows quite well that the first bill you get that you send along to your insurance provider is what negotiators call a highball: an obviously grossly overstated estimate of the actual cost of care. Whatever the reasons for treating a routine hospital stay the same way you would haggle over a rug in Marrakesh, the effect on the patient is the same: "good gravy, look at this crazy medical bill. Thank God I have a good insurance plan to take care of it. Could you even imagine having to pay this out of pocket?"

Of course, no hospital would even think of making a patient pay those ridiculous rates out of pocket.

Unless...

"Against medical advice," aka AMA should be right below "we've had an ebola outbreak in med-surg" as the most terrifying thing you can hear as a patient. If you do anything your loving medical staff disapproves of (including undergoing superfluous tests, seeking a second opinion, or refusing medication you've deemed too risky to justify the alleged benefits), you will be acting against medical advice. And if you go AMA, your insurance company is no longer obliged to pick up the tab. That absurdist comedy of a bill you get at the end of a couple days' inpatient care is all yours, baby.

So here's my question for all my great friends out there: is this exploitation? Do hospitals and insurance companies effectively conspire to over-provide zero (or negative)-product care using the threat of AMA as a bludgeon in case patients do not cooperate? And if they do, are they morally justified in doing so? Why or why not?

And if they are not justified in doing so, what moral intuitions steer the median voter away from their ordinary skepticism of big business for health care provision, and instead towards beefing up the entire apparatus via Medicare, the AMA, the ACA, et al? Can the care ethic alone do all the heavy moral lifting here?

I think I'll devote the rest of the week at EE to exploring different possibilities for health care delivery in very broad strokes. Medicine is not euvoluntary, but some systems may be more not euvoluntary than others.

[Update] My old [AS] confederate Cepheus84 informs me that in his professional experience in the medical billing industry, it is (unruly) patients more often than service providers that end up rattling the AMA saber. This is consistent with the frequent tales told by Mrs. Spivonomist about some of the more desperate drug-seeking behavior she encounters at work. AMA, it seems, is a double-edged sword, as the hassle of dealing with an investigation is often more costly than just signing a prescription for some percocet. It's an information asymmetry problem, and patients who've learned how to game the system have an advantage.

Safety and Efficacy are Separable: Solon's FDA

Imagine for a moment that your parents ran a pharmaceutical company. They've recently developed a new drug that attacks the prions responsible for Creutzfeldt-Jakob Disease and it shows promise in the lab. And by "in the lab", I mean in a petri dish, not in animal tests.

Now, you know as well as anyone that CJD is both currently incurable and fatal in 100% of cases, so you allow yourself a flash of optimism. But you temper your glee because you know that FDA regulations insist on two hurdles before drugs may be brought to market: the drug must be "safe" (holy epistemological problem, Batman) and "effective." The safety criterion is a garden-variety precautionary principle measure, bound in the ubiquitous Hippocratic maxim primum, non nocere: do no harm. Knowingly inflicting harm is criminal mischief, unknowingly inflicting harm is at the very least non-euvoluntary and quite probably criminally negligent. But what of the efficacy requirement? The FDA imposes prior restraint on drug manufacturers to shield consumers against buying placebos. Why? And where's the public outcry?

Establishing efficacy is expensive and time consuming. And much more so when the drugs are to treat rare conditions like CJD. Every year that passes in which a drug is stuck in regulatory purgatory is a year in which patients don't at least have a Hail Mary shot at a cure. Is protecting folks against getting ripped off at the pharmacy so important that the US regulatory authority will routinely, cavalierly send patients to the grave? Or if you're more inclined to the Tullockian view that the raison d'etre of regulators is to protect incumbent organizations, how is it that voters' moral intuitions don't have them storming the gates of 10903 New Hampshire Ave, Silver Spring, MD?

I have a feeling that it's a BATNA disparity issue. Big pharma is suspect because it's big pharma, and for no other reason. Rhetorically, that's a tough point to dismiss. This bias, the skepticism of large organizations (particularly when driven by the profit motive), is well-entrenched. But I urge you, gentle reader, to indulge a Solonic substitution. Imagine it's your parents rather than Ian Read running Pfizer. Under what circumstances should you be willing to let them hawk their wares. Would you let them sell poison to the public? No, of course not. Would you let them sell a drug that maybe might work to fight a rare disease, but might also just be a dud? I'd like to think that you'd lend them and their customers the benefit of the doubt.

Perhaps Plato's Divine Maxim is a better heuristic for regulation than a muscular precautionary principle.

Medicine Is Not Euvoluntary: Patient Happiness Metric Edition

Via William Sonneberg, MD: a reminder that the principal-agent problem is real and that what you choose to measure matters in determining outcomes.

The private problem: patients may have a shaky understanding of what counts as quality care, and by matching physician incentives with "happiness," hospitals may end up compromising care to satisfy the narrow self-interests of patients who may not know any better. As an editorial note, consider how this problem may be worsened by third party payments: if patients don't have to pay out of pocket for pain meds, they might be more easily be given out like candy.

The public problem: overprescription of antibiotics. If patients think "antibiotics make everything better", the odds of drug resistant strains increase precipitously, particularly for non-compliant patients. The threat of a post-antibiotic world cannot be understated. Uncontrollable contagion in a world of 7B+ humans with access to air travel is something that should set even the most sanguine optimist's teeth on edge. In a best case scenario, humans will shift to low-contact association. Worst case? Decimated populations become subjugated and exterminated to control the spread of infection.

Medicine is not about vanity. Pretending otherwise puts the entire race at risk. It sounds like an SMBC comic. And since I'm not 100% on Zach's back catalog, I wouldn't be surprised to find he's already described this scenario in zany detail.

Yikes.

h/t Mrs. Spivonomist

Fiscal Externalities are not Real Externalities: Baby Execution Edition

A-Cast points us to a provocateur JME piece on "after-birth abortion" aka infanticide. ATSRTWT.

Money quote:

[T]o bring up such children might be an unbearable burden on the family and on society as a whole, when the state economically provides for their care. On these grounds, the fact that a fetus has the potential to become a person who will have an (at least) acceptable life is no reason for prohibiting abortion. Therefore, we argue that, when circumstances occur after birth such that they would have justified abortion, what we call after-birth abortion should be permissible.

The authors essentially claim that the birth event is not morally relevant in the decision to terminate a pregnancy. If abortion is morally permissible, it's a non-sequitur to hold that infanticide (the authors object to the use of this word for rhetorical purposes) is immoral, so long as the only salient difference in the decision is that the organism is now located outside of the womb.

Swiftian pro-life arguments are fun to contemplate, but they'd be a lot better if they refrained from making explicitly fallacious appeals to fiscal externalities. The "burden on society" argument is one of public choice. That is, the level of care of the poor or infirm funded through public expenditure is made by the sovereign. If welfare payments are the problem with "burdensome" children, advocate for reforming the welfare system. The median voter only supports poor families by express political choice.

Of course, a Straussian reading of this piece would suggest that this frippery is what the authors want you, dear reader, to cluck your tongues at, but this is in the Journal of Medical Ethics. My priors are that they're sincere on the fiscal externalities point. More's the pity.

But on the chief argument: does birth impart full moral status on a person? Or is there more of a spectrum starting at conception and increasing logarithmically to adulthood (however that might be measured)? If early infanticide were completely legal, what would be the actual outcome? Do you suppose there would be a rash of baby murders o'er the land?

Raising children is not euvoluntary (for infants—think of their BATNA). Let's not compound the issue by confusing legitimate externalities with politically chosen "externalities". It's so rare that it's practically unheard of for a healthy human to be a net lifetime negative externality on society, and when he is, it's probably because he's chosen either a life of crime or of politics.

Hanlon's Razor: BSN in 10

Hanlon's Razor: "never attribute to malice that which can be adequately explained by stupidity."

This is horrifying. Some states are considering legislation that will mandate Registered Nurses obtain a 4-year BSN within 10 years or lose their jobs. Here's a quote from New Jersey's State Nurses Association:

Q: Why do we need to legislate that newly licensed RN’s in NJ need to obtain a BSN?  

A: The purpose of this legislation is to support the delivery of the best quality care to patients in an increasingly complex health care environment. Studies, comparing patient outcomes with the educational background of nurses, demonstrate that in facilities with a greater proportion of BSN or higher educated nurses patients have lowered mortality and adverse events.

 Ah, those wonderful "studies". I love those guys. You see, one of the great things about having a basic undergraduate education in elementary statistics is that you gain sensitivity to the limits of statistical inference. Consider one of the "studies" listed in support of the BSN-in-10 legislation.

Tourangeau, A.E, Doran, D.M., McGillis Hall, L., O'Brien Pallas, L., Pringle, D., Tu, J.V. & Cranley, L.A. (2007, January). Impact of hospital nursing care on 30-day mortality for acute medical patients. Journal of Advanced Nursing, 57(1), 32-41.

An ungated copy of the paper can be found here. I've read a few of the other ones, like the Estabrooks piece, and they're pretty much all the same thing (except they're all gated). Here, let the authors tell you in their own words:

Findings. Using backward regression, 45% of variance in risk-adjusted 30-day mortality rates was explained by eight predictors. Lower 30-day mortality rates were associated with hospitals that had a higher percentage of Registered Nurse staff, a higher percentage of baccalaureate-prepared nurses, a lower dose or amount of all categories of nursing staff per weighted patient case, higher nurse-reported adequacy of staffing and resources, higher use of care maps or protocols to guide patient care, higher nurse-reported care quality, lower nurse-reported adequacy of manager ability and support, and higher nurse burnout.

Holy post-treatment effects, Batman.

Look, people. It's great to find that extra education is linked to better patient outcomes. I can easily say that with all sincerity. This finding is a boon to folks looking to assign difficult cases to proficient hospitals. But taking this result and building a mandate on top of it violates some pretty basic reasoning.

Here is that reasoning.

Consider two hypotheses. Under hypothesis A, education creates excellent job performance. Under hypothesis B, education reveals excellent performers. Now consider how two cases look under each hypothesis.

Mike and Jeff are nurses. They're both good guys, competent and reliable.

• In scenario one, they're identical in every regard, from the creases in their little hats down to their diagnostic ability. Then, driven by the winds of fortune, Mike decides out of the blue to go ahead and get his Bachelor of Science in Nursing. As a direct result of the lessons learned there, he gains a new set of skills that improve his ability to coax patients from the jaws of death. Even with all else held equal, his hospital's mortality rates improve. 
• In scenario two, Mike is more than just a good guy, competent and reliable. He's a nursing powerhouse, and his innate nursing prowess drives him to not only provide the best possible care for his patients, but to obtain higher levels of education. As a direct result of his native talent and ability, he is both more able to coax patients from the jaws of death and more likely to obtain a BSN.

What the observational studies can do is to say that nurses with more education can be positively, affirmatively linked to better patient outcomes. What they cannot do is adjudge between these two hypotheses. Despite this painfully obvious observation on the limits of statistical inference, legislatures proceed as if hypothesis A is the only possible explanation. That you can take mediocre nurses, send them through expensive, time consuming education and out the other side, you'll have unicorns farting rainbow-colored clouds of strawberry compote. And if they can't hack it? Bye bye. You're out on your tuchus. 

This is scandalous. I have to assume that the people pushing for this are simply too stupid to know the difference between random selection and random assignment, because the alternative explanation would reveal them to be villains of the worst sort, holding patients hostage to secure higher barriers to entry, siphoning rents into the pockets of incumbents. I'm a cynical guy, but even I can't grasp cupidity that dire.

Nursing is not euvoluntary: the patient is always at the mercy of the caregiver. Making it less so under the thin cover of inappropriate "studies" is inconsistent with good reasoning, commonplace morality, and good sense. Proponents of this legislation should be ashamed, and voters should be appalled. 

h/t RKW

Vaccination

I know just enough epidemiology to be obnoxious at dinner parties. Depending on the dinner party, that may be a touch above the median. But what I lack in knowledge about communicable infections I make up for by my familiarity with Bayes' Theorem. For those of you unable or unwilling to get through Yudkowsky's post, in the 18th century, the Reverend Thomas Bayes gave us a very handy formula for how to adjust probability estimates when confronted with new evidence. The two-word advice? Maintain skepticism. It's more complicated than that, obviously. It accounts for the probability of measurement errors (both type I and type II) and forces you to consider base rates. The Wikipedia page is here, though I find Yudkowsky's walkthrough pretty close to the best you're likely to find on the Web. Here's the equation (from the wiki page):

What does Bayes' Theorem have to do with epidemiology? Well, there seems to be pretty compelling evidence that the standard childhood vaccinations (Hepatitis B, Rotavirus, Diptheria, Pertussis [whooping cough], Tetanus, Haemophilus influenzae type b [meningitis], Pneumococcal [meningitis, pneumonia et al], Poliovirus) work pretty well in the sense that vaccinated kids tend to avoid contracting the illnesses associated with infections of the above pathogens*. There also seems to be evidence that some previously CDC-approved vaccines containing a mercury-based preservative could be linked to cases of autism. Well, there's a correlation anyway. Bacterial meningitis rates fell from 2.00 per 100,000 in the early 90s to 1.38 per 100,000 in 2007 (source: CDC). During that same time reported cases of autism increased by a factor of more than ten. (source: also CDC).

Again I ask, what does Bayes' Theorem have to do with any of this? Well, we have the components needed to estimate beliefs. For the question "does Menomune‐A/C/Y/W‐135 sold by Sanofi Pasteur prevent the acquisition of neisseria meningitidis, a bacterium that causes meningitis?", we can gather the lab evidence, trace the pathology, check rigorous double-blind studies, do all that due diligence borne by the FDA and estimate the treatment effects. In terms of the equation, Pr(A|B) is the probability that someone comes down with meningitis conditional on them having received a dose of the vaccine. Pr(A) is the base rate, the probability of contracting bacterial meningitis. Pr(B|A) is the probability of having had the vaccine in a patient diagnosed with meningitis. Pr(B|~A) is the probability of having had the vaccine in someone other than a patient diagnosed with meningitis. Pr(~A) is just the conjugate of Pr(A). Yes, my notation is a little different than the image above. I like "Pr" for probability and the tilde key is easier to reach than the alt+number pad combination you need for the negation symbol.

For fun, here are the base rates by age in the US, 2000-2009 (CDC):

The tricky bits for many folks to get at heuristically are error rates. That is, with what probability do we see the terms in the denominator? If the disease is rare, the diagnosis doesn't even have to be faulty to generate lots of error. But that often (and folks who work with public opinion data know what I mean when I say "often") goes unreflected in the formation of posterior beliefs.

Put another way, the frequentist (naive) reasoner would look at a diagnosis of meningitis in someone who got the vaccine and say "that vaccine is useless, it didn't keep that patient from getting sick", and the Bayesian would say, "uh, let's go ahead and get a second opinion on that diagnosis." Empirically (Bar-Hillel is amazing at this stuff), most folks are frequentists rather than Bayesians.

The downside to this is that these people use the wrong statistical inference techniques to draw conclusions with policy implications. Consider the autism link. What happens when we estimate the Pr(A|B) of the likelihood of having autism conditional on receiving the meningitis vaccine when there's no causal relationship (I can't find an ungated copy of the joint CDC-NIH study on this, sorry)? A good Bayesian would adjust for shifting diagnosis base rates, or try to get additional information. What is the frequentist response? Two sequential events, one after another, the prior caused the latter, QED.

Yikes!

All that's fine and dandy, Sam. But this blog is about euvoluntary exchange, not Bayesian inference. Get to the good stuff.

Yes, of course. Consider the implications of frequentist reasoning, particularly way out in the tails of the probability distribution. Rare events get blown way out of proportion, people over-react to uninformative information, and anecdotal evidence becomes mass movements, perhaps partly fueled by many of the same sentiments we chronicle here at EE. For instance, did you know that Sanofi Pasteur is the biggest producer of human vaccines in the world and that they're just a branch of a humongous international conglomerate based in France of all places? BATNA disparity, my friends.

And the tragic downside of not vaccinating your kids? Invisible to most people. My grandparents grew up knowing what polio looked like up close and personal. I know it only from the history books. Out of sight, out of mind. It's a free rider problem heaped on the backs of suffering, dying children. Say it with me: uncompensated externalities. And if the rest of us are lucky, the polluted commons will be limited to that one select club.

Of course, we could all get lucky, vaccinated or not. That would be the best possible outcome. Think a bit more carefully if you're willing to play that game however. Analyze the collective action problem like you were Tullock himself.

The annual influenza vaccine is another matter. That one's a scam. But that's a post for another day.








*By now the astute reader may have noticed that I've provided additional evidence for my claim of amateurishness when it comes to epidemiology. 

Scrub Shaming

Here's a new one for me (h/t RKW). Activists snap photos of wayward nurses who have the gall to leave hospital grounds wearing their scrubs. Ah, the gentle "coercion" of social stigma.

The (irrational) fear is that nursing uniforms are ambulatory biohazard depositories. Patient please.

Yes, there are problems with hospital-borne infections, and contamination is a perennial threat for biological (and chemical, and radiological, but let's stick to the topic) threat exposure, but please consider your base rates. Of the 2.6 million nurses working in the US, can you recall even a single case where scrubs have been identified as an infection vector? Even one?

Unwashed hands are a far bigger threat to public health (and that's in relative terms, mind you). But you can't take a picture of microbes lurking under someone's fingernails, can you? No, but you can harass someone who just got off a 12 hour shift of keeping sick people alive.

Nursing is not made any more euvoluntary by the meddling of foolish scolds.

PPACA, Provider Immigration, and Rigged Rent Contests

Tyler Cowen has a piece in the NY Times on the near future of the Patient Protection and Affordable Care Act. Knowing that Cowen is a finely tuned engine of economic analysis, readers should be unsurprised to find that the Grey Lady article wastes no ink decrying trifling implementation hiccups, instead pointing straight to a few of the deep structural flaws in the design of the legislation.

He follows up at Marginal Revolution (link here) with a half-buried bullet:

I did not have enough space to talk about more immigration for physicians and nurses, liability reform, and other supply-side reforms. They are very important.

Tyler is a prodigious reader. Prodigious. I can count on one hand the number of times I've seen him in person without a book in his hand. No joke, the guy reads more in one day than the median US citizen does in a year. Despite this, I strongly doubt he's read EE more than a couple of times. It is therefore quite unlikely that he ran across what I wrote on Friday. To recap, I argued that if there's persistent, legislated real wage differentials across borders, marginally liberalized immigration policy for high skill services without general immigration relief might possibly create what I would have called "scalpel drain" had I been more mentally adroit. The key difference between scalpel drain and old-fashioned brain drain is geographical scope of practice. A nurse cannot practice medicine from afar the same way an IT professional can write code halfway around the world. And under asymmetrical price controls, wages don't accurately reflect relative scarcity. This could be bad. Maybe not giant Twinkie bad, but still pretty bad.

Here's the interesting thing: the forward induction on this game is tough to nail down. Cowen's a superb chess player, and he knows as well as anyone paying half a dram of attention (much better, actually) that the ACA was never intended to be anything even close to approaching a steady-state equilibrium in the delivery of medicine in the US. He's better than you at ignoring all the political jawboning and kayfabe to peer through the smoky aperture into the likely states of the world down the cobblestone path of stochastic political waffling. And so far as I can tell, he's mum on how the rent contest over medical professionals will change as the demographic hammer prepares to strike hospitals' anvils.

I want you to think for a moment about how rent contests work, particularly with respect to very roundabout production. In this case, the prize is a relatively comfortable position as a nurse catering to wealthy American patients in a finely-appointed hospital and earning considerable wage premiums to do so (more so for nurses than for doctors, what with all the malpractice insurance and forgone wages during school and whatnot). If you're lucky enough to land in a magnet hospital, you'll recognize your surroundings more as a resort than a hospital. That's the payoff. The probability of earning the prize arises from a mixed strategy based on how many medical professionals you think the US will admit in the future and how many other people you think will also be competing for that payoff. From there, the comparative statics are a matter of a little intuitive mental math. Would you dedicate several years to your life on the chance you might someday earn higher wages? If I know my audience, I can guess that the answer is "yes". Folks with high discount rates aren't well-known for frequenting economics blogs.

But here's the snotty kicker: a very large part of the probability of earning that delicious rent is bound in foreign perceptions of American political dysfunction. If you're a 17 year old high school kid in Gdansk with stars in your eyes about  packing up your bindle and heading to the States to put that BSN to work ministering to the ill in Dayton and you see news filled with porcine, icy-eyed legislators throwing expansive public temper tantrums, you might seriously think twice about making what amounts to a very specific long-term human capital investment that has a relatively barren domestic BATNA. If and when the ports open up for more nurses to report for work, there may well be too few ready migrants to staff the wards of both America and the hospitals abroad. Without the regime uncertainty, a mild rent contest might well spur a bit of nursing professional overproduction, encouraging enough entry that the home markets will stay solvent (for lack of a better word).

Of course, the other option for foreign wage boards is to raise the statutory wages, which is marginally better for economic efficiency, but wouldn't do much to cure the third-party disease that is eating the bones of US health care delivery.

@ez_angus Single payer is "when", not "if".
— Dr.Phil of Economics (@DrPhilofEconomi) October 13, 2013

Medicine is not euvoluntary. Immigration is not euvoluntary. Labor is not euvoluntary. All three together? Yikes!

Price Discrimination for Health Insurance

Mrs. Spivonomist is eligible for open enrollment at her new place of employment. She has expressed some... well, let's call it consternation at the baroque processes by which one now signs up for medical insurance with the provider her company uses.

The most irritating part? It's kind of laughable if you've taken a principles of microeconomics course. They offer discounts on the order of five or ten bucks a month if you take two out of four offered courses: 

1. Smoking cessation (we both quit in 2002)
2. Weight management 
3. I can't recall the other two, but they were also inapplicable to our situation.

Point is, these courses would have been entirely orthogonal to our interests. A waste of time, if you will. But they allow for some price discrimination. Folks whose time is valuable because of high opportunity cost also tend to be those folks who would have a high willingness to pay to avoid nonsense courses offered by insurance companies. They can then extract some of this consumer surplus. Straightforward relative price economics.

Here's the curious thing for me: as tech improves and these firms are legislatively barred from price discrimination along certain margins, should we expect to see more of this sorts of skulduggery? Is this even dirty pool? 

And now that medical coverage is coercive, how will folks adjust their attitudes towards insurance firms? My gut tells me that it'll become more adversarial than it already is. I'm with the GTM. I'd bet even odds that the US will be single-payer by the time my daughter is old enough to have her own coverage.

CONFORM, HUMAN

Sarah (The Healthy Home Economist) reports on the ongoing saga of Sarah Hershberger, an Amish girl with leukemia. In breve, the 10 year old patient begged her parents to keep her off another round of chemotherapy. Her folks agreed, the hospital did not. Hospital administration sought custody and so spawned a court struggle.

This story reminds me strongly of a case that was plastered all over the New Zealand news while I was visiting for a month in 1999. Maori parents took their son out of chemo to pursue alternative treatments and the hospital turned to the state to reel the patient back in.

Okay, so let's get the red herrings out of the way. Appeals to religious liberty and the shades of medical ethics codes are top notes played over a foundation of conflicting virtue. The care ethic pulls in both directions here. What we've really got is a question of the appropriate role of coercion.

I think the thing that confuses me is why a hospital would want to risk being painted as a bully. It seems to me that jawboning little girls is a pretty surefire way to make future patients all the more pee-shy, particularly for outgroup members. Think about the message this sends: "you'll take your goddamn medicine whether you like it or not, citizen." This is meant to inspire confidence in a medical system already well-plagued by, well, let's call it "rent-seeking and preservation" rather than the ever so slightly more confrontational "institutionalized corruption" that might also be accurate on a certain reading?

Patients (and even doctors) tend to be terrible Bayesians. Should this impute to a common moral intuition that consumer sovereignty in medicine be revoked? There's already a lot to suggest that the typical response to this question is "yes". I have a friend who lives in Germany who has been threatened on more than one occasion that her son would be (read: permanently) taken into state custody because she refused to administer his prescribed dose of ADHD medication before she sent him off to school in the morning. The key measure of the ACA is that every citizen is compelled to participate in the market (I'll leave off the scare quotes this time) for medicine. Coercion, my boy. Coercion as far as the eye can see.

How euvoluntary is medicine? How euvoluntary should it be?

Abortion is not Euvoluntary

Few topics generate as much heat and as little light as abortion. I've found it interesting that it seems to come up relatively infrequently among those libertarians whose company I frequent. Something tells me that there's not a salience problem. Indeed, I imagine that almost every liberty-minded person out there has spent time mulling this thorny issue, wrestling with its complexity, weighing implicit, stochasic agency against predictable regret, noting likely BATNA scenarios. Giving the topic its due, as it were.

So it's particularly interesting for me to see a libertarian heavyweight tangle with arguably one of the most deservedly important living economists in the world. Bryan Caplan engages Richard Thaler.

Apart from Mario Rizzo's ongoing campaign against the camel's nose in the tent, the idea of soft or "libertarian" paternalism flared up again right here on EE with a post I wrote about the British Parliament's efforts to make salacious materials on the Web available to homes on an opt-in basis. Way off down under in the Land of the Kiwi, crazy Canuck Eric Crampton had similar thoughts at Offsetting Behavio[u]r. Professor Thaler emphatically denied the Nudge link on Twitter, even though "choice architecture" and his work was directly referenced by the politicians designing the scheme.

That's the funny thing about ideas. They're a common pool resource. It'd be nice if there were a lifeguard on duty, making sure nobody's running and that the splashing and horseplay is kept to a minimum, but sure as the day is long, that old burrito is bound to catch up with Smalls and he'll crap right in that pool. That's the nature of politics: it encourages, nay, demands that someone take a dump in the ol' swimmin' hole sooner or later. Virginia Political Economy details this mechanism with sufficient clarity and detail that James Buchanan won a Nobel Memorial Prize for it. I don't think he ever used any pool-pooping metaphors though. That undignified nonsense is 100% Sam. Point is, the originator loses control of an idea once ceded to a legislative authority. Perhaps this is obvious to me only because I'm a public choice student, and expecting others to share my esoteric knowledge is excessive. I should temper my expectations.

The conversation continues with Caplan posing a pointed question to Nudge Paternalists: why not nudge expectant parents away from the decision to abort a fetus? Included in the terms is what seems like a reasonable proposal, regardless of your stance on choice architecture: end government subsidies. After all, to get more of something, subsidize it, and I don't think that even the most staunchly pro-choice left liberal actively seeks more abortions, unless perhaps they subscribe to eugenic or NPG philosophies. Which they might. I know such people. Here's how Thaler responds: "what do you think the ban on government money does? Medicaid=poor. yikes!" Bryan follows up here.

I think Thaler's making a claim underpinned by EE conditions! One of the strongest arguments for keeping abortion legal is founded in BATNA considerations: one alternative to safe, legal abortion is dangerous, black market ("back-alley") abortion, which is riskier for the mother. Of course, that's an assumption. Elsewhere, JR has proposed a new logical fallacy: "I proclaim a new rhetological fallacy: the error of assumed opportunity, e.g. pursuit of leisure costs productivity, instead of leisure." It works well here, since the Right assumes that the alternative is childbirth and the Left assumes that the alternative is the medical equivalent of Jesse Pinkman in season 1 with a surgical mask... okay, let's leave the rest of that alone. More sophisticated arguments on both sides acknowledge multiple margins or a continuum, but most of what we hear are simplified platitudes. Hence the "much heat", "little light" above.

As the novelty account based on Dr. Phil lower in the Tweet thread notes, the median price for an abortion is around $470, and I checked about the Medicaid thing. Only 15 states allow Medicaid to help with the out-of-pocket cost of abortions. I can imagine how I would set up the econometric strategy to find out where the substitution margins actually are (it's not an easy specification, in case you were wondering), but something tells me that even carefully conducted empirical studies are unlikely to cause a whole lot of people to change their minds on this particular subject. It's pretty likely that this is based on strong moral considerations, not on dispassionate utilitarian evidence.

Maybe the reason libertarians don't like talking too much about this subject is because of the problem I'm having right now. I can't write a snappy concluding paragraph. I can't even beg you to consider the issue in a new light. You've heard the arguments, you know the positions. I have nothing new to add to the conversation. All I can say from an EE point of view is that in the exchange of services between a pregnant woman and a physician, the potential future human whose life is at stake gets no say in the transaction. That's it. I can make no further positive claims than that. This observation does not imply in any way any sort of policy position one way or the other and principled people can have legitimate disagreement over what to do next. This is a clash of values, not of beliefs. Our deontology here includes consequences, but the actual moral calculus is not ours to solve on your behalf.

Best wishes everyone, and sorry about the poop jokes. I get nervous when I tackle difficult subjects and it sometimes manifests poorly.

Update: another take here from Joe Colucci. I think he makes an excellent point when he notices that the nudge camp wants to quietly alter knife-edge behavior. Abortion is anything but. The decision to abort is fraught with distress, moral panic, and deep consideration. This is another reason why disinterested third parties have a very difficult case to make for interfering.