Archive for the ‘Research’ Category

CoVid 19 Quick Takes

Friday, April 3rd, 2020

 

Quote of the day: “To put it bluntly, the U.S. economy went from full speed to full stop — and millions of workers were not wearing seat belts.” – Josh Lipsky, director of global business and economics policy at the Atlantic Council, a nonpartisan think tank.

 

Keeping up with all things CoVid 19 is like swimming through Semolina. It takes a lot of fortitude and stamina. But here goes, anyway.

The states versus the nation

Examining the national response to CoVid 19….no, wait, we don’t have a national response. We have close to 60 responses, one for each of the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands and the other US territories. If you don’t think they’re all on their own, just ask Andrew Cuomo. He said yesterday that none of the governors were currently screaming for states rights. They all want help, they all want national leadership, and they want it yesterday, maybe last week. Look at Ron DeSantis, Governor of Florida. For weeks, under withering criticism and through the debacle of Spring Break on the beaches, he refused to issue a Stay At Home order. Said the state didn’t need it. His excuse? The White House hadn’t told him to do it. But yesterday it did, so he did. Well, actually, the White House “recommended” it. DeSantis made a point of saying he “cleared it with the President.”

Contrast DeSantis’s actions with those of Mario Cuomo, Jay Inslee, Gavin Newsom, JB Pritzker, Gretchen Whitmer, Janet Mills, Charley Baker, and Mike DeWine. They’ve all been on their own, but they’ve been decisively responsible, and their constituents will one day thank them.

Every governor is reacting, and reacting is the right word, differently. It’s like watching an Athenian Trireme in the Mediterranean with all 170 oarsmen rowing at different speeds.

Don’t believe me? Let’s look at Stay At Home orders. Here’s a New York Times map showing state Stay At Home orders from 30 March, four days ago:

And here’s the same map as of yesterday, four days later:

The nation’s Governors are all having to act like European Prime Ministers, many of whom have issued travel restrictions and sealed borders. A week ago, Rhode Island’s Governor Gina Raimondo began letting New Yorkers into her state only if they would self-quarantine for 14 days, and she had the National Guard at the border to enforce the order.

All Governors would like their constituents to view them as Horatius At The Bridge, but Covid 19 is likely not the particular bridge they would have in mind. They need national leadership, not national cheerleading. Absent that, they’ve been forced to step into the void, some, like DeSantis, very reluctantly.

Trouble coming for the southeast

Vann R, Newkirk, II, has a terrific piece in this week’s The Atlantic looking at the public health difficulties facing young people, made even more severe by CoVid 19, in America’s southeastern states. Newkirk says:

So far, about one in 10 deaths in the United States from COVID-19 has occurred in the four-state arc of Louisiana, Mississippi, Alabama, and Georgia, according to data assembled by the COVID Tracking Project, a volunteer collaboration incubated at The Atlantic….The coronavirus is advancing quickly across the American South. And in the American South, significant numbers of younger people are battling health conditions that make coronavirus outbreaks more perilous.

Some context is needed. A new study by the World Health Organization (WHO), endorsed and published by the National Academies of Science, Engineering and Medicine ranks America at or near the worst in just about every mortality rate category you can think of when compared with the other 16 wealthiest countries. U.S. Health in International Perspectives: Shorter Lives, Poorer Health paints a grim picture that should concern us all.

Now, look at the health of people in the deep south, particularly young people, who, according to a new study by the Kaiser Family Foundation, have more comorbidities than young people anywhere else in the country. Those comorbidities put them at much greater risk of becoming seriously ill if they contract CoVid 19.

According to Newkirk:

If you define Oklahoma as part of the South, southern states fill out the entirety of the top 10 states in percentage of population diagnosed with hypertension by a doctor. Southerners are more likely to suffer from chronic diseases than other Americans—even as Americans are more likely to suffer from chronic diseases than citizens of other countries with comparable wealth.

Imagine you have a big barrel full of apples. Inside that barrel is a smaller barrel with apples your farm stand might label “seconds.” Inside that “seconds” barrel is a third and smaller barrel with apples your farm stand wouldn’t ever sell. The third barrel is health in the deep south.

The USNS Comfort

Remember this photo?

That’s the USNS Comfort, the 1,000 bed ship Donald Trump, to great fanfare, sent to New York to help with the serious hospital bed shortage, getting worse every day.

I’m guessing not too many people knew that the Comfort’s orders prohibit treating CoVid 19 patients. As President Trump said when he sent her on her way, “By treating non-infected people remotely on the ship, it will help to halt very strongly the transmission of the virus.” Note the words, “non-infected.”

So far, the Comfort has taken in three of New York’s patients. It’s kind of a Catch 22 thing. The ship can only take patients not infected with CoVid 19, but without sufficient testing, the ship’s clinicians won’t know if anyone actually has the disease, or not. Result: three patients. “If I’m blunt about it, it’s a joke,” said Michael Dowling, the head of Northwell Health, New York’s largest hospital system.

And finally – Getting back to the deep south

The American Association of Medical Colleges is out with its 2019 State Physician Data Workforce Report,

This annual report examines the supply of physicians in the United States. It documents the number of physicians per 100,000 inhabitants of every state. I’m proud, (I think) to report my home state, the Commonwealth of Massachusetts, takes the Gold Medal with 449.5 doctors per 100,000 people. On the other end of the scale, coming in at Number 50, is Mississippi with 191.3. I would love to know what goes on in Mississippi. It seems to be at or near the bottom of anything you can name.

Here are how all the southern states rank:

State                                MDs/100K                       Rank

Mississippi                       191.3                                50

Oklahoma                        206.7                                48

Arkansas                          207.6                                47

Alabama                           217.1                                43

Texas                                224.8                                41

Georgia                            228.7                                39

South Carolina                 229.5                                38

Kentucky                          230.9                                36

Tennessee                        253.1                                29

North Carolina                255.0                                28

Louisiana                          260.3                                27

Florida                              265.2                                23

Given that New York, which is begging for retired clinicians and clinicians from other states to come and help with its CoVid 19 fight, and given that New York, with 375.1 doctors per 100,000 people, ranks Number 3 on the list, just behind Massachusetts and Maryland, how do you think a state like poor Mississippi is going to fair when the full weight of this virus lands on it with a loud thud?

I hope all of you hermits have a safe weekend!

 

 

It Really Is The Prices, Stupid!

Thursday, March 21st, 2019

Trying to understand American health care these days is a little like trying to do the breast stroke through molasses. A lot of effort for not much progress.

The scope of the issue is vast. In 2017, US health care spending grew 4.6%, exactly double the growth rate of inflation, to $3.5 trillion. In 2018, it grew another 4.4% to $3.65 trillion. That’s 18% of US Gross Domestic Product (GDP). To put this in perspective, consider this: $3.65 trillion is more than the entire GDP economies of Italy and Spain – combined! It is $1 trillion more than the entire GDP of France and  equals that of Germany’s $3.6 trillion GDP.

Each of the health care players say they want to do something about this, just as long as you don’t touch their particular slice of the pie. And, because the health care lobby dwarfs every other one, we’re reduced to nibbling around the edges.

In 2003, Uwe Reinhardt, Gerard Anderson, Peter Hussie and Varduhi Petrosyan published their seminal work, It’s The Prices Stupid: Why The United States Is So Different From Other CountriesThey examined health care data from 30 OECD countries for the year 2000. Here is the basic conclusion from their Abstract:

U.S. public spending as a percentage of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy, and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper also compares pharmaceutical spending, health system capacity, and use of medical services. The data show that the United States spends more on health care than any other country. However, on most measures of health services use, the United States is below the OECD median. These facts suggest that the difference in spending is caused mostly by higher prices for health care goods and services (my emphasis) in the United States.

In 2017, Reinhardt died, after which his co-authors decided to re-examine their original conclusions and publish their findings as a tribute to him. Their new paper, It’s Still The Prices, Stupid, which they published in January, 2019, concluded that their original conclusions were “still valid.”

The conclusion that prices are the primary reason why the US spends more on health care than any other country remains valid, despite health policy reforms and health systems restructuring that have occurred in the US and other industrialized countries since the 2003 article’s publication. On key measures of health care resources per capita (hospital beds, physicians, and nurses), the US still provides significantly fewer resources compared to the OECD median country. Since the US is not consuming greater resources than other countries, the most logical factor is the higher prices paid in the US. Because the differential between what the public and private sectors pay for medical services has grown significantly in the past fifteen years, US policy makers should focus on prices in the private sector.

Another way to look at this is to compare the growth of health care utilization with the growth of prices. This produces some highly informative, surprising and, sometimes confounding, data. For example, from 2012 through 2016, US hospital in-patient prices rose 24.3%, yet in-patient utilization decreased 12.9%. I guess all that hospital consolidation has really lowered hospital prices, hasn’t it? During that period, and due primarily to the opioid epidemic, prescription drug utilization was the only medical service whose utilization rose, and it was up only 1.9%, despite the prices of prescription drugs rising 24.9%.

Question: Who has the most skin in this game?

Answer: Employers and the 156,199,800 people who work for them.

That answer is why I believe Warren Buffet, Jamie Diamond and Jeff Bezos, three major employers, have formed their joint health plan, Haven, and hired Atul Gawande to run it.  They have given Dr. Gawande time and a lot of money not just to slow the spending growth in their respective companies, but to reverse it. Buffet has spoken loudly about how health care costs place America at a competitive disadvantage. He has been vocal in his criticism of Republicans’ devotion to reducing corporate taxes, which, at 1.9% of GDP, are now the lowest among advanced nations and pale to near insignificance when compared to the health care costs borne by employers. He has said, “Medical costs are the tapeworm of American economic competitiveness.” Further, they are a major cause for little or no real wage growth.

More proof for his point: According to the US Census Bureau, employer sponsored insurance plans (ESIs) cover 56% of the US population. In 2018, the year we hit $3.65 trillion, the average annual premium for a family in an ESI was $19,616, of which employees paid an average of 29%, or $5,688. Employees in family plans also had an average deductible of $2,788, plus co-pays. So, even without the co-pays, employees are paying more than $8,000 for an ESI family plan. In 2019, we will blow through $20,000 for the cost of an ESI family plan. This is patently unsustainable and leads to two inescapable conclusions: First, Washington has not fixed this, and, given past experience, it is doubtful it ever will, regardless of efforts by progressives. Second, employers are the only people with the leverage and urgent incentive to do anything constructive. They need to stop worrying about corporate taxes, get on the Buffet, Bezos and Diamond bus, and throw all the muscle they have at the American health care fiasco.

 

Robots In The Manufacturing Sector – We’re Lagging Behind

Thursday, March 14th, 2019

In 2013, Oxford professors Carl Frey and Michael Osborne published what became a highly read, highly cited and highly criticized study suggesting that machines could replace 47% of America’s jobs over the following 25 years. This landed like a stink bomb on the robotic revolution.

The study, which examined more than 700 US occupations, found that jobs in transportation, logistics, and administrative and office work were at “high risk” for automation. “We identified several key bottlenecks currently preventing occupations being automated,” said Dr. Osborne when the study was released. “As big data helps to overcome these obstacles, a great number of jobs will be put at risk.”

Following the study, academics and pundits jumped into the middle of the debate to argue its conclusions. In 2015, Forrester Research’s J. P. Gownder authored The Future Of Jobs, 2025: Working Side By Side With Robots and updated it two years later in 2017. Gownder concludes that, yes, AI will replace many jobs, but it will also create many jobs. He suggests a net job loss of perhaps 9.1 million, or about 7% of the workforce. Seven percent isn’t 47%, but 9.1 million jobs are a lot of jobs. And a lot of people who could be swept away by the rise of the robots.

So, clearly, the robots are coming. And, just as clearly, there is now, and will continue to be, human collateral damage. We should do everything in our power to help the millions of people the robots will displace. It would be outrageously stupid, and immoral as well, not to do that.

But if you believe development and adoption of robots is essential to keep the country competitive and prosperous, then you should be concerned, because other countries are outpacing us. By long shot.

A new report from the Information Technology & Innovation Foundation (ITIF) finds the US ranks 7th in the world in the rate of robot adoption in the manufacturing sector.

When controlling for worker pay, the situation is even more bleak. In that case, we’re 17th in the world.

The report relies on International Federation of Robots data for industrial robot adoption rates but adjusted the rankings to control for differences in manufacturing worker pay. The decision to use robots usually weighs the cost savings that can be achieved when a robot can perform a task instead of a human worker, and those cost savings are positively related to the worker compensation levels. Higher wages lead to faster payback, making more robots a more economical investment.

On a compensation-adjusted basis, the report found that southeast Asian nations significantly outperform the rest of the world in robot adoption, with South Korea, Singapore, Thailand, China, and Taiwan the top five nations, in that order. Moreover, China’s rate of robot adoption is so high, fueled by massive government subsidies, that if China and South Korea’s respective growth rates continue, by 2026 China will lead the world with the highest number of industrial robots as a share of industrial workers, when controlling for compensation levels.

Robert Atkinson, ITIF’s President, has some sensible suggestions for how we can catch up. Policy makers should listen to him.

Low Wage Workers Pay More For Health Care Than High Wage Workers

Monday, January 21st, 2019

Anyone who can rub two brain cells together knows America spends more, much more, on health care than any other developed nation, as this chart from the Organization for Economic and Cooperative Development  (OECD) shows.

Also well established is the sad fact that in terms of health care outcomes our brethren in the OECD – Canada, England, Germany and France, for example – fare better than we.

Now, recent data published by the Bureau of Labor Statistics show lower wage workers pay more for health insurance than higher wage workers in employer provided plans.

What this means is: The employee portion of the monthly premium for family coverage paid by the lowest 10% of earners is $612, while the monthly premium for the highest 10% is $488. The lowest 10% of earners pay 25% more than the highest 10%. Similar results for single coverage.  Look at the light blue and light green bars in each of the strata in the chart. The more you make, the less you pay.

This is wacky. And terribly unfair. But wait, there’s more.

For every year in the 21st century, this has been getting worse.

From 2000 through 2018, health insurance costs for a single person in an employer-provided health plan rose 179%; family coverage rose 204%. During this same period, the Consumer Price Index was up 49%, while earnings for hourly employees grew by 48%. So, essentially, workers’ pay matched inflation, meaning real wages, wages adjusted for inflation, did not move as health care costs continued their rocket ride to the moon.

I keep thinking this cannot continue. I keep thinking Herb Stein was right: If something cannot go on forever, it will stop. And I keep being proven wrong. The fact is, up until the mid-1980s, our health care system was like a typical family home with its two bedrooms, a bath and a half and a nice little two-car garage. Today, it seems like the 1,000-room, maze-like Windsor castle where you need a map and a guide to find your way around. Vested interests litter the landscape, and any change gores somebody’s ox.

How can we possibly stop this runaway train? Many placed hope in the Affordable Care Act, but look what’s happened to that. The new generation of Democrats yearns for “Medicare For All,” but has yet to figure out how to pay for it. Others suggest “Medicaid For All,” but Medicaid is a state-based system, and every state has its own version. I’d love to see a single payer system, but, looking at the lunacy behind our current government shutdown, can you envision that cresting over the horizon, given all the work and bi-partisanship it would take? When I look at the health care horizon, I see the Four Horsemen of the Apocalypse coming over the rise.

Certainly, there are pockets of innovation and excellence around the nation, but we have no national, systemic approach to fix to the problem of extraordinary high costs, and it’s hard to imagine this congress, or any congress, doing anything about that. At more than $8 billion dollars, the health care industry spends more on lobbying than any other industry, and that’s not about to change, once again proving Mark Twain right: We have the best government money can buy.

I believe the work done in those “pockets of excellence” will gradually lead to improved health for Americans who can afford to pay for it. It’s the “can afford to pay for it” part that sickens me.

What Price Life?

Thursday, November 29th, 2018

Part One

“Insulin is my gift to mankind” – Frederick Banting

A Quick Quiz

Question 1: Name a chronic disease requiring medication, which, if not taken every day, guarantees death within two weeks.
Answer: Type 1 Diabetes.

Question 2: Name the medication.
Answer: Insulin.

Question 3: What is the monthly cost of insulin for a Type 1 diabetic?
Answer: As we shall see, that depends.

Question 4: If Type 1 diabetics cannot afford the cost of insulin, without which they will surely die, what should they do?
Answer: This is happening at this moment, and people are dying.  In these two blog posts we’ll examine why and what can be done about it. But we need to first posit some truths about diabetes, and then describe how, in 1922, Canadian doctor Frederick Banting made the ground-breaking discovery that allowed Type 1 diabetics, for the first time in history, to live.

Ten Fast Facts

  1. Insulin is a hormone made by the pancreas that allows the body to use sugar (glucose) from carbohydrates in the food we eat for energy or to store glucose for future use. Insulin helps keeps blood sugar levels from getting too high (hyperglycemia) or too low (hypoglycemia). Type 1 diabetics, T1Ds, can no longer produce insulin. They have none of it. Although older adults can also contract Type 1 diabetes, it usually strikes children and young adults. Without insulin, whether old or young, they die.
  2. There are about 1.3 million T1Ds in the U.S. They comprise one half of one percent of the population. Currently, there is no cure for any of them. Without insulin, they will die.
  3. There are about 29 million Type 2 diabetics. T2Ds still make some insulin. In most, lifestyle changes will improve their health, sometimes to the point where they will no longer require insulin or any other medical prescriptions. Some will become insulin-dependent, and without it, they face life-changing complications.
  4. Diabetic Retinopathy is the leading cause of blindness.
  5. Diabetes is the leading cause of non-traumatic amputation.
  6. Diabetes is a leading cause of heart attack and stroke.
  7. Diabetes is the leading cause of kidney failure.
  8. Complications from diabetes sometimes cause workplace injuries and often exacerbate the severity and length of recovery.
  9. In 2017, the nation’s total direct medical costs due to diabetes were $237 billion. Average medical expenses for diabetics were 2.3 times higher than for non-diabetics. The extent to which diabetes added to workers’ compensation medical costs is unknown.
  10. Based on information found on death certificates, diabetes was the 7th leading cause of death in the United States in 2015, with 79,535 death certificates listing it as the underlying cause of death, and 252,806 listing diabetes as an underlying or contributing cause of death. However, diabetes is underreported as a cause of death; studies have found that only about 35% to 40% of people with diabetes who died had diabetes listed anywhere on the death certificate and only 10% to 15% had it listed as the underlying cause of death. An example of best practice would be, “Death caused by infection contracted from hemodialysis due to kidney failure, a complication of the patient’s diabetes.”

Banting and Insulin

Image result for photo of frederick banting

Frederick Banting is perhaps Canada’s greatest hero. Born in 1891, he graduated medical school with a surgical degree in 1915 and found himself in a French trench by the end of 1917. In December of that year, he was wounded during the Battle of Cambrai, the first great tank battle in history. He remained on the battlefield for 16 hours tending to other wounded soldiers until he had to be ordered to the rear to have his own wounds treated. For this action he won the British Military Cross, akin to America’s Silver Star. After returning to Canada, he continued his studies and, in 1920, secured a part time teaching post at Western Ontario University. While there, he began studying insulin Why? Serendipity. Someone had asked him to give a talk on the workings of the pancreas.

Banting became interested – and then obsessed – with trying to come up with a way to get insulin to people who couldn’t make any of their own. In November 1921, he hit on the idea of extracting insulin from fetal pancreases of cows and pigs. He discussed the approach with J. R. R. MacLeod, Professor of Physiology at the University of Toronto. MacLeod thought Banting’s idea was doomed to failure, but he allowed him to use his lab facilities while he was on a golfing holiday in Scotland. He also loaned him two assistants, Dr. Charles Best and biochemist James Collip. Collip devised a method to purify the insulin Banting and Best obtained from the fetal pancreases.

To MacLeod’s surprise, Banting’s procedure worked, and in 1922 Banting and Best successfully treated the daughter of US Secretary of State Charles Evans Hughes.

In 1923, one year later, Banting, at the age of 32, won the Nobel Prize, which, to his disgust, he had to share with MacLeod. To this day, Frederick Banting is the youngest person ever to win the Prize in Physiology or Medicine.

His discovery could have made Banting mind-numbingly rich, but he would have none of that. Along with Best and Collip, Banting patented his method and then the three of them sold the patent to the University of Toronto for the princely sum of $3.00. When asked why he didn’t cash in on his discovery, Banting said, “Insulin is my gift to mankind.” With Banting’s blessing, the University licensed insulin’s manufacturing to drug companies, royalty free. If drug companies didn’t have to pay royalties, Banting thought they would keep the price of insulin low.

And they did. For decades.

But patents expire, and capitalism being what it is, people get greedy, and greed is why we have no generic, low-cost insulin today and why, over the past 20 years, insulin prices have risen anywhere from 800% to 1,157%, depending on the variety and brand. It’s why, lacking health insurance, some Type 1 diabetics have recently been driven to ration their precious insulin. Some of them have died.

More about all that in Part Two.

 

 

 

Violence In The ER: A Big Problem Getting Worse

Monday, November 26th, 2018

Men and women who yearn to follow in the footsteps of Hippocrates, Galen and Banting are taught many things in Med School, but there is no course called Violence In The ER, And What To Do When It Happens To You. 

Until recent times that hasn’t been much of an issue for the doctors and nurses who take care of us when we need critical care in a hurry. But in the 21st century, violence in the ER has become less the exception and more the rule.

In a 2018 American College of Emergency Physicians (ACEP) survey of 3,539 ER doctors, 47% reported being assaulted at work, 60% of those within the last year.

Why is this happening? According to ACEP, there are at least three problems with no easy solutions causing the sharp uptick in ER violence.

First, America has a tremendous shortage of psychiatric beds for people in profound mental stress. That means people in serious need of behavioral and mental health care can languish on a gurney in the ER for days, even weeks until a bed becomes available somewhere. Second, patients who’ve become addicted to opioids often show up in the ER demanding medication, and when they don’t get it things can get dicey in a hurry. Third, hospitals haven’t done enough to protect physicians and nurses from attacks by highly-stressed knife and (sometimes) gun wielding patients. Some hospitals have installed metal detectors at entrances, but the detectors and the labor required to screen incoming people can be pretty expensive, especially to a cash-strapped community hospital. Even with the metal detectors, many doctors in the ACEP study reported being kicked, punched, bitten and spit upon by deranged patients. This is a difficult issue for hospital risk managers to confront successfully.

We’ve known for many years that nurses and nursing aides are much more likely than other professionals to be victims of violence in the workplace. According to the US Bureau of Labor Statistics, “intentional injury’’ by another person rose nearly 50%, from 6.4 per 10,000 hospital workers in 2011 to 9.0 per 10,000 hospital workers in 2016, the most recent year of data. The rate across private industry is 1.7. OSHA has analyzed this and published Guidelines for dealing with it. But the ACEP survey is one of the first to shine a light on the stark potential for violent harm confronting Emergency Physicians.

One wonders if the threat of violence in the ER will dissuade med school graduates from specializing in Emergency Medicine. This would certainly be unfortunate, because a shortage already exists for rural ER physicians as documented in a June 2018 study published in the Annals of Emergency Medicine. At the time of the study, more than 27 percent of US rural  counties did not have emergency medicine clinicians and 41.4 percent of counties did not have any emergency physicians reimbursed by Medicare fee-for-service Part B, according to the study.

We’ll continue to follow this phenomenon and occasionally report on progress or lack of it in protecting these highly trained and dedicated life savers. For, now, consider this graphic from the aforementioned ACEP study.

At The Bottom Looking Up

Tuesday, November 13th, 2018

What does a nation owe its citizens with respect to health care?

For nearly all members of the Organization for Economic and Cooperative Development (OECD), the answer is guaranteed, high-quality, universal care at reasonable, affordable cost. For OECD founding member America, the answer seems to have become an opportunity to access care, which may or may not be of high-quality at indeterminate, wildly fluctuating and geographically varying cost.

It is indisputable that the US devotes more of its GDP to health care than other countries. How much more? For that answer we can turn to many sources, roughly all saying the same thing. The OECD produces annual date, as does the World Health Organization, among others. Another reliable and respected source is The Commonwealth Fund, which conducted a study of eleven high income OECD members including the US. The collection of health care cost data lags, so data from this study is mostly from 2014. Here is the cost picture:

As you can see, in 1980, US spending was not much different from the other ten OECD countries in the study. While high, it was at least in the same universe. But now, at 50% more than Switzerland, our closest competitor in the “how much can we spend” sweepstakes”, we might be forgiven for asking, “What in the name of Hippocrates happened?” As if this weren’t enough, the 2014 GDP percentage of spend, 16.6%, has now risen to nearly 18%, according to the CMS.

So, what do we get for all that money? We ought to have the highest life expectancy, the lowest infant mortality rate and the best health care outcomes in the entire OECD. But we don’t.

For many readers, it is probably galling to see both the UK and Australia at the top of the health care system performance measure and at the bottom of the spending measure. In the early 2000s, each of these countries poured a significant amount of money into improving its performance, and the results speak for themselves.

Consider all of this mere background to the purpose of this blog post.

Last week, we wrote about the terrible, 40-year stagnation of real wage growth in the US, pointing out that in that period real wages in 1982-1984 constant dollars have risen only 4.5%. But, as we have seen, health care spending did not follow that trajectory. This has resulted in tremendous hardship for families as they have tried to keep pace with rising health care costs. For, just as US health care spending has risen dramatically since 1980, so has what families have to pay for it.

To put this in perspective, consider this. Since 1999 the US CPI has risen 54%, but, as the chart above shows, the cost of an employer offered family plan has risen 338%. If a family’s health care plan’s cost growth had been inflation-based, the total cost to employer and employee would be $8,898 in 2018, not $19,616. In 2018, the average family in an employer-based plan pays 30% of the plan’s cost ($6,850), plus a $2,000 deductible, plus co-pays that average $20 whenever health care is accessed, plus varying levels of co-pays for drugs.

On top of all that is the enormous difficulty people have in trying to navigate the dizzying health care system (if you can call it that). American health care is a dense forest of bewildering complexity, a many-headed Hydra that would make Hesiod proud, a labyrinthine geography in which even Theseus with his ball of string would find himself lost.

With wages and health care costs growing ever farther apart, America has a crisis of epic proportion. Yet all we can seem to do is shout at each other about it. When do you think that will end? When will we begin to answer the question that this post began with: What does a nation owe its citizens with respect to health care? When will our nation’s leaders realize we can actually learn from countries like Australia, the UK, Switzerland and all the other high performing, low cost members of the OECD? Continuing on the present course is no longer a viable option.

 

Note: You may be questioning The Commonwealth Fund’s research. To put your mind at ease about that, here are the study sources:

Our data come from a variety of sources. One is comparative survey research. Since 1998, The Commonwealth Fund, in collaboration with international partners, has supported surveys of patients and primary care physicians in advanced countries, collecting information for a standardized set of metrics on health system performance. Other comparative data are drawn from the most recent reports of the Organization for Economic Cooperation and Development (OECD), the European Observatory on Health Systems and Policies, and the World Health Organization (WHO).

 

 

It Is Time

Monday, November 5th, 2018

This is not a piece about insurance or health care. It won’t make the cut for Health Wonk Review and it will probably cost us readers (Well, 15 years has been a pretty good run). What this piece is is one that addresses the health of our nation.

Today, the Bureau of Labor Statistics (BLS) released a chart showing gains in productivity and hourly wages from Q3 2017 to Q3 2018. It looks remarkably similar to the chart BLS released at the end of Q2. Impressive Productivity and Output gains in both quarters. And, if you didn’t know better, you’d think Hourly Compensation is rising pretty well, too.

However, look to the far right of both charts to see the change in Real Hourly Wages, which are wages after inflation is factored in. The Trump administration and most of the press have trumpeted (pun intended) the nominal wage increase of 2.8% for Nonfarm Business and 2.2% for Manufacturing in Q3, 3.2% and 2.5%, respectively, in Q2, without saying a thing about the negligible, and in some cases decreasing, Real Wages.

Real Wages for Nonfarm Business during this one-year period (Q3 to Q3) are up a measly 0.1%, after rising an anemic 0.5% in Q2; Manufacturing Real Wages in Q3 are actually down 0.4% after being down 0.2% in Q2. And this is not a new phenomenon. In the 40 years since 1979, Real Wages for hourly and non-supervisory workers have increased by a total of only 4.5%. During that same period, the CPI has risen 247.7%.

These are not “alternative facts.”

Since the day Donald Trump and his cronies got the keys to the kingdom, Real Wages per week have risen from $349 to $351 in constant 1982-1984 dollars. Two bucks! For the mathematically inclined among you, that’s an increase of 0.005%. During the same period, the Dow Jones average has grown 20.9%, and that counts the recent decline. I like the stock market as well as the next guy, but barely one-third of families in the bottom 50% of earners own stocks, according to the Federal Reserve. The fact is, lower-income Americans don’t have extra money to put into stocks, and a third of workers don’t have access to a 401(k) or another retirement plan, according to Pew.

The facts make clear that since Republicans took control of everything, the economic gains  have gone to the top earners. Folks in the middle and lower end have, to a large degree, been left by the wayside. Inequality reigns supreme. It is beyond baffling that these people who continue to get the smelly end of the stick resolutely remain, seemingly unperturbed, in the center of Mr. Trump’s base. Look at the enthused, smiling faces at his rallies. Sociologists have written about this, but I have yet to see anything that explains it fully.

Regardless, tomorrow is Election Day. Many of us have already voted. Many more will exercise the option tomorrow. Predictions call for a large turnout, large being defined, God help us, as perhaps a little more than half. I’m now in my eighth decade, and I cannot recall a more consequential election.

Many Americans (as well as some of my friends) are highly satisfied with the tax law changes, the rise in the stock market and the new makeup of the Supreme Court. In exchange for those they allow, without condemnation, the bullying behavior, the constant hyperbole, the ad hominem attacks and the non-stop lying.

It is time for the better angels of our nature to rise to the challenge. It is time to demand decency, and it is time to reject the abject vulgarity that oozes from the awesome edifice where John Adams, Thomas Jefferson and Abraham Lincoln once lived and guided the nation. It is time to raise up America to its true potential. It is time for America to become once again the world’s beacon of hope. Maybe tomorrow America will say, “It is time.” To quote John Milton, “Hope springs eternal.”

Perhaps it is fitting to end this non-insurance piece with the words John Adams wrote to his wife Abigail at the end of his first day residing in the yet-to-be-completed new White House in 1800. Franklin Roosevelt had the words engraved onto the mantel of the White House State Dining Room in 1945. Adams wrote, “May none but honest and wise men ever rule under this roof.” I wonder if the current occupant has ever seen those words.

This Can’t Go On Forever, Right?

Monday, April 23rd, 2018

The ratio of wages to the cost of living is what the economist calls real wages; the desirability of having real wages as high as possible, consistent with high employment, is a social objective. Rises in real wages do for the most part come about in fact as a consequence of rises in productivity. In a modern economy, what has [sic] normally to be expected  is rising productivity. – J. R. Hicks: Unions, Management and the Public; New York, Harcourt, Brace, and Co., 1960

What Hicks wrote 58 years ago had been true for more than 100 years. But 13 years later, in 1973, his economic model crashed. Productivity and real wage growth, which had been so tightly bound for so many years, parted company.

The consequences have been enormous. Hourly paid workers comprise about 60 percent of wage and salary workers. In Hicks’s day, nearly a third of all  workers were unionized. In 2017, however, the union membership rate had fallen to 10.7 percent, according to the U.S. Bureau of Labor Statistics. It’s only that high because of public sector participation. The union membership rate of public sector workers (34.4 percent) is more than five times higher than that of private sector workers (6.5 percent). Ponder that for just a moment. Only 6.5% of private sector workers are unionized today. This, despite union members having median weekly earnings about 25 percent higher than earnings for nonunion workers in comparable jobs ($1,041 versus $829).

This presents us with a befuddling paradox:

  1. Since 1973, the year when hourly wages and productivity waved goodbye to each other, real wages have been essentially flat, rising about 4% in the intervening 45 years;
  2. But in the same period, the CPI has risen 586%. That’s right. What you bought for $1.00 in 1973 will cost you $5.86 as of one month ago.
  3. Yet throughout this period, union participation and membership has declined by roughly 50%, despite union membership resulting in considerably higher wages for workers.

In Massachusetts, my home state, union membership was 12.4% in 2017, but 70% of that was in the public sector. At the recent Workers’ Compensation Research Institute’s annual conference I asked Steve Tolman, President of the Massachusetts AFL-CIO, why union membership hasn’t risen like a rocket to the moon given the persistent stagnant growth of real wages. He said he thought legislatures and employers had made it increasingly more difficult to win a union campaign. So, I then asked Keynote Speaker Erica Groshen, Ph.D., former Commissioner of the U.S. Bureau of Labor Statistics, her opinion. She wasn’t sure if there was a link between lack of union membership and stagnant real wage growth and suggested more research should be done. And in yesterday’s New York Times Louis Uchitelle suggested that American manufacturers relentlessly moving manufacturing jobs offshore has led to a steady decline in union membership – you can’t be in a union if you don’t have a job. The title of Uchitelle’s piece was, “How Labor’s Decline Hurt American Manufacturing.” Could have just as easily been titled, “How American Manufacturing’s Decline Hurt Labor.”

Regardless, what we’re left with is this (as I’ve written before): The 60% of the American workforce that is paid hourly resembles a swimmer trying to catch up to a battleship; with every stroke he falls farther and farther behind.

One highly illustrative area where meager wage growth has impacted the American family can be found in the cost of health care.

In 1989, Herb Stein (father of Ben), former Chairman of President Nixon’s Council of Economic Advisors, coined Stein’s Law*, which says, “If something cannot go on forever, it will stop.”

Do you think this can go on forever? What are the societal and political consequences if we see continued flat wage growth, the accelerating decline of private-sector unions, a rising CPI and an increasingly costly health care burden for families? Do you think today’s polarized American society is capable of addressing, let alone reversing, these decades old trends? What will it take for that to happen? I wish I knew.

But here is something I do know. If employers do not begin to do their best to address these issues – wage stagnation and ever rising health care costs that come with ever increasing deductibles – then unions and people like Steve Tolman, dormant for so long, will, and they’ll come with all guns blazing.

 

* Stein’s Law appeared on Page One of the June 1989 issue of the “AEI Economist” under the headline “Problems and Not-Problems of the American Economy.”

 

WCRI’s Annual Conference: The Curtain’s About To Rise

Monday, March 19th, 2018

This week will see most of the nation’s workers’ compensation cognescenti at the Workers’ Compensation Research Institute’s annual conference in beautiful downtown Brahmin Boston, the home of the bean and the cod, where the Lowells speak only to Cabots, and the Cabots speak only to God.

This is WCRI’s 34th annual conference, and it sports an agenda that should satisfy even the geekiest of data geeks.

To me, two things stand out. First, if you’re coming to my home town expecting not to hear much about drugs, I submit you’ve been living on another planet. Three of the eight total sessions address drugs: two on opioids, one on Medical Marijuana.

Dr. Terrence Welsh, Chief Medical Officer at the Ohio Bureau of Workers’ Compensation, will detail Ohio’s successful program aimed at reducing opioid dependence among injured workers.

In 2011, the Ohio Bureau of Workers’ Compensation (OBWC) found that more than 8,000 injured workers were opioid-dependent for taking the equivalent of at least 60 mg a day of morphine for 60 or more days. By the end of 2017, that number was reduced to 3,315, which meant 4,714 fewer injured workers were at risk for opioid addiction, overdose, and death than in 2011.

After years of thumb-twiddling, other states have made great strides in combating opioid dependence in workers’ compensation, California and Washington State to name just two. But because workers’ compensation is state-based, there’s no national workers’ compensation solution; every state is on its own. Most are actively engaged in building programs to reverse the deadly trend, but workers’ compensation is only the tiny caboose on the back end of the great big American health care train(wreck). Nationally, the health care industry doesn’t seem to be having as much success as workers’ compensation’s committed leaders.

Evidence: U.S. life expectancy at birth dropped in 2015 for the first time since 1993 during the AIDS epidemic. The years 2015 and 2016 saw the first consecutive two-year drop in life expectancy at birth since 1962/63 (generally attributed to an epidemic of flu).  The two-year drop in American’s life expectancy is primarily due to drug deaths. In 2015, the nation suffered 52,400 drug overdose deaths. That’s more people than were killed in car crashes in any year since 1973. In 2016, the total rose to 63,600, more than were killed during the entire Vietnam conflict, which lasted more than a decade. Drug deaths for 2017 appear to be even higher, although, because drug deaths take a long time to certify, the Centers for Disease Control and Prevention will not be able to calculate final numbers for 2017 until December. No other country in the OECD has seen a drop in life expectancy in recent history.

Although it is obviously appropriate that medical issues make up the preponderance of this year’s WCRI sessions, the Keynote Address, to be given by Dr. Erica Groshen, former head of the U.S. Bureau of Labor Statistics, is of great interest to me. In her presentation, “Future Labor Force Trends and the Impact of Technology,” Dr. Groshen will address and analyze current labor market trends and provide official statistics leading to her views on the future of work. Because I have written about America’s pathetic, more-than-four-decade lack of hourly wage growth, I’ll be keenly interested in her remarks. Here are some questions I’d like her to answer:

January, 2018, saw the first substantial monthly hourly wage growth (2.9% from a year earlier) since 1974. This was not repeated in February (0.1% gain in wages, offset by 0.2% growth in the Consumer Price Index)
  • Does Dr. Groshen see any correlation between stagnant hourly wage growth and workers’ compensation’s declining injury frequency and loss costs?
  • If this is a current unknown, should WCRI study it? If not WCRI, then who?
  • Between 1948 and 1973 there was a one to one correlation between productivity and wages. However, since 1973, productivity has risen nearly 75%; wages about 9%. How does Dr. Groshen see this playing out in the next decade?

Two final thoughts about the upcoming conference. I know time is limited, but I wish WCRI had allotted one session to Artificial Intelligence and Machine Learning and their impact now and in the immediate future on workers and workers’ compensation. Artificial Intelligence (AI) continues to gain significant momentum throughout industry.  The workers’ compensation industry is ever so slowly increasing the bandwidth of its AI capability, but it still seems to lag far behind other industries in embracing much that AI has to offer.

Speaking of AI, IBM Q, the creator of Watson, put a 5 cubit quantum computer prototype in the cloud in 2016 and two months ago unveiled a 20 cubit quantum computer available to its clients and a prototype 50 cubit quantum computer. Unlike  current computers, which perform operations sequentially, quantum computers perform many operations simultaneously. An operation which currently can take days, or even weeks, will be done on a quantum computer in minutes, or even seconds.

I would love to see the massive brain power at WCRI turn its attention to this fascinating area and its potential impact on the labor force and workers’ compensation.

See you in Boston.