Category Archives: Health Care

COVID and Hospital Capacity

15 Sunday Nov 2020

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The fall wave of the coronavirus has brought with it an increase in COVID hospitalizations. It’s a serious situation for the infected and for those who care for them. But while hospital utilization is rising and is reaching tight conditions in some areas, claims that it is already a widespread national problem are without merit.

National and State Hospital Utilization

The table below shows national and state statistics comparing beds used during November 1-9 to the three-year average from 2017 – 19, from Justin Hart. There are some real flaws in the comparison: one is that full-year averages are not readily comparable to particular times of the year, with or without COVID. Nevertheless, the comparison does serve to show that current overall bed usage is not “crazy high” in most states, as it were. The increase in utilization shown in the table is highest in IA, MT, NV, PA, VT, and WI, and there are a few other states with sizable increases.

Another limitation is that the utilization rates in the far right column do not appear to be calculated on the basis of “staffed” beds, but total beds. The U.S. bed utilization rate would be 74% in terms of staffed beds.

Average historical hospital occupancy rates from Statista look like this:

Again, these don’t seem to be calculated on the basis of staffed beds, but current occupancies are probably higher now based on either staffed beds or total beds.

As of November 11th, a table available at HealthData.gov indicates that staffed bed utilization in the U.S. is at nearly 74%, with ICU utilization also at 74%. As the table above shows, states vary tremendously in their hospital bed utilization, a point to which I’ll return below.

COVID patients were using just over 9% of of all staffed beds and just over 19% of ICU beds as of November 11th. One caveat on the reported COVID shares you’ll see for dates going forward: the CDC changed its guidelines on counting COVID hospitalizations as of November 12th. It is now a COVID patient’s entire hospital stay, rather than only when a patient is in isolation with COVID. That might be a better metric if we can trust the accuracy of COVID tests (and I don’t), but either way, the change will cause a jump in the COVID share of occupied beds.

Interpreting Hospital Utilization

Many issues impinge on the interpretation of hospital utilization rates:

First, cases and utilization rates are increasing, which is worrisome, but the question is whether they have already reached crisis levels or will very soon. The data doesn’t suggest that is the case in the aggregate, but there certainly there are hospitals bumping up against capacity constraints in some parts of the country.

Second, occupancies are increasing due to COVID patients as well as patients suffering from lockdown-related problems such as self-harm, psychiatric problems, drug abuse, and conditions worsened by earlier deferrals of care. We can expect more of that in coming weeks.

Third, lockdowns create other hospital capacity issues related to staffing. Health care workers with school-aged children face the daunting task of caring for their kids and maintaining hours on jobs for which they are critically needed.

Fourth, there are capacity issues related to PPE and medical equipment that are not addressed by the statistics above. Different uses must compete for these resources within any hospital, so the share of COVID admissions has a strong bearing on how the care of other kinds of patients must be managed.

Fifth, some of the alarm is purely case-driven: all admissions are tested for COVID, and non-COVID admissions often become COVID admissions after false-positive PCR tests, or simply due to the presence of mild COVID with a more serious condition or injury. However, severe COVID cases have an outsized impact on utilization of staff because their care is relatively labor-intensive.

Sixth, there are reports that the average length of COVID patient stays has decreased markedly since the spring (it is hard to find nationwide figures), but it is also increasingly difficult to find facilities for post-acute care required for some patients on discharge. Nevertheless, if improved treatment reduces average length of stay, it helps hospitals deal with the surge.

Finally, thus far, the influenza season has been remarkably light, as the following chart from the CDC shows. It is still early in the season, but the near-complete absence of flu patients is helping hospitals manage their resources.

St. Louis Hotspot

The St. Louis metro area has been proclaimed a COVID “hotspot” by the local media and government officials, which certainly doesn’t make St. Louis unique in terms of conditions or alarmism. I’m curious about the data there, however, since it’s my hometown. Here is hospital occupancy on the Missouri side of the St. Louis region:

It seems this chart is based on total beds, not staffed beds, However, one of the interesting aspects of this chart is the variation in capacity over time, with several significant jumps in the series. This has to do with data coverage and some variation in daily reporting. Almost all of these data dashboards are relatively new, so their coverage has been increasing, but generally in fits and starts. Reporting is spotty on a day-to-day basis, so there are jagged patterns. And of course, capacity can vary from day-to-day and week-to-week — there is some flexibility in the number of beds that can be made available.

The share of St. Louis area beds in use was 61% as of November 11th (preliminary). COVID patients accounted for 12% of hospital beds. ICU utilization in the St. Louis region was a preliminary 67% as of Nov. 11, with COVID patients using 29% of ICU capacity (which is quite high). Again, these figures probably aren’t calculated on the basis of “staffed” beds, so actual hospital-bed and ICU-bed utilization rates could be several percentage points higher. More importantly, it does not appear that utilization in the St. Louis area has trended up over the past month.

At the moment, the St. Louis region appears to have more spare hospital capacity than the nation, but COVID patients are using a larger share of all beds and ICU beds in St. Louis than nationwide. So this is a mixed bag. And again, capacity is not spread evenly across hospitals, and it’s clear that hospitals are under pressure to manage capacity more actively. In fact, hospitals only have so many options as the share of COVID admissions increases: divert or discharge COVID and non-COVID patients, defer elective procedures, discharge COVID and non-COVID patients earlier, allow beds to be more thinly staffed and/or add temporary beds wherever possible.

Closing Thoughts

Anyone with severe symptoms of COVID-19 probably should be hospitalized. The beds must be available, or else at-home care will become more commonplace, as it was for non-COVID maladies earlier in the pandemic. A continued escalation in severe COVID cases would require more drastic steps to make hospital resources available. That said, we do not yet have a widespread capacity crisis, although that’s small consolation to areas now under stress. And a few of the states with the highest utilization rates now have been rather stable in terms of hospitalizations — they already had high average utilization rates, which is potentially dangerous.

COVID is a seasonal disease, and it’s no surprise that it’s raging now in areas that did not experience large outbreaks in the spring and summer. And those areas that had earlier outbreaks have not had a serious surge this fall, at least not yet. My expectation and hope is that the midwestern and northern states now seeing high case counts will soon reach a level of prevalence at which new infections will begin to subside. And we’re likely to see a far lower infection fatality rate than experienced in the Northeast last spring.

Not News: Infections and Long-Term Complications

06 Sunday Sep 2020

Posted by in Coronavirus, Health Care

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At 15 years of age I was diagnosed as a Type I diabetic — 49 years ago. I had a genetic predisposition, but I’ve been told by several endocrinologists over the years that an “event” likely triggered the antibody response for which I was predisposed. The event was, in all probability, a viral or bacterial infection. The autoimmune response to that infection attacked the islet cells in my pancreas and destroyed my body’s ability to produce insulin. I’ve been dependent on external delivery of insulin ever since. Life goes on.

I relate this information to emphasize that it is not “novel” for a virus to trigger long-term “complications”. Recently, certain media factions have been shrieking about the long-term complications that might be triggered by the coronavirus (C19) even in those with otherwise light symptoms. Those are unfortunate, but again, this aspect of viral and bacterial infection is not uncommon.

We know, for example, that bacterial and viral infections often trigger autoimmune diseases like diabetes. Other examples are chronic fatigue syndrome, fibromyalgia, rheumatoid conditions, celiac disease, Graves’ disease, Guillain-Barré syndrome, Sjogren’s Syndrome, multiple sclerosis, and many others.

One condition that’s been cited as an especially dangerous complication of C19 is myocarditis, or inflammation of the heart muscle. This has been invoked as a reason to cancel sports competitions, for example. (See here for a denial of one rather hyperbolic claim regarding this condition.) Myocarditis has a long history as a side effect of influenza. Most people recover with no long-term complications, and others manage to live with it and remain productive. While C19 is “novel”, infection-induced myocarditis is not.

If you catch a virus or a bacterial infection, you might experience other complications with varying severity. Get used to the idea. It’s an unfortunate fact of life.

Trump Hates/Loves Lockdowns, Dumps on Swedes

07 Sunday Jun 2020

Posted by in Health Care, Pandemic

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President Trump was in a festive mood last Friday, pleased with the May employment report, as he should be. But in his Rose Garden word jam, he made some questionable and unnecessary claims about coronavirus policies in the U.S. and the Swedish experience. I credit Trump for pushing to end the lockdowns as it became clear that they were both unhealthy and unsustainable. However, he’s now way too eager to cover his earlier tracks. That is, he is now defensive about the precautions he advocated on the advice of his medical experts in March and early April.

In the Rose Garden, Trump said that lockdowns were necessary to stop the spread of the virus. But to assert that lockdowns “stopped” or even slowed the spread of the virus is speculation at best, and they had deadly effects of their own. Most of the social distancing was achieved through voluntary action, as I have argued previously. Lockdown advocacy lacked any semblance of geographic nuance, as if uniform application makes sense regardless of population density.

Trump went on to say that Sweden was in “bad shape” because it did not impose a lockdown during the pandemic. This is not a new position for the president, but the facts are anything but clear-cut. Again, there is mixed evidence on whether mandatory lockdowns have a real impact on the spread or mortality of the coronavirus (also see here). That’s not to say that social distancing doesn’t work, but much of the benefit comes from private decisions to mitigate risk via distancing. Of course, that also depends on whether people have good information to act on. And to be fair, Sweden did take certain measures such as banning gatherings of more than 50 people, closing schools, and limiting incoming travel.

While the full tale has not been told, and Sweden’s death rate is high on a per capita basis, several other Western European countries that imposed lockdowns have had even higher death rates. The following chart is from the Institute for Health Metrics and Evaluation (IMHE). It is expressed in terms of coronavirus deaths per 100,000 of population. The orange line is Sweden, the purple line is Belgium, and the light blue line is the UK. Actuals are reported through June 4th. While Sweden’s death toll has a somewhat steeper gradient, the level remains well below both Belgium and the UK. It is also lower than the death rates for Italy and Spain, and it is about the same as France’s death rate. Yes, a number of other countries have lower death rates, including the U.S., but the evidence is hardly consistent with Trump’s characterization.

Sweden’s big mistake was not it’s decision to rely on voluntary social distancing, but in failing to adequately protect highly vulnerable populations. The country’s elderly skew older than most countries by several years. Residents of nursing homes have accounted for about half of Sweden’s coronavirus deaths, an international outlier. Inadequate preparedness in elder care has been a particular problem, including a lack of personal protective equipment for workers. There was also a poorly implemented volunteer program, intended to fill-out staffing needs, that appears to have aggravated transmission of the virus.

Sweden has also experienced a concentration of cases and deaths among its large immigrant population. It has the largest immigrant population among the Nordic countries, with large numbers of low income migrants from Syria, Iraq, Iran, Somalia and parts of Eastern Europe. Earlier in the pandemic, according to one estimate, 40% of coronavirus fatalities in Stockholm were in the Somali population. These immigrants tend to live in dense conditions, often in multigenerational households. Many residents with health problems tend to go untreated. Conditions like Vitamin D deficiency and high cholesterol, apparent risk factors for coronavirus severity, likely go untreated in these communities. In addition, language barriers and traditional trust relationships may diminish the effectiveness of communications from public health authorities. In fact, some say the style of Swedish public health messaging was too culturally idiosyncratic to be of much use to immigrants. And one more thing: immigrants are a disproportionately high 28% of nursing home staff in Sweden, implying an intimacy between two vulnerable populations that almost surely acts as a risk multiplier in both.

It might be too harsh to suggest that that Sweden could have prevented the outsized impact of the virus on immigrants. However, Sweden’s coronavirus testing has not been as intensive as other Nordic countries. More testing might have helped alleviate the spread of the virus in nursing homes and in immigrant communities. But the vulnerabilities of the immigrant population might be more a matter of inadequate health care than anything else, both on the demand and supply sides.

Contrary to Trump’s characterization, Sweden’s herd immunity strategy is not the reason for it’s relatively high death rate from the virus. Several countries that imposed lockdowns have had higher death rates. And Sweden’s death rate has been heavily concentrated among the aged in nursing homes and its large immigrant population. It’s possible that Sweden’s approach led to a cavalier attitude with respect identifying vulnerable groups and taking measures that could have protected them, including more intensive testing. Nevertheless, it’s inaccurate and unfair to scapegoat Sweden for not imposing a mandatory lockdown. The choice is not merely whether to impose lockdowns, but how to protect vulnerable populations at least cost. In that sense, general lockdowns are a poor choice.

 

Suspending Medical Care In the Name of Public Health

23 Saturday May 2020

Posted by in Health Care, Pandemic

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Step back in time six months and ask any health care professional about the consequences of suspending delivery of most medical care for a period of months. Forget about the coronavirus for a moment and just think about that “hypothetical”. These experts would have answered, uniformly, that it would be cataclysmic: months of undiagnosed cardiac and stroke symptoms; no cancer screenings, putting patients months behind on the survival curve; deferred procedures of all kinds; run-of-the-mill infections gone untreated; palsy and other neurological symptoms anxiously discounted by victims at home; a hold on treatments for all sorts of other progressive diseases; and patients ordinarily requiring hospitalization sent home. And to start back up, new health problems must compete with all that deferred care. Do you dare tally the death and other worsened outcomes? Both are no doubt significant.

What you just read has been a reality for more than two months due to federal and state orders to halt non-emergency medical procedures in the U.S. The intent was to conserve hospital capacity for a potential rush of coronavirus patients and to prevent others from exposure to the virus. That might have made sense in hot spots like New York, but even there the provision of temporary capacity went almost completely unused. Otherwise, clearing hospitals of non-Covid patients, who could have been segregated, was largely unnecessary. The fears prompted by these orders impacted delivery of care in emergency facilities: people have assiduously avoided emergency room visits. Even most regular office visits were placed on hold. And as for the reboot, there are health care facilities that will not survive the financial blow, leaving communities without local sources of care.

A lack of access to health care is one source of human misery, but let’s ask our health care professional about another “hypothetical”: the public health consequences of an economic depression. She would no doubt predict that the stresses of joblessness and business ruin would be acute. It’s reasonable to think of mental health issues first. Indeed, in the past two months, suicide hotlines have seen calls spike by multiples of normal levels (also see here and here). But the stresses of economic disaster often manifest in failing physical health as well. Common associations include hypertension, heart disease, migraines, inflammatory responses, immune deficiency, and other kinds of organ failure.

The loss of economic output during a shutdown can never be recovered. Goods don’t magically reappear on the shelves by government mandate. Running the printing press in order to make government benefit payments cannot make us whole. The output loss will permanently reduce the standard of living, and it will reduce our future ability to deal with pandemics and other crises by eroding the resources available to invest in public health, safety, and disaster relief.

What would our representative health care professional say about the health effects of a mass quarantine, stretching over months? What are the odds that it might compound the effects of the suspension in care? Confinement and isolation add to stress. In an idle state of boredom and dejection, many are unmotivated and have difficulty getting enough exercise. There may be a tendency to eat and drink excessively. And misguided exhortations to “stay inside” certainly would never help anyone with a Vitamin D deficiency, which bears a striking association with the severity of coronavirus infections.

But to be fair, was all this worthwhile in the presence of the coronavirus pandemic? What did health care professionals and public health officials know at the outset, in early to mid-March? There was lots of alarming talk of exponential growth and virus doubling times. There were anecdotal stories of younger people felled by the virus. Health care professionals were no doubt influenced by the dire conditions under which colleagues who cared for virus victims were working.

Nevertheless, a great deal was known in early March about the truly vulnerable segments of the population, even if you discount Chinese reporting. Mortality rates in South Korea and Italy were heavily skewed toward the aged and those with other risk factors. One can reasonably argue that health care professionals and policy experts should have known even then how best to mitigate the risks of the virus. That would have involved targeting high-risk segments of the population for quarantine, and treatment for the larger population in-line with the lower risks it actually faced. Vulnerable groups require protection, but death rates from coronavirus across the full age distribution closely mimic mortality from other causes, as the chart at the top of this chart shows.

The current global death toll is still quite small relative to major pandemics of the past (Spanish Flu, 1918-19: ~45 million; Asian Flu, 1957-58: 1.1 million; Hong Kong flu, 1969: 1 million; Covid-19 as of May 22: 333,000). But by mid-March, people were distressed by one particular epidemiological model (Neil Ferguson’s Imperial College Model, subsequently exposed as slipshod), predicting 2.2 million deaths in the U.S. (We are not yet at 100,000 deaths). Most people were willing to accept temporary non-prescription measures to “slow the spread“. But unreasonable fear and alarm, eagerly promoted by the media, drove the extension of lockdowns across the U.S. by up to two extra months in some states, and perhaps beyond.

The public health and policy establishment did not properly weigh the health care and economic costs of extended lockdowns against the real risks of the coronavirus. I believe many health care workers were goaded into supporting ongoing lockdowns in the same way as the public. They had to know that the suspension of medical care was a dire cost to pay, but they fell in line when the “experts” insisted that extensions of the lockdowns were worthwhile. Some knew better, and much of the public has learned better.

Coronavirus Controversies

11 Saturday Apr 2020

Posted by in Health Care, Leftism, Pandemic

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The coronavirus and the tragedy it has wrought has prompted so many provocative discussions that it’s hard to pick just one of those topics for scarce blogging time. So I’ll try to cover two here: first, the question of whether coronavirus deaths are being miscounted; second, the politically-motivated controversy over the use of hydroxychloraquin to treat severe cases of Covid-19.

Counting Deaths

I’ve been suspicious that Covid deaths are being over-counted, but I’m no longer as sure of that. Of course, there are reasons to doubt the accuracy of the death counts. For example, there is a strong possibility that some Covid deaths are simply not being counted due to lack of diagnoses. But there are widespread suspicions that too many deaths with positive diagnoses are being counted as Covid deaths when decedents have severe co-morbidities. Members of that cohort die on an ongoing basis, but now many or all of those deaths are being attributed to Covid-19. A more perverse counting problem might occur when public health authorities instruct physicians to attribute various respiratory deaths to Covid even without a positive diagnosis! That is happening in some parts of the country.

To avoid any bias in the count, I’ve advocated tracking mortality from all co-morbidities and comparing the total to historical or “normal” levels to calculate “excess deaths”. One could also look at all-cause mortality and do the same, though I don’t think that would be quite on point. For example, traffic deaths are certainly way down, which would distort the excess deaths calculation.

Despite the vagaries in counting, there is no question that the coronavirus has been especially deadly in its brief assault on humans. New York has experienced a sharp increase in deaths, as the chart below illustrates (the chart is a corrected version of what appeared in the Reason article at the prior link). The spike is way out of line with normal seasonal patterns, and it obviously corresponds closely with deaths attributable to Covid-19. It is expected to be short-lived, but it might taper over the course of several weeks or months, Once it does, I suspect that the cumulative deaths under all those other curves in the chart will exceed Covid deaths substantially. Also note that the yellow line for the flu just stops when Covid deaths begin, suggesting that the red line probably incorporates at least some “normal” flu deaths.

Once the virus abates, we’ll be able to tell with a bit more certainty just how deadly the pandemic has been. It will be revealed through analyses of excess deaths. For now, we have the statistics we have, and they should be interpreted cautiously.

Hydrocholraquin

A more boneheaded debate centers on the use of the anti-malarial drug hydroxychloraquin (HCQ) to treat coronavirus patients. There have been many successes, particularly in combination with a Z-Pak, or zinc. Guidelines issued by the American Society of  Thoracic Surgeons last week call for HCQ’s use in advanced cases of coronavirus infection. These and other therapies are being tested formally, but many are prescribed outside any formal testing framework. Remdesivir has been prominent among these. Plasma therapy has been as well, and several other possible treatments are under study.

With respect to HCQ, it’s almost as if the Left, much of the media, and a subset of overly “prescriptive” medical experts were goaded into an irrational position via pure Trump Derangement. Just Google or Bing “Hydroxychloraquine Coronavirus” for a bizarre list of alarmist articles about Trump’s mention of HCQ. To take just two of the claims, the idea that Trump stands to earn substantial personal profits from HCQ because he holds a few equity shares in a manufacturer of generic drugs is patently absurd. And claims that shortages for arthritis, lupus, and malaria patients are imminent are unconvincing, given the massive stockpiles now accumulated and the efforts to ramp-up production.

So much lefty hair is on fire over a potential therapy that is both promising and safe that the media message lacks credulity. But more ominously, the Democrat governors of Michigan and Nevada were so petulant that they banned HCQ’s use in their states, though at least Nevada’a governor rescinded his order. It’s almost as if they don’t want it to work, and don’t want to give it a chance to work. Or do I go too far? No, I don’t think so.

Victoria Taft has a good summary of the media backlash against President Trump’s hopeful statements about HCQ. Not only was the FDA’s authority over the use of HCQ misrepresented, there was also a good bit of smearing of various researchers who’d found preliminary evidence of HCQ’s effectiveness. Let’s be honest: the quality of medical research is often inflated by the research establishment. And the media eat up any study with findings that are noteworthy in any way. Over the years, a great deal of medical research has been based on small samples from which statistical hypothesis tests are shaky at best. That’s one reason for the legendary replication problem in medical research. In the case of HCQ, there has been widespread misuse of the term “anecdotal” in the media, prompted by experts like Dr. Anthony Fauci, who should know better. The term was used to describe clinical tests on moderately large groups of patients, at least one of which was a randomized control trial.

Every day we hear stories from individual patients that they were saved by HCQ. These are properly called anecdotal accounts. But we also hear from various physicians around the country and world who claim to be astonished at HCQ’s therapeutic efficacy on groups of patients. This link gives another strong indication of how physicians feel about HCQ at this point. These are not from RCTs, but they constitute clinical evidence, not mere “anecdotes”.

By virtue of state and federal right-to-try laws, terminally ill patients can choose to take medications that are unapproved by regulators. Beyond that, FDA approval of HCQ specifically for treating coronavirus was unnecessary because the drug was already legal to prescribe to cover patients as an “off-label” use. That’s true of all drugs approved by the FDA: they can be prescribed legally for off-label uses. When regulators like Dr. Fauci, and even practicing physicians like Dr. Jeffrey Singer (linked below) claim that the FDA hasn’t approved HCQ specifically for treating Covid, it is a technicality: the FDA can certainly “approve” it for that specific use, but it’s already legal to prescribe!

While it won’t end the silly argument, which is obviously grounded in other motives, Dr. Singer brings us to the only reasonable position: treatment of Covid with HCQ is between the patient and their doctor.

 

 

Left’s Pandemic Response: Politics As Usual

17 Tuesday Mar 2020

Posted by in Health Care, Pandemic, Regulation

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The Left asserts that President Trump dismissed and dismantled the nation’s Pandemic Response Team. That’s bullshit. So is the claim that the CDC was defunded. The news media and certain pundits have helped to feed this narrative. Or, as Glenn Reynolds calls those pundits, “Democrat operatives with bylines”.

First of all, the team in question was not at the CDC, a fact that hasn’t always been clear from the commentary on this issue. It was a team of White House overseers at the National Security Council’s “Directorate for Global Health Security and Biodefense”. What happened was this: the senior director of that team resigned after John Bolton was appointed to head the NSC. Bolton might have wanted him out, but what we know is the director resigned. Subsequently, that team was folded into another directorate as part of an long-overdue consolidation. Health experts from the team remain on the NSC staff today. Yet Sen. Sherrod Brown (D-OH)—and many others since—had the temerity to charge that Trump had fired “the entire Whilte House pandemic team”. Well, at least he didn’t imply that it was the CDC.

Tim Morrison wrote the following in the Washington Post yesterday:

“Because I led the very directorate assigned that mission, the counterproliferation and biodefense office, for a year and then handed it off to another official who still holds the post, I know the charge is specious. …

When I joined the National Security Council staff in 2018, I inherited a strong and skilled staff in the counterproliferation and biodefense directorate. This team of national experts together drafted the National Biodefense Strategy of 2018 and an accompanying national security presidential memorandum to implement it; an executive order to modernize influenza vaccines; and coordinated the United States’ response to the Ebola epidemic in Congo, which was ultimately defeated in 2020.”

This assessment at Brietbart.com quotes former senior NSC official Richard Goldberg:

“Weird. A year later I was inside the NSC working with talented global health/biodefense professionals who coordinated an incredibly effective response to Ebola. They’re still there. Working hard. On .”

It’s true that Bolton sought to eliminate red tape, duplication, and bureaucracy within the NSC, and that was wholly justified. According to Morrison, the NSC staff quadrupled from the 1990s through the second Obama term. Pandemics are supposed to be the CDC’s purview, but the proliferation of administrative layers is what happens as government grows uncontrollably. Leslie Eastman at Legal Insurrection questions whether the U.S. needs a permanent “Pandemic Response Team” in the White House. She quotes GOP Chairwoman Ronna McDaniel:

“JAN 7: CDC established a coronavirus incident management system, two days before China announced the outbreak. … Pelosi began Week 3 of withholding her sham impeachment articles. 

JAN 21: The CDC activated its emergency operations center to provide ongoing support to confront coronavirus. …What were Congressional Democrats focused on? Writing their opening arguments for their bogus impeachment trial.”

Well, bully for the CDC. As for “defunding the CDC”, the facts are this: the proposed budget submitted to Congress by the Trump Administration in February, but never passed, did indeed include cuts to the CDC’s budget, which has grown over the years as it expanded its mission from fighting infectious diseases to matters like obesity, racism, and questions of social justice. The cuts proposed by Trump, however, were primarily to state grants. Actually, the proposal called for increased CDC staffing, and it funded all programs related to infectious diseases. But no matter, because that proposal is unlikely to become part of any appropriations bill that would pass Congress.

True to form, the Left plays politics in the middle of a national crisis. When the Trump Administration told airlines that it was considering banning flights from China in late January, it was called racist. Now, of course, he hasn’t done enough. A huge irony, however, is that Trump’s biggest mistake was in trusting the FDA and the CDC’s authority to develop and regulate testing for the coronavirus. They botched it. In a classic case of over-regulation, they prohibited hospitals and labs from conducting tests developed privately or by academic researchers, insisting that everyone wait for the “approved” test to be distributed. Then, the test they released in early February was flawed, costing additional weeks before testing was available.

 

Covid-19: Killing It With Sunshine, Fresh Air

14 Saturday Mar 2020

Posted by in Health Care, Pandemic

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Update: also see “Don’t Be Cowed: Shelter, But Get Outside”

Patients with viral and bacterial infections seem to respond better if exposed to sunshine and fresh air. In fact, anyone hoping to keep infections at bay would do well to get outside in the sun for a while every day. A friend’s post alerted me to this fascinating article in Medium.com: “Coronavirus and the Sun: a Lesson from the 1918 Influenza Pandemic“, by Richard Hobday. It is well-sourced, though the references aren’t hyperlinked. Here’s the main point:

“... records from the 1918 pandemic suggest one technique for dealing with influenza — little-known today — was effective. … Put simply, medics found that severely ill flu patients nursed outdoors recovered better than those treated indoors. A combination of fresh air and sunlight seems to have prevented deaths among patients; and infections among medical staff. There is scientific support for this. Research shows that outdoor air is a natural disinfectant. Fresh air can kill the flu virus and other harmful germs. Equally, sunlight is germicidal and there is now evidence it can kill the flu virus.

On the last assertion, see here. Viruses always ebb as the weather warms in the spring. Light conditions improve, which might be more important than temperature: UV light is thought to kill germs of many kinds. Moreover, Vitamin D is generally protective against infections, and a deficiency is thought to increase Covid-19 risk.

Hobday goes on to describe the Open Air Factor, which probably is related to the presence of ozone, but maybe other curatives:

“Doctors who had first-hand experience of open-air therapy at the hospital in Boston were convinced the regimen was effective. It was adopted elsewhere. If one report is correct, it reduced deaths among hospital patients from 40 per cent to about 13 per cent. …

Patients treated outdoors were less likely to be exposed to the infectious germs that are often present in conventional hospital wards. They were breathing clean air in what must have been a largely sterile environment. We know this because, in the 1960s, Ministry of Defence scientists proved that fresh air is a natural disinfectant. Something in it, which they called the Open Air Factor, is far more harmful to airborne bacteria — and the influenza virus — than indoor air. They couldn’t identify exactly what the Open Air Factor is. But they found it was effective both at night and during the daytime. 

I’m not sure they were able to control for the relative absence of germs in fresh air, as opposed to the presence of something beneficial, but it’s certainly intriguing.

So whether you’re still on the “office team” or otherwise on the job, try to get outside! Whether you’re in a Covid-19 self-quarantine or worried about catching it, get outside if you can. Get some sun and fresh air, especially after a thunderstorm, when the air is rich with ozone. But drink plenty of fluids and don’t get burned! I’ll be hanging out in my back yard.

Single-Payer: Queue Up and Die Already

19 Sunday Jan 2020

Posted by in Health Care, Health Insurance

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I constantly hear this sort of naive remark about health care in “other major countries”, and while Chris Pope’s rejoinder below should chasten the ignorant, they won’t listen (emphasis is mine):

“[Bernie] Sanders recently argued that ‘our idea is to do what every other major country on earth is doing,’ but this claim is … fictitious. In fact, there is not a single country in the world that offers comprehensive coverage with an unlimited choice of providers, fully paid for by taxpayers, without insurer gatekeeping, service rationing, or out-of-pocket payments. In reality, there is a direct trade-off between ease of access to providers and the cost borne by individuals in out-of-pocket expenses.”

Pope’s statement pretty much strips bare the fiction of “universal” coverage, a concept too loosely defined to be of any real use except as a rhetorical device. It also highlights the non-monetary costs inflicted on consumers by non-price rationing of care. The presumption that government must provide universal health care coverage and that all other developed countries actually have that arrangement is incorrect.

Pope has another article at the Manhattan Institute site, written late last year, on the lessons we can learn on health care from experience abroad under various payer systems. This offers a more detailed comparison of the structure of the U.S. payment system versus seven other countries, including Canada, the U.K., Australia, and Germany. Single-payer tends to be the “gold standard” for the Left, but the only systems that “approximate” single-payer are in Canada and the U.K. Here is one blurb about Canada:

“Canadians have easy access to general practitioners, but getting an appointment to see a specialist is more difficult than in all the other nations studied in this report. The Canadian medical system provides the least hospital care, delivers consistently fewer outpatient procedures, and provides much less access to modern diagnostic technology.

Canadians also have limited access to drugs, according to Pope. And out-of-pocket (OOP) spending is about the same as in the U.S. At the first link above, Pope says:

“Canadians spend less on health care than Americans mostly because they are not allowed to use as much — not because they are getting a better deal. … Waiting lists are generally seen as the single-payer budgeter’s friend, as some patients will return to health by themselves, others will be discouraged from seeking treatment, and a large proportion of the most expensive cases will die before any money is due to be spent on them.”

Pope says this about the U.K. at the second link:

“U.K. hospitals often lack cutting-edge technology, and mortality after major emergency hospitalizations compares poorly with that of other nations in this report. Access to specialists is very limited, and the system falls well short of most other nations in the delivery of outpatient surgery.” 

Waiting times in the U.K. tend to be long, but in exchange for all these shortcomings in care, at least OOP costs are low. Relative to other payment systems, single payer seems to be the worst in several respects.

The other systems described by Pope are:

  • “dual payer” in Australia and France, with public entitlements and the choice of some private or supplemental coverage;
  • “competing payer” in Switzerland, Germany, and the Netherlands, whereby subsidies can be used to purchase coverage from private plans (and in Germany some “quasi-public” plans; and
  • “segmented payer” in the U.S., with two public plans for different segments of the population (Medicare for the elderly and Medicaid for the non-elderly poor), employer-sponsored coverage primarily from larger employers, individually-purchased private coverage, and subsidies to providers for “uncompensated care” for the uninsured.

Here is what Pope says about the various “multi-payer” systems:

“Dual-payer and competitive-payer systems blend into each other, according to the extent of the public entitlement in dual-payer countries …

… limitations in access to care are closely tied to the share of the population enrolled in private insurance—with those in Britain and Canada greatly limited, Australians facing moderate restrictions, and those in the other countries studied being more able to get care when they need it. 

The competing-payer model ideally gives insurers the freedom and responsibility to procure health-care services in a way that attracts people to their plans by offering them the best benefits and the lowest medical costs. While all competing-payer systems fall short of this ideal, in practice they consistently offer good access to high-quality medical care with good insurance protection. The competing-payer model is, therefore, best understood as an objective that is sought rather than yet realized—and countries including Germany, the Netherlands, France, and the U.S., which have experienced the most significant health-care reform over recent years, are each moving toward it.”

The U.S. has very high health care costs as a percent of GDP, but OOP costs are roughly in line with the others (except the Swiss, who face very high OOP costs). The U.S. is wealthier than the other countries reviewed by Pope, so a large part of the cost gap can be attributed to demand for health care as a luxury good, especially late in life. Insured U.S. consumers certainly have access to unrivaled technology and high-quality care with minimal delays.

Several countries, including the U.S., are plagued by a lack of competition among hospitals and other providers. Government regulations, hospital subsidies, and pricing rules are at the root of this problem. Third-party payments separate consumers from the pricing consequences of their health-care decisions, which tends to drive up costs. If that weren’t enough, the tax deductibility of employer-paid insurance premiums in the U.S. is an subsidy ironically granted to those best-able to afford coverage, which ultimately heightens demand and inflates prices.

Notably, unlike other countries, there is no longer an individual mandate in the U.S. or any penalty for being uninsured, other than the potential difficulty in qualifying for coverage with pre-existing conditions. Consumers who lack employer-sponsored or individual coverage, but have incomes too high to qualify for Medicaid or premium subsidies, fall into a gap that has been the bane of would-be reformers. There are a few options for an immediate solution: 1) force them to get insured with another go at an individual mandate; 2) offer public subsidies to a broader class; 3) let them rely on emergency-room services (which cannot turn them away) or other forms of uncompensated care; 4) allow them to purchase cheap temporary and/or catastrophic coverage at their own expense; 5) allow portability of coverage for job losers. Recently, the path of least political resistance seems to have been a combination of 3, 4, and 5. But again, the deficient option preferred by many on the Left: single-payer. Again, from Pope:

“Single-payer systems share the common feature of limiting access to care according to what can be raised in taxes. Government revenues consistently lag the growth in demand for medical services resulting from increased affluence, longevity, and technological capacity. As a result, single-payer systems deliver consistently lower quality and access to high-cost specialty care or surgical procedures without reducing overall out-of-pocket costs. Across the countries in this paper, limitations in access to care are closely tied to the share of the population enrolled in private insurance—with those in Britain and Canada greatly limited…”

Hospital Price Insanity

15 Sunday Dec 2019

Posted by in Health Care, Health Insurance

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Almost nothing is less transparent than hospital pricing. If you’re shopping for a procedure, you probably won’t hear about the negotiated prices worked out with large insurers…. you’re likely to be quoted something much higher. A high price is billed to an insurer, but the excess above their negotiated prices is “disallowed” via contractual adjustment. You and/or your small insurer might not get the same deal. As Robert Laszewski says:

“The chargemaster is complete nonsense that really doesn’t matter — unless you are an uninsured person and you’re getting these huge bills driving you toward bankruptcy. The biggest irony of the U.S. healthcare system is that only the uninsured — often people who don’t have a lot of money — are the only ones the hospital expects to pay these incredibly inflated prices!”

An uninsured patient might be billed at the higher rate, but of course few end up paying. But there is harm in this arrangement, and it extends well beyond the uninsured. You might not be surprised to learn that the government is right in the middle of it. Read on…

What a Racket!

There’s some slight of hand going on in hospital pricing that creates perverse incentives. Who has something to gain from a huge gap between the full price and the hospital’s allowable charge? The answer is both the hospital and insurers, and that’s true whether the hospital is for-profit or nonprofit. When the list price and the size of the discount increase, the insurer gets to brag to employer-plan sponsors about the great savings it negotiates. In an episode on EconTalk, Dr. Keith Smith, a partner in the ultra-competitive and cash-only Surgery Center of Oklahoma, says (only partly in jest) that the conversation between the insurer and hospital might go something like this:

“Now, what the insurers actually do is ask the hospital administrators, ‘Can you do a brother a favor and actually charge $200,000 for that, so that our percentage savings actually looks larger?‘”

This does two things for the insurer: it impresses employers as prospective plan sponsors, and it might also earn the insurer a bonus known as Claims Repricing, whereby the employer pays a commission on the discounts the insurer “negotiates”.

What about the hospitals? How do they benefit from this kind of arrangement? By inflating the “list price” of procedures, the hospital creates the appearance of a write-down or loss on a substantial share of the care it provides, despite the fact that its real costs are far below list prices and usually below the discounted “allowable amounts” negotiated with insurers as well. The appearance of loss serves to benefit the hospitals because they are compensated by the government on that basis through so-called Disproportionate Share Hospital (DSH) payments. These are, ostensibly, reimbursements for so-called uncompensated care.

This would not be such a travesty if the prices approximated real costs, but they don’t, and the arrangement creates incentives to inflate. The DSH payments to hospitals are used in a variety of ways, as Smith notes:

“Yeah; and before we get to feeling too sorry for the hospitals, all of the ones I know of claiming to go broke have a crane in front of them building onto their Emergency Room. …

So, I don’t know: again, the hospitals that are complaining about this, they are buying out physician practices, they’re buying out competitors. They seem to have a whole lot of money. They’re not suffering. Now, what they have done is used the situation you described–the legitimate non-payer–they’ve used that as a propaganda tool, I would argue, to develop a justification for cost shifting where they charge us all a whole lot more to make up for all the money that they’re losing. But they really need a lot of this red ink to maintain the fiction of their not-for-profit status.”

Non-profit hospitals are also entirely tax-exempt (income and property taxes), despite the fact that many use their “free cash flows” in ways similar to for-profit hospitals. The following describes a 2015 court ruling in New Jersey:

“The judge stated ‘If it is true that all non-profit hospitals operate like the hospital in this case… then for purposes of the property tax exemption, modern non-profit hospitals are essentially legal fictions.’ Judge Bianco found that the hospital ‘operated and used the property for a profit-making purpose’ by, in part, providing substantial loans, capital, and subsidies to for-profit entities, including physician groups.“

The bad incentives go beyond all this. Smith adds the following:

“Waste in a big hospital system is actually encouraged, many times because hospitals are paid based on what they use…. So, to the extent that the hospital uses a lot of supplies, that typically raises and increases the amount of revenue that they receive.”

Hospitals have been shielded from competition for years by the government. As Chris Pope explains, hospital pricing is designed “to accommodate rather than to constrain the growth of hospital costs“. This encourages hospitals that are inefficient in terms of costs, quality of care, and over-investment in equipment. Conversely, duplicated facilities and equipment simply add costs and don’t encourage competition given the cost-plus nature of hospital pricing and government efforts to prevent entry by more efficient operators. These restrictions include “Certificates of Need” for new entrants, and the ban on physician-owned hospitals in the Affordable Care Act (ACA). At the same time, the ACA encouraged hospital consolidation by rewarding the formation of so-called Accountable Care Organizations, which are basically exempt from anti-trust review. In the end, any reductions in administrative costs that consolidation might offer are swamped by the anti-consumer force of monopoly power.

Mandated Transparency?

The lack of price transparency really isn’t the root problem, in my view, but it is undesirable. Can government action to create transparency foster a more competitive market for the services hospitals offer? A recent Trump Administration Executive Order would require that hospitals publicly post prices for 300 “shoppable” services or procedures. The effective date of this order was recently delayed by a year, to January 2021. Hospital trade groups have challenged the order in court on the grounds that the First Amendment protects private businesses from being compelled to reveal details of privately-negotiated deals for complex services. While I try to be a faithful defender of constitutional rights, I find this defense rather cynicical. I’m not sure the First Amendment was intended to aid in concealing dishonest schemes for private benefit at the expense of taxpayers and consumers.

Avik Roy likes the price transparency rule. It would require the posting of gross charges for procedures as well as specific negotiated prices. The executive order would also require Medicare to pay no more to hospital-owned clinics than to independent clinics for the same procedure, which is laudable. Roy is sanguine about the ability of these rules to bring more competition to the market. He predicts a more level playing field for small insurers in negotiating discounts, and he thinks the order would spur development of on-line tools to assist consumers.

John C. Goodman is mildly skeptical of the benefits of a transparency mandate (also see here). Consumers with decent levels of coverage aren’t terribly motivated to make hospital price comparisons, especially if it means a delay in treatment. Also, Goodman points out a few ways in which hospitals try to “game” transparency requirements that already exist. John Cochrane worries about gaming of the rules as well. Competition and price discipline are better prescriptions for price transparency and might be better addressed by eliminating the incentives for third-party payment arrangements, like the unbalanced tax deductibility of health insurance premiums, but that kind of reform isn’t on the horizon. Goodman concedes that many procedures are “shoppable”, and he does not minimize the extent to which pricing varies within local hospital markets.

Conclusion

The most insane thing about hospital revenue generation is its reliance on fictitious losses. And hospitals, profit and non-profit, have a tendency to spend excess cash in ways that fuel additional growth in cost and prices. Sadly, beyond their opacity, hospital prices do not reflect the true value of the resources used by those institutions.

In my view, the value of price transparency does not hinge on whether the average health care consumer is sensitive to hospital prices, but on whether the marginal consumer is sensitive. That includes those willing to pay for services out-of-pocket, such as those who seek care at the Surgery Center of Oklahoma. Third-party payers lacking significant market power would undoubtedly prefer to have more information on pricing as well. Mandated price transparency won’t fix all of the dysfunctions in the delivery and payment for health care. That would require more substantial free-market reforms to the insurance and health care industries, which ideally would involve replacing price subsidies with direct payments to the uninsured. The transparency mandate itself might or might not intrude on domains over which privacy is protected by the Constitution, a question that has already been brought before the courts. Nonetheless, transparency would lead to better market information for all participants, which might help rationalize pricing and encourage competitive forces.

 

Rx Drug Prices Are Falling, But You’re Aging

08 Friday Nov 2019

Posted by in Health Care, Prescription Drugs, Price Controls

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Ask anyone on the street about prescription drug prices, or ask anyone in the press, and you’ll probably hear they are out of control. That contention is false. The conventional wisdom is typified by this exaggerated BS about insulin pricing … actually, you can find a vial of the kind I used for many years for about $25 without much difficulty.

Individual experience differs, of course. Yes, there are new drugs on the market that are exorbitant; there are older drugs still under patent that are pricey too. Those represent a fairly small part of the total market, however, and one on which policymakers should tread lightly if they hope to foster the development of new, life-saving drugs. Newer insulin varieties are not in that class, and those varieties don’t always incorporate meaningful improvements for patients.

Getting Old Is Hell

In fact, prescription drug prices have been declining for a number of years. The real problem is we’re always getting older! In a report from the Progressive Policy Institute, Michael Mandel describes what he calls the prescription drug escalator. Alex Tabarrok has a good summary of the article. The chart at the top of this post, from Mandel, shows that the number of drugs prescribed rises steadily with one’s age. The total bill rises along with age, which may create the perception that you’re paying higher prices. Unsurprisingly, more of each health-care dollar spent out-of-pocket  (OOP) goes to prescribed medications as you age, and more goes to prescription drugs as health declines. As Mandell says, the increases experienced by individuals are a matter of utilization as opposed to pricing..

Generic Dominance

Tabarrok notes that generic drugs account for somewhere between 80-90% of all prescriptions, and generic costs have been falling for some time. He links to one of his earlier posts on generics and to this study by the National Bureau of Economic Research, which states:

“… direct-out-of-pocket CPI for generic prescription drugs decline[d] by about 50% between 2007 and 2016 …”

Average OOP prescription costs peaked in 2006, according to Mandel’s data. Tabarrok quotes Mandell:

“May 2019 research report from the Agency for Healthcare Research and Quality reported that average out-of-pocket spending for prescribed medications, among persons who obtained at least one prescribed medication, declined from $327 in 2009 to $238 by 2016, a decrease of 27 percent. Data from the Bureau of Labor Statistics Consumer Expenditure Survey shows that average household spending on prescription drugs fell by 11% between 2013 and 2018.

Moreover, OECD data shows that average out-of-pocket spending on prescribed medicines in the United States ($143 per capita in 2017) is actually lower than countries such as Canada ($144), Korea ($156), Norway ($178), and Switzerland ($215).”

The declines in OOP drug costs came despite a shift in health-care payment responsibilities from insurers to consumers in recent years — OOP costs would have declined much more had the shift not occurred, according to Mandel. As he says, consumers now have more “skin in the game”, and apparently they act on it.

Another basis of the misperception about escalating drug prices has to do with the way they are reported. Mandel says:

“List prices are the published prices that manufacturers charge to wholesalers. Net prices reflect the revenues that drug manufacturers receive, net of rebates and discounts to prescription benefit managers, insurance companies, and hospitals.

Studies of list prices invariably show very strong growth. For example the IQVIA Institute for Human Data Science found that the list price of the average brand rose from $364.92 to $657.08 since 2014, an 80% increase. Similarly, a widely cited recent study based on list prices found that from 2008–16, the costs of oral and injectable brand-name drugs increased annually by 9.2 percent and 15.1 percent, respectively. … By contrast, net prices and net pharma revenue have been growing much more slowly, once rebates and discounts are accounted for.” 

The Pricey Segment

There are a variety of circumstances that bear on the pricing of individual drugs. Clearly, non-generic drugs are subject to more upward price pressure and give rise to anecdotes that feed misperceptions about the overall trajectory of drug prices. These are either new drugs or older ones sold under extended patents, which are sometimes granted for even minor changes in a drug’s chemical makeup.

Some new drugs are life-saving breakthroughs targeting rare diseases. The unfortunate truth is that drug development is a very costly enterprise, often stretching well over a decade in the U.S. under the FDA’s approval process. Moreover, U.S. consumers actually subsidize the cost of drugs for European consumers, where drugs are typically subject to price ceilings or are directly negotiated by government. By the time drugs go to market, development is treated as a fixed cost; even the low prices in Europe cover the marginal cost of production, so pharmaceutical manufacturers don’t mind selling there as long as their development overhead is paid by someone. That’s the rub.

Drug development costs are heavily influenced by public policy, often to the detriment of consumers. The FDA’s drug approval process is in dire need of reform, and patent extensions should be severely curtailed. As an advocate of free trade, I also favor a lifting of restrictions on imports of drugs to the U.S.

Conclusion

You’re likely to see more physicians as you age, they’re likely to prescribe more drugs, and you’re likely to pay more for prescriptions OOP. That’s the escalator in action. You can minimize the slope of your personal prescription escalator by taking good care of yourself and using generics when possible, but the slope is often beyond a person’s control. Nevertheless, over the past 13 years in the U.S.,  most of those experiencing higher OOP costs have this escalator, i.e., aging, to thank… it’s drug utilization, not pricing.

A relatively small but important share of the market has experienced price escalation. Newer, highly specialized drugs can carry high price tags. Patents give drug manufacturers considerably more pricing power, and drug companies have sought to maintain “evergreen” patents by manipulating their formulations. U.S. import quotas and restrictive pricing abroad have left consumers in the U.S. holding the bag for a large share of drug development costs. These shortcomings can be addressed via streamlined drug approval, patent reform, and lifting import restrictions.

A critical policy prescription is to liberate market forces and foster competition in the pharmaceuticals industry. Price controls in the U.S. would eliminate all incentives for new breakthroughs, leading progress in many areas of treatment to a stand-still. Price controls merely substitute the arbitrary decisions of politicians and bureaucrats for the market’s ability to balance dynamic consumer needs, medical expertise, and the costs faced by sellers.