The Incidental Economist

A Reuters post today – “Americans confused about healthcare reform“:

A Thomson Reuters poll of consumer confidence released on Monday shows Americans’ confidence in their ability to pay for and access healthcare has fallen by 5 percent since December 2009.

The Thomson Reuters Consumer Healthcare Sentiment Index, based on a monthly survey of 3,000 consumers, asks if they have had trouble paying for or had to postpone care in the three months prior. And it asks if they expect to in the coming three months.

On every survey question, responses were more pessimistic in July than they were in December…

“I doubt the average person really knows what has been implemented,” he said. “They just know there is a lot of talk and there has been a lot of negative publicity.”

I don’t doubt that the results are valid.  I don’t think the poll is a sham.  I just don’t understand the point.

The economy is a mess.  Is there any reason to believe that the fact that respondents are pessimistic about paying for things isn’t related to that?

Moreover – and this is the real kicker – I don’t understand why there is this sudden need in the media for everyone to have a perfect understanding of the PPACA.  Don’t get me wrong – I wish everyone did.  But is there some underlying belief that everyone understands Medicare?  That isn’t the case.  Is there an underlying belief that everyone understands the tax code?  I don’t think that’s true.  Do you think everyone understands how the Pentagon functions?  How the farm subsidies work?  They don’t even understand the filibuster.

I don’t entirely blame the people, either.  After all, they need to get their information from somewhere, and I don’t see many stories on TV or in the paper on how any of this stuff works.

Maybe the media should spend a little less time telling us how little we know and a little more time informing us.

Because the media is super-fickle, I made it a point on my old blog to tell people on Twitter when I was going to be on the radio or TV.  It’s too much to keep updating that on blog posts.

If, for interest, you want to know when I will be on Stand Up! today on Sirius 110 or XM 130, you should follow me on Twitter.

A reader drew my attention to the 7 January 2010 LA Times opinion piece by Orville Schell in which he lists the “aspects of U.S. life that are are still vigorous and filled with potential,” those “that still function but need help,” and finally those which he feels are “in need of drastic intervention.” Schell was inspired by his observations during travel.

In the last few months, as I’ve roamed the world from San Francisco to Copenhagen to Beijing to Dubai, I’ve taken to keeping a double-entry list of what works and what doesn’t, country by country. Unfortunately, it’s become largely a list of what works elsewhere but doesn’t work here. In places such as China, South Korea, Sweden, Holland, Switzerland and (until recently) the United Arab Emirates, you find people hard at work on the challenges of education, transportation, energy and the environment. In these places, one feels the kind of hopefulness and can-do optimism that used to abound in the United States.

Many of Schell’s entries in his three lists make sense to me, but a few are at least debatable if not clearly misplaced. For instance, are civil society and the spirit of cohesiveness still vigorous and full of potential in the U.S.? If so, it is in spite of regular claims of increased polarization, cynicism, and apathy that are the mainstay of social commentary. I’d put this in the “debatable” category, especially in light of Schell’s comments on the federal government, “which is essentially paralyzed by partisanship and incapable of delivering solutions to the country’s most pressing problems.”

I also disagree that the electronic and print media are in need of intervention. As for the former I do not perceive as Schell does that the electronic media is “an overly commercialized, broken-down mess that have let down the country in terms of keeping us informed.” I feel very well informed and not at all let down. And print media may be in dire straits but I don’t think it is self-evident it is in need of intervention. I think the market place will sort this out, albeit in a manner that will be painful for many journalists.

There are other entries in Schell’s list that one could debate. Take a look for yourself, and let me know what you think.

Harold Pollack writes, “Press coverage of health care reform was the most careful, most thorough, and most effective reporting of any major story, ever.” (Italics his.) Then he goes on to make the case, linking to many excellent sources of news and information on health reform and the new law. Whether you agree with him or not, if you’re looking for information on the topic, read his post and follow the links.

It isn’t hard to find selection bias once you know how to spot it. Yet many people, including reporters and bloggers, don’t see or willfully overlook it, even in its simplest form. It is so much fun (even profitable) to report results that suffer from selection bias because they “show” such “interesting” things. I think the media actually loves selection bias and doesn’t know it.

Quick review: What is selection bias? Suppose a study finds that a group of individuals with larger feet have higher on IQs than a group with smaller feet. Does having big feet cause people to be smarter? No. Big footed people are older and have more education. The selection criterion (foot size) for the groups across which IQ is compared leads to a bias in the estimate of the causal relationship between foot size and IQ because the two groups differ in systematic ways that are important (age, education). Clearly taking growth hormone to increase one’s foot size is unlikely to make one smarter.

Recent posts by Kevin Drum (Mother Jones), Mark Blumenthal (National Journal), Matt Yglesias, and Ezra Klein (Washington Post) all draw conclusions from comparisons that potentially suffer from selection bias. The first three report the same comparison of survey results on the satisfaction of individuals with their health plan. Medicare is associated with greater satisfaction among its beneficiaries than is private insurance among its policyholders. Drum, Blumenthal, and Yglesias claim this indicates that people really like (or would like) a government run health plan better than those provided by private insurers. They suggest that the public nature of Medicare causes greater satisfaction. (By the way, Krugman has also implicitly made this argument too.)

That may be so, but these comparisons don’t illustrate that. The samples for which satisfaction is compiled for the different plan types are systematically different in ways that could bias the findings. The Medicare population is very different from the population that has private coverage. The most obvious way is in age, but also in health, income, and others. The documentation that accompanies the results upon which these statistics are extracted illustrates other ways in which the samples differ. 

Ezra Klein’s selection bias problem arises in comparing survey results from populations of different nations on the proportion that thinks their national health system should be completely rebuilt. Do differences in the characteristics of the health systems of nations cause the differences in population level of dissatisfaction with those systems? Perhaps, but one can’t conclude it from the simple comparison that Klein reports. Not only do the health systems differ but so do the populations. Which is the cause of the differences in satisfaction levels? One can’t tell. It is the same problem as above: comparison across samples with systematic differences can produce biased results.

There is no way to know the extent of bias in studies based on non-randomized samples (such as those above) without using more advanced statistical methods (which, by the way, is what some health economists (and others) do–ahem.) Therefore, by themselves the results shown by Drum, Blumenthal, Yglesias, and Klein referenced above are useless in supporting their arguments. Sadly, reporting of results that suffer from selection bias is very common. They’re in the news every day and they’re meaningless.