The Incidental Economist

My most requested talk is on how researchers can promote their work via social media. My latest AcademyHealth post provides five lessons from it.

@afrakt

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The following originally appeared on The Upshot (copyright 2016, The New York Times Company).

Billions of dollars are spent every year on medications that reduce the risk of heart disease — the No. 1 killer in the United States.

But some people feel powerless to prevent it: Many of the risk factors seem baked into the cake at birth. Genetic factors can have a huge impact on people’s chances of dying of heart disease, and it has long been thought that those factors are almost always outside of one’s control.

Recent research contradicts this, though, and that should give us all renewed hope.

Since the 1930s, we’ve recognized that heart disease runs in families. For the last decade, we’ve been able to identify specific genes that are linked to coronary artery disease. In fact, these genes seem to have a cumulative effect. People who have more of them are at greater risk.

Familial factors are some of the strongest arguments for using drugs like statins widely. After all, there’s only so much you can do about your cholesterol through diet and exercise changes. Some people can see reductions in cholesterol only through pharmacological intervention.

Still, we tend to treat those at low risk with lifestyle changes, while those at high risk get more intensive therapy. A new study in The New England Journal of Medicine argues that thinking may be wrong.

Researchers gathered data from four large prospective cohort studies that followed thousands of people for years, looking at the relationships between various risk factors and heart disease. The first began enrolling patients in 1987 and the last in 2008. Even though specific genes of interest weren’t known when these studies began, data were available that allowed scientists to evaluate genetic risk decades later. Using about 50 different variations — single-nucleotide polymorphisms (otherwise known as SNPs) — researchers created a risk score.

They also looked at how lifestyle factors were associated with outcomes. These included not smoking cigarettes, not being obese (having a B.M.I. less than 30), performing physical activity at least once a week and having a healthful diet pattern.

That last criterion was defined as doing at least half of the following recommendations: eating more fruits, nuts, vegetables, whole grains, fish and dairy products and eating less refined grains, processed meats, unprocessed red meats, sugar-sweetened beverages, trans fats and sodium. Every one of the four lifestyle factors was associated with a decreased risk of coronary events.

That’s the first bit of good news. Doing any one of these things makes a difference.

But the effect is cumulative. The researchers divided people into three groups based on these factors. “Favorable” required at least three of the four factors, “intermediate” required two of them, and “unfavorable” required one or none. Across all studies, those with an unfavorable lifestyle had a risk that was 71 percent to 121 percent higher than those with a favorable lifestyle.

More impressive was the reduction in coronary events — heart attacks, bypass procedures and death from cardiovascular causes — at every level of risk. Those with a favorable lifestyle, compared with those with an unfavorable lifestyle, had a 45 percent reduction in coronary events among those at low genetic risk, a 47 percent reduction among those with intermediate genetic risk, and a 46 percent reduction among those at high genetic risk.

What does this mean in real-world numbers? Among those at high genetic risk in the oldest cohort study, 10.7 percent could expect to have a coronary event over a 10-year period if they had an unfavorable lifestyle. That number was reduced to 5.1 percent if they had a favorable lifestyle. Among those at low genetic risk, the 10-year event rate was 5.8 percent with an unfavorable lifestyle and 3.1 percent with a favorable lifestyle. In the other cohort studies, similar relative reductions were seen.

These differences aren’t small. The risk of a coronary event in 10 years was halved. The absolute reduction, more than 5 percentage points in the genetic group at high risk, means that lifestyle changes are as powerful as, if not more powerful than, many drugs we recommend and pay billions of dollars for all the time.

There are caveats, of course. All of the participants in these analyses were white, because there are few well-validated genetic studies in black populations. But the researchers also saw similar findings in the black population of the oldest cohort. These aren’t randomized controlled trials, and there could be other factors at play that we aren’t measuring. But the results were consistent over a number of studies, and the effect size is large.

There are important lessons to be learned. These results should encourage us that genetics do not determine everything about our health. Changes in lifestyle can overcome much of the risk our DNA imposes.

Lifestyle changes are hugely important not only for those at low risk, but for those at high risk. The relative reductions in events were similar at all levels of genetic risk.

Moreover, given how changes in lifestyle will also reduce your risk of other diseases like cancer (the No. 2 killer), it’s clear that a healthier lifestyle could have huge implications for many, many more people.

It’s important to acknowledge that these lifestyle recommendations are even less constrictive than those I’ve discussed in the past. You need only be a current nonsmoker; past smoking doesn’t exclude you. You can also be overweight, just not obese. And in contrast with most physical activity recommendations, it requires only once-a-week exercise, not the 30 minutes for five days that most professional organizations like the American Heart Association endorse.

@aaronecarroll

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One provision of the new law pertains to a proposed rule from SAMHSA that would, among other things, restore researchers’ access to data on substance use disorders.

Sec. 11002. Confidentiality of records. Not later than 1 year after the date on which the Secretary of Health and Human Services (in this title referred to as the ‘‘Secretary’’) first finalizes regulations updating part 2 of title 42, Code of Federal Regulations, relating to confidentiality of alcohol and drug abuse patient records, after the date of enactment of this Act, the Secretary shall convene relevant stakeholders to determine the effect of such regulations on patient care, health outcomes, and patient privacy.

In plain English, this is just an instruction to hold a stakeholder conference once the rule is finalized. It doesn’t require SAMHSA to finalize the rule. And even if the rule is finalized, the agency isn’t obliged to adopt the portions governing research access. Austin and I would’ve preferred a genuine legislative fix, not this vague commitment to hold a meeting.

The provision does, however, reflect Congress’s expectation that something along the lines of the proposed rule will eventually be adopted, even in a Trump administration. Given the regulatory moratorium that President Trump is likely to impose on any new rulemaking, that counts as mildly encouraging news.

@nicholas_bagley

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One of my biggest eye-rolling topics is the idea that somehow kids today are the worst, or that the kids in the past were better. Shut up, already. I’ve done multiple Healthcare Triage episodes on this topic. Today, Monitoring the Future released their yearly data on trends in substance abuse. Here’s alcohol:

Sloping ever lower at all age groups. Here’s pot:

At worst stable. But still, going down. And this is any use in the LAST YEAR! Here’s heroin:

Granted, never a huge amount, but still – sloping ever downwards. Finally, here’s all drugs other than pot together:

Sloping down, down, down.

Forever claiming that things are worse, that things used to be better, that somehow the kids these days are anything but awesome is lazy and ignores the evidence. Kids should be telling us to get off their lawn.

@aaronecarroll

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Last week, Austin and I wrote a piece raising concerns about the one-size-fits-all approach to the benefits covered by employer-sponsored insurance. A few years ago, Kate Baicker, Mark Shepard, and Jonathan Skinner made a similar point about Medicare in Health Affairs:

[P]ublic insurance programs generally provide a uniform benefit to enrollees—a “one-size-fits-all” approach to coverage. These features are motivated by the egalitarian ideal that all people should have access to life-saving health care, regardless of income. But as the menu of health care innovations—and accompanying costs—has expanded, this relatively egalitarian structure has become increasingly expensive to sustain. …

This unrestricted or “gold-plated” insurance design may represent what an upper-income American would wish to purchase even if faced with its full cost. But it might not reflect what the majority of Americans would choose if they had to pay the full cost of such a package. … Would low-income Medicare recipients be better off with a program that covered proton beam therapy for prostate cancer—costing at least $25,000 more than conventional treatment but with little evidence of better outcomes—or with equivalent financial assistance to buy food or pay the mortgage?

Most significantly, the paper supplies a model that offers a fresh way of thinking about why health spending in the United States has outpaced spending growth in other countries. In brief, the model suggests that our relatively low baseline rate of taxation has reduced pressure to constrain escalating costs. Other countries with higher rates of taxation have had less headroom to work with before new taxes would crimp economic growth or require cuts to antipoverty programs.

As a result, they argue, Medicare has persisted with gold-plated coverage—proton beam therapy for everyone—even as other countries have imposed restrictions on what the government will finance. “The idea of providing or mandating basic insurance,” the authors write, “but allowing people to top up that coverage at their own expense is … common in European countries. The Netherlands, for example, mandates only basic coverage, but most citizens buy supplemental coverage.”

I’m not sure the Netherlands—or Europe as a whole—is the best example for them. Yes, most Dutch people do purchase supplemental coverage, but it’s not coverage for whiz-bang technologies. It’s coverage for “benefits such as dental care, alternative medicine, physiotherapy, spectacles and lenses, contraceptives, and the full cost of copayments for medicines … .” There are enormous technical obstacles to crafting a “basic” coverage package that excludes costly care of marginal value. I don’t think any country has managed it, although some (like the United Kingdom) have done more than we have.

What mainly keeps spending in check is not a two-tier health system, but rather a willingness to use government power to drive down prices. As Uwe Reinhardt and co-authors noted in It’s the Prices, Stupid, “the government-controlled health systems of Canada, Europe, and Japan allocate considerably more market power to the buy side” than we do in the United States.

That said, the model may still have some explanatory force. It’s possible, for example, that the relatively high tax burden in European countries has spurred them to allocate more power to the buy side. By the same token, the relatively light tax burden in the United States may partly explain our unwillingness to allow the government to throw its weight around in price negotiations.

@nicholas_bagley

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Many are still unhappy with Obamacare.The main intent of the Affordable Care Act was to expand the safety net (Medicaid), regulate the non-employer-based private insurance market (the insurance exchanges) and help people buy that insurance (subsidies) in order to reduce the number of Americans who are uninsured. On those metrics, it appears to be succeeding.

First and foremost, Obamacare was about improving access to health care. While it did improve access to insurance, in many, many other ways the United States is falling short. Things are likely to get worse before they get better. That’s the topic of this week’s Healthcare Triage.

This episode was adapted from a column I wrote for the Upshot. Links to references and further reading can be found there.

@aaronecarroll

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Friend of the blog Bradley Flansbaum drew my attention to this MedPAC status report on Medicare Advantage (MA), presented by Scott Harrison and Carlos Zarabozo on December 8, 2016. It includes some MA facts I didn’t know, and I’m guessing you (or the vast majority of you) don’t know them either.

• In 2017, the average, PMPM rebate to MA plans will be $89, higher than it has been since 2011. I don’t know what the figures are prior to that year. (The rebate is a percentage of the difference between an MA plan’s bid and the benchmark. The percentage, as well as the benchmark, varies by plan quality. Think of it as a kind of shared savings. Plans are required to use rebates to increase benefits or reduce cost sharing.)
• For the 2017 plan year, the average MA bid was 90% of traditional Medicare spending (TM) for a comparable beneficiary. I do not recall it ever being that low, but could be wrong. Plans are still paid above their cost (hence the rebates), but in 2017, for the first time this century,* payments to plans are at parity with TM spending. This is something that MedPAC has advocated and is an ambition of the Affordable Care Act. Mission accomplished, with the caveat that MA coding intensity may still not be completely adjusted for. If so, plans could still be paid above a (properly diagnostically adjusted) TM rate.
• MA payment rates are based on TM Part A and Part B costs. But — and this is something I never knew — this includes TM enrollees that only have Part A, and they spend less on Part A than those who also have Part B.** MA covers A and B, and 87% of TM beneficiaries have both (this proportion is shrinking over time). The upshot of this is that payment rates based on all TM beneficiaries are lower than they would be if they were calculated on Part A and Part B enrollees. Whereas, coding pushes payments up, this mismatch pushes payments down, by how much the status report doesn’t say.
• MA enrollment growth is more rapid than Medicare as a whole, as it has been for many years.

There’s more in the report, though not a lot more. It’s a PDF of a brief PowerPoint presentation. But I thought the above were among the most interesting, and less widely known, facts.

* I could be wrong on this, but it’s certainly the first time since at least 2003.

** Just keep reading that sentence slowly. You’ll get it.

@afrakt

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Republicans may have the votes pass a reconciliation bill that will hollow out the ACA in a few years. They pinkie swear that, at that point, they’ll pass some kind of replacement.

But for that to work, they’ll need Democratic support. Chuck Schumer is already saying they won’t get it: “We’re not going to do a replacement. If they repeal without a replacement, they will own it. Democrats will not then step up to the plate and come up with a half-baked solution that we will partially own. It’s all theirs.”

Maybe this is bluster. But I don’t think so: the 2016 election offered a lesson to Democrats about the political spoils of obstruction and brinksmanship. Repeal and delay could just be … repeal.

In that vein, Chris Koller has a must-read op-ed over at Politico. As the health insurance commissioner for Rhode Island, he oversaw a market for individual insurance that prohibited insurers from discriminating against the sick, but didn’t compel anyone to participate. It didn’t work so well:

To maintain the right balance between rates in the sick pool and the healthy pool, our office had to conduct extensive rate reviews and regulation, including forcing insurers to limit their rate hikes. The local Blue Cross plan, obligated by charter, was the only insurer to offer products; other carriers in Rhode Island found the market overregulated and too small. Only about 15,000 people bought coverage, and consumer dissatisfaction with this model was high. Approximately 100,000 people in the state—or about 10 percent of the population—either could not afford coverage or elected to go uninsured.

Fiddling with insurance regulations—a key Republican priority—wasn’t the answer.

With the legislature, we regularly considered less comprehensive benefit requirements. State-mandated benefits, however, were found to comprise only 10 percent of premium costs, and half of that amount was for mental and substance-use-disorder services now required by federal statute. Services comprising the other 90 percent were what most people consider essential — pharmacy, hospital and physician care. …

Wider rate bands — charging lower rates for young and healthy folks and higher rates for older ones — might have helped a little, but at the political cost of an irate and vocal older constituency. Taxing a broader base for our high-risk pool may have allowed for lower rates in our healthy pool, but historical experience with high-risk pools has shown that maintaining political support for an adequate tax base for a segregated pool of sick people is very challenging. …

The big lesson here is quite simple: Voluntary insurance is hard to do. There is a reason banks compel mortgage holders to buy homeowners insurance and states compel car owners to purchase liability insurance. Insurance pools cannot be comprised solely of those who think they will need to use coverage.

Let’s put some numbers on it. Urban just modeled the bleak consequences of repealing through the reconciliation bill:

The number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent). The share of nonelderly people without insurance would increase from 11 percent to 21 percent, a higher rate of uninsurance than before the ACA because of the disruption to the nongroup insurance market.

Of the 29.8 million newly uninsured, 22.5 million people become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate. The additional 7.3 million people become uninsured because of the near collapse of the nongroup insurance market.

Maybe these consequences are so politically intolerable that they’ll never come to pass. Maybe Republicans and Democrats really will come together, sing kumbayah, and replace the ACA.

But can you be sure? Repeal and delay lights a fuse that’s attached to a bomb. No one should be surprised if it explodes.

@nicholas_bagley

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The following originally appeared on The Upshot (copyright 2016, The New York Times Company). It is jointly authored by Nicholas Bagley and Austin Frakt and appeared on page A3 of the December 6, 2016 New York Times print edition.

A co-worker struggling to make ends meet comes to you with a problem. The price of admission to a dear colleague’s retirement party at an upscale establishment is beyond her means, though not yours.

You both feel obliged to attend. She’d rather bring some refreshments to a conference room than spend what she cannot afford on a lavish event. You like the idea of a grand send-off for your retiring colleague. There can be only one party.

A similar, underrecognized conundrum arises in health insurance. Both you and your less fortunate co-worker are obliged under the law to obtain coverage (which you both want anyway).

But you differ in what you’d prefer to pay for. A high-level manager who makes, say, $200,000 per year is probably willing and able to pay more for health care than someone who makes $50,000.

Unfortunately, neither person really has a choice because the plans all cover “medically necessary” care, meaning any care that offers a clinical benefit. That includes lots of expensive and technologically sophisticated care that is no better, or only slightly better, than cheaper alternatives. You may be just fine paying for high-tech care of marginal value. For your colleague of more modest means, it’s a stretch.

Consider, for example, treating prostate cancer with proton-beam therapy. It’s more expensive than alternatives like intensity-modulated radiation therapy, but isn’t proven to be any better. If given the choice, many people — especially those with lower incomes — might rather buy health insurance plans that exclude high-cost, low-value treatments.

The trouble is that insurers rarely sell those sorts of plans. Even insurers that try to exclude a particularly expensive and unproven technology from coverage are often rebuffed by legislatures and the courts.

This one-size-fits-all approach to insurance coverage disproportionately hurts low-income people, many of whom might reasonably prefer to devote their scarce dollars to housing or their children’s education. To some extent, subsidies and other monetary adjustments can mitigate this problem. Medicare and Medicaid, for example, are financed in large part out of federal income taxes. And within the Affordable Care Act marketplaces, lower-income people receive subsidies that cover some of their costs.

People who receive coverage through their employers, however, don’t get that kind of help. Perversely, employer-sponsored health insurance is more highly subsidized for the rich than the poor. The subsidy comes in the form of an exclusion of health-insurance premiums from taxation. Since income tax rates are progressive — that is, the rich pay a higher rate of income tax than the poor — lower-income families get less of a benefit.

But both high-wage and low-wage workers at the same company are effectively forced into the same plans. To qualify for the tax exclusion, federal law requires that companies offer the same plans to all or most of their employees, with no consideration for the variable demand for health care. Employees then pay for their fringe benefits by taking home lower wages — and a flat, across-the-board cut in wages burdens low-wage workers disproportionately.

In theory, the labor market could adjust in ways that might lessen the problem: Low-income workers, for example, could demand higher wages for being forced into plans that are more expensive than they’d prefer. These would have to be made up by reducing the wages of high-income workers, something it’s not clear they would accept. There’s no evidence that labor markets actually work this way.

“The notion that labor markets perfectly offset the varying preferences for health insurance among workers by giving higher wages to those who value health insurance less is a comforting but crazy idea,” said Amitabh Chandra, a Harvard economist.

The problems with one-size-fits-all insurance run deeper. In some insurance markets, like those for small businesses in Massachusetts, employees across companies are pooled together and pay the same premium. A recent report from the Massachusetts attorney general showed that workers in companies that receive health care at less expensive hospitals effectively subsidize those at comparable companies who receive care at more expensive ones.

The uniformity of insurance plans also affects the pace and composition of technological innovation. To extend our party metaphor, if everyone — even those who preferred simpler events — were effectively forced to pay for any retirement party, regardless of how lavish, we’d see, and pay for, retirement parties of ever-escalating extravagance.

In much the same way, medical innovators respond to the size of the market for new technologies. The fact that health plans routinely cover all medically necessary care sends an “if you build it, we will pay for it” signal. Innovators are not getting the right signals, the right incentives, to develop high-value or cost-saving treatments. It’s more lucrative, instead, to develop pricey new therapies, even if they offer only marginal clinical benefits. The result is lots of new treatments that don’t provide much bang for the buck.

Those new treatments pose a continuing challenge to efforts to bend the cost curve. Economists have long known that technology is the primary driver of escalating health expenditures. Indeed, in 2012 medical technologies that were not offered a decade earlier accounted for almost a third of Medicare spending delivered by physicians and outpatient hospital departments.

What’s to be done? Managing technological innovation would require us to consider policy changes that would have been unthinkable a generation ago. “The tax code could be restructured to make extravagant health insurance less appealing,” Mr. Chandra suggested. Employers might then offer health plans that appealed more to low-income workers.

The Cadillac tax on expensive health plans, which is scheduled to go into effect in 2020, is a step in that direction, but according to Mr. Chandra doesn’t go far enough. And it is unpopular across the political spectrum. Other ideas — like incorporating cost-effectiveness criteria into Medicare and private plan coverage criteria — are sure to prompt disagreement.

Contentious solutions they may be. But as the cost of health care and health insurance rises, it won’t be a party for politicians feeling more pressure from consumers.

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After campaigning for years on a plan of “repeal and replace Obamacare,” Republicans finally have the means within their grasp to make much of that possible. They control the presidency, the House, and the Senate. The filibuster still poses some potential threats to their plans, but it’s also within their means to abolish its widespread use in such a way that they could both repeal the Affordable Care Act and replace it with something of their own design.

What would that be? In contrast to what many say, there are Republican plans out there to consider.

Go read about them all in my latest post over at the JAMA Forum!

@aaronecarroll

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