• Reflex: December 5, 2011

    The CDC has released a report on prescription painkiller overdoses in the US. “One in 20 people in the United States, ages 12 and older, used prescription painkillers nonmedically (without a prescription or just for the “high” they cause) in 2010… Prescription painkiller overdoses killed nearly 15,000 people in the US in 2008. This is more than 3 times the 4,000 people killed by these drugs in 1999.” Aaron’s comment: I don’t have much to add other than this is a serious problem, and since we’re writing the prescriptions, doctors should be aware.

    Farmers contest revised child labor laws, writes Ana Campoy. The new rules would prohibit persons younger than 16 who are not the children of farmers from operating machinery, doing tasks with animals, and working in grain silos. Don’s commentI was a hired hand on a tobacco farm beginning at age 11-18 and performed many of the tasks that will be banned. I never thought much of it, was given training, and this experience provided me with many good life lessons. However, the statistics on risk to children in farming (esp from tractor accidents) are sobering, and there is no way I would let my 14 year old son do what I did on a farm when I was 14. So, I have mixed feelings, but this seems the correct step.

    Health care provision and distribution problems are among “contemporary capitalism’s numerous flaws,” writes Ken Rogoff. The health care market “fails to satisfy several of the basic requirements necessary for the price mechanism to produce economic efficiency, beginning with the difficulty that consumers have in assessing the quality of their treatment. […] In health care, perhaps more than in any other market, many countries are struggling with the moral dilemma of how to maintain incentives to produce and consume efficiently without producing unacceptably large disparities in access to care. It is ironic that modern capitalist societies engage in public campaigns to urge individuals to be more attentive to their health, while fostering an economic ecosystem that seduces many consumers into an extremely unhealthy diet.” Austin’s comment: Rogoff is right. If you examine our deeds, collectively, and not our words, we clearly want to behave in ways that are bad for health while hoping someone else will pay for the costs of doing so. That Rogoff counts this as a fundamental flaw of capitalism and devoted three paragraphs of a short opinion piece to it is notable.

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    • -All of the data shows that people are horrible at estimating the probability of the things that will actually kill them, yet we have a very robust and competitive life insurance market, etc, etc, etc. I can think of very few markets where the requirement for perfect information on both sides of the transaction is or has ever been satisfied, yet folks wedded to the neoclassical Samuelsonian/DSGE still to make reference to this as a pre-condition for markets to function – at least as defined by some arbitrary standard of perfect efficiency

      -Has it really been established consumers need to have a perfect knowledge in order for the insurance market to function? Actuaries/institutions with less than perfect knowledge of the future can take known correlates between a limited sub-set of physical/physiological metrics that relate to conditions that individuals can actually influence and determine how to price health insurance and translate those into premiums that will either encourage high-risk people to change their behavior, or limit their capacity to impose those costs upon other people.

      Pay nothing for treatments that have no evidence to support them, and increase the percentage in tandem with proven efficacy. Now people have incentives to act as though they have both the knowledge and expertise associated with perfect information even though all they have access to is prices and their own subjective preferences.