Greatness is part of America’s birthright and lexicon. Its 18th-century founders had no doubt that they were embarking on a daring experiment inspired by the highest ideals of the Enlightenment. In the 19th century came Manifest Destiny, great migrations and the push to the West, civil war and the end of slavery. The 20th brought titanic struggles and famous victories against fascism and communism.

And America has much to be proud of, from its origins as a grand experiment in offering people more freedom and voice in their government to its role in advancing those ideals worldwide, to its cultural, scientific, technologic, and economic achievements.

But, the more Economists I read and the more I look around at what is driving excitement in the venture capital world, the more obvious the signs are that we will soon see a close to America’s era of unquestioned pre-eminence:

• The rise of BRIC – Brazil, Russia, India, and China are rapidly growing economic superpowers. This is something that the private sector is recognizing and rewarding with investment, sales, and outsourcing/relocation.  Venture capitalists are increasingly looking towards overseas innovation for the next wave of venture returns, and companies which have for years driven most sales domestically now view the BRIC countries as markets of equivalent (and sometimes greater) strategic value. With that comes greater political power and greater influence over the global economic sphere – all at the expense of America’s former dominance.
• America’s uncertain financial future – Look around. Not only is the US government (and its European allies) hopelessly in debt with no clear way out, it is struggling with a (as it stands) unsustainable social security system, an unsustainable long-term health care cost trend, and a recent financial system and real-estate market near-collapse which, with the alarming rise in anti-immigration and anti-trade sentiment, reduce the prospects for future growth. There’s even talks that the US is about to face decades of economic stagnation. Not an optimistic outlook for someone hoping for America to remain an unparalleled economic engine.
• Declining importance of Western power – With the rise in the stature and wealth of the BRIC nations and the decline of the West’s, countries which once had to (at least superficially) profess support for Western values and rules have now been able to turn to Brazil, India, China, and the Middle East which are now eager to expand their sphere of influence – but this time, without the Western-centric preconditions which US aid & influence has come to be associated with. Take Sri Lanka – a country that is under constant fighting where both sides routinely commit morally questionable acts against one another. If the US or Europe were to give economic aid to Sri Lanka, they’d insist on peace talks and possibly some sort of checks to insure human rights were being protected – and let’s not even talk about weapons sales. China? Couldn’t care less. In fact, China is continuing to sell the Sri Lankan government weapons leading the Prime Minister to boast “We have understood who is important to us.” How long will the US continue to have disproportionate influence over the world (especially on a moral level) when these new rising stars are eagerly replacing the US economically and politically? And that’s not even talking about China’s rise as a military power capable of rivaling the US’s…

In some ways, these are to be expected (and even welcomed). Some of the unparalleled performance of the US over the last couple of decades was due simply to the US not having to deal with the poverty, poor infrastructure, and bad governance that other countries had to deal with. That the billions living in Brazil, Russia, India, and China are finally able to see significant growth and reform is something that we should all be happy about. Its good on a humanitarian level, and its good on a self-interest level as it has created new markets and new ideas.

But, in other ways, these should be alarming signs for Americans. On a “philosphical” level, it means a potential re-evaluation of the confidence which has pervaded America’s history. On a more practical level, it means declining influence, less deference abroad to American interests and ideals, a harder time attracting new businesses and ideas, and potentially even greater difficulty financing our debt as investors look elsewhere for safety and growth. Taking it further, a decline in optimism could also stymie the idealistic ambitions America has been long associated with: maybe we’ll delay that mission to Mars, or that anti-poverty campaign, or that idea to help bring about world peace.

Now, its important to not be unrealistic in painting this. Even if the US did nothing, America would remain the dominant economic and military superpower in the world for some time. It should also be noted that America has survived previous threats to this position: anybody out there old enough to remember when everybody thought Japan was going to take the title? It’ll also (rightfully) take a lot to deflate America’s confidence in its exceptionalism.

But, more to the point, I do think that the US can do a number of things to not only slow how quickly the BRIC nations can catch up to it:

• Exceptional, not entitled: In terms of mental state, America need to distinguish between “exceptionalism” and “entitlement.” Too often, America’s diplomats and domestic concerns have been built on the notion that America’s greatness gives Americans a divine right to things. That not only breeds bad government (as voters become prone to listening to “too good to be true” promises from politicians), it alienates allies (who have no interest in bending over backwards to satisfy every American whim), and breeds complacency amongst American workers and businesses (oh I don’t need to improve, after all, I deserve this perk/customer/market/ position). In my view, exceptionalism is not a blank check to whatever someone wants – that’s entitlement — it is a challenge to be better and do more, and I think that’s a sentiment that needs to come back.
• Encourage big thinkers and big do-ers:  Psst. The secret to greatness is: think big thoughts and then do them. Seriously, if you want great things, encourage people who think big thoughts and encourage them to turn those into reality. This means building up our education system to help train people for the thinking and the doing. It means reforming our taxes, regulations, and financial systems so that more people can get the funding and support to turn their big ideas into reality. It means embracing globalization and soft power initiatives so that the world’s thinkers and hard workers see America as the place (or at least the best partner) to do what they do best. It means putting one’s full weight behind creative destruction: letting bad ideas (and businesses/systems) die so that better ones can take their place. I think it is unacceptable that so many businesspeople and thinkers see places like Brazil, China, India, and Singapore as better places to do business and research. While there’s no way to win them all, there is definitely much that can be done to change the balance.
• Be good: While the cold and calculating may view moral good as an expensive luxury, I think it’s an obligation. If we truly believe ourselves to be exceptional, then the choice between morals and prosperity should be a false one. This doesn’t mean unrealistically embracing every bleeding-heart cause, but it does mean that we should seize the many opportunities that exist for win-wins. Instead of attempting to fight global povery solely with aid, we should endeavor to cut the tariffs which not only keep emerging economies impoverished but raise domestic food prices. Instead of playing a zero-sum game where the government must choose to inefficiently allocate resources between many worthy causes, we should truly embrace the exceptional and empower people to have a greater impact on the causes they believe in. On the international arena, the US should also strive to take a leadership role when facing problems which require multilateral cooperation like stopping nuclear proliferation, protecting intellectual property, halting global warming, and fighting human trafficking.

(Image credit) (Image credit) (Image credit)

So, when I found out he wrote a paper which happened to be one of the Top 10 downloads on the Social Sciences Research Network about healthcare policy (something I’ve blogged about several times in the past), I knew I had to recommend it to all my blog subscribers.

Oh and, the fact that I made it to his list of acknowledgements has, of course, no bearing at all on my recommending the piece .

In all seriousness, give it a read. I haven’t finished it yet, but if it comes from Mike, I know its definitely worth perusing regardless of if you agree with him or not.

With the deal closing soon, Schering-Plough’s execs had to deliver one last earnings call with the analyst community which cover Schering-Plough stock.

Generally, these are very dry affairs full of corporate speak with many empty promises, excuses, and boasting (although, occasionally, if you have an interesting enough CEO like NVIDIA’s Jen-Hsun Huang, you get some very interesting commentary). But, this most recent analyst call had a bit of poignancy you don’t usually get in an analyst call, as covered by the Wall Street Journal Healthcare blog:

The earnings call’s invariable bleating about operational sales growth and foreign exchange impact came with notes of nostalgia… Analysts offered kind good byes and good lucks. Executives waxed about the company, and its pipeline of new drugs, that they had built. It will all go to Merck now, Chief Executive Fred Hassan said in closing.

Awwww. Adios, Schering-Plough.

(Image credit – Merck/Schering Plough)

The first is that I’ve been very impressed with President Obama’s efforts. This may come as a shock to my more liberal friends who have been reading my Google Reader shares on the subject, many of which have been critical of Obama’s plans. But, as someone who was not terribly impressed with Hillary Clinton’s efforts in healthcare in the 1990s, I have been pleasantly surprised by the different strategy that Obama has taken. At least from this blogger’s perspective, Obama’s process has been much more open, allowing the plan to receive input and win support from the numerous groups which need to be won over (i.e. pharmaceutical companies, doctors and nurses, insurance companies, hospitals, etc), and much more driven by Congress rather than force-fed from the Executive Branch.

The result? In my opinion, a much more nuanced policy than what I’m used to hearing from pie-in-the-sky single-payer advocates and market fundamentalists with a promising focus on addressing access and cost concerns with a combination of regulatory/government directives and market-based methods.

The second is around the balance between using government initiatives and using private markets to solve the US’s healthcare problems. I tend to be biased towards the latter, given my lack of faith in the ability of central organizations to solve the coordination, innovation, pricing, and customization challenges which markets are more adept at solving. With that said, anyone who is not a free-market fundamentalist is probably also aware of the coordination challenges that markets face (i.e. one of the reasons why we don’t trust the market to be entirely responsible for national defense or international treaties) and the blindness to equality/access concerns that markets can have.

From that perspective, I think the Obama plan does a relatively good job of balancing the two. After all, I can list at least two “market failures” that are abound in the American healthcare system:

1. One can probably assign blame for many of our current complaints about American healthcare to the fact that there is a very poor market for health insurance (David Leonhardt at the NYTimes does). After all, why would insurance providers increase quality while lowering cost when most US healthcare coverage decisions are made by employers who don’t have the incentive or the information to shop around between plans and the fact that, in many markets, there are very few insurance companies who a consumer can choose between.
2. Holding concerns of access aside, not enough people get health insurance. This is true for three reasons. First, people oftentimes underestimate the “safety net” that they may actually need to deal with sudden illnesses and accidents. Without the bargaining power of a large health insurance company on your side, the costs of seeing a doctor and obtaining treatment are astronomical – something which many uninsured find out when they suddenly need treatment. Second, the fact that the uninsured are able to still get government-funded care or emergency room care, while morally praiseworthy, means that extra costs are added to our healthcare system (and hence our insurance premiums and copays) which could be avoided had those individuals originally been covered. Finally, there are a number of conditions (e.g. breast cancer) which are more easily and cheaply dealt with if detected and treated earlier. Individuals without health insurance oftentimes are less likely to find and treat these conditions early on, resulting in greater costs and more difficult problems for doctors to treat.

That Obama is pushing for a regulated “insurance exchange” and a requirement that all individuals have health coverage is, to me, a step in the right direction to addressing these two issues. The devil is of course in the details, but the fact that Obama is leaning towards these provisions is very encouraging.

I am much less enthusiastic about the “public option” that has been thrown around because I don’t believe it manages the public/private divide very well. The theory is that the government will step in and provide coverage to individuals who are not happy with any of the options on the table with the hope that this “public option” will help “keep the insurance companies honest.” While the theory is appealing on the level that everyone would like to have an extra safety net which helps to prevent market failures, I think the “public option” idea is based on a flawed premise.

There are three possibilities that I can envision for the public option. The first is a world where the initiatives that Obama is proposing create a strong market for insurance. In that case, in the same way that the low prices in the used car market cause a self-fulfilling doom loop where they attract only bad cars (the “lemon problem”), the public option will doom itself to be a high cost, inefficient solution that attracts all the patients which insurance companies don’t want to cover (e.g. those with difficult pre-existing medical conditions).

The second and third possibility that I can see have the same outcome. Either Obama’s market initiatives fail to create a strong market for insurance or the a strong market is created, but to bolster the public option, the government heavily subsidizes the public option and protects it from competition from the private sector. In both cases, the result is that insurance companies are unable to compete with the government plan, resulting in the market for insurance becoming even less robust than it is today, effectively converting the health insurance market into a single-payer model whereby the government takes on all health care. I’ve discussed many reasons why this would be undesirable, but the two biggest ones that come to mind are governments being generally bad at innovation (due to central planning being notoriously bad at allocating resources between different uncertain technologies) and the politicization of the rationing of healthcare rather than relying on medical and personal factors.

In all three cases, the public option not only leads to undesirable costs, but distracts the government from the solution which should be implemented: creating a strong insurance market with good options for consumers and using subsidies/regulations to expand coverage. That’s the only solution that provides the coverage, the level of cost, and quality of care that we want.

The final thought that I had revolved around additional steps which I hope the Obama plan will eventually take. I outlined them in a previous post I made on healthcare policy, but they include two things:

• Universal coverage for children – Morally and practically (as there’s no better way to improve the long-term health of the country by making sure that children at an early age are vaccinated, have routine checkups, and are taught good health habits), I see no reason why every child should get quality healthcare coverage.
• Making health insurance actually act like insurance – “Health insurance” is only insurance in name, not practice. You don’t expect your car insurance to pay for every tune-up and every time you fill up at the gas station. Why should you expect your health insurance to pay for every drug and every visit to the doctor’s office? The fact that so much of this payment is handled by someone else means that individuals don’t need to control their own healthcare costs, which makes insurance premiums higher for everyone. This fact also means that insurance ceases to be the “safety net” that protects you from catastrophic losses that its supposed to be, but instead becomes a significant drag on your earnings potential.

It is certainly an exciting time for anyone interested in healthcare policy, and hopefully, we leave this process with a set of initiatives and proposals which make us all better off.
(Image credit – Dr. Obama) (Image credit – Flag + stethoscope) (Image credit – Public Option pin)

I am a gold medalist in the macho Sleepless Working Olympics.  I once worked a 60-hour shift without sleep.  (Yes, that’s 2.5 days without any shuteye.)  One stormy February, I put in 468 hours, almost 120 hours a week for four weeks straight, sleeping an average of less than 4 hours a night.  I have enjoyed all the exciting side effects of prolonged sleep deprivation, like uncontrollable “microsleep” which once almost caused me to walk into the path of a cab, or the hallucinations that set in after 48 hours or so–not fun hallucinations, either, just long conversations with co-workers who turned out to have left the building hours or even days before.  I was essentially dreaming with my eyes open.  

So I know whereof I speak when I think about interns training on gruelling regimens.  And you know what I learned on all those sleepless nights?

Well, actually, not much.  It turns out that adequate sleep is crucial to memory formation.  But I did manage to process and retain one fact:  when you have not had enough sleep, you. are. stupid. 

Your attention span shortens.  Your decision making process slows down to a crawl.  Your emotions fray–towards the end of that fateful February, I burst out crying when I learned that the delivery of a hot-swappable backup drive had been delayed.

And, what I think is the most telling argument:

I understand that against this, you have to set the benefits of continuity of care.  But there’s a funny thing:  if continuity of care were really that great, attendings would only have four days off a month, instead of the sybaritic five or more that McNamee is deploring.  Most doctors I know work really hard.  But they don’t work a lot of 36 hour shifts, and they don’t think that two weekends a month off is the height of decadence. 

Let me propose something a little different for all those attending physicians who think that residents should be hazed work in 36 hour shifts. Why don’t you work 36 hour shifts with only 4 days off per month? I mean, don’t you care about your patients and their continuity of care?

I was not impressed. The WSJ article cited three unconvincing arguments against resident hours reform:

1. Lack of improvement in patient care from reduced hours
2. Hospitals may need to hire more residents, and this will be expensive
3. Patient hand-off increases medical errors

The first argument asserts that the reduction in hours is not a good thing because there hasn’t been a significant improvement in patient care. This makes absolutely zero sense to me. In the business world, if I could achieve similar results but with much lower worker burnout and hourly commitment, I’d call that a great victory. Odd that these doctors think the exact opposite?

The second point sounds convincing at first glance, but has two big problems with it. First, the estimated cost of hiring additional residents (~$1.6 billion) is a tiny drop in the ocean of total healthcare spend ($2.2 trillion in 2007). To argue that this is a ridiculous burden is to argue that $5.33 per person in a year or an increase of 7 cents on every hundred dollars of healthcare spend is an unconscionable amount to spend to reduce resident burnout and fatigue-related error. Secondly, this point assumes that we currently don’t need/want additional doctors. Given the shortage of doctors in the US, you’d think that hiring more residents could actually be a good thing. Again, to use business as an example, if all our clients could fix their staffing shortage and morale/fatigue problems by increasing their budget by 0.07%, my job would be very easy.

Lastly, the same tired argument is rehashed about hand-off errors. I’m too lazy to come up with new points, so I’ll simply re-quote what I said before:

1. I strongly prefer a resident who is rested and slightly unfamiliar with my case over a resident who is half-asleep and is probably not all that familiar with my case anyways given that he/she is probably dealing with many other patients and was probably half-awake/running-on-adrenaline during those patient visitations as well.
2. Really? Handoff errors are occurring at such a high rate that they are compensating for decrease in fatigue-related errors? I find that really hard to believe. 
3. Even if handoff error rates are close to fatigue error rates, it suggests that we aren’t training doctors correctly at all. After all, while fatigue error is practically impossible to control (if you’re tired, your brain doesn’t think properly — there’s not much you can do about that one), handoff errors are. I fail to see why training doctors to communicate more effectively, to learn to collaborate with other doctors more effectively, and to take better records (Obama is committing $19B to developing better healthcare IT) is something that is unfeasible or undesirable or an unnecessary burden.

Now, I personally was under the impression that the uninsured pose a major burden to the healthcare system. After all, we’re talking about a fairly large number of individuals who cannot afford health care (and hence need to be subsidized by the American taxpayer). Much to my surprise, the blog Healthcare Economist quotes from a paper from the Journal of Health Economics that finds that the uninsured in net might not actually be a burden on doctors’ wallets at all (hat tip: A. Phan)

The majority of physicians actually make money, on net on their uninsured patients…12-14% of physicians found their uninsured patients patients more than twice as profitable as their insured patients; that is the net payments from the uninsured were more than twice the expected payments from the insured patients.

The reason? Apparently (although, as a consultant, I shouldn’t be surprised by this), insured patients are able to extract bargain prices for medical equipment/drug suppliers as a result of insurance companies being able to bargain for prices. Uninsured patients, on the other hand, have to pay the full list price, because they lack the scale (or, in other words, the bargaining power) to negotiate lower prices.

But, even more interesting, is that if the higher prices are ignored, the study concluded that

Even our most conservative estimates suggest that uncompensated care amounts to only 0.8% of revenues, or at most $3.2 billion nationally [Ben's note: (a) the report shows that most of this cost comes not from care that doctors hand out for free but by nonpayment and (b) this is TINY compared to total health spending, and even smaller compared to US GDP].

This is interesting, because while it is known that the standard statistics cited about the uninsured also count those who choose to forgo insurance or those who, although unable to pay for large expenses, are able to pay for smaller ones, there’s usually some level of controversy over the ability of uninsured patients to pay. This finding suggests that there is a reasonable capacity to pay amongst the uninsured. This isn’t a blanket statement that can be made, and this is certainly not claiming that individuals without insurance can pay for chemotherapy or heart surgery, but it’s a caution that we don’t necessarily have to jump to a single payor-universal health care form of coverage. We just need to find a way to get more people covered (kind of like my proposal).

Furthermore, this will hopefully shed more doubt on claims by individuals believing that the uninsured are a horrible burden — an insurmountable problem that can’t be solved.

While I don’t profess to have all the answers, as this is really a product of several commutes worth of thinking about how a business-person would approach the problem of healthcare policy, I feel that the most logical place to start in devising a solution is to start with the complaints that we hear so often about healthcare:

1. It’s too expensive. This is pretty clearly true, but is in and of itself not a problem. Why? First, it assumes that the quality of healthcare does not increase. If healthcare gets twice as good but the price only increases by 50%, then this would not be such a big deal. Secondly, it assumes that incomes do not rise as fast as healthcare costs do. If incomes tripled while healthcare costs doubled, then there would be no problem. However, while the quality of healthcare has improved due to improvements in medical science and American medical schools churning out batches of highly trained MDs, incomes have not increased as quickly as healthcare costs have making this a problem not so much of expense, but a problem of access. This access/expense problem is exacerbated by the fact that greater costs have made insurance companies and employers unwilling to bear the costs of paying for the care of individuals who suffer from terminal or difficult-to-treat conditions. 
2. Doctor-patient relationship has deteriorated. This is a vastly more subjective and complex issue than the one of expense. But, in a nutshell, this is a problem that is perpetuated on two levels: the first is at the level of managed care. It’s difficult to maintain a strong doctor-patient relationship when the actual “customer” in the transaction is an insurance company seeking to minimize cost rather than the patient him/herself. The second is at the level of medical malpractice. That medical malpractice premiums are shooting up is not a product of corporate greed on the part of the malpractice insurance companies, but that the number of lawsuits and the magnitude of damages claimed has increased.

This is, of course, a simplistic overview of the problems involved, but it outlines the key issues that a healthcare policy needs to start with. The era of managed care was a response to the problem of expense and access, but not only has it failed to completely control the problem of costs, it created and exacerbated the problem of the doctor-patient relationship.

A lot of people see the solution in a single payer system — a system whereby the government (presumably) would step in and regulate costs and quality in such a way as to arbitrate a balance between expense and damage to the doctor-patient relationship. Unfortunately, this sort of monopsony (a single buyer, rather than a single seller which is a monopoly), especially one run by a government, is rarely desirable for a number of reasons. Allowing politicians to either decide which care to withhold rarely takes into consideration the needs and interests of the people involved and may be worse than managed care in terms of damaging the doctor-patient relationship given the single payer’s supreme market power. The flip side, where the political process allows almost all medical procedures, suffers from the exact opposite problem whereby there will be no incentive for doctor or patient to control costs, leading to escalating costs which will be reflected in either a massive government deficit or a massive tax hike.

The private sector, while certainly with its share of flaws particularly with regards to access, however does a great job of increasing quality of care. Furthermore, it provides a wide range of flexibility in offerings which a single payer system run by the government does not. I don’t believe that most American doctors would wish to give up their private-sector salaries and autonomy to become government employees with regulated salaries and restricted freedom.

So, taking these into consideration, I’ve come up with four basic healthcare objectives that a healthcare policy ought to fulfill:

1. All children should have healthcare. I don’t even see what moral argument one could have for depriving children, especially poor children, from having healthcare. They have absolutely no say in their economic situation. And, taking care of children today means reduced medical expenditures and increased quality of life in the future. There is thus a moral imperative and a preventive imperative in this principle.
2. Doctors should be able to freely advise their patients on the best course of action, and patients should be able to take that advice. The great failure of managed care is its sacrifice of this basic principle. Doctors are medical experts. Medical decisions should be made by them, not by a government, by insurance companies, or faith healers. By doctors.
3. Individuals should take responsibility for at least some of their medical expenses. The tragedy of commons says that when people don’t bear the cost of their bad actions, those bad actions proliferate. If individuals do not pay for healthcare to some degree, there will be no reason to control costs. The alternative is for an HMO or the government to step in, but this is not only undesirable for the reasons mentioned earlier but because it overrides principle #2 that doctors and patients should feel like they can trust each other and act on that trust.
4. Individuals should not have to pay more than 1/3 of their income in healthcare costs. At the same time that we consider #3, we also have to consider that healthcare is a necessity, not a nice-to-have. Given the choice between death and poverty, most people choose poverty, but that they have to make that choice at all is a problem. The 1/3 number I give above is of course an arbitrary number which can be debated, but it strikes me that a fraction is ideal here, as the critical issue is not expense, but access.

Taking these four principles together, the healthcare policy I’d love to see is:

• The government assumes all healthcare costs for all children and students. This will be expensive, but given the moral and practical arguments involved, I feel this is wise. The government can mitigate the problems of monopsony by purchasing this care from private providers in bulk by means of auction and by giving parents the option to opt out and purchase comparable coverage elsewhere. This has the side benefit of being able to implement preventive measures in children, including vaccination (in loco parentis if necessary given the absolute catastrophe that the Thimerosal scare has been producing in uninformed parents) and better monitoring and treating of childhood obesity, eating disorders, and other public health concerns.
• Every individual is required to purchase catastrophic insurance which kicks in when healthcare expenditures exceed 1/3 of after-tax income for life-threatening conditions. This is to prevent the free-rider problem where the care of individuals without insurance are subsidized by the insurance of others. This insurance should be need-blind, in the sense that the providers should be legally bound to cover all patients regardless of the patient’s need. This is the central piece of my healthcare policy which targets the “access” problem.
• Institute a health savings account-like system which allows individuals to contribute pre-tax money, say up to 10% of their income every year, to a tax-free savings account which they can withdraw from to pay medical expenses. This sum can accrue over time. This restores choice to an individual on what doctor to see, what treatments to take, etc. and puts the responsibility of getting and paying for care on the individual up until some point. The 10% number is of course arbitrary (and can be flexible depending on if the individual has dependents) and there is of course the issue that an individual will save only up to 33% of their income, but this is a good start in restoring the patient-focus in the doctor-patient relationship by removing the potential for a third party to withhold or allow care for purely financial reasons and in combating the tragedy of commons which currently occurs because patients rarely face the full cost of their care expenses.

I’m not sure if this system is politically feasible, and it certainly has kinks to work out (i.e. how to transition to such a system, what the exact percentages should be, how do we deal with dependents/spouses, how do we deal with college students, what counts as “life-threatening”), but I believe I’ve created a system which does actually address the problems of access and worsened doctor-patient relationships while adhering to a clear set of objectives.

While I am loathe to parrot the reactionary yearning for the “good ol’ simple days”, the truth is that the world we live in today is a brave new world very different from the one from only a few decades ago. Post-World War II America emerged as the uncontested military and economic power on the planet. Europe and Asia had no choice but to enrich America’s businesses and its people at little real risk to Americans. The tri-partite alliance between business, labor, and the government acted as a check against the extremes of socialism and of income inequality. The lack of the advanced telecommunications and infrastructure rendered cheap, long-distance, high-speed communication and transportation moot and hence kept everything local. You knew your neighbors. You all shopped at your neighborhood grocery store. You all read the same local newspaper, went to the same Church, had the same style homes and car, did the same type of job for many years in a row, etc. In short, simplicity was the name of the game.

Flash forward to the post-Cold War era. We now have more choices than most people know what to do with. You can choose between multiple major cell phone providers, in addition to niche players, in addition to the home phone service that you have on top of this new voice-over-IP thing. Each provider carries multiple plans each carrying pages of fine print which are intimidatingly incomprehensible — there are multiple phones to choose from with multiple, non-overlapping features — the phones also have multiple accessories that you can buy. And this is just talking about cell phone choice!

At their jobs, people now face an unprecedented degree of uncontrollable complexity. What once was a secure job protected by the triple alliance of business, labor, and government, has now been replaced by a system where all three members of that alliance have diminished in strength in the face of increased competition and complexity. Obstacles to career progression are no longer one’s colleagues and one’s boss, they are now the invisible millions in other cities, states, and countries each vying for top position. Detroit’s big three auto manufacturers have learned this the hard way — where once they could build and push new car models out at a leisurely pace and expect the consumers to buy whatever they sold, they are now facing the horror of an incomprehensibly (to them) efficient and high-quality Japanese auto industry. Labor, once able to make demands of a growing manufacturing sector, now find themselves choosing between the current economic well-being of their workers and the future competitiveness of their firm.

Increased globalization has led to much higher capital mobility and, as a side effect, much greater complexity in our lives. As late as the 1980s, mergers and acquisitions were rare and only executed by the largest of players acquiring moderate sized firms. The rise of hedge funds, investment banks, and private equity groups have changed this to the point where all but the largest of Fortune 500 companies are now accessible targets. This means that today’s employee is not only facing greater competition than ever before, but he/she is also facing the grim specter of being downsized by giant market forces that no layperson has any real understanding or control over. Three and four letter acronyms pertaining to arcane financial concepts now dictate the future of your job, not necessarily how well you got along with your boss or how hard you work. Gone are the personal relationships with your bank — these days your mortgage and bank accounts are in the hands of large institutions who see you as merely a cell in a spreadsheet.

Even things like healthcare have become increasingly complex. With fatalities from infectious diseases on the decline, the former “magic bullet” treatments (low side effects, high efficacy, rapid turnaround) such as penicillin are no longer the wonder treatments of healthcare productivity. Instead, because of modern antibiotics, humans now face diseases which cannot be truly treated, but only managed. This is a major improvement morally and medically from being completely unable to treat cancer and various viral infections, but the added complexity has added anxiety in terms of (1) avoiding the myriad risk factors for diseases where we don’t clearly comprehend the cause (cancer, heart disease, diabetes), (2) dealing with the stress and randomness which comes from being diagnosed with one of these conditions (e.g. you can be a lifelong smoker and not contract lung cancer, and you can be completely smoke-free and still get it), and (3) getting care (e.g. long periods of debilitating chemotherapy/watching what you eat for your whole life, etc).

On a foreign policy front, we see complexity has dramatically increased. No longer is the enemy of the United States clearly the Godless forces of Soviet and Chinese communism, the enemy today is a faceless group of terrorists. And, unlike the Communists, they do not all report to the Kremlin, they are decentralized, belong to different (and oftentimes conflicting) groups with different views and methods. The big threat is no longer the simple instant and massive destruction via nuclear bomb, but the potential destruction of a building, of infrastructure, of our comfort zone.

So yes, we have more money. The era of history which showed a reasonable chance of complete nuclear annihilation ended. We have more understanding. More choices. More power. But with it, we have so much complexity — no wonder people are anxious.

Lester Leung struck me as very odd the first time I met him. The odd dash of color in his hair. The strange look in his eyes whenever he talked about “pirates”. And the paranoid side of me was always a bit uneasy around someone who seemed to be nice all the time and yet was pre-med — I thought he was going to stab me in the back sometime…

Of course, he was good friends with Eric (who had gone to high school with him) and he and I happened to run into each other pretty often as a result of sharing meals or because he and I were interested in similar biomedical things. That, and he plays Starcraft.

It was through these interactions that I discovered that Lester was not only a Kung-Fu pirate-crazy colorful hair premed, but that he had started an online publication — the Next Generation MD — a site made with the editors of the famed New England Journal of Medicine directed at providing information for pre-medical students around the country.

And, although I was skeptical, Lester reached out and recruited me. At the time, I was committed to dropping my work at the Harvard International Review and was unsure if I wanted to join up with yet another publication. But, Lester got me very excited very quickly. My first assignment — interview Professor Doug Melton, former Bush administration advisor and renowned scientist, regarding his views on stem cells. To say I was nervous is a bit understated. But, I pushed hard, and although Melton’s schedule proved dodgy, I finally was able to interview the man and we talked — or more correctly, I stammered while Melton delivered in his very cool deadpan a brief primer on stem cell science and the state of policy regarding embryonic stem cell research.

I followed this up with a much more difficult interview with Frederick Hayden, a big honcho in the world of avian influenza epidemic control, and Michael Osterholm, director of the Center for Infectious Diseases Research and Prevention, on the threat of bird flu. It was difficult for a number of reasons. First, the structure of the interview was a great deal more challenging as not only did I had to perform a great deal more research on both the policy and the scientific aspects of avian influenza, I also had to specifically research what both Hayden and Osterholm had done to best utilize them in my interviews. Secondly, scheduling, if I recall correctly, was very difficult, with me juggling two very busy and very different people. Finally, the interview was conceptually difficult because both Hayden and Osterholm had very different ideas and different interviewing styles for me to negotiate. While I think the article is one of the most substantive pieces that I’ve ever written for a general audience, I was somewhat daunted after the fact at the prospect of setting another interview.

Which brings us to this year. I’ll admit, I slacked a bit in first semester. I had crafted a very grandiose idea about interviewing politicians and public health professors about medical malpractice reform, but I found that my doubts from the Hayden/Osterholm interview and the sheer scope of the issue scared me away from actually writing one. However, when Eric, I believe, came up with the idea that I interview the Medical Consultant for Scrubs, one Dr. Jon Doris (namesake for Zach Braff’s character “JD”), I immediately jumped at the opportunity. The interview was a lot of fun to “do research for” (read: watch Scrubs until I feel sick) and even more fun to do as Doris was one of the most congenial people I’ve ever had the privilege of talking to.

Through NextGen, I’ve also been treated out, on the NEJM’s dollar, to Henrietta’s Table, I’ve also gotten to talk with some of the top editorial staff for the NEJM, meet some very interesting people, both undergrads and intervewees, but most importantly, I’ve contributed to what I think is a very worthwhile endeavor.

1. We have to get up at 6:45 am and drive to school
2. We have lunch together at 12 on the quad
3. We have lockers
4. We are in the same room everyday
5. There are lunch clubs
6. The same people are officers in every club
7. The dating pool is extremely small
8. Everyone has the same classes and you can’t drop any o fthem
9. Everyone knows everyone else
10. There’s a prom
11. For girls, the skirts get shorter and the shirts get lower
12. For guys, spitwads are an acceptable form of entertainment in lecture
13. We carpool to school
14. “I still can’t make eye contact with the girls in our class”
15. two words: class elections
16. we have homerooms and homeroom teachers
17. why its like the 3rd grade: we have cubbies and desks with our names on it
18. if something happens before lunch, everyone knows about it by the end of the day
19. we see each other everyday in class, but that doesn’t stop us from hanging out on the weekends

In her first post, she responds to the question of whether or not health care is a right or a commodity and answers that it ought to be a right:

“It’s not a question of economics but a question of morals. The United States spends more of its GDP annually on helath care than any other developing [I assume she meant developed] country yet it is the only one that does not have universal health care. This indicates that the United States health providers and policy makers do not consider that health is a right for every single human being. Who says a single mother working two part time jobs and raising two children doesn’t have the right to access effective health care (preventative and treatment) but the soccer mom in the suburbs whose husband works in a firm that provides a family health plan does? What about illegal farmworkers that are subjected to the toughest conditions and toxins every day, do they deserve healthcare? Did you know that those who belong in the 20s age group has one of the highest rates of uninsured because they’ve just come out of college and do not have a steady job or cannot hold jobs that gaurentee health care.“

I think it’s a very problematic position to take.

1. Statistically, we can argue back and forth for days about just how bad access to health care is. I can cite reasonable studies from the Cato Institute among other organizations which point out that the numbers of “uninsured” oftentimes cited are also composed of those who have rationally chosen to forego insurance (because they assess the risk to their health as not high enough to justify paying premiums) or who are between jobs and have insurance coverage for the mjajority of the year or who are Medicaid/Medicare eligible, or an NEJM study that the advent of insurance has kept it so that the actual out-of-pocket expenses per person as a percentage of income have not changed all that much. Of course, this doesn’t deny that there is an access problem. I’m not trying to pretend that everything’s fine and dandy, but just that most estimates of how bad the problem is are probably overstating the problem and hence I don’t think its a sufficient case to demand that healthcare ought to be a “right”.
2. The United States has the finest healthcare system in the world. I’m not aware of any serious questioning of that. I think this is a testament not only to the dedication of the many doctors and scientists in the US, but also to the market system which efficiently allocates resources and talent to maximize productivity and efficiently matches patient’s desires with willing and able healthcare providers. Fundamentally then, its the concept of health care as a “commodity” which has enabled this. Who cares if the conception of something as a commodity is somewhat repulsive (I’ll freely admit that I find the idea of healthcare as a right has a much more “feel-good” feeling to it) if it gets the job done?
3. If healthcare is a right, and not a commodity, then certain questions have to be answered — questions which have traditionally been answered by governments very poorly: Who gets the best doctors? Who gets the worse doctors? How much do doctors get paid? Should a person with more money be allowed to pay for better healthcare or extra services? Should we have privatized health spending at all? What qualifies as a healthcare consideration and what doesn’t (ie nose job vs reconstructive surgery, anti-schizophrenia drugs vs “i’m feeling depressed, can you give me meds?”)? Not everyone’s going to answer these questions in the same way, and not everyone is going to be happy with how other people answer this.
4. The big question — WHO PAYS FOR IT!? If health care is a right that must be paid for, then are we not just trampling on someone else’s right to property to force them to pay for someone else? Or, if redistributive questions don’t bother you, what if there is a health procedure that I find morally objectionable (ie circumcision, abortion, birth control, or if I’m Tom Cruise — painkillers)? Should I be forced to put my money into something that I don’t want to sponsor? On a more traditional economics level, if people no longer have to pay their doctors, then what is to reward good doctors? What is to punish bad doctors? What is to keep patients from ordering too many tests or overly-expensive meds? I think most doctors would argue that the doctor-patient dialogue ought to be what determines healthcare choices, but at the point healthcare is a right which the government must provide, then we reach a point where that dialogue cannot ever (for reasons that I hope are patently clear) take first priority.

Just because there are problems of equity and just because most humane and rational individuals would agree that increasing access to health care is a good thing doesn’t mean that rational solutions can begin by deeming health care as a right as opposed to a commodity. In her second post, Allie does back off from the purely idealistic positioning to talk about practical issues, but from my (I’ll admit, limited) understanding, it seems to me that “health care as a right” is not the idea that one ought to begin with as it forces problems which lead to compromising quality.

I would even go so far to argue that most countries with universal health care systems are only able to maintain quality in the face of the fact that the United States and India and China maintain a mostly privatized, non-universal systems of health care and cheap research and development with the ability to reap large rewards and gains from innovation and good service.

This, however, shouldn’t be interpreted as a defense for the current state of healthcare in the United States. There are serious problems both with regards to equity and with efficiency/quality in the current system. This is solely an objection with starting from the position that “healthcare is a right”.

Conquering Cancer with Private Medicine
by Michael D. Tanner

Few things in life are as terrifying as a diagnosis of cancer. But for millions in the United States, the news just got a little bit better. Death rates for those suffering from cancer are actually beginning to drop. In particular, death rates have declined for the four most common forms of cancer: lung, colorectal, prostate and female breast cancers. Overall, fewer U.S. citizens died of cancer than at anytime in the past 70 years.

While there are many reasons for this welcome trend, one reason is the much-maligned U.S. free-market health care system.

The one common characteristic of all national health care systems, including Canada’s, is that they ration care. Sometimes, they ration it explicitly, denying certain types of treatment altogether. More often, they ration indirectly, imposing global budgets that limit the availability of high-tech medical equipment, or which require long waits for patients seeking treatment.

In the United States, by contrast, there are no such limits, meaning that the most advanced treatment options are far more available. This translates directly into saved lives.

Take prostate cancer, for example. Even though U.S. men are more likely to be diagnosed with prostate cancer than their counterparts in other countries, they are less likely to die from the disease. Less than one out of five American men with prostate cancer will die from it, but 57% of British men and nearly half of French and German men will. Even in Canada, a quarter of men diagnosed with prostate cancer, die from the disease.

That is, in part, because in most countries with national health insurance, the preferred treatment for prostate cancer is … to do nothing. Prostate cancer is a slow disease. Most patients are older and will live for several years after diagnosis. Therefore, it is not cost-effective in a world of socialized medicine to treat the disease aggressively. The approach saves money, but comes at a human cost.

Similar results can be found for other forms of cancer. For instance, just 30% of U.S. citizens diagnosed with colon cancer die from it, compared to 74% in Britain, 62% in New Zealand, 58% in France, 57% in Germany, 53% in Australia, and 36% in Canada.

Even when there is a desire to provide treatment, national health care systems often lack the resources to provide it. In Britain, for example, roughly 40% of cancer patients never get to see an oncology specialist. Delays in receiving treatment under Britain’s national health service are often so long that nearly 20% of colon cancer cases considered treatable when first diagnosed are incurable by the time treatment is finally offered.

Canada has its own problems. For example, the Canadian Society of Surgical Oncology recommends that cancer surgery take place within two weeks of preoperative tests. Yet one study indicates that median waiting time for cancer surgery in Canada ranged from 29 days for colorectal cancer to more than two months for urinary cancers. Radiation treatment and new therapies, such as brachytherapy, are also less available than in the United States. Consider this: Seven out of ten Canadian provinces report sending prostate cancer patients to the United States for radiation treatment

But the advantages of free-market health care go beyond an absence of rationing. With no price controls, free-market U.S. medicine provides the incentives that lead to innovation breakthroughs in new drugs and other medical technologies. U.S. companies have developed half of all the major new medicines introduced worldwide over the past 20 years. In fact, Americans played a key role in 80% of the most important medical advances of the past 30 years. Eighteen of the last 25 winners of the Nobel Prize in Medicine either are U.S. citizens or work here.

Obviously, there are problems with the U.S health care system. Too many Americans lack health insurance, or are unable to afford the type of care they want. But it is important to understand that, for all its faults and all the criticism that it has received, the United States’ free market health care system has made it the place you want to be if you have a serious illness. Millions of cancer patients have discovered that. And much of the rest of the world might be able to learn something from it as well.

This article appeared in the National Post on March 16, 2006.

While I share her assessment that the species jump from birds to humans is a very difficult and unlikely one, and the jump from bird-human transmissability to human-human transmissability is a tough leap to make, I do think that its more or less inevitable for two reasons:

1. Flu viruses mutate RAPIDLY. That’s why you have to (“have to”, the government ought to do a better job of subsidizing this given its almost purely externality, but that’s a different story) get a new flu shot every couple of years. This is something I intend to touch on in a bit, but suffice to say, the virus’s capacity to mutate rapidly will make it more likely to jump species especially since…
2. Human population density is high, and a large chunk of the world (even though us sheltered Westerners oftentimes forget it) lives in reasonably close contact with animals. Yes, the recent onslaught of bird flu news on the media is more due to people actually paying attention and the media liking to blow things out of proportion, but the fact that we have such dense, mobile populations of humans, especially in close proximity to animals which are oftentimes killed in unsanitary and unclean fashions (remember SARS? not a big deal of a disease, really, but we got it b/c of improper animal killing and preparation). Moreover, research into corpses and medical information from the huge 1918 flu epidemic which probably is a reason the World War I period had such a high death toll suggests that it was a flu virus which jumped from bird to human, so this isn’t without historical precedent.

The big issue, though, isn’t whether or not the virus jumps species. The issue is whether or not we can control such an outbreak. The problem is, simply, we can’t. Today’s world is heavily globalized and inter-connected (which is most of the time a good thing), except that people (and animals) are highly mobile, and impossible to contain. Its simply not possible to quarantine bird flu away. Most areas and countries don’t even have pandemic control plans in place, so even if we wanted to try, there would be little organization (anyone remember the FEMA debacle with Katrina?). Moreover, since the species jump will probably happen in the poor countries where little effort is being undertaken to monitor infected birds and educate farmers and butchers in how to properly kill and dispose of animals, little money is available to implement pandemic controls, it seems highly unlikely that US domestic policy (or the ineffectual WHO) would be able to do anything of significance.

Moreover, and this is really the only real part of where I disagree with Jane, the drug situation is ABYSMAL. For starters, the pharmaceutical industry has no real incentive to produce flu drugs, for two reasons:

1. Kleenex is cheap. It sounds silly, but it was the reason Vicki Sato (former president of Vertex pharmaceuticals) gave as to why flu drugs aren’t made. For the most part, the accessibility of the vaccine, the high probability of survival with minimal complications (other than feeling really sick for a couple of days), makes people not really want to spend lots of money on flu drugs, making it not a very smart business bet for the pharmaceutical industry
2. Recent eminent domain acquisitions and the threat of activists around the world to seize flu drugs (ie Taiwan’s ignoring Roche’s patent on Tamiflu) makes it doubly unlikely that pharmaceuticals are going to create a drug which they know they won’t be able to sell for political reasons.

So, that leads us to the drugs and vaccines that we have now. In terms of a vaccine, we are so far away from that its not even funny. We first need a clinical isolate of the virus, then we need to be able to grow it (which is no small task), then we need to be able to know which strains are going to infect people, and then we need to do LOOONG ass clinical trials even if the FDA is on your side and is trying to rush things along. Moreover, our current methodology of mass-producing vaccines relies on ENORMOUS quantities of eggs and specialized equipment — a break in the supply chain (aka like the one recently which prevented Chiron from getting enough flu shots to the US) would completely screw the effort.

With regards to the drugs that we do have, there are two classes. The amantadines and the neuraminidase inhibitors. Frankly, they suck. The amantadines have been in use since the 60s/70s I think, and it has been shown that not only are they highly toxic (they’re teratogenic and they cause Central nervous system problems), but resistance emerges rapidly. Recent studies have also shown that, whether a product of genetic drift or by uneducated Chinese farmers throwing amantadine into their chicken feed (I’m not even joking), many of the viruses out today are resistant to amantadines.

The neuraminidase inhibitors are slightly better in that they are not as prone to resistance because most of the resistant viral strains show a compromised ability to reproduce and spread. But, sadly, there are only two drugs, Tamiflu and Relenza. Both drugs have only been shown to be effective if given prophylactically (ie BEFORE one gets the flu) or within 48 hours of infection, and they only manage to reduce duration of symptoms between 1 to 2 days and ONLY if given during that critical time (so, if you start feeling really sick, its already too late). The drugs themselves are very expensive, and in the case of Tamiflu is synthesized from a naturally derived compound which is in limited supply (Shikimic acid). This is no joke, as apparently Roche has literally bought up the entire world supply, which really comes from apparently four provinces in China which harvest the plant that produce it, the star anise. As for the other drug, Relenza, GSK has stopped making it due to production and formulation problems, as well as very low demand given its price and limited effect.

So… the virus is inevitably going to jump to humans. We have no vaccine and even if we did no system to distribute it or manufacture it to the levels we need. Our drugs suck and are expensive and in limited supply. Not a pretty picture…