Paul Krugman on health care

Paul Krugman has really been quite impressive this past year. His recent articles on why the free market can't work for health care are really first class...

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket...The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (“I hear they’ve got a real deal on stents over at St. Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

Health Care Realities

Why markets can’t cure healthcare

Biology, not the next big thing

When I tell people I have a biomedical engineering degree, one of the most common responses is "that is going to be the next big thing." They then either get shrugged off, or a long philosophical ramble depending on my mood. Far from being the next big thing, a lot of the biomedical world is set up for a pretty bad crash.

Biomedical Engineering faces one strong issue. Many of its best inventions, while quite impressive, don't actually provide much benefit to most patients. A great example is the poster child of the field, MRI. Doctors make a fortune off of sending patients to get MRIs. They have large fixed costs, and fairly low variable costs, so when a hospital has one it is in their best interest to keep it running all the time. To do that they often pay doctors well if they send doctors to get a scan. Patients are easily talked into getting them, and often pressure doctors into using them since they sound like the sort of thing that would help convince the doctor that the pain in their back is really some horrible condition that needs immediate surgery. This adds up to a lot of MRIs being done, and a lot of money being sent back to Biomedical Engineers and Medical Physicists. There is only one problem. For most conditions the patients who get MRIs do not do any better than those who don't. This means that whenever hospitals get serious about cutting inflation of medical costs medical imaging will be one of the hardest hit fields. You can save significant money without hurting patients.

The bigger trend for the biomedical field is that the United States spends twice as much on health care as a percentage of GDP than any other country in the world. For this extra money we buy essentially nothing. Most of the money is wasted. Some of this goes to the fact we pay doctors more than any other country. Some of this goes to our over-treating of many conditions like back pain or cancer that we really aren't able to do much for. But whatever the cause of the extra expense it is clear that this country could choose to spend a lot less money on health care and get the same or better outcomes. Whenever the government takes this fact seriously expect a lot less money to be flowing into that part of the economy. When that happens we will find that, actually we need a lot less biomedical engineers and laboratory scientists. It may even go as far as hurting nurses and other professions that interact with patients, but I suspect they are more insulated.

On the research side of the world there are two issues that will cause an increasing squeeze. First, we are producing less and less new drugs. For quite some time now the number of new drugs approved by the FDA has been decreasing. This means that in the long run all those jobs at pharmaceutical companies are unstable. There will still be blockbuster drugs, but as patents run out companies just won't be able to afford as much research and development as they had in the past.

At the same time NIH budgets are huge. Medicine takes up the highest percentage of government research dollars it ever has. Regression to the mean says that it is a pretty good guess that in the long-run this value will drop. Eventually the military, or NASA, or energy research, or some other field will pass up medicine in importance for those in congress. If that happens it won't be pretty for those with professor jobs that require grant money to get any real chance at tenure. To be honest with how things looked before the stimulus plan, I am not sure we haven't hit that point already.


Even if biomedical sciences was the next big thing, that doesn't make it a good field to enter. A lot of demand for a skill set can still result in poor job prospects if supply is greater than demand. In 2008 there were 75,151 bachelors degrees granted in the life sciences. To that number add another 101,810 in "health sciences and related clinical sciences" and another 90,039 in Psychology. That is a lot of competition in this part of the economy. Compare this to the 67,092 in all engineering degrees combined!

Of course doctors will always do just fine, worst case scenario they start taking jobs from nurses. But being in a non-patient oriented part of the biomedical world is a pretty scary prospect right now.

Why California Utilities Love Renewables

I just had my new employee orientation training today. Most of it was pretty dumb. What idiot turned the perfectly reasonable policies of not allowing bosses to make employees to sleep with them or lose their job, into don't tell a joke involving sex or the PC police will come and yell at you? The same applies to racial jokes. The whole over-reaction to minor issues makes a farce of the real issues and invites a huge backlash.

Anyways I did learn something interesting though, how Utilities make money in California. They are allowed a guaranteed return on capital investments. What does this mean? Well if they build a ten thousand dollar piece of equipment they get something like an eight percent return on the investment or 800 a year. So, how do utilities make more money? By talking the regulatory committee into letting them build more capital of course. So if we build relatively cheap power lines to a few central plants we make less money than if we build a ton of power lines to little solar plants...

That explains all the pro-renewable energy propaganda i have been hearing here. It is the best way the utilities have to grow. They will make billions off the state requirements.

Allergy hypochondria

I always suspected a lot of people I know just made up there allergies. Given how long I thought I was allergic to milk with from what I can remember no evidence whatsoever this seems pretty plausible...

This LA times article from today supports this thesis.

KD6HMN

I have interesting luck with license plates. My last one seemed to mark me as the devil(DRD 6667). My current one starts with 6HMN. This would not be an unusual license plate if given to anyone else. However when I had an Amateur Radio license my call sign was KD6HMN. I can see no reason to believe this was more than random.

There is no important science in space

There is no important science in space.

Ok, there is Hubble and a few other space telescopes which are actually important. But the general theme stays true. All those probes we send to other planets, they are sightseeing. They take a lot of pretty pictures, and collect data about other objects in the solar system, but that data is essentially useless. All those microgravity experiments on the space station, they also don't matter. I don't think I have ever heard of a result with real impact coming from it.

The reason this bugs me is that I occasionally hear people argue we should cancel our manned space program because we could do everything more efficiently with robots. If all we ever send to space is robots though we may as well stay on earth. All we would gain by this route is a couple books full of meaningless data, and a few picture books of our solar system. The only reason to bother with space is to ultimately colonize it. The only real way this happens is if we make orbital travel cheap. Space travel is just too expensive. This is not an inherent problem, if you look at the kinetic energy of an object at escape velocity, that calculate how much that amount of energy costs on the electrical grid you find it costs just a few cents. Clearly if we build a new space shuttle design every five years we can build on our failures until costs are a fraction of what they are today.

Unfortunately it does not appear that Obama agrees with me here. As far as I can tell they are asking NASA to scale down the successor to the space shuttle. That gives me little hope that they will redirect money away from almost everything else NASA does into new engines and shuttle designs.

Cucumbers

I ran into this on the wikipedia article about cucumbers the other day:

In the later 1600s, a prejudice developed against uncooked vegetables and fruits. A number of articles in contemporary health publications state that uncooked plants brought on summer diseases and should be forbidden to children. The cucumber kept this vile reputation for an inordinate period of time: “fit only for consumption by cows”, which some believe is why it gained the name, “cowcumber”.

That makes me realize just how long we have been demonizing food types without anything resembling solid evidence. It makes it easier to laugh at the biases we have in our own society.