Monday, March 29, 2010


A solution to a problem I've discussed before.

The Last Mile

Sendhil talks about the last mile challenge to health and other areas of the economy.

Maybe his ideas can be applied to achieve these gains:

Thursday, March 25, 2010

Friday, March 19, 2010

Order Bias

A great example of order bias in survey questions.

Wednesday, March 17, 2010

Tony Judt

This is my first brush with the writing of Tony Judt. He is an excellent writer, even for a blog entry the prose is juicy. His blog entry entitled "Girls! Girls! Girls!" is an excellent look into the vagaries of student professor interactions.
History was a fast-feminizing profession, with a graduate community primed for signs of discrimination—or worse. Physical contact constituted a presumption of malevolent intention; a closed door was proof positive.

Shortly after I took office, a second-year graduate student came by. A former professional ballerina interested in Eastern Europe, she had been encouraged to work with me. I was not teaching that semester, so could have advised her to return another time. Instead, I invited her in. After a closed-door discussion of Hungarian economic reforms, I suggested a course of independent study—beginning the following evening at a local restaurant. A few sessions later, in a fit of bravado, I invited her to the premiere of Oleanna—David Mamet’s lame dramatization of sexual harassment on a college campus.

How to explain such self-destructive behavior? What delusional universe was mine, to suppose that I alone could pass untouched by the punitive prudery of the hour—that the bell of sexual correctness would not toll for me? I knew my Foucault as well as anyone and was familiar with Firestone, Millett, Brownmiller, Faludi, e tutte quante. To say that the girl had irresistible eyes and that my intentions were…unclear would avail me nothing. My excuse? Please Sir, I’m from the ’60s.
Read the comments. You'll no doubt notice we still exist in a world of punitive prudery.

Surprising Conclusions

From a recent AER paper on Medicare part D:
Our paper provides evidence for what we consider a surprising outcome: in the case of the new prescription drug program for Medicare enrollees, moving consumers from cash-paying status to membership in an insured group lowers optimal prices for branded prescription drugs below what they otherwise would be. This is surprising because the standard effect of insurance is to create inelastic demand and therefore elicit higher prices from a seller with market power (Duggan and Scott Morton 2006). However, the insurers that we study bundle insurance with a formulary and other mechanisms to create elastic demand. An individual consumer typically does not know which drugs are acceptable therapeutic substitutes; the consumer’s physician typically has poor knowledge of prices, especially negotiated prices; and any one consumer is too small a share of demand to negotiate with a pharmaceutical company. A prescription drug plan can potentially surmount all three hurdles.

Our evidence leads us to conclude that the formulary and other mechanisms perform the special role of allowing buyers to move market share among drugs with patent protection, thereby raising cross-price elasticities and lowering purchase prices (or reducing price increases) for branded drugs. This result contrasts with the common intuition that an uninsured consumer, paying at the margin for her own purchases, is the best tool with which to create competition in the market and impose pricing discipline on sellers. Certainly, this reasoning is at least part of the rationale behind many current policies in health care such as tax-free health care savings accounts (R. Glenn Hubbard, John F. Cogan, and Daniel P. Kessler 2005). Our evidence suggests that this picture is incomplete; for maximum effect, the consumer also needs to be part of a group that can substitute one provider for another.

Saturday, March 13, 2010

Health Links

The AP covers the Health care proposals.

The food pyramid and the food subsidy pyramid.

Comparative Effectiveness vs. Cost Effectiveness

Comparative Effectiveness vs. Cost Effectiveness:
Many supporters of comparative effectiveness research contend that there is little need to confront cost-effectiveness in order to contain costs. Some clinical practices, once subjected to rigorous evaluation, have been found to be of no benefit, if not harmful. Moreover, there is considerable variation in health care expenditures and a weak or even negative association between spending and outcomes, such as mortality at the regional level4 and quality measures at the state level.5 This evidence has been interpreted to mean that cutting back on these putatively useless or harmful services would simultaneously reduce cost and improve health.4,6 In contrast, several cross-sectional studies that have shown positive associations between spending and outcomes have been interpreted to show that more spending leads to better outcomes.7

We question whether these associations — either negative or positive — are being interpreted correctly. An association between higher spending and poorer outcomes does not imply causality. Such negative associations may result if physicians and hospitals in lower-cost areas are more skilled — or if they use resources for more cost-effective services.

Whether additional spending yields improved outcomes depends critically on what the money is spent on. Clinical trials of treatments such as coronary reperfusion in patients with acute myocardial infarction, implantable cardioverter–defibrillator therapy, fusion surgery for spinal stenosis, and new drugs for patients with cancer or the AIDS have established their comparative benefits.8,9,10,11,12,13 Several of the cost-effectiveness ratios for these treatments are well under $100,000 per quality-adjusted life-year (QALY) gained, indicating good value for the money (Table 1).

But cost-effectiveness studies reveal a stunning range of incremental cost per QALY gained, ranging from a negative net cost to millions of dollars per QALY gained.14 Preventive services are no more and no less likely to save money than treatments.15 For example, annual screening for cervical cancer costs about $800,000 more for every life-year gained than does biennial screening.16 Small variations in the mix of utilization across the spectrum of therapeutic, diagnostic, and preventive technologies could produce large geographic variations in overall costs and health outcomes.

As long as there are opportunities to substitute more cost-effective clinical strategies for less cost-effective ones, costs can be lowered without adversely affecting health. But at some point, difficult choices must be made. Should the Medicare program continue to pay for cancer drugs that improve survival by a median of 10 days and have cost-effectiveness ratios of up to $500,000 per QALY added?12,17

Tuesday, March 09, 2010

Infographic on Porn

As is always the case with data on the porn industry, this should be viewed with a healthy dose of skepticism. Same is true for the youtube video below. The video is risque, but no nudity. However it might not pass your employer's test, so in that case consider it NSFW. It is a unique way to view data. I wonder if I did this with my power point slides for class what would happen? They probably would still miss the message.

Monday, March 08, 2010

Think Like A Statistician

Think Like A Statistician

A Mystery

So here is a bit of an economic mystery:
Less expensive, lower-quality innovations abound in every economic sector—except medicine

Whereas all this fancy theory plus a token can get you on the subway, might there be practical applications of “decrementally” cost-effective innovation? To explore this, working with colleagues at the Tufts Center for the Evaluation of Value and Risk (who maintain a comprehensive database of cost-utility studies), we enlisted Aaron Nelson, then a medical student, to help us sort through more than 2,000 cost-utility comparisons for any potential examples that might be decrementally cost-effective. We found that about three-quarters of published comparisons described new technologies or treatment strategies that increase both costs and benefits, and that most of these (about 65 to 80 percent) were cost-effective by conventional criteria (depending on which conventional threshold was used, $50,000 or $100,000 per QALY gained). Less often, published analyses described innovations that are either dominant or dominated (about 10 percent and 15 percent of the time, respectively), but only very rarely were innovations both cost- and quality-decreasing. Indeed, fewer than 2 percent of all comparisons were classified in the cost- and quality-decreasing “southwest quadrant”, and only 9 (involving 8 innovations) were found to be decrementally cost-effective (0.4 percent of the total)—that is, they saved at least $100,000 for each QALY relinquished.

Examples of these cost-saving interventions include using the catheter-based percutaneous coronary intervention in place of bypass surgery for multivessel coronary disease, which on average saves about $5,000 while sacrificing a half day of perfect health (for a cost-savings of more than $3 million for every QALY lost) and using repetitive transcranial magnetic stimulation instead of electroconvulsive therapy for drug-resistant major depression, which avoids the need for general anaesthesia and saves on average over $11,000 but sacrifices about a week of perfect health (for a ratio of more than $500,000 for every QALY lost). Nearly all the remaining innovations involved the tailored withholding of standard therapy, including watchful waiting for selected patients with inguinal hernia, withholding mediastinoscopy for selected patients with lung cancer, and abbreviated physiotherapy or psychotherapy for patients with neck pain or deliberate self-harm, respectively. Finally, the cost-saving innovations included the sterilization and reuse of dialysate, the chemical bath used in dialysis to draw fluids and toxins out of the bloodstream—a degree of thrift even the late Sheldon Kravitz would have to admire.

That decrementally cost-effective innovations are so rarely described in the health-care literature suggests that medicine is distinct from most other markets, in which cost-decreasing, quality-reducing products are continuously being introduced—think IKEA, Walmart and the Tata car. Several reasons may explain this “medical exceptionalism.” First, there is fundamentally a lack of incentives both for physicians to control costs, especially under a fee-for-service regime, and for patients to demand less expensive treatment when insurance shields them from the direct costs of care. Second, medical “bargains” frequently come with health risks, and trading health for money strikes some as vulgar, regardless of ratio. The inherent ethical unease that decrementally cost-effective innovations can elicit poses a serious public relations and marketing challenge.

Marginal Revolution has a link to the actual article.

Brain Rules

A post on brain research by Tyler, has this great line:
As the authors put it, experienced value and decision value are not the same. The main test involves heterosexual men looking at the faces of women and thus one concrete implication, or so it seems to me, is that the pornography men enjoy the most is not necessarily what they are willing to pay the most for.

Sunday, March 07, 2010

Budget Forecasts

The NYT recently had a good graphic on the budget deficits and Presidential forecasts. I've recreated it below. There are two striking facts. The first is how every, and I mean every 5 year budget forecasts calls for decreasing deficits if not in the first or second year, definitely by the third through fifth year, yet that is rarely the case. Forecasts are clearly not rational as the errors are biased, averaging almost 1% above actual. Notice the other striking thing, how much of a surprise the boom of the late 1990's was for the public coffer.

Thursday, March 04, 2010


Thats stands for Prostate-Specific Antigens rather than Public Service Announcements. PSA screenings are a common test performed in the US, whose efficacy is still disputed. Our local paper has a good article covering some of the issues.
The American Cancer Society is urging doctors to make clearer to men that the test used to screen for prostate cancer has limits and may lead to unnecessary treatments that do more harm than good.

American men long have been urged to have prostate cancer screenings, but over time studies have suggested most cancers found are so slow-growing that most men could have avoided treatments that can lead to incontinence or impotence.
New Guidelines include:
Doctors should discuss the pros and cons of testing with their patients, including giving them written information or videos that discuss the likelihood of false test results and the side effects of treatment; stop giving the rectal exam as a standard screening tool because it has not clearly shown a benefit, though it can remain an option; and use past PSA readings to determine how often follow-up tests are needed and to guide conversations about treatment.
You might want to bring these into to the doctor. It will be your get out of jail free card should you see him go for the rubber gloves and vaseline. Interestingly there is some evidence that PSA tests have had some sort of effect on mortality. Looking at the US and UK this study, came to the following conclusions:
The striking decline in prostate-cancer mortality in the USA compared with the UK in 1994–2004 coincided with much higher uptake of PSA screening in the USA. Explanations for the different trends in mortality include the possibility of an early effect of initial screening rounds on men with more aggressive asymptomatic disease in the USA, different approaches to treatment in the two countries, and bias related to the misattribution of cause of death. Speculation over the role of screening will continue until evidence from randomised controlled trials is published.

Wednesday, March 03, 2010

Fewer New Cars

A permanent decline in new vehicle registrations?
MADISON, Wis. - New vehicle registrations in Wisconsin are nearly half of what they were in 2000.

Registrations dropped 46 percent - a hit that's felt well beyond the state's auto dealerships.

Thousands of jobs have disappeared as auto plants and their suppliers deal with the fractured auto industry.

The auto statistics service Cross-Sell shows the number of new vehicles registered in
Wisconsin in 2009 was nearly 172,000 - down from nearly 320,000 in 2000.

Since 2000, 107 auto dealerships have closed in Wisconsin, including 56 in 2008 and 2009.

The Journal Sentinel reports state employment in auto parts manufacturing fell 44 percent from 2000 to 2009. Parts factories such as Tower Automotive and Delphi in Milwaukee and Lear and SSI in Rock County closed.

Monday, March 01, 2010


1. The future is here, and it involves analyzing data. In this case, predicting movements with cell phones.

2. An awesome visualization, well audio-ization of the time differences in Olympic sports.

3. The problems with the GOP.

4. The challenges facing employment growth.

Working at Starbucks

There are a few things I hate about Starbucks. For starters I hate the sometimes forced interest in my life the baristas display. I'm a regular and even though I prefer to be anonymous, I'm not. But I still return. Unlike the other coffee shops in town, this isn't filled with annoying 20 year-old girls chatting about their drinking escapades. Well, not at 6am anyway.  But Starbucks does create a nice atmosphere with their musical choices. They seem to hit my work tempo just right, and help me discover new music.  This morning I heard the Sade tune "Soldier of Love" and they turned me on to the new Kate Earl CD. Here is the video for "Melody".