Unforeseen Contingencies

Greetings from Chicago.

I continue to follow panels on health care economics. The most interesting presentation I've heard today was, oddly enough, given at two consecutive panels. I've never heard of one paper being given twice, and I suppose it is mostly a very bad idea, but this one was worth hearing twice. Amitabh Chandra of Harvard outlined Chandra and Staiger's "Expertise, Underuse, and Overuse in Healthcare." The gist: It's been known for quite some time that there are often important regional differences in the rates of use of particular medical treatments, controlling for severity of problems under consideration. This study examines differential rates of uses of procedures across hospitals and considers 3 explanations: overuse, underuse, and expertise. In essence, some hospitals might be under-or-overusing a procedure for some reason, or maybe some hospitals have unusual competence at the procedure and hence justly use it more. Really interesting and disturbing results: there's good evidence of both overuse and expertise explanations. Among other things, this implies that standardizing treatments could be quite dangerous.

This is an area I find extremely interesting for several reasons. First, because of my family's extensive background in medicine and my own experience, I've come to appreciate the idiosyncratic nature of "what works." I’m quite convinced of the importance of evidence-based medicine, but skeptical of one-size-fits-all prescriptions, particularly from the standpoint of the provider. It's clear that two different patients with the same complaint might respond differently to a particular treatment. But even with a single patient, it is not at all clear that two different providers should use the same treatment. If Dr. A is unusually good at providing treatment X and Dr. B at treatment Y, both of which will address the problem, it's unclear that there’s a single "best" protocol that a central authority can prescribe. This ought to be obvious from basic economics (ever see an isoquant?); Chandra and Staiger put empirical teeth in this observation.

BTW, Chandra is the economist whose banana comment I critiqued in yesterday's post. To be clear, his discussion comments yesterday were particularly perceptive (he argued rather convincingly that ACA subsidies can't reasonably substitute for an individual mandate).

Meanwhile, once again Occupy the AEA made its presence felt. At least 15 of them marched along Wacker chanting "Ho, ho, hey, hey! Occupy the AEA!" and waving some poorly made signs. The only sign that wasn't hand scrawled on scratch paper had a picture of Alan Greenspan with the caption "I was wrong." I’m doubtful that anyone at the conference finds this much of a challenge to their beliefs. The Occupy AEA flyer (pictured above) denounces such a strange caricature of economics that seems rather far removed from what most economists believe and discuss at these meetings. But then, what would occupying the AEA mean anyway? AEA isn’t a space one can occupy. Maybe they intend to enroll as members?

Economists walking the other direction outnumbered them about 3 to 1, and again seemed largely unaware that this was a protest directed at them.