Thursday, December 31, 2009

Product labeling

An interesting article in the Baltimore Sun discusses the possibility of product labeling for caffeine--particularly for products to which caffeine is added.  As with any product labeling question, an issue that arises is how much it will cost manufacturers to include the information on their labeling, how much it will cost the government to enforce such labeling, and how much it will change consumers behavior.  Moreover, if consumers really demanded the information, why does it not emerge in the private market without government intervention?

Even if consumers would benefit, why hasn't this type of labeling emerged in a private market?  Each consumer would benefit a little.  It would cost the food and beverage manufacturers a lot.  Concentrated costs and diffuse benefits often lead to a lack of regulation as those facing costs have a much stronger incentive to lobby against a new regulation.

Why would consumers want the information?  The article does a good job of describing the facts that (1) some people are extra sensitive to the stimulant, (2) caffeine can accentuate attention deficit disorder, hyperactivity, and insomnia, (3) excessive caffeine may harm fetuses, and (4) a variety of other health effects may be related.

Do consumers understand all the effects?  There is no way to say, but given that at least some consumers seem to have a sufficiently difficult time with things like energy in and energy out needing to be similar so as not to gain weight, it is not clear that all consumers understand all implications.

Would it change consumers' behavior?  Again, there are lots of examples of when labeling has not seemed to change consumer behavior, but, for example, parents with children may be very interesting in limiting their caffeine intake and pay attention to the labeling and change their purchasing behavior.  That will affect the demand for some company's products.

Would educating consumers be enough?  Maybe.  Although that process could take a long time.  First, consumers would need to receive the information.  Then, consumers would need to incorporate the information into their decision making.  Then, consumers would need to demand the information on the labels.  Then, at least some companies would have to try it and find that it increases the demand for their products.  Then, other companies would have to follow.  From a decision maker's perspective, it would be important to assess how long this would take and how much consumers would eventually benefit with how much consumers would benefit if the information were available immediately and how much it would cost companies and the government to impose and comply with the regulation immediately.

Health Cuts (?) with LIttle Effect on Care (?)

I have lifted the title for today's blog entry directly from a New York TImes headline (except for the question marks that I have added for emphasis).  This interesting article focuses on the health care situation in Richmond, Virginia and links the changes in health care spending over time (particularly Medicare spending) to restrictions on how much capacity is allowed to be added to the system.  In general, I agree with the premise that there can be less care given than in the places with the most intense care in the United States without having seriously detrimental effects on health at a population level.

However, I would like to make a few comments on what the article points out.  First, a key part of what I describe as the premise of the article above is that the conclusion is drawn at a population level.  Why is that particularly relevant?  It is relevant because the article also mentions that when there is less care some people are likely to feel like they are not getting what they need.  The article suggests that's the point.  The question is whether people are just "feeling like" they are not getting enough or are truly missing out on care.  If the latter, then what?  For the one person who is missing out on care that may truly be necessary, the change to less care does not make them better off.  It is a reasonable fear that a person may be "the one" who has worse access and is adversely affected.  However, if we only make changes if everyone in the entire system is guaranteed to be better off, we will never make any changes.

Also, when the author of the article compares certificate of need (a regulation by which health care providers and organizations must get permission to expand or to purchase new equipment) to things like a tax on "Cadillac health insurance plans", I find this to be a faulty comparison.  Here is why.

Certificate of need regulations operate largely "behind the scenes".  In other words, people don't see their effects very much on a daily basis.  If individuals look into things they may still find it problematic that a governmental authority is dictating how much care will be available, but it doesn't affect their wallet every time they pay a premium.  The Cadillac insurance tax (i.e. a tax on the most expense health insurance plans) directly affects the wallet of some group of individuals every time they pay a premium.

So, the comparison between a certificate of need regulation that rations care one way and other forms of rationing may not work.

All of this is just to say that those who are planning for how to ration care to control costs of health care in the United States without harming health at the population level need to be very careful to affect the smallest proportion of the population negatively as possible and to use rationing methods that (whether they are the most effective or not) attract as little attention as possible.  The alternative is to education the American public about the relatively low chances that any individual will be harmed by the new policy and to convince people to accept that risk in order to enjoy the benefits of lower premiums and lower health care expenses if they are in the group that does not end up worse off as a result.  It is all a matter of how our society comes to grips with tradeoffs in the future.

Tuesday, December 29, 2009

More on resistance to antibiotics

I don't usually write two blog entries in one day, but when I saw today's JHBSPH news feed, I just couldn't resist (no pun intended given what I am writing about).  Today, I will refer readers to another article in the Washington Post (although since it is an Associated Press article you could probably find it other places).  Another reason to write about this article is that one of my JHBSPH colleagues, Ellen Silbergeld, is quoted.

In any case, this article is about the use of antibiotics on the farm rather than the use of antibiotics in humans.  The article's byline is from Frankenstein, MO.  I can only assume that the author was aiming for some type of humor.  We are certainly not talking about engineering organisms that cause disease, but we are talking about the effects of our engineering of antibiotics when they are use in ways that do not necessarily promote long-term public health.

In the article, one farmer is quote as saying that all the public cares about is safe foods at cheap prices.  Maybe.  There are any number of consumers these days who purchase eggs, milk, or meats raised with no antibiotics.  Some insist on only this type of product. Some do it as long as they can afford.  Some mix and match whether they look specifically for labels indicating no antibiotics depending on prices and other issues that affect their purchasing decisions.

The issue is this.  Antibiotics are given to some healthy animals.  They promote growth and keep the animals from getting diseases against which the antibiotics are effective.  One key issue is, as was pointed out in the article, that we would not "sprinkle antibiotics on healthy kids' cereal".  Giving antibiotics as a matter of course allows for the development of drug resistant disease causing organisms.  Notably, a member of the Union of Concerned scientists was quoted as pointing out that the drug resistant organisms that are found in the gut of a pig on a farm in Iowa (and it could have been any state) don't stay there.  

So what does this mean?  If using antibiotics keeps the price down now but threatens our health later what is the correct tradeoff?  Should everyone be forced to pay higher prices for meats and other products raised without antibiotics or should be leave it to the private market so that people who want to pay more can and those who do not can continue to buy products produced with antibiotics in the feed?  The ultimate answer will be made by our society as it struggles with the issues outlined in the article.  This may be another situation, however, in which only the coordination and regulation hat a government can bring will solve the problem.  Having a relatively small fraction of the population paying for antibiotic free produce because they are willing to is unlikely to solve the problem.

Back to blogging about health economics and infectious disease

Yesterday, while many of us in academia were "off" or working at a reduced level, the staff who prepare the Johns Hopkins Bloomberg School of Public Health news feed were still working hard.  One of the articles posted by the news feed yesterday was on drug resistant tuberculosis in the United States.  This is an important issue.

In one of the two classes I taught at the Johns Hopkins Bloomberg School of Public Health in the eight weeks between late October and mid-December, I had an entire lecture on the economics of infectious disease.  The issues raised by drug resistant TB are critical to understand.

First, they illustrate the importance of the economics of information.  There was a time at which the overall impression was that we had a handle on how to take care of infectious disease in general.  In the time since, we've seen the emergence of HIV and the emergence of an increasing number of drug resistant diseases in the time since then.

Second, the importance of the provision of public funding for certain things.  There are some markets that are difficult to make functional as private markets.  When individuals with limited resources are faced with something that doesn't  necessarily require immediate attention, they will use the resources they do have in favor of more immediate concerns.  Why?  The personal benefit does not outweigh the personal cost.  However, the social benefit may outweigh the social cost as others will benefit from individuals at risk of things like TB (and drug resistant TB in particular) taking care of themselves.  Sometimes, the only way to achieve this is through public funding.

Third, the importance of using resources for monitoring the use of drugs that are given as treatment.  When antibiotics are not used properly they can increase drug resistance. Thus, the proper use of antibiotics is a public good as ultimately everyone is at risk of being affected when drug resistant strains of disease causing organisms arise.

Some situations require regulation and coordination that only a government can provide.  Failing to regulate and coordinate can put many (some of whom understandably do not always see the need for their tax dollars to be used for 'public health') at risk.  

If you follow the link and read the article note one thing in particular: at the top of the second screen, it notes that drug resistant infection killed more people than all cases of breast and prostate cancer combined.  Think for a moment about which gets more attention in the news.  Think for a moment about which you may have been asked to make a donation for.  Then think about which one may be the biggest threat in the long run.  I don't have a definitive answer for the last question.  But it is quite possible that the answers to which you've heard about,  which you've been asked to make a donation for, and which is the biggest threat may not match up.

Monday, December 14, 2009

More on influenza vaccinations

The Johns Hopkins Bloomberg School of Public Health newsfeed for today had a link to an interesting site.  The site points out the seeming inconsistencies between what different parts of the United States government are telling us about the combination of mercury and the influenza vaccination, particularly when it comes to pregnant women.

If everything that is reported at the site is true, then it certainly raises some interesting questions about the tradeoffs that society is ready to make.

As importantly, reflects the difficulties or organizing the control disease within a large organization like the United States federal government.  Even within an organization, if there are not strong incentives, the outcomes will not necessarily be optimal.  As I told a class I teach last week, this is a great example of the concept of transaction costs, where individuals in an organization have a cost to interacting with each other and finding ways to minimize these costs is important to the organization's success at achieving its goal.  It is interesting intersection between economics and organizational studies.