(2007-10-01) Hanson Medicine Waste

Robin Hanson says that much of our HealthCare spending is a waste.

Our main problem in health policy is a huge overemphasis on medicine. The U.S. spends one sixth of national income on medicine, more than on all manufacturing. But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status... The first study known to me was by Auster, Leveson, & Sarachek, Journal of Human Resources, in 1969. It found that variations across the 50 U.S. states of 1960 age-sex-adjusted death rates (Life Expectancy) were significantly predicted by variations in income, education, fractions of white collar and female workers, and the existence of a local Medical School, but not by variations in medical spending, urbanization, and alcohol and cigarette consumption... The RAND experiment was not quite large enough to see mortality effects directly, and so the plan was to track four general measures of health, combined into a total "general health index," and also 23 physiological health measures. Their main result: "For the five general health measures, we could detect no significant positive effect of free care for persons who differed by income ... and by initial health status." This summary isn't fully forthcoming, however. At a 7% significance level they found that poor people in the top 80% of initial health ended up with a 3% lower general health index under free medicine than under full-priced medicine.

If you wonder how the usual medical literature could give such a misleading impression of aggregate medical effects on health, I will point to funding and publication selection biases, statistical tests ignoring data mining, leaky Placebo effects, differences between lab and field environments, and the fact that most treatments today have no studies. If you wonder how medicine could suffer so much more from such problems than other subjects, I'll point you to my forthcoming Medical Hypotheses article, wherein I suggest humans long ago evolved a tendency to use medicine to "show that we care," rather than just to get healthy. Briefly, the idea is that our ancestors showed loyalty by taking care of sick allies, and that, for such signals, how much one spends matters more than how effective is the care, and commonly-observed clues of quality matter more than private clues. So today we spend enough to distinguish ourselves from people who don't care as much as we do, and we pay little attention to private clues about the health effectiveness of medicine. Since loyalty signals can be privately beneficial and yet socially wasteful, my proposal to cut medical spending in half could still be a good idea.