The Devil Mandate

Did you realize the Supreme Court was in session earlier this week? Might’ve been some arguments about health care? Of course there was, and of course the Supremes are considering striking down the whole law. This leads Matt O’Brien to argue that insurers saw the news and are cheered:

One reasonable conclusion is that Wall Street's betting that Obamacare will either be struck down in its entirety or upheld in its entirety. Both would be very, very good news for healthcare companies. The death of the individual mandate, alone, would be bad news for Big Insurance.

It’s correct that losing the mandate alone would be bad news for insurers—but I’m not sure the entire law being struck down is all that wonderful for insurance companies specifically and the health care industry more broadly. Obamacare has many elements that envision a much different health care industry than the one around today, but it’s not that hostile to the system. It really could go so much worse, and with continuing inflation in health care and pressure on public budgets, the risk of it becoming so much worse increases. That scenario has a lot of uncertainty. The devil you know can be so much more friendly than many of the devils you don’t.

Cheating and High-Stakes Testing

The AJC has a super article about cheating on standardized tests. It probably should cause some hard questions to be asked:

The analysis shows that in 2010 alone, the grade-wide reading scores of 24,618 children nationwide — enough to populate a midsized school district — swung so improbably that the odds of it happening by chance were less than one in 10,000.

And:

Big-to-medium-sized cities and rural districts harbored the highest concentrations of suspect tests. No Child Left Behind may help explain why. The law forced districts to contend with the scores of poor and minority students in an unprecedented way, judging schools by the performance of such “subgroups” as well as by overall achievement.

Hence, high-poverty schools faced some of the most relentless pressure of the kind critics say increases cheating.

Improbable scores were twice as likely to appear in charter schools as regular schools. Charters, which receive public money, can face intense pressure as supposed laboratories of innovation that, in theory, live or die by their academic performance.

This will almost certainly need more study to see how widespread cheating on these sorts of high-stakes standardized tests. There have been some recent gains on standardized tests—how much of that is attributable to cheating? The impact of charter schools on test scores is ambiguous—but how much of that ambiguity might be removed if we knew that a disproportionate number of them were cheating, as the AJC article suggests? These questions need further study.

Pittsburgh Brawl

A WSJ and Jeffrey Young piece in Huffington Post reveals one of the big tensions in health care post-ACA. The articles examine a situation in Pittsburgh in the middle of a market share fight (I’ve written about that exact subject here). It seems that the University of Pittsburgh Medical Center is prepared to reject patients who are insured by Highmark, an insurer, due to Highmark’s acquisition of a struggling health group. They feel that it will boost Highmark’s attractiveness and thereby lessen market share and bargaining power.

As Young points out, agglomeration among health care entities is probably a necessary byproduct of an integrated system. Most of the health care systems health policy people seem to admire—your Kaisers, your Geisingers, your Intermountains—are integrated insurer/health care providers housing many different groups. On the other hand, big hospital groups will definitely also raise prices. It’s something that needs disentangling.

At any rate, such aggressive tactics are not something I’ve heard of the innovative providers engaging in as frequently. In fact, Geisinger usually uses the patients insured by third-parties to subsidize their innovative activity. I’m not suggesting the two situations are exactly the same, but I do think it’s worth thinking about.

The Robots Are Probably Coming For The Surgeons, Too

I appreciate this Atlantic article questioning whether robots are currently more effective than surgeons—technological reporting is too often dominated by slightly-naïve acceptance that this stuff all works—but I found this note to be a bit naïve to end with:

"Robotics is a tool, albeit the most technologically advanced and expensive one, but a tool nonetheless," says Dr. Bernard Park, the chief of thoracic surgery at Hackensack University Medical Center. "No technology will ever replace the critical importance of a skilled, thoughtful surgeon."

“Ever” is an awfully long time, isn’t it? I’m fairly confident we’ll see robots infringing on surgeons’ domains more and more because we’ve seen it for most other professions; for example, see software replacing grunt-level lawyers for coding depositions. Indeed, it’s not as if health care people are totally innocent of robots—they’re starting to introduce them to the hospital (though, again, for low-level stuff).

Let’s consider the stuff robots might do better than human surgeons:
1) Robot “hands” don’t tremble.
2) Robots do not get tired.
3) Robots do not forget tools inside the people they’re operating on.

And so on—I’m sure you can think of additional things which a robot might be really good at that people might not be so good at. Again, you don’t have to be at the-singularity-is-coming level of techno-optimism to believe that this is the case.

Totally Not-Policy Related

But this ad really is incredible (as in unbelievable):

(via Andrew Sullivan)

This reminds of this ad:

How did anyone think this is a good idea, again? Forget women--I don't see how this works on men.

We Don't Know What We Don't Know: Hip Replacement Edition

A striking result from The Lancet has led researchers in Britain to urge banning metal-on-metal hip replacements in that country:

Data on more than 400,000 hip replacements found metal-on-metal implants needed revising more often than other types and that failure rates were higher in women.

It comes two weeks after the Medicines and Healthcare products Regulatory Agency (MHRA) issued new guidance on the implants, saying almost 50,000 patients in the UK will need annual blood or MRI checks.

That’s bad, of course, but the danger is mitigated in the U.K. by the fact that only about a tenth of hip replacements in that country are metal-on-metal—and it’s been decreasing, also. The process would seem to have worked—you’ve got data from a large registry; the data is worrying; you act upon it.

Contrast, of course, to the U.S. The study cites the rate of U.S. metal-on-metal hip replacements at 35%...in 2009. It appears the study has no more recent source of data, and I wasn’t able to find anything more recent in my own searches. That’s because we have no such registry and therefore aren’t able to track the failure rates of hip replacements in the field. As ever, we don’t know what we don’t know.

Why Sports Superstars Are Liked and Others Might Not Be

Kenneth Rogoff asks why we like highly-paid superstars in entertainment and sports but don’t like superstars in other fields, especially finance and business:

What amazes me is the public's blasé acceptance of the salaries of sports stars, compared with its low regard for superstars of business and finance. Half of all NBA players' annual salaries exceed $2m, more than five times the threshold for the top one per cent of household incomes in the United States. Because long-time superstars such as Kobe Bryant earn upwards of $25m a year, the average annual NBA salary is more than $5m. Indeed, Lin's salary, at $800,000, is the NBA's "minimum wage" for a second-season player. Presumably, Lin will soon be earning much more, and fans will applaud.

Yet many of these same fans would almost surely argue that CEOs of Fortune 500 companies, whose median compensation is around $10m, are ridiculously overpaid. If a star basketball player reacts a split-second faster than his competitors, no one has a problem with his earning more for every game than five factory workers do in a year. But if, say, a financial trader or a corporate executive is paid a fortune for being a shade faster than competitors, the public suspects that he or she is undeserving or, worse, a thief.

Sadly he doesn’t cite any evidence for this; it’s probably self-evident at this point that financiers are less well-liked than entertainment and sports figures as a class, but he cites no data that business executives are widely disliked.

But I’d make a very simple argument as to why people like entertainment and sports figures and don’t like financiers terribly much: the value that sports and entertainment superstars deliver is much more clear than that of financiers, who as Rogoff notes are possibly zero-sum (at best, some might argue). And, as for business executives, it’s not clear what their value is at any given time—after all, American business executives are much more highly paid than their European and Asian counterparts; are American business executives that much better than their international peers? There’s no data on this, but it can be argued. Meanwhile, despite the influence of stuff like Moneyball, it’s nevertheless abundantly clear that players like LeBron James, Dwyane Wade, Kevin Durant, Dwight Howard and Derrick Rose are among the best 10 players in the world—I would near guarantee that all of the preceding players would appear on all of the lists of a poll of the most informed basketball people. Now, if you tried to repeat the exercise of the most informed business people, would there be a consensus of the 10 best business executives in the world? Would someone like Carlos Slim appear on the list, despite the source of his wealth (essentially because of the cartelization of the Mexican economy)? Some nontrivial percentage of business wealth in the world has been derived because the owners of wealth have obtained it in unsavory if not illegal methods. Those business superstars who are perceived to have gotten their wealth fairly are widely admired and celebrated--see Jobs, Steve.

Rogoff tries to sidestep this problem by noting that sports teams often obtain their money by inefficient means—for example, lobbying for public money for arenas—but this is a different question than whether sports players derive their money from unfair means. In other words, his argument doesn’t hang together, from beginning to end.