Posts Tagged ‘United States



26
Feb
10

feel good, look good, and live forever!

I spent almost all day yesterday listening to the health care reform summit. It triggered some recdollections.

Years ago — was it 15 or 20? — I attended a couple of conferences at Berkeley about managed care, the solution du jour for relentlessly rising health care expenditures. On one panel was Leonard Schaeffer, former president and CEO of WellPoint. (I emphasize “former” to insulate him from the heat the company has taken recently for double-digit premium increases to some customers.) He mentioned that he was often asked at meetings, “What to people want?” with respect to healthcare. His standard reply was: “They want to feel good, to look good, and to live forever.”

He said this only partly in jest. As the CEO of a major payer company he had seen that there was heavy demand by customers to pay not only for treatments alleviating physical ailments but also for treatment to relieve their distress, to make them look more like they thought they should, and to forestall the ravages of age and the ultimate insult, death. The boundaries of the three categories were so ill-defined that it was possible to expand what people wanted reimbursement for indefinitely. This resulted in the administrators dilemma: satisfying the customer’s expectations without utterly exhausting the bank.

Apparently not much has changed. Our expectations for medical relief remain largely unbounded. Perhaps it’s because after WWII we came to expect medical miracles: antibiotics that knocked down infections, vaccines that eliminated polio and communicable diseases, surgery that seemingly made anything possible. I recall watching open heart surgery on fuzzy black and white nationwide TV broadcasts because it was such an astonishing development. After that we sent men to the moon.

When I went to work in the cancer field we had an organizational slogan: “We want to wipe out cancer in your lifetime.” “Wipe out” as in totally eradicate. Seriously! It wasn’t a disingenuous promise; it only reflected the limits of what we knew about the complexity of the disease at the time. People in the cancer field had to let that notion go by the wayside as we began to see that terms like “cure” and “eliminate” were perhaps over-statements when dealing with a disease that stemmed from malfunctions of the most basic biological processes of living things.

The aim of much of the cancer community today is to shift more cancer cases into chronic conditions (as opposed to acute, lethal episodes). Well, that’s progress and perhaps an inevitable step in greater mastery of the disease; but one of the most serious problems we have in health care today is the rising cost of chronic diseases. A study published in Health Affairs a week ago indicated that half of the increase in Medicare spending 1997-2006 was due to increases in prevalence of cases of 10 diseases or to increased cost of treating cases. Cancer isn’t even in the top 5 of the chronic disease list…yet.  One of the biggest surprises of my career was that the financial barriers to state-of-the-art treatment would become a challenge nearly as serious as the intricacy of the disease itself.

We have a difficult time in America discussing pragmatic matters like to cost of protracted care in the same conversation with the good of “saving lives.” Extending life is taken as an unalloyed good. You can become a pariah for mixing the two (i.e., examining comparative effectiveness becomes “death panels” or “pulling the plug on grandma”). I don’t know how many times over the years I’ve listened to well-meaning people advocate efforts requiring a lot of resources with the argument that, “If we can save just one life it will be worth it.” Have I just become too callous when I react: “Uhm…maybe some good can be  done putting the resources elsewhere”? In my entire 40 years in public health I never heard a serious discussion about the unintended or down-side effects of doing whatever it takes to retard illness.

But it’s not a discussion that can be avoided much longer. During the health care debate yesterday everybody seemed to agree on a couple of things: 1) we needed reform for humanitarian reasons, and 2) the continued relentless rise in costs will bankrupt us. One of the Republican senators said something like (I’m paraphrasing), “In a perfect world we’d want everybody to have everything, but we can’t afford this.” I’m a lifelong, unrepentant liberal, but I thought that was a pretty straight statement, one that resonated with me. The truth of  that specific assertion can be argued either way, but it is a matter we have to address. It’s bigger than just the price of the the current health fix. We need to have some frank talk about allocating our less than infinite resources for many benefits that might be achieved. I’m hoping that the baby boomers — of which I’m one — currently heading into the nexus of this issue can bring forth some of the brashness with which we’ve talked about many things in our time (drugs, sex and rock ‘n roll, etc.) and break down the taboo about discussing the realities of life, death, and the price of peanuts.

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25
Feb
10

Hmm, is the China juggernaut that obvious?

I’ve done several posts — as recently as yesterday — mentioning the spectacular rise of China as a change driver with widespread effects. My assessment is that this will have big impact on people everywhere and be a disquieting influence that will disturb a lot of people. But my question now is: Am I just reitterating what’s become obvious to Americans?

In today’s Washington Post there’s a report of a Washington Post-ABC poll headlined: “Poll shows concern about American influence waning as China’s grows.”

Facing high unemployment and a difficult economy, most Americans think the United States will have a smaller role in the world economy in the coming years, and many believe that while the 20th century may have been the “American Century,” the 21st century will belong to China. […]

Asked whether this century would be more of an “American Century” or more of a “Chinese Century,” Americans divide evenly in terms of the economy (41 percent say Chinese, 40 percent American) and tilt toward the Chinese in terms of world affairs (43 percent say Chinese, 38 percent American). A slim majority say the United States will play a diminished role in the world’s economy this century, and nearly half see the country’s position shrinking in world affairs more generally.

This has a lot of Americans worried. Losing economic hegemony is not only perceived as a loss of power, but it also suggests that perhaps the country has lost its mojo, it’s in decline. I’d look at it another way. I’m a big fan of Fareed Zakaria’s 2008 book, The Post-American World. His first chapter is titled: “The Rise of the Rest.” His view is that America will remain a powerful and influential country, but other countries like China, India, and Brazil will gain much economically and gain world influence. In other words, wealth and power will have to be shared. His perspective suggests not that this is the end of American glory but that an adjustment to historical evolution is necessary.

The US is about 5% of the world’s population. Since WWII we’ve enjoyed enormous economic prosperity, military power, and prestigue. But history moves on, and the other 95% of the world’s people are developing too. How 5% would expect world dominance to last I don’t understand. Back in 1997 William Greider published a book I also admire: One World, Ready or Not: The Manic Logic of Global Capitalism. In essence, Greider said the capitalism widely advocated in America had won; communism was discredited. The consequence of that is that labor income would move to the masses of people around the world willing to work for less than Americans because they have a much lower standard of living. Capitalism is the force leveling incomes worldwide, and, hence, influence.

A participant in the WashPo survey put it pretty well:

Annetta Jordan, another poll participant, said in a follow-up interview that she has witnessed the shifting economic strength firsthand. Jordan, a mother of two from Sandoval, N.M., was working at a cellular telephone plant in the early 1990s as production and hiring were ramped up. By 1992, the plant had 3,200 workers. “Then this whole China thing started and we were very quickly training Chinese to take our jobs,” she said. Now the plant has 100 people left. “We’re transferring our wealth to China,” she said. “I see that as a very negative thing. When I was younger, a lot of corporations had a lot of pride and patriotism toward America. But corporations have changed. If we in the U.S. go down, that’s okay; they’ll just move their offices to Beijing.”

Ahh, the fruits of success!

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24
Feb
10

Global economics as a force of change

I played out my career in the nonprofit part of the economy: public health cancer control. I knew people involved in many causes who were constantly striving to achieve specific kinds of “change.”  Toward the end of my years in the field it struck me that what is actually happening is the converse: there are an unprecedented number of broad forces instigating change and they interact in weird and wonderful ways. Indeed, in today’s world there’s really no way to stop change; but many outcomes are not controllable or consistent with what folks want to see. In the USA today there are those who “want our country back,” and they blame the Obama administration for upsetting a past order they recall as more satisfying and proper. From what I can  tell a lot of people have a hard time putting their finger on just what it is that’s wrong, but somebody is to blame for their unease.

A couple of weeks ago I posted about the huge growth in the economy of China forecast by economists: $123 trillion GDP by 2040. I was reminded of that again in a recent article in Wired News by Zach Rosenberg about how the American auto industry is swinging to fulfill the thirst of the Chinese middle-class for automobiles. They’ve read the projections too. It’s not exactly a nuclear secret that the next 900 lb. creature in the room will be a giant panda. Rosenberg quotes a GM executive:

“This is clearly the market of the future,” says Freidhelm Engler, General Motors director of design in China. “It’s not going to slow down.”

To sell cars in China a lot of cultural tweeks are need. For example, a design concept of the Buick Regal specifically for China has new features.

Inside, the back seat envelops the passenger “like a clam” … in the same manner as an emperor’s throne. Interior coloring is nearly monotone from the rear passenger’s perspective in accordance with Chinese expectations of a car. Notice the deep purple color. GM says was “chosen to elicit the right level of attention and respect” and named it euphemistically after a rare and slow-growing Chinese tree, It was designed, Engler says, to look like a smooth fabric blowing in the wind.

And beyond that, the Chinese will begin to exert influence back on the US.

With the demands of the enormous Chinese market, the expansion of Chinese companies into the West and the introduction of Chinese vehicles to U.S., American consumers should expect to see some Chinese characteristics make their way across the ocean. “Decoration to enhance proportion,” says Engler, “may show up in North America in coming months.”

Do you suppose these changes are going to result in more jobs in the US on the assembly line? Are Americans going to be happy with “Made in China” stickers in the most sacred of American symbols: the automobile? This is certainly not going to be a resurrection of the era of the ’57 Chevy.

For people who are unsettled by change the future is going to be a very distressing place. Even for the people who keep calling for change, what we get may not be what you had in mind.

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08
Feb
10

Have we learned anything from the recession?

In my last post I talked about the trade-off between committing personal and national financial resources to education of the up-and-coming generation versus the end-of-life expenses of the Baby Boom generation. When we Boomers entered the world after WWII it cost US society a lot to expand educational and other systems across the country to accommodate the Baby Boom. But it may cost even more to pay for the exit of this generation at the prices that the last years of life cost through Medicare and family supplements.

I quoted from $123,000,000,000,000*, a recent article by economist Robert Fogel in Foreign Policy. Fogel was drawing attention to the huge commitment to education that China is making. He estimates that as a result of education and other things, the country’s economy will soar to $123 trillion by 2040. The inference is that this will reduce the US and Europe to much lesser financial powers in the world; an outcome that is undesirable if not something to be feared. The implied message is that the US needs to make a similar commitment to education and other economic steps to enable it to compete and grow in the next three decades.

Fogel seems to be in awe of China’s coming achievement, and the article’s subtitle is: “China’s estimated economy by the year 2040. Be warned.” By contrast, Fogel seems rather contemptuous of Europe’s social situation: falling population and low economic libido. He states:

One-hundred fifty years ago, it was considered a sin to enjoy sex, the only legitimate purpose for which was procreation. But today, young [European] women believe that sex is mainly a recreational activity. Behind the fertility trend is a vast cultural shift from the generation that fought in World War II, which married early and produced the great baby boom of 1945 to 1965. The easy availability of birth control and the rise of sex as recreation mean that populations are likely to shrink in many European countries. […]

In another way, Europe’s culture confounds economists. Citizens of Europe’s wealthy countries are not working longer hours to make higher salaries and accumulate more goods. Rather, European culture continues to prize long vacations, early retirements, and shorter work weeks over acquiring more stuff, at least in comparison to many other developed countries, such as the United States. In my observation, those living in most Western European countries appear to be more content than Americans with the kind of commodities they already have, for example, not aspiring to own more TVs per household. Set aside whether that’s virtuous. A promenade in the Jardin du Luxembourg, as opposed to a trip to Walmart for a flat-screen TV, won’t help the European Union’s GDP growth.

Perhaps Fogel is being tongue-in-cheek in this implied criticism, but the inference is that poor Europe is a slacker culture that doesn’t want the benefits of ingesting more goods and boosting its GDP. Shame on them for not wanting a flat-screen in every room!

Let’s see: smaller population, lots of recreational sex, and a population that values taking time for life experiences rather than expending it to have more “stuff,” as Fogel puts it. Future Europe sounds to me like a great place to live. When I imagine 2040 China with  ~1.5 billion people on hamster wheel’s generating $123 trillion worth of “stuff” and activity annually, I can hardly imagine a less appealing place to live. Is an economy of that scale  supposed to be some form of Nirvana, a “worker’s paradise” perhaps?

As I recall, over the last 18 months the media have been telling stories about people in the US  who have learned that it isn’t the end of the world if they can’t afford a 50″ TV, or the latest pair of Nike collectible basketball shoes. When you remodel the kitchen is it really vital to your happiness to have granite counter tops and a professional gas range?Reportedly, some folks have even learned that a simple, less consumption-driven life could be happier than one haunted by debts to get stuff that provides thrills that expire much sooner than the bills.

I suspect that Fogel is tweaking our noses to make his point about China’s imminent ascendency. I’m with him that a nation’s wellbeing is deeply connected to it’s intellectual capital (i.e., ideas and well-educated citizens), but gross GDP is not, to my way of thinking, the best measure.

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05
Feb
10

Taking the measure of healthcare “elephant in the room”

I called this blog The Vortex because it seems to me we’re in the midst of some really big forces that’ll send us spinning. One of those — here in the US and elsewhere — is demographics. Specifically, the denoument of the Baby Boom generation — of which I am a member — is going to cause perhaps even more turbulence than our advent.

I seldom read George Will’s column in the WashPo because I almost never agree with his perspective on things, but the one he published yesterday brings up the issue of the cost of care of the elderly and its impact in the next couple of decades. I think the situation is of great concern even if I don’t agree with Will’s conclusions about what to do.

The column quotes data about the increase cost of care with age from “Forecasting the cost of US Healthcare” in  the American Enterprise Institute’s newsletter.  The author, Robert Fogel, cites what I think is pretty compelling data about the cost of the end-of-life and, by implication, the possible total cost of the expiration of my generation.

Figure 1

…In this figure, the burden of per capita healthcare costs, which is based on U.S. data, is standardized at 100 for ages 50–54. Figure 1 shows that the financial burden of healthcare per capita rises slowly in the 50s, accelerates in the 60s, accelerates again in the 70s, and accelerates even more rapidly after the mid-80s. The financial per capita burden at age 85 and older is nearly six times as high as the burden at ages 50–54. Notice that the financial burden of healthcare for ages 85 and older is over 75 percent higher per capita than at ages 75–79. However, the physiological prevalence rates (number of conditions per person) is roughly constant at ages 80 and over.

Costs rise, even though the number of conditions (comorbidities) per person remains constant, because the severity of the conditions increases or because the cost of preventing further deterioration (or even partially reversing deterioration) increases with age. It should be kept in mind that standard prevalence rates merely count the number of conditions, neglecting both the increasing physiological deterioration with age and the rising cost of treatment per condition.

Mr. Fogel goes on to discuss various ways the curve could play out over the next couple of decades and ends with what I think is an amazingly optimistic forecast that rising US incomes is going to inspire greater use of biotechnology that results in longer life, fewer chronic conditions and — by some calculus unclear to me — less than devastating total health care cost. In other words, not to worry about the hockey-stick graphs of huge long-term costs, and healthcare is a great business to be in. Read it for yourself and see what conclusion you reach.

This information is cited by George Will as part of a point I think is worth considering. The health care data sets up a contrast between the health care expenditures ahead for the US versus the very large expenditures being made for education in China as a stride toward having by the world’s largest economy by 2040. Will cites another article by Fogel in Foreign Policy titled: “$123,000,000,000,000*” — Fogel’s estimate of the total GDP of China in 2040. That’s a number intended to rock your world that will put China at 40% of world GDP while the US produces only 14%. So China replaces the US as the world’s economic hegemon less than 30 years from now.

The idea doesn’t make me shudder as badly as it would some other poeple, but I think the conundrum identified is valid: how is the US to allocate it’s resources? How much is going to be allocated to health care for us Baby Boomers versus how much is to be allocated to development of the next generations in a highly competitive world? That dilemma faces indivicual families as well. If grandma doesn’t have the money for things not covered by Medicare like long-term-care (which can run thousands of dollars per month), are you doing to wipe out the kids’ college funds?

During the recent health care reform debate calls for evidence-based treatment or comparative effectiveness were greeted by the demagogic  charge of “death panels.” Nevertheless, decisions about resources will be made, even if they’re only the path of least confrontation. This elephant-in-the-room isn’t going away, and it’s big.

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