Monday, August 29, 2005

More on Gladwell's lameness

Arnold Kling has a longer post on why Gladwell's article on healthcare is lame (I discussed this earlier). He details the distinction between moral hazard and the law of demand (as things get cheaper, people buy more of them) and how Gladwell clearly doesn't understand either.
As an economist, I believe that the law of demand applies in health care. I believe that if patients are insulated from the cost of health care, then they will err on the side of obtaining unnecessary CT scans, MRI's, and visits to specialists. They also will "err" on the side of obtaining useful preventive care.

In the United States, over 85 percent of health care expenses are paid for by insurance companies or governments. This is one of the highest rates of insulation in the world (based on OECD health data, but this particular table is not available on line). Even in Canada, the percent of health care costs paid out of pocket is slightly higher than in the United States. Americans' high rate of insulation, combined with the abundant availability of trained specialists and the latest equipment, accounts for the high level of health care spending in this country. I hope that for the most part this is cost-effective, but I believe that the issue deserves careful study.
Chicagoboyz take the assertion that universal health coverage is all that's standing between poor Americans and poor dental care, and looks up some facts.
In 2003, when a dentist in Wales announced that it would accept 300 NHS patients, some 600 queued to get on the list. After waiting 11 hours, some 300 were turned away. Money quote: A few hundred miles east, in Essex, a friend has been told that she can only become a national health dental patient "if someone dies".

Indeed, due to the "continuing lack of access to NHS dentists " the private dental care market in the UK is large and growing. As a result of low reimbursement, many NHS dentists are converting to private practice. The value of private dentistry grew from £289m in 1994-95 to just under £2bn in 2001-02. According to the New Statesman article above, the "most recent figures show that just 48 per cent of the population in Britain is registered with an NHS dentist. Roughly 1.5 million fewer people have access now than in 1998, and five million fewer than in 1994."

According to the WHO, inequality in oral health appears to be universal, even in countries with a long tradition of oral health promotion, preventive oral care, outreach dental health services and high utilization rates. In Denmark, for example, socioeconomic status greatly affects the risk of dental caries in young children, despite the fact that they are covered by comprehensive public oral health programs. Multivariate analyses show more frequent dental caries in cases when sugar consumption is high, regardless of payment type.
I was particulary interested that socioeconomic status has such a large impact on caries in the young. Floss, toothbrushes, and toothpaste are so cheap and ubiquitous that this simply cannot be a difference caused by wealth or access issues, it must come from things like conscientious health habits which cannot be improved through affirmative action or other forms of wealth transfer.

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