Limiting Crestor
November 18th, 2008 by DrRich
In a previous post, DrRich wrote about the JUPITER trial, the controversial clinical trial (so controversial that even Stephen Colbert did a riff on it) which showed that the (extraordinarily expensive) statin drug Crestor significantly and substantially reduced the risk of heart attack, stroke and death in people who had normal cholesterol but high CRP levels.
While many prominent medical figures have defended the JUPITER trial as being well-designed, well-conducted, and productive of very compelling results, and have therefore concluded that doctors should take this information into account when treating their patients, and have even called for the guidelines on statin therapy to be formally revisited, other prominent figures tell us that we must dismiss such ridiculous opinions as coming from mere shills and puppets for the pharmaceutical industry.
But, as DrRich showed in his earlier posting with his characteristic thoroughness and impeccable reasoning, those who wish to dispel the notion that Crestor should be ground up and mixed into everyone’s toothpaste are taking the wrong tact when they simply try to make the results of the JUPITER trial go away.
Sure, we might all wish the sponsors and investigators had also studied one of the cheap statins in this trial, or had included an arm within the trial that would have told us whether doing expensive CRP testing was really necessary, but we cannot be legitimately angry with them for doing what they did. After all, it’s the system we’ve purposely laid out for the drug companies that requires them to invest tens of millions of dollars in trials like this before they’re permitted to sell their products. So we can scarcely criticize them when they comply with the prescribed system by designing their trials to test only their own products. (Let those other companies run their own trials, at their own expense.)
The sad fact is, as much as we may not like the study’s design, there is no denying that when you give Crestor to people like the ones enrolled in the Jupiter trial, their clinical outcomes will be significantly improved.
So let’s just cut to the chase and admit that despite the fact that we would spare nearly 35,000 JUPITER-like Americans a heart attack, stroke or death each year by giving several million of them Crestor, we just don’t want to pay the $7 billion per annum it would cost us to do so. (Heck, it would be only half as expensive to send each of the affected spouses a condolence payment of $100,000, and who’s to say many of them wouldn’t appreciate that consolation more than they would appreciate receiving a free lifetime supply of Crestor for those lumps on their couches?)
The question, then, boils down to this: Given that we have no intention whatsoever of buying our fellow Americans all that Crestor, in the face of the results of the JUPITER trial how are we going to justify that intention, to ourselves and to others?
DrRich has spent a good bit of time reading the various arguments experts (and others) have advanced to justify not purchasing the prodigious amounts of Crestor which the JUPITER trial was designed to coerce us into purchasing. He believes these arguments can be summarized into two general categories.
Why we should limit Crestor: Argument 1.
The first general argument is the notion that in the JUPITER trial, the benefit imparted by Crestor really didn’t do that much good after all, so bothering about placing millions of people on Crestor just doesn’t make sense. There’s just no need to consider the matter any further.
DrRich, of course, answered this argument in his previous posting. Simply put, the argument is statistically spurious. It requires ignoring the actual statistical analysis presented in the JUPITER paper itself, and instead considering only the data as it was misrepresented in (or perhaps misinterpreted from ) the accompanying editorial. And, even if you allow the misrepresented data, the magnitude of benefit imparted by Crestor in this population is (considering the sheer number of Americans who would be spared a cardiovascular catastrophe if they took the stuff) still quite substantial.
In the days since publishing his last article, DrRich has done a bit of research to see what the magnitude of benefit is said to be for a well-known comparable therapy, one that is not only widely used in modern medicine, but is also celebrated as perhaps the most important preventative medical therapy yet devised - the treatment of hypertension. Americans are all urged to have their blood pressure checked beginning at a very young age, and if they have hypertension they are urged to have it treated aggressively. Scores of clinical trials have been done looking at the benefits of treating hypertension, and DrRich knows of no physicians, professional organizations, or even nihilistic consumer groups (such as exist to castigate statins) who say that treating hypertension is not worth the effort.
As it turns out, aggressively treating moderate hypertension (diastolic blood pressures of 90 - 100 mmHg) for five years yields a relative reduction in cardiovascular events (heart attack and stroke) of between 16% - 40%, and an “absolute” reduction in risk of 0.7% - 1.3%. Well, what do you know? That’s pretty much the same as the relative and absolute risk reductions resulting from Crestor (even allowing the unfortunately-presented summary of data from the JUPITER editorial), except the benefits with Crestor are accrued after only two years.
If we’re going to argue that using Crestor in JUPITER-like patients just doesn’t do enough good to bother with, then to be consistent we’ll have to also abandon all the anti-hypertension hype we’ve all been promulgating for 30 years. (DrRich uses the word “hype” advisedly. By the same criteria of data analysis being urged upon us by critics of the JUPITER trial, the massive public health campaign on hypertension we’ve been so deeply engaged in - and paying for - for so many years can only be considered hype.)
If we can save a bundle by withholding Crestor, just think of how much we can save by withholding the treatment of hypertension.
Why we should limit Crestor: Argument 2.
The second general argument is that we shouldn’t pay for Crestor because individuals could achieve similar benefits “simply” by choosing to engage in healthier lifestyles. All they need to do is stop smoking, exercise vigorously for 30 - 60 minutes per day, attain an ideal weight, eat an exemplary diet, and have their hypertension, cholesterol levels, and diabetes optimally treated. Because people have it in their power to control these important factors, they should do so, and we should not discourage them from doing so by providing them with a pill to achieve similar benefits. Providing them with such a pill (apparently) would be fiscally irresponsible, morally irresponsible, or both.
DrRich finds that this is not a completely illegitimate argument. People should take responsibility for their own health, and perhaps should not expect society to bail them out when they develop one degenerative disease or another because their lifestyles are not completely exemplary.
However, if we are to make this the official policy of our healthcare system, then we certainly would not stop with Crestor for elevated CRP levels. To be consistent (and the whole point of “tough love” is to be consistent), we would also need to withdraw therapy for most people with hypertension, type II diabetes, stroke, heart disease, metabolic syndrome, lung diseases, liver diseases, sexually transmitted diseases, osteoporosis, trauma, and numerous other conditions often associated with lifestyle choices.
Talk about saving ourselves a bundle.
Here is the bottom line as DrRich sees it: Any healthcare (or political) policy that relies on a fundamental change in human nature is doomed to failure. (If this were not universally true, then Communism would have worked out just great in one place or another.) We can encourage and educate people about their lifestyle choices. We can even incent them to make good choices. But we can’t have a realistic healthcare system that insists or relies upon every person making those good individual choices.
So, while refusing to purchase medical services for people who could help themselves by choosing healthy lifestyles is not a completely illegitimate approach, it is an approach that we need to consider very carefully given its certain negative outcome. And for us to attempt to force this approach not generally, but instead to one specific medical condition or one specific therapy, and for completely arbitrary reasons, is perhaps feasible but is hardly morally or logically defensible.
Besides, the JUPITER investigators inform us that Crestor worked just as well in patients who apparently did follow reasonable lifestyle recommendations. So we might end up having to give the stuff to people whether or not they live the way we insist they live.
The right approach
It is not wrong for us to balk at spending $7 billion each year on Crestor. We would be crazy not to balk at it. It’s just that neither general argument advanced by the opponents of JUPITER seems very satisfactory, and in fact, to DrRich they seem completely bereft of merit.
It is likely not appropriate for us to spend all that money on Crestor for the amount of benefit that we would stand to gain. But it’s not because there isn’t substantial benefit to be had, nor is it because people just need to take better care of themselves before asking us for any healthcare.
What we’re really asking ourselves is whether Crestor is one of those healthcare products that ought to be withheld in response to the absolute unavoidability of rationing. And there’s simply no good answer to this question as long as we insist on pretending that rationing is not necessary and is not already occurring, that is, as long as we insist on accomplishing the unavoidable rationing covertly. The abandonment of rational discourse and the enthusiastic adoption of self-delusion are inherent features of covert rationing, and both are on obvious display here.
An open, transparent system of healthcare rationing would allow us to objectively assess the merits and the cost of Crestor in patients with elevated CRP levels, and to compare those merits and costs to other, similar medical services - the treatment of hypertension, for instance. With such a system we could make disposition on the use of Crestor quickly and objectively, without the twists of logic and without appeals to Platonic ideals of human nature, as we’re seeing today. Perhaps even better, the transparency of such a system would finally focus companies away from developing products they believe they can coerce us, through the use of cleverly designed randomized clinical trials, into paying for. An open system of rationing would, for the first time, focus the innovators of medical technology on developing products that reduce healthcare costs. Today, under covert rationing, technology is instead employed - with great creativity and incredible efficiency - to produce a steady stream of high-margin products that offer only incremental benefits.
Calling for the adoption of a system of equitable, objective open rationing is relatively easy. Designing a system for doing so - not so much. So it would not be fair or reasonable for DrRich to insist on a system of open rationing without describing how such a thing could be accomplished. And so, in the interest of fairness and reasonableness, he reminds his readers that he has attempted to do so both in his book and on his other website. Other, smarter people could doubtless come up with even better systems. It would be difficult, though, to come up with a reasonable system of open rationing that is not less destructive than the system of covert rationing we’re engaged in today.
Crestor, Guidelines, Rationing and Other CRP
November 13th, 2008 by DrRich
The JUPITER trial, reported this week at the American Heart Association Scientific Sessions and simultaneously published in the New England Journal of Medicine, has created quite a stir in the mass media and in the blogosphere. DrRich would like to do his bit in flaming the controversy.
On its surface the study and its results are pretty straightforward. Nearly 18,000 men and women from 26 countries who had “normal” cholesterol levels but elevated C-reactive protein (CRP) levels were randomized to receive either the statin drug Crestor, or a placebo. CRP is a non-specific marker of inflammation, and an increased CRP blood level is thought to represent inflammation within the blood vessels, and is a known risk factor for heart attack and stroke. Patients randomized to Crestor, after an average treatment period of 1.9 years, had a highly significant 44% reduction in a composite endpoint that included heart attack, stroke, the need for stenting or bypass surgery, and cardiovascular death. Both CRP and cholesterol levels were also significantly reduced in patients taking Crestor.
This study is noteworthy because it is the first large randomized trial to show that Crestor (or any statin) can markedly reduce the incidence of some very nasty cardiovascular outcomes in people who are considered to have “normal” cholesterol levels. (Notably, typical LDL cholesterol levels among primitive hunting/gathering cultures is around 50 mg/dL, instead of the 100 - 120 mg/dL we consider to be normal. These people have an extremely low incidence of cardiovascular disease, so maybe humans’ optimal cholesterol level is much lower than we now think. On the other hand, the low risk of cardiovascular disease among hunters/gatherers may instead be related to the fact that many of them are consumed by bears before they’re 30.)
So here’s what we know from the JUPITER trial: giving Crestor to patients similar to the ones enrolled in this study can be expected to significantly and substantially improve their cardiovascular outcomes, and in a relatively short period of time.
But, as with any clinical trial, this one does not answer all the questions that we would like to have answered.
This trial, for instance, does not tell us whether the beneficial outcome is specific to Crestor, or is a class effect of all statins. (DrRich believes it is very likely to be a class effect, since the statins all tend to behave similarly in virtually every other way.) This trial does not tell us whether reducing CRP levels is beneficial - it only tells us that giving Crestor to people with high CRP levels is beneficial. (As Dr. Centor points out, it is time to begin thinking of statins as plaque-stabilizing drugs instead of cholesterol-lowering drugs; their benefit may not rely on lowering either CRP or cholesterol.) It does not tell us whether using CRP as a screening tool is actually helpful. (Only patients whose CRP was elevated were enrolled in this study. Similar patients - that is, patients who tend to be overweight and have a fairly high incidence of metabolic syndrome and a relatively high incidence of smoking - but with normal CRP levels, might have had the same outcome.) And this trial does not tell us the risks of lifelong Crestor therapy. (DrRich notes, however, that statins have been in widespread clinical use for nearly 20 years, and seem unlikely to hold very many surprises at this point.)
So there’s a lot we still don’t know, and much of what we don’t know would be important to any doctor counseling a patient who wants to reduce their risk of cardiovascular disease.
But still, there should be no controversy here. If medicine were practiced the way it ought to be - where the doctor takes the available evidence, as imperfect as it always is, and applies it to each of her individual patients - then the JUPITER trial would present no special problems. After all, doctors never have all the answers when they help patients make decisions. So, in this case the doctor would discuss the pros and cons of statin therapy - the risks, the potential benefits, and all the quite important unknowns - and place the decision in the perspective of what might be gained if the patient instead took pains to control their weight, exercise, diet, smoking, etc. At the end of the day, some patients would insist on avoiding drug therapy at all costs; others would insist on Crestor and nothing else; yet others would choose to try a much cheaper generic statin; and some would even opt for a trial of lifestyle changes before deciding on statin therapy. In other words, there is a range of reasonable options given the limitations of our knowledge, as there often is in clinical medicine. As time goes by, more scientific evidence is often brought to bear and clinical decisions (hopefully) become more and more effective. But whatever the state of the evidence, doctors and patients can generally get by without violating too severely any ethical or medical precepts that would cause objective and neutral observers to complain very much.
But we don’t practice medicine the way it ought to be. We practice it according to guidelines.
And this makes the stakes very high when it comes to a clinical trial like JUPITER. For guidelines do not generally permit a range of actions tailored to fit individual patients - they generally present a binary answer. In this case, the binary answer yields either no change in clinical practice (and no change in spending), or a change in clinical practice (and an increase in spending, on Crestor, amounting to several billion dollars a year).
So as one might predict, a controversy has broken out.
On one hand, many point out that JUPITER is an important clinical trial which has demonstrated a vital clinical benefit (prevention of heart attack, stroke and death) with a high degree of statistical significance, which meets the high standards demanded by evidence-based medicine, and which therefore obviously demands a change in the clinical guidelines. But on the other hand, many others insist that the JUPITER trial simply does not demonstrate enough of a benefit with Crestor to justify changing the guidelines.
DrRich’s position - that the results of the JUPITER trial are striking and important but incomplete, and ought to change the conversation between, but not dictate the actions of, doctors and patients - does not obtain in the modern era.
So, unable to side with either party, DrRich observes with great interest the debate between those who want to change the guidelines, and those who believe that changing the guidelines would be the greatest of travesties.
Those who want to change the guidelines have, in their favor, the virtue of consistency. For, if one insists that every action by physicians must be supported by evidence-based medicine, then one is pretty much obligated to fully embrace clinical trials like this one that give clear-cut and statistically significant results. Unfortunately, the evidence-based strict-constructionists have painted themselves into a corner when it comes to JUPITER. They will not be able to say, for instance, “Statins are pretty much alike, so we’ll make the guidelines say ’statins’ instead of ‘Crestor.’” For JUPITER did not study “statins,” it studied only Crestor, the most expensive statin on the planet. Expanding the results to all statins (despite a large body of experience that suggests this would be just fine) does violence to the whole concept of evidence-based medicine. It’s just not possible. The strict constructionists have therefore boxed themselves in to advocating a new, multi-billion dollar annual expenditure.
It is even more amusing to observe those who do not want to change the guidelines.
These people fall into two general camps. First, and easier to dismiss, are those who believe that drug companies are the embodiment of evil, and that any clinical trial sponsored by a drug company must be dismissed out of hand. There is furthermore a subset of this group who believe that statins, in particular, are the devil’s work, and represent some sort of effort on the part of the pharmaceutical companies (all of which seem to market a statin of one variety or another) to enslave every American. These people, one can only surmise, would object to statins even if they were proven to cure heart disease, cancer, baldness, obesity AND to produce fine and durable erections upon demand.
DrRich simply points out that the advancement of clinically useful medical science - in America and in the world - is almost entirely dependent on drug companies and other corporate dens of iniquity. That companies must pay for our medical research is the system we’ve invented. Furthermore, our total capitulation to the dictates of evidence-based medicine means that companies must fund large, expensive clinical trials before they are allowed to sell a new product, or create a new indication for an old product. This evidence-based paradigm is inherently a double-edged sword. Sure, it creates a huge barrier to the development and adoption of expensive new therapies (which is the covert rationing dividend of evidence-based medicine), but it also creates opportunities, for companies who manage to successfully complete such trials, to create iron-clad indications for their products. For, once a product has been “proven” in a randomized clinical trial, there is no easy way to legitimately keep that product out of the guidelines and off the shelves. The makers of Crestor have simply figured out the rules. One can whip up anti-corporate emotions by criticizing AstraZeneca for playing the game well, but the fact that the sponsor stands to gain does not negate in any way the results of a well-designed study.
That the anti-pharmaceutical and anti-statin crowds vociferously object to the results of the JUPITER trial is, of course, entirely expected and cheerfully acknowledged. DrRich will merely observe that their position is one of default. It is not dependent on the scientific merit of JUPITER (or any company-sponsored study), and thus it adds no useful information to the debate. We can only note their objections and move on.
The second group of people who object to changing the guidelines are less dogmatic and more open to reason, and indeed (and very interestingly so) claim to be proponents of evidence-based medicine, and thus claim to be willing to follow the data to where it will lead. It seems pretty clear (to DrRich, anyway), that the chief concern of these individuals is cost. That is, this group feels strongly that the implications of the JUPITER trial are simply too costly to follow to their logical conclusion. This, indeed, is a very reasonable position to take.
Unfortunately, the only legitimate way to turn aside the results of a costly but statistically definitive, evidence-based study is by rationing healthcare. (To ration, remember, is to withhold at least some useful medical services from at least some people who would be likely to benefit from those services.) But we can’t do that, because, well, it would be rationing. Because members of this second group are unable to invoke the “r” word, they are therefore forced to find other “reasons” for keeping the guidelines unchanged. This unfortunate situation leaves them little choice but to discover ways in which to impugn the legitimacy of the JUPITER trial.
In short, they find themselves forced to engage in statistical legerdemain in order to diminish the significance of the JUPITER trial. From what DrRich has seen, most of the statistics that have been ginned up to this end have not come directly from the JUPITER trial itself, but instead from an editorial accompanying this study, written by Dr. Mark A. Hlatky.
Most of Dr. Hlatky’s editorial is measured and reasonable. But he has thrown in a key summary sentence that has been greedily grasped by the antialterguidelinetarians, to wit: “The proportion of participants with hard cardiac events in JUPITER was reduced from 1.8% (157 of 8901 subjects) in the placebo group to 0.9% (83 of the 8901 subjects) in the rosuvastatin group; thus, 120 participants were treated for 1.9 years to prevent one event.”
This statement, at least taken at its face value as a stand-alone analysis, is statistically naive and wrong. DrRich will not make anyone wade through the reasons why, because he realizes that one or two of his readers might not enjoy statistical arguments. (Instead he will provide those reasons in this footnote.*) Suffice to say here that Hlatky’s summary statement apparently ignores the appropriately analyzed data which is clearly presented in the JUPITER paper itself, and which documents that the clinical benefit of Crestor was substantially more impressive than this widely-quoted summary statement by Hlatky suggests.
As illegitimate as this summary statement may be, let us accept it for a moment just for the sake of discussion, since that’s the data the antialterguidelinetarians have latched on to. Taking these numbers, the “antis” make the following argument: While the relative reduction in “hard cardiac events” is 50% (1.8 to 0.9), the absolute reduction is only 0.9%, which, anyone would agree, is a pretty small number. So, they conclude, the actual benefit imparted by Crestor is actually quite small.
That’s a very interesting argument. Let’s look at it in a couple of ways.
So we’ve got a population of patients whose risk of heart attack, stroke, bypass surgery/stenting, or death is about 2% at about 2 years, and by giving them a pill we can reduce that risk to about 1%, and we’re arguing that the absolute drop of 1% is not very much to crow about. Well, OK. But what if we found a pill that reduced their risk to zero at 2 years? That is, it completely wiped out the risk of cardiovascular catastrophes. Would that be a good thing? Or would we say, “It’s just a 2% drop, really not much greater than the 1% drop we had with Crestor, so it’s no big deal?” DrRich thinks not. DrRich supposes we would think it’s a very big deal.
When you’re starting at a 2% risk, then any drop in risk is going to be an “absolutely” small number. And if we’re not going to pursue improvements in outcome of such a small magnitude, then why the heck are we worrying about preventative medicine in the first place? Once you get past the big things (drain the swamps, don’t drink the water downhill from the outhouse, etc.) then all preventative medicine tends to consist of small, incremental improvements in outcome. Popular pronouncements to the contrary notwithstanding, preventative medicine is largely the art of spending a lot of money for this kind of incremental improvement. If we decide we shouldn’t do this anymore, then DrRich would find it unfortunate but understandable. But it hardly seems reasonable to arbitrarily focus on this one, particular improvement in preventative cardiology, and (within a healthcare system that insists it is not rationing care) pronounce that this is the one we’re not paying for.
Another way of looking at this “the benefit is too small” argument is by considering that 7.4 million Americans fit the entrance criteria for JUPITER. By giving all these people a statin, we would be preventing about 66,600 major cardiovascular events over a 2 year period. If you’re going to say that 1% is a small number, DrRich will counter that 66,600 is a big number. So do statins offer a substantial benefit or not? It depends on whether you choose to focus arbitrarily on the 1% or the 66,600.
(DrRich understands that many of his readers are not focusing at this moment on the 66,600 cardiovascular catastrophes that could be prevented, but on the 7.4 million people who will be taking a drug that costs $120 per month. But we’re not talking about cost yet, we’re only talking about whether the drug does some good. If we decide it does, then we’ll need to link that “good” to a procedure that measures whether the “good” is worth the money we would need to spend to achieve it. The “antis” try to avoid talking about cost - since that would admit they’re rationing - by insisting that there’s just not enough “good” to bother. DrRich is simply pointing out that such an argument - that preventing 66,600 very bad outcomes is not enough to bother with - is on its face absurd.)
Another argument invoked by the antialterguidelinetarians is based on the “number needed to treat” (NNT) analysis. Again they rely on Hlatky’s unfortunate summary of the data: “120 participants were treated for 1.9 years to prevent one event.” This number - which the “antis” insist is just too high - is misleading for the reasons outlined in the footnote.* The real NNT, based on more legitimate statistical analysis, is plainly laid out in the JUPITER paper itself. It turns out that the longer patients in this trial were treated with Crestor, the lower the NNT became. So: At 2 years, the NNT was 95; at 4 years, it was 31; and at 5 years, it was projected to be only 25. Whether you think it is reasonable to treat 25 people with a pill for 5 years to prevent one of them from having a heart attack, stroke, or death is, DrRich supposes, a matter of opinion. But based on NNT analyses for many widely-accepted therapies in medicine today, it looks pretty good.
All these arguments, of course, are merely distractions. The fact is that JUPITER showed a pretty striking reduction in nasty cardiovascular events, and the only real reason there’s any controversy is because of the cost of Crestor.
That cost is what makes us want to withhold Crestor, even though it is imparting at least some (and, DrRich, argues, quite a bit of) clinical benefit. In other words, the high cost makes us want to ration Crestor. The fact that we can only ration covertly, instead of openly, is what makes us want to bastardize the science and do a Kabuki dance with the statistics.
If we were rationing healthcare openly, then we could do an objective, full-bore cost-benefit analysis on the use of Crestor in JUPITER patients, using legitimate and not ginned-up statistical analysis, and taking into account not only the cost of the drug, but also the cost that would be incurred by failing to stop preventable heart attacks, strokes, etc., and then determining where the overall cost-benefit result fell within our coverage criteria. If it met the criteria we would cover it, if not, not. This decision would not be arbitrary. It would be a fully transparent process, so that if AstraZeneca did not like the results, they would try diligently to find a way to reduce the cost of Crestor (DrRich thinks they would succeed) to a value that would be compatible with their staying in business. (And for the first time, the price of medical products would be determined by a Laffer-like curve, where a price that was too high - like taxes that are too high - would reduce revenue, instead of increase revenue. Companies, being fairly rational, would ratchet their prices down to the optimal price point.)
But since we insist on doing our rationing covertly, DrRich is sorry to say that we’re destined to keep making spurious arguments, and using dumbed down statistical analysis to back them up. The JUPITER trial, while it is imperfect and while it does not answer every question, really is pretty straightforward. That we get so wrapped around the axle trying to fold such clinical trials into our covert rationing paradigm is simply another demonstration of Corollary Four of the Grand Unification Theory of Healthcare: Covert rationing corrupts everything it touches.
*In a long-term clinical study in which the endpoints are events that can occur at any time (such as heart attack, stroke or death), then the probability that an enrolled patient will reach an endpoint in the trial increases the longer he/she has been enrolled in the trial. But in virtually all clinical trials, the length of time different people are enrolled varies greatly. This is because it often takes years to enroll people in clinical trials, so that when the trial ends, some will have been in the trial for many years, others for only a little while. This means that the risk exposure of each research subject is different, and is proportional to the total time they were enrolled. Not uncommonly, the enrollment process is not smooth - there are periods of more rapid enrollment, and periods of slower enrollment - so if all you do is average the enrollment time (as was done here - 1.9 years) you are likely to get skewed results. So it is simply not statistically legitimate to do so.
There is a legitimate way of analysing such longitudinal outcome statistics, and it’s called the Kaplan-Meier method. And indeed, the authors of the JUPITER trial presented in their paper a complete Kaplan-Meier analysis of their data (see Figure 1), and the results look quite a bit different from Hlatky’s summary statement. The Kaplan-Meier analysis reveals that the risk of heart attack, stroke, and death all increase steadily through at least 4 years (5 years was the longest time anyone was enrolled in this study), so that at 4 years, the risk of reaching one of the “cardiovascular event” endpoints was about 8% (not 1.8%). Further, the Kaplan-Meier analysis shows that the protection imparted by Crestor persists through at least 4 years, and that indeed the magnitude of protection (i.e., the difference in outcomes between the treated group and the placebo group) increases for that entire duration. So, at 4 years, the placebo group had roughly an 8% event rate, compared to roughly a 3% event rate for the Crestor group - an absolute difference of about 5% (not 0.9%). This is a far greater benefit than is suggested by Hlatky’s shorthand summary.
On Respecting Nurses
November 10th, 2008 by DrRich
DrRich commends to his readers Dr. Val’s new blog, Getting Better with Dr. Val. Val is taking the good work she did on her former site at Revolution Health, and lifting it to new heights.
In particular, DrRich suggests you make yourself a nice cup of tea and listen to her 30 minute podcast on what’s ailing American nurses today. This is a patented Dr.Val well-known-people interview, this time with three eminent blogging nurses, all of whom are very thoughtful and very articulate about their profession.
DrRich has been a great admirer of nurses for 35 years, ever since a head nurse went out of her way to (diplomatically) save DrRich’s intern *ss when he was about to do something stupid to a patient. DrRich worked very closely with colleagues who were nurses during his entire clinical career, and considers many of these people to be the finest medical professionals he has ever known. More recently, DrRich has come to admire and respect the nursing profession as possibly the last bastion of real medical ethics. (The physicians’ new ethical precepts have largely thrown patients under the bus. Nurses haven’t done that yet.)
Much of what Gina (Code Blog), Strong One (My Strong Medicine), and Mother Jones (Nurse Ratched’s Place) have to say about the nursing profession is not all that surprising. That nurses are often disrespected and stereotyped by god-like doctors and poorly-informed patients is, sadly, an old story. But DrRich is struck by two things in Val’s podcast.
First is that there is a long, long waiting list for entrance to nursing school. DrRich had no idea. He finds it uplifting that so many young Americans are lining up to enter this still-noble profession, especially at a time when nurses are so needed. It seems likely that at least some of this enthusiasm reflects the fact (and it is a fact) that the nursing profession is entering an era where the stereotypes and the disrespect seem ready to be torn down. While he has no special insight into the matter, DrRich finds it very likely that nursing school slots will be rapidly expanded (and nursing instructors will be adequately rewarded to staff these new slots), simply because there will be little other choice for our healthcare system.
Second, it is striking that nurses seem to have figured out already that taking over primary care medicine from the rapidly-dwindling primary care physicians is a losing proposition. They are avoiding the opportunity in droves.
That, if nothing else, should tell us how smart nurses really are.
Thanks to a) the growing nursing shortage, b) the inability to accommodate all the people who want to enter nursing, and c) the fact that those who have made it into the nursing profession are very smart people with “disturbingly” high ethical standards, we find that the healthcare system will soon need to re-evaluate its strategy in regard to primary care medicine.
Our healthcare system has taken exquisite pains to make primary care medicine an untenable proposition for American doctors. Not only is their pay (which, by the way, is determined the same way it was determined for workers in the old Soviet collectives) low, but also their autonomy as physicians has been wrecked by arbitrary guidelines; their clinical activities are closely monitored and second-guessed by stone-witted bureaucrats; they have been limited to 7.5 minutes per “patient encounter” and the stuff they must accomplish during those 7.5 minutes is determined by Pay for Performance checklists; they have been charged with operating flawlessly under a system of hundreds of thousands of pages of federal rules, regulations and guidelines whose meaning is not merely unclear, but is fundamentally indeterminate, like Schrodinger’s cat, and (also like Schrodinger’s cat) which remains fundamentally unknowable until the “box is opened” through criminal prosecution (whereupon doctors who had been practicing in good faith have at least a 50- 50 chance of learning that they are actually professionally dead); and finally, they have been charged with the duty of covertly rationing their patients’ healthcare at the bedside by the healthcare bureaucracy, by the United States Supreme Court, and by the new-age ethical precepts of their own profession.
The healthcare system has done all this precisely to drive physicians out of the primary care business, for the explicit purpose of opening the primary-care doors to a profession it believes is more tractable than physicians - namely, the nurses. The healthcare system sees nurses as professionals who (once they are duly certified in primary care medicine through respected testing organizations), will have just enough training to diagnose and treat the average patient (i.e., the ones with high blood, low blood, fat blood and sugar), and who will cheerfully, unquestioningly follow whatever guidelines are handed down to them from on high. And they will do all this for less pay and with less lip than the now-obsolete physician PCPs. These new practitioners of primary care medicine will be a perfect fit.
Except for one thing. The nurses want no part of it.
The nurses interviewed by Dr. Val speak of the relatively low pay primary care nursing practitioners receive, especially compared to what specialist nurses can make working in hospitals. They also seem to understand the real downsides of primary care nursing. There is an inherent lack of respect toward primary care in the U.S., which is clearly expressed by both specialist doctors and patients, no matter who is delivering it. Primary care nurses will also be saddled with the same guidelines, intrusive bureaucratic oversight, time limits, threats of a federal fraud rap if they misinterpret a rule, and the same bedside rationing expectations that have ruined the careers of primary care doctors. They will be accountable for their patients 24/7, and will be subject to malpractice suits beyond most nurses’ imagining. And the fact that primary care practitioners have been maneuvered into owing their chief allegiance to third party payers instead of to patients will be perhaps even more insulting to nurses than it turned out to be for doctors.
The notion that nurses will jump at this opportunity is absurd. That the healthcare system appears to blithely assume they will happily do so is perhaps the greatest disrespect being perpetrated on the nursing profession today.
For what it’s worth, DrRich supports the nursing profession in saying “no” to the healthcare bureaucracy. They should not engage in primary care until they can do so without compromising their principles and their commitment to patients. He prays they will stick to their strong ethical ideals, and keep their patients first, and tell the system that if they want to treat patients like widgets, then go find somebody else to do it. Had doctors given this answer the medical profession would not be in such sad shape today.
Nurses may not magically garner instant respect from doctors and patients if they take this stand, but they’ll at least maintain their own self-respect. And anyone who doesn’t think this is the most important kind of respect, just ask someone who has lost theirs - you might want to start with some of the doctors.
Government-Run Healthcare “Despite” Obama?
November 6th, 2008 by DrRich
In his campaign, President-elect Obama did not promise or even advocate a universal healthcare system controlled by the government. Indeed, he referred to government-run healthcare as an “extreme” option that ought to be avoided. Instead, he advocated a system in which people who liked their current health insurance would be permitted to keep it, while those who did not have health insurance or who did not like their current insurance would be able to join a new government insurance plan, based on the plan “available to members of Congress.”
Conservatives and cynics, of course, pointed out that such a plan amounted only to a stealth government takeover of healthcare. Since the new government insurance plan would be competing with private insurance, and since the government would be establishing the rules of competition, it would be a simple matter to arrange things so that, before too long, the private competition would melt away.
As a matter of fact, DrRich himself painted such a scenario, and even suggested that the insurance company executives were supporting Obama over McCain during the election precisely because Obama would present them with a graceful (and lucrative) exit strategy. (Mr. McCain’s plan, in contrast, relied on insurance companies to invent the “efficiencies” that would control healthcare costs, as if the insurance companies hadn’t already been trying unsuccessfully to control those costs for 20 years, and were not already completely bereft of useful ideas.)
The fervent wish of the insurance executives, DrRich surmised, was this: Mr. Obama would provide them with one last, huge windfall, in the form of government-provided premiums for some significant chunk of the 47 million uninsured Americans. Then (DrRich went on) a couple of years later and having realized their final gains, they would get out of the health insurance business altogether and let the feds have the whole mess.
But now, things have changed.
Thanks to the sub-prime mortgage crisis and the economic meltdown that has resulted, it will be difficult if not impossible for Mr. Obama to implement any sort of organized healthcare reform, or any other reform that promises to greatly increase federal spending. (Dick Morris points out in a column today that the realities of our current economic situation will serve as a general constraint to the Democrats now controlling the administration and both houses of Congress.)
But if Obama-style healthcare reform is off the table, or even significantly delayed, the health insurance companies are likely to be in deep trouble - and soon.
The market value (i.e., stock price) of these companies completely relies on their continued growth. Through the 1990s and for the first half of this decade, their growth was spurred by the acquisition of public assets (not-for-profit institutions) at a tiny fraction of their real value, and on mergers and acquisitions among insurers. But there are no more non-profits to take over, and these companies have pretty much run out the string on mergers. So, for the past few years their growth has almost solely relied on their participation in government programs such as the Medicare Advantage Plans (which, by the way, may be going away soon given the recent election results). The entire prospect for future growth (and therefore viability) in the health insurance industry, as DrRich has explained, depends on an Obama-style expansion of government programs that will provide a new stream of insurance premiums.
One sure thing is that health insurance companies have no hope of even maintaining their current profitability, let alone continuing their growth, solely by doing what they are supposed to be doing - by managing the healthcare of their enrollees. (The prospect of having to survive by doing that, once again, is what frightened them so much about the McCain plan.)
Panicked insurance company executives are not in a pretty place. On top of a mounting recession in which their customers (American businesses) are cutting back or failing, and during which their own costs continue to increase at a double-digit rate of inflation, they now have to face the likelihood that in spite of Mr. Obama’s election there won’t be a massive infusion of government dollars into their businesses any time soon. These poor souls are very likely casting about for a Plan B.
And Plan B seems pretty obvious to DrRich. The path has been very recently blazed by others.
Over the last two months it has become obvious that when businesses vital to the public welfare are about to fail, the government has little choice but to take them over. This was the case with AIG, with Fanny and Freddy, and to a lesser extent with several major banks. We now see the American auto industry lining up for a bailout/takeover. It is easy to imagine the gasping airline companies forming themselves up into the same landing pattern.
So if you are a health insurance executive, you are probably looking at your current broken business model, lamenting that your savior Mr. Obama is probably not going to be able to come to your rescue with the one last windfall he has promised, and observing what is happening with other “vital” American industries in similar straits. DrRich imagines that these executives have already resolved themselves to a government takeover (indeed, this was the end-game they have long planned once their last Obama windfall played itself out), and that they are merely calculating the right moment for it. How best to divest their stock before hinting that such a takeover is in the works? With careful planning and negotiation, can some of the takeover money be parlayed into executive bonuses, or at least into one last, extravagant junket (a la AIG)? There is no real hurry, after all - whenever the health insurance industry says it just can’t do this any more and that the government needs to take over healthcare, then no matter which other industries the government will have already acquired, what choice will the feds have?
If DrRich is right in such speculations, we may end up with government-run healthcare sooner than we think, despite the promises and intentions of Mr. Obama, and despite the seeming unlikelihood of achieving organized healthcare reform in the foreseeable future.
DrRich humbly suggests that those who currently own stock in health insurance companies should take note of what happened to the shareholders of AIG and other companies whose demise the feds have recently engineered - which is to say, they were completely wiped out. DrRich is not really trying to give investment advice here, and admits to being entirely unqualified to do so, as anyone would agree who saw his portfolio. He’s just sayin’.
The Real Reason Americans Have a Right to Healthcare
October 30th, 2008 by DrRich
In recent posts (here, here and here), DrRich has considered the legitimacy and the implications of our recently-announced right to healthcare.
In one of those “meditations” DrRich decided that declaring healthcare to be a right is indeed legitimate, but not because it is the only humane thing to do, or because there is some sort of a natural right to healthcare, but rather, due to the BOSS rule (that is, Because Obama Says So), which is simply another manifestation of the longstanding principle that the sovereign authority gets to declare anything he/she/it wishes to be a right.
At this time, DrRich wishes to drop his usual sarcasm, to the furthest extent possible, and explain why Americans in truth have a legitimate claim to a right to healthcare - even if the electorate (through some unaccountable fluke) should fail to consummate their promised elevation of Mr. Obama, thus, incredibly, negating the BOSS rule.
In short, Americans have a right to healthcare because they’re paying for it.
Under our present system, every person living in the United States is sharing in the cost of healthcare for every person who receives healthcare. Let us list some of the ways in which this is true:
1) Anyone receiving a paycheck is subject to payroll deductions to pay for Medicare for the elderly and Medicaid for the poor.
2) Anyone paying income tax is paying higher tax rates to offset tax-deductible health insurance premiums purchased by businesses for their employees. (That is, employer-provided health insurance is subsidized by the taxpayer.)
3) Anyone buying products in the U.S. is paying higher prices to cover the healthcare costs of American businesses.
4) Anyone living in America is sharing in the massive societal burden we are creating by allowing healthcare spending to be passed off to future generations, by way of the national debt.
These costs, and more, are borne by everybody living in the U.S. Since everyone in one or more ways is paying for healthcare, everyone has a just claim - a right - to some of that healthcare.
It is important to notice that this argument for a right to healthcare is fundamentally different from the arguments typically given. Typically, a right to healthcare takes on the characteristics of an entitlement, a grant bestowed on individuals by society just because of who they are (such as, citizens, people over 65 years of age, etc.) A right like this - an entitlement - is rarely taken away, or even limited, once granted. Entitlements are soon seen by their recipients (and by the bureaucracy that administers and regulates them) as something that is owed forever, as a natural, God-given right, which can always be expanded, but never ever restricted.
In contrast, the right to healthcare which DrRich is describing is not “granted” to an individual by a beneficent society because of some inherent characteristic of the recipient, but rather, comes into being solely as a result of their being party to a social contract, under which healthcare is a consideration given in return for certain obligations the individual makes to society. Those obligations would include paying for the publicly-funded healthcare through taxes, and subjecting oneself to whatever limits to publicly-funded healthcare such a system requires in order to maintain societal integrity.
This kind of contractual right to healthcare would enable us to set necessary limits on what we mean by healthcare. There would no longer be an obligation to provide individuals with every manner of available healthcare under all circumstances, but only to provide individuals with that level of healthcare provided as a public benefit to all other individuals, under the terms of the social contract. (An entitlement, in contrast, generally is an open-ended promise in which “healthcare” comprises anything and everything one might think has any possibility of restoring every bit of health.)
To summarize, as DrRich sees it we have already created an obligation to provide publicly-funded healthcare to all individuals, by virtue of the fact that we have already burdened every individual with the cost of healthcare for anyone who is now receiving it. We might as well own up to our responsibilities with a formal contract that recognizes the widely-shared cost of American healthcare, that recognizes the right of all Americans to the considerations that arise from this widely-shared burden, and that establishes clear limits to the obligations borne by the parties, limits that are part of any legitimate contract.
Such a social contract will finally give us the framework we need for a public discussion on setting necessary limits on publicly-subsidized healthcare spending.
Why Conservatives Shouldn’t Sweat Our New Right to Healthcare
October 27th, 2008 by DrRich
In response to a couple of recent posts (here and here) defending the declaration by President-Nearly-Elect Obama that healthcare is a right, several readers have offered comments indicating that simply declaring healthcare to be a right is not very useful, unless you also clearly say what you mean by “healthcare.”
This is indeed the question. Exactly how much healthcare are you entitled to if you have a right to healthcare? Do you have a right to certain specified healthcare services, to a certain dollar amount of healthcare per year or per lifetime, to whatever healthcare it takes to achieve perfect health, or to some other limit or non-limit?
The question of limits (whether we should have them or not, and what should they be) has been a central theme of this blog and of DrRich’s book. To reiterate the fundamental problem: 1) In America we believe that it is wrong to limit healthcare in any way, that everyone is entitled to the very best healthcare, that any bit of healthcare that offers even a small potential of benefit should be provided, and that death itself is merely a manifestation of insufficient research (or actionable incompetence, or systematic discrimination against the unwealthy, or corporate greed). 2) But against that closely held belief, we must balance the unremitting law of economics which tells us that there is simply not enough money in the known universe to buy all the healthcare that might potentially offer some small amount of benefit to every person. Healthcare spending has to be limited, or it will become a fiscal black hole.*
Our insistence upon simultaneously balancing these two utterly incompatible factors (the rock-solid belief that there are and can be no limits vs. the unalterable law that limits are unavoidable) requires us to do the necessary rationing of our healthcare (that is, withholding at least some potentially useful healthcare from at least some of the people who might benefit from it) covertly.
So, our entire healthcare system, from all three branches of the government, to health insurance companies, to hospitals, to doctors, to individual Americans (at least when they themselves are not actively patients), are fully and extravagantly and enthusiastically engaged in covert rationing, by a thousand different mechanisms, some of which have been chronicled here.
One reason DrRich is not as reluctant as some to accede to the notion that healthcare is a right is that such a declaration might, at last, move us closer to the day when we will actually be forced to engage in a public discussion of what we mean by healthcare; that is, will move us closer to deciding what should be the limits of healthcare.
Consider: When we have tens of millions of uninsured Americans who don’t have ready access to regular and routine healthcare, then it’s relatively easy to pretend that “healthcare” should include everything we might want it to include. By using the uninsured as a huge fiscal safety valve for our dysfunctional healthcare system - a valve that can be opened, as needed, to increase the number of people ineligible to consume routine healthcare - we can shore up the fiction that “healthcare” ought to have no limits. (Indeed, steadily increasing the number of uninsured Americans has become perhaps our most effective mechanism of covert rationing). This simple expediency alone goes a long way toward enabling us to avoid having to consider or discuss limits.
But once healthcare becomes a right, then presumably those (currently) 47 million Americans will suddenly have a claim to equal access to whatever it turns out we mean by healthcare. The severe fiscal stress produced by this sudden influx of entitled Americans will likely force us, finally, to explicitly define the limits of what we should expect from our healthcare system.
Defining those limits will be extraordinarily painful, and will very probably traumatize our social structure. However, the process is necessary, because if we fail to set those limits the resulting fiscal tsunami - which will utterly dwarf the economic trifle we’re dealing with today as a result of the mortgage crisis - will leave us without any social structure to traumatize.
If declaring healthcare to be a right causes us to engage in this painful exercise now, before it is too late, then DrRich is in favor of it. Even American conservatives ought to be thanking Mr. Obama for doing his bit to bring the issue to a head.
*In contrast, our national, de facto declared right to affordable mortgages for everyone, no matter one’s credit risk, will result in some finite, limited amount of national debt, since every home has some finite, limited value. Even if the final cost to society is very, very large, a national right to home ownership in fact results in a fiscal obligation for society that is limited and quantifiable, and in one way or another is therefore ultimately manageable.
Anyone who insists that there must also be similar inherent limits on what we can spend on healthcare should simply consider that once we have artificial hearts, artificial kidneys, artificial livers, and can indefinitely preserve brain function sufficient to, perhaps, plug aged-but-medically-preserved bodies into some sort of virtual reality where they can frolic like virtual children forever (DrRich does not really know what medical immortality will turn out to look like, just that it is the ultimate goal of medical research, as any real American can tell you), then the amount of money we can spend on any given individual’s healthcare becomes limitless. It is indeed nearly limitless with just the stuff we have today.
More Implications of Our Right to Healthcare
October 20th, 2008 by DrRich
Last week, DrRich defended Mr. Obama’s recent declaration that healthcare is a right. DrRich’s defense was not based on the idea that awarding Americans a right to healthcare is inherently a proper and necessary thing to do, or that a right to healthcare is one of those natural, God-given rights we Americans used to celebrate (like life, liberty or the pursuit of happiness), but rather, that the sovereign authority (i.e., that authority within any society which has the ultimate capacity to force its will by the exertion of violence) can declare anything they wish to be a right. So if Mr. Obama (presumptive President-elect, and soon-to-be wielder of sovereign authority) says healthcare is a right, then it’s a right.
DrRich understands, of course, that our Constitution in its very first paragraph awards sovereignty to “We the People,” and that the rest of the document goes on to specify the limits of governmental authority, and that those limits are most specifically spelled out in the Bill of Rights (which actually does not award rights to the people, the rights of the people being granted by “nature,” but instead explicitly lays out a few of the limits on the government’s ability to intrude on God-given individual sovereignty).
But DrRich has also been taught, by the unambiguous verbiage of our political leaders and by decades of observation of actual governmental actions, that the Constitution is a “living document,” which means that the government may grow its authority as needed in order to deal with perceived social (or financial) crises, or political exigencies.
Simply put, the responsibility for American healthcare, being both a social crisis and a political exigency, certainly fits as one of those items that heretofore has fallen to individuals, but that the government may now choose to take upon itself without violating any really important precedent.
And indeed, it has so been declared.
To his fellow conservative Americans, DrRich wishes to assure that really, this is not such an extraordinary step as many seem to think.
DrRich has heard it said, by those who disparage healthcare as a right, that this is a dangerous step, that, if the government awards Americans a right to healthcare, then what’s to stop the government from also awarding them a right to food, clothing, and shelter (the lack of which would pose a much more dire problem to the vast majority of people than a mere lack of healthcare)?
To which DrRich replies: Where have you been for the past two months? The housing crisis, the near collapse of our financial markets, and the extraordinary taxpayer bailout that will burden our progeny down through the generations, all amount merely to partial payment for the decision by our duly-elected representatives (and the policies and actions that naturally derive from that decision) that all Americans should have access to an affordable mortgage (or, for that matter, mortgages). That is, we are simply getting a first look at the bill that is coming due thanks to a government-declared right to a house. And when we are finished, it appears, our government will own the actual mortgages, the government-backed entities (Fannie and Freddie) that support the mortgages, and even large chunks of the banks themselves that do the original lending (several of which, last week, were forced against their will - in a graphic demonstration of the definition of sovereignty - to accept a federal buy-in of their institutions).
So be soothed. The right to healthcare is simply a natural extension of the already extant idea that the government should supply (and control, and therefore, own) all the necessities of life.
There’s a lot to learn from studying societies in which governments have taken on this role. Several such societies have risen (and fallen) just over the past century. We who worry about the cost of healthcare perhaps can take solace in the fact that, in all of these societies, the notion of “healthcare” quickly came to be seen as the extravagant luxury it has been throughout most of human history, rather than a fundamental necessity. People enduring famine and exposure (or, at best, inanition) have relatively low expectations regarding healthcare.
In other words, as we look at the real implications of the recent taxpayer bailout of our financial system (engineered by a Republican administration), and at the fact that we are about to elect a Democrat President whose stated aim is to spread the wealth around, a right to healthcare actually becomes a relatively unimportant consideration. Socialism invariably reduces the people’s expectations to the point where it should become relatively easy to pay for our new right to healthcare. So, not to worry.
Healthcare Is a Right If the Authority Says It Is
October 14th, 2008 by DrRich
DrRich has been traveling, so he is late to comment on the presidential debate last week in which our presumptive next President declared that healthcare is a right for all Americans. (In contrast, Mr. McCain said healthcare is merely a responsibility, but since he’s only a Senator we can safely discount his opinion on the matter.)
Medical bloggers far more notable than DrRich have since provided commentary on whether healthcare ought really to be called a right. DrRich particularly recommends posts by Shadowfax and Maggie Mahar, both of whom offer beautifully nuanced arguments which are singularly interesting in that, while both of them are American progressives who favor both universal healthcare and Mr. Obama, neither is quite willing to label healthcare a right. Presumably, when awarded too (as it were) liberally, the granting of new “rights” raises the hackles of too many people. Rather, after much analysis and thought, they prefer to call healthcare either an entitlement (Shadofax) or a moral obligation (Ms. Mahar).
DrRich, being a relatively conservative American, does not do well with such nuances. In his simplistic, Palin-esque way of seeing things, nuances (even when he is too thick to follow them) are fine if they draw meaningful distinctions. But they are not so fine when they are invoked chiefly to disguise or confuse.
The Stanford Encyclopedia of Philosophy says that a right is an entitlement to perform certain actions or to be in certain states, or an entitlement that others perform certain actions or to be in certain states. In other words, a right is simply an entitlement, or an obligation imposed on others, or both. So, when some insist on calling healthcare an entitlement or an obligation instead of a right, they are merely engaging in soothing obfuscation.
DrRich is sorry to say that the common argument that conservatives like to use against creating a “right” to healthcare - that there is no such thing as a right that imposes obligations or limitations on the individual rights of others - is mistaken. This is easy to see when one considers certain of the rights that have been legally promulgated during the course of human history, such as the exceptional rights of the aristocracy (especially the divine rights of kings), the unique rights of the clergy, or the special rights of the politburo (or the Congress), all of which clearly imposed more-or-less oppressive obligations on, and limited the individual rights of, the masses.
Where we conservatives tend to get confused is by the notion of natural rights, such as those natural rights to life, liberty and the pursuit of happiness enumerated in our Declaration of Independence. Natural rights are equal rights granted to all people by the Creator (or by “nature”), and cannot be legitimately modified by any mere governmental authority.
Conservatives tend to forget that there is also such a thing as legal rights, which are man-made, created by legislation (or decree, depending on the governmental structure), are not necessarily equally distributed to all people, and are subject to amendment and modification at any time. In many cases governments will find that, for the overall benefit of the society, or of some subset of society (or even of the governing class), a new “right” will be necessary that produces a limitation on the freedoms or property of individuals within that society, and that those limitations are often not equally distributed. The progressive income tax, eminent domain, and the military draft immediately come to mind, all of which have been used in countless ways to support innumerable legal rights the government has granted to some or all Americans.
So, DrRich’s message to his progressive friends is: Don’t sweat the “healthcare is a right” kerfuffle. The now-nearly-official right to healthcare is not fundamentally different from other obligations and entitlements that the government has granted to or imposed on American citizens over the years, particularly over the past 70 years. There is plenty of precedent for it, which should be immediately obvious even to many of us conservatives once you take a second to explain it to us.
So, now that President-Nearly-Elect Obama has decreed it to be so, just go ahead and use the “R” word, and save your nuances for other times when they might be more necessary.
Good Debt and Bad Debt
October 5th, 2008 by DrRich
So the House passed the bailout bill after all, and, we are told, as a result we will avoid the worst that our current financial crisis had to offer. DrRich has mixed feelings about this outcome, having decided that nothing short of another Great Depression would finally shake us out of the fiscal habits we have embraced over the last 40 years or so, habits that have led us to these straits, habits that make it seem normal to promise people all the houses (and all the healthcare) they want, and merely add the bill to our astoundingly massive national debt obligation.
Many have said that the federalization of a trillion dollars of bad mortgage debt sets a brand new precedent that inexorably sends America down the path toward socialism. But other, possibly more insightful commentators have pointed out that, to the contrary, it was a very similar action by the very first Treasury Secretary, Alexander Hamilton, that placed the United States on solid economic footing in the first place, and that, perhaps, this new bailout package does not fundamentally change the American idea after all.
In the early 1790s, unsupportable debt obligations held by the various states and by private individuals had entirely frozen up the credit markets and precluded the brand new United States from having a functioning economy. Hamilton’s idea was for the federal government to buy up all these private and state obligations, and then issue federal bonds to raise enough capital to pay off the debt and to provide stuff, like a United States Navy, that would encourage investment and economic growth. (That Jefferson so viscerally disagreed with this approach, believing that all Americans should grow their own food and make their own clothes, etc., and that a national financial system was not only unnecessary but dangerous, was one of the chief factors that created the two-party system in the U.S.)
Hamilton ended up doing a deal with Jefferson (agreeing to move the nation’s capital southward, where the feds would find it more difficult to undermine some of the south’s more peculiar institutions), and got his way. And as a result of Hamilton’s massive and unprecedented bailout of the various states and private investors*, the United States of America became not only one country, but a stable and growing concern. Indeed, it is arguably by this action that Hamilton definitively earned his place as one of our most important Founding Fathers.
So in terms of its audacity and its size, the bailout passed last week by Congress certainly has a precedent, and a very important and positive one at that.
But, while being an admirer of Hamilton and while recognizing some of the similarities between the Hamilton bailout and the Paulson bailout, both of which were aimed at placing the United States on solid fiscal footing and thereby avoiding catastrophe, DrRich sees a fundamental difference between the two bailouts that renders this new one very disturbing.
That difference is the one between “good debt” and “bad debt.” The debt that Hamilton bought up was good debt. The debt Paulson is buying up is likely to be bad debt.
National debt is not necessarily a negative. In fact, Hamilton’s great insight was that national debt can be the engine of economic growth. When the government borrows money to build out the national infrastructure, to provide easier access to markets, to provide easier transportation of goods, to provide easier access to energy, and to provide a stronger military to guarantee that its investments are safe, the government is doing what businesses do when they want to grow. It is borrowing money today that will generate economic growth, and that will, in turn, repay that borrowed money with interest. That’s good debt.
When Hamilton bailed out the various states and the private investors, he was essentially buying up war debt. He was taking upon the federal government the responsibility for paying for the war that had created the United States in the first place. In economic terms the Revolutionary War was like the high-risk start-up that exhausts its funding in creating its product. While the product of their effort (i.e. independence) was intrinsically very valuable, the various states had bankrupted themselves in achieving it. And because the states were bankrupt, commerce was paralyzed, and the new country was about to break up into warring factions. Hamilton saw that by creating a central entity to buy up the debt, and to raise capital against the country’s new independence, he could realize the intrinsic value of the new nation. Hamilton’s debt, because it was truly a catalyst to pent-up economic potential, was good debt. It was an investment in the nation’s future, one that paid off for future generations of Americans beyond even his wildest dreams.
On the other hand, when we accumulate national debt not to catalyze a growing economy, but instead to buy consumable products for individuals that the individuals “ought” to be buying for themselves (because they are consuming the products themselves), that’s just debt. It’s like credit card debt - it’s debt that is not paying for itself by stimulating new economic growth, but instead that will just have to be paid off sooner or later, and that in the meantime requires large payments in the form of interest. Such debt is not creating economic growth that pays for itself. Instead, it merely compounds until it collapses of its own weight. That’s bad debt.
That’s the kind of debt the mortgage crisis has created. The federal government has now gone into great hock buying up mortgages taken out by its individual citizens. It is taking steps to see that those individuals get to stay in the houses they cannot afford. It is not taking steps to stop issuing the sub-prime mortgages that created the crisis in the first place. One of the chief reasons we hear for freeing up the credit markets is so that more sub-prime mortgages can be issued. The notion that all Americans should have access to reasonable shelter is a compelling one. But that’s different from a policy that allows individual Americans to choose their own shelter, from a vast array of choices, and then send the taxpayer the bill.
That, DrRich argues, is bad debt, and it is the kind of debt that can bring the country to its knees. That’s why he was against the bailout package.
While going into national debt bailing out the sub-prime mortgages is bad debt, it is nothing compared to our going into national debt buying healthcare for individuals. Our accumulating healthcare debt is really bad debt. According to the GAO, we’re already committed to accumulating $25 trillion to $55 trillion in healthcare debt over the next several decades. Furthermore, when a person “consumes” healthcare, it is well and truly consumed. There’s nothing left (except, for the individual, some chance of prolonged life or less suffering, which is good for the individual but neutral to our national economic health). At least when the government buys up mortgage debt it owns actual real estate, which has some intrinsic worth. Not so when buying up healthcare debt.
So this new bailout is not the same as Hamilton’s bailout. We’re buying mere debt, and not the promise of future growth. And we’re setting a brand new precedent whereby the government becomes the purchaser of last resort for the debt accumulated by individual Americans making their own decisions about their own lives. This is a very bad precedent to set at a time when the fiscal soundness of our healthcare system is rapidly reaching a “crisis” stage.
*Many of the “private investors” who needed to be bailed out turned out to be prominent political figures and supporters of Hamilton, whose names you’ve all heard and revered, and whose shady deals had helped to produce the fiscal crisis in the first place. So there are indeed many parallels to our current situation.
Armageddon? Bring It On.
September 29th, 2008 by DrRich
DrRich notes with more than a little interest that the House of Representatives today rejected the $700 billion bailout package that was painfully negotiated over the past 10 days or so. Since everyone - from the President, to leaders of Congress, to the gurus on CNBC - have all promised that failing to pass the bailout package “immediately” would result in instantaneous Armageddon, DrRich writes this article with a certain sense of futility, realizing (the collapse of the Internet certainly being integral to any self-respecting end-of-the-world scenario) that when he presses the “Publish” button, this, his latest work of literary art, will very likely simply disappear into the ether, available to no one except God (who now may be too busy to read it, since it is in His hands, our political leaders have promised us, that the fate of our economic system would rest if we didn’t pony up the $700 billion).
DrRich at first observed with great concern the pasty and frightened faces of our Congressional leaders as they exited that famous nocturnal meeting with Mssrs. Paulson and Bernacke on September 18, in which they were informed that without an immediate and massive infusion of cash by the government our economy - and our culture - faced imminent collapse, with widespread business failures, unemployment, starvation, and homelessness. Not wishing to see (or participate in) such suffering, DrRich was inclined to reluctantly support the bailout.
His support for the bailout stopped, however, when it became apparent, a few days ago, that Congressional leaders were loading the bailout bill with pork, and that at least some of the pork was intended to shore up policies that had been at the root of the credit problem in the first place. While that particular pork has apparently been removed from the “final” bill, its presence in the original version reveals that Congress is not at all serious about addressing the underlying problem that is wrecking our credit system, and indeed, is interested in keeping the underlying policies going despite the severe problems they have already caused.
Apparently the threat of Armageddon is not enough. Apparently we’re actually going to have to experience Armageddon before Congress changes its behavior. If Armageddon is coming, DrRich would rather risk his own life savings by suffering through it now, than postpone it so that his children and grandchildren lose theirs.
As DrRich pointed out in a previous post, there are several causes for our current financial crisis, and plenty of blame to go around. But at the root of all the causes and all the blame is a governmental policy that insists that “loans” be given to people who cannot hope to repay them, then arranging for those bad loans to be purchased by quasi-governmental agencies, then repackaged, and sent off throughout the entire financial system. It is as if, by disguising the bad instruments as “investments” and distributing them throughout the system, the “magic” of the market would make them disappear. Instead, what these bad investments have done is to poison the entire financial system - since nobody knows which instruments are toxic, all similar instruments have lost their value. Credit, and money, are frozen.
A bailout that takes the potentially toxic instruments off the market and sequesters them into a government-owned portfolio would restore confidence in financial institutions, and allow credit and money to flow again within the financial system. So a bailout makes sense.
But not if we insist on continuing our policy of making bad loans to high-risk individuals. Unless we change our government policy on “sub-prime” loans, we’re continuing to make the underlying problem worse, and the bailout will mean nothing. It will just postpone the final collapse for our children to deal with.
So, DrRich says, do the Armageddon thing now. Apparently that is what it will take to really wake us up.
And once again, DrRich points out that the current fiscal crisis is merely a trifle compared to what faces us when our healthcare bill finally comes due. One can only pray that this current crisis ends up teaching us a bit of economic reality - that we can’t have the government (directly or through its agencies) just go ahead and give individuals all the housing (or all the healthcare) they want, without actually paying for it, but at the same time backing it up with the full faith and credit of the United States government. With such a policy we will inevitably face extraordinarily dire consequences.
So, if our suffering through another Great Depression now (which, after all, would be potentially survivable) finally wakes us up in time to stop a REAL financial Armageddon from hitting our children, then so be it. DrRich says (while very reluctantly preparing to begin yet another career, this one consisting of lancing boils and getting paid in chickens), if that is what it takes to get us back to fiscal responsibility, then bring it on.
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