Mike Kueber's Blog

June 21, 2012

Repeal and replace ObamaCare?

Filed under: Medical — Mike Kueber @ 7:23 pm
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Ever since ObamaCare was enacted into law, the Republican mantra has been “repeal and replace,” with the emphasis on repeal.  This emphasis on “repeal” is understandable because everyone knows that it is easier to tear something down than it is to build something up. 

An article by Texas senator Kay Bailey Hutchison in today’s San Antonio Express-News continues the Republican Party’s untoward tendency toward demagoguery (rationing, death panels).  In the article, Hutchison asserts that the medical profession will be irreparably damaged by ObamaCare because a government bureaucracy will soon interject itself between doctors and patients.  As evidence of this evil, Hutchison cites a recent recommendation by a government panel to exclude PSA screening from a group of medical services that an insurance company must pay for without charge (no deductible, co-pay, etc.).

Hutchison’s point is wrong on at least two levels.  The first is she implies that PSA screening will no longer be covered.  That is wrong.  The PSA will remain covered; it is simply not included in the basket of preventive services that ObamaCare requires insurance companies to pay for without charge.  If ObamaCare is repealed, as Hutchison wants, the PSA and other preventative services will be covered just like any other medical service – i.e., subject to co-pay and deductibles.

The second and more important mistake with Hutchison’s argument is her premise that a government bureaucracy or insurance company should not get between the doctors and patients.  That suggests that the patients should have a blank check to incur any medical services and expenses that they and their doctors agree on.  Well, such a philosophy is a major reason that medical insurance has become unaffordable.  Doctors and patients should be allowed to do whatever they want on their own nickel, but when they ask the federal government or an insurance company to pay for a medical service, that service needs to be reasonable and necessary based on objective evidence, not the subjective determinations of the doctors and patients, without any consideration of costs and benefits.  You can’t do a cost-benefit analysis if your costs are zero.

Hutchison closed her column by providing some interesting statistics:

  • A recent survey of 5,000 physicians found that 60 percent believe the healthcare legislation will have a negative impact on overall patient care.
  • More than half believe that increased bureaucracy is reducing the personal interaction that is essential to building better understanding of patients’ needs.
  • One statistic stuck with me as I spoke to those graduates: nine out of 10 would not recommend the healthcare profession to a family member.

 Yes, we can expect physicians to believe that patient care will be negatively impacted if the government and insurance companies stop giving them and their patients a series of blank checks; and that increased bureaucracy is reducing the time that they have to interact with patients.  What else would you expect them to say?

I am struck, however, by the statistic that 90% of the new doctors would not recommend the healthcare profession to a family member.  My second son is a newly commissioned M.D., and he shared that burnt-out feeling a couple of years ago while in the later stages of medical school, while wistfully thinking of the other things he could be doing.  However, I spoke to him last week, after nearly a year of residency, and he enjoyed his work so much that he said he would almost do it for nothing.

So regarding Hutchison’s use of statistics, I think of Mark Twain’s sage comment, “There are lies, damned lies, and statistics.”  I wish Hutchison would use her waning days in public office to educate instead of fueling the fire.

July 27, 2011

Aphorism of the Week #5 – Lies, damned lies, and statistics

“Lies, damned lies, and statistics” is of uncertain origin, but was popularized by Mark Twain.  The phrase came to mind earlier this week when I read conservative chain letter by an old geezer claiming to being shortchanged by Social Security.

The geezer argued that a person who paid into the system for 49-years, like he had done, would receive only a fraction of what he was entitled to.  Specifically, he said:

  • Remember, not only did you contribute to Social Security but your employer did too. It totaled 15% of your income before taxes. If you averaged only 30K over your working life, that’s close to $220,500. If you calculate the future value of $4,500 per year (yours & your employer’s contribution) at a simple 5% (less than what the govt. pays on the money that it borrows), after 49 years of working (me) you’d have $892,919.98. If you took out only 3% per year, you receive $26,787.60 per year and it would last better than 30 years, and that’s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month. The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madoff ever had.”

Although those numbers may sound reasonable to a person unschooled in statistics, a closer analysis would suggest that average people didn’t make $30,000 in 1962.  The average job in 1962 probably paid about $5,000, not $30,000.  In fact, the maximum income that was taxed by Social Security in 1962 was $4,800, and the SS rate at that time was 3% combined for employee and employer, not the current 15.3%.  Thus, the geezer’s example should begin the compounding process with only $144 in 1962, not $4,500.  Obviously, the results will not be in the same ball park.  I think most people accept that Social Security has been actuarially too generous for many years and that the generosity will have to end soon.

Because statistics are so easy to misuse, I am especially careful accepting any statistics that from someone without established credibility.  Although I have traditionally treated the mainstream media as credible, that is beginning to change.  Too often, journalists use statistics inaccurately to advance their story.

For example, last night Rachel Maddow’s substitute host, Melissa Harris-Perry, reported on a lady in Los Angeles who lost her job at UCLA and is now facing financial devastation because her replacement job pay $40,000 less and her house has lost $200,000 in value.

My skepticism concerns the value of the house.  The number we are given is the value of the house at the height of the real estate bubble.  What is the relevance of that number?  A more relevant number would be the cost of the house when the UCLA person bought it.  For all we know, the house is worth more than what the person paid for it.  But such information would detract from the plight of the UCLA person.

I remember thinking the same thing when I read about the Enron collapse and its effect on past and present employees whose 401k consisted almost entirely of Enron stock.  In all the stories that showed employees and retirees lamenting the loss of 90% of their 401k value, the comparison was always based on the value of their stock at the height of the Enron bubble.  Never once did a journalist ask what the employee had paid for the pre-bubble stock, which is obviously the more relevant number.  Once again, the journalists were using misleading numbers to advance the drama in their story.

The moral of this story – caveat emptor, or buyer beware, is the best policy.

September 22, 2010

Statistics in sports

 There are three kinds of lies – lies, damned lies, and statistics.  Although attributed to Mark Twain, it was actually British politician Benjamin Disraeli who coined that expression.  I don’t think statistics in sports have reached that level of mendacity, but there are often misleading.

I’ve been a statistics aficionado every since I was a kid collecting hundreds of baseball cards.  (I could have retired from USAA earlier if I hadn’t misplaced those cards sometime along the way.)  One of my favorite games when I was a kid was to compare one baseball card against another to determine which player had the better year.  Because I gave each category of statistic on the card equal value (e.g., triples and RBIs), I remember certain non-star players with a large number of doubles, triples, stolen bases, and runs would stack up surprisingly well against slugging stars.  I also gave the same credit for winning a category by one or by 50.  Thus, having one more triple would be worth the same as 50 more RBIs.  These rules made the game fun and a bit unpredictable, but even then I realized that baseball-card statistics could be misleading.  

Statistician Bill James has done more than anyone to make sports statistics meaningful.  Starting in 1977, he self-published The Bill James Baseball Abstract, which contains his statistical analysis of baseball strategy, productivity, and effectiveness, and his influence in the baseball world has grown continually ever since.  James has developed countless statistics that reveal a player’s offensive and defensive effectiveness (e.g., runs created and range factor), and he has shown that certain time-honored managerial strategies are incorrect (e.g., when to hit-and-run or bunt).  In 2006, James was named by Time magazine as one of the hundred most influential people in the world (in the Thinking category).  He has also been the subject of a profile on “60 Minutes.”

The reliance on statistics in baseball is called sabermetrics, which refers to the acronym of the Society of American Baseball Research (SABR), of which Bill James is the most prominent member.  Another famous practitioner of sabermetrics is Oakland GM Billy Beane, about whom the book Moneyball was written in 2003.  According to Wikipedia:

  • The central premise of Moneyball is that the collected wisdom of baseball insiders (including players, managers, coaches, scouts, and the front office) over the past century is subjective and often flawed. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of a 19th century view of the game and the statistics that were available at the time. The book argues that the Oakland A’s’ front office took advantage of more empirical gauges of player performance to field a team that could compete successfully against richer competitors in Major League Baseball.   

Examples of sabermetrics include:

  • OPS – on-base plus slugging
  • LIPS – late-inning pressure situations
  • DIPS – defense independent pitching situations
  • WHIP – walks plus hits per inning pitched

As sabermetrics became generally accepted in baseball, it made gradual in-roads into other sports, too, like basketball and football.  In fact, I was prompted to write about this subject by a recent Happy Hour with Kevin Brown during which he complained about some misleading basketball statistics.  He thinks scoring, rebounds, and assists should be modified to reflect so many per minute.  (I think Kevin’s favorite player doesn’t play a lot of minutes, but generates a lot of numbers in those minutes.)  Kevin also complained that quarterback ratings in football should consider dropped passes and interceptions off of deflections.

I responded to Kevin that I had some pet-peeve statistics, too:

  • Basketball – points per possession consumed.  Whereas Kevin wants statistics to show points per minute, I want show points per possession consumed.  You might think that the number of shots taken would fully reflect this, but it doesn’t because it fails count possessions that end in free throws.  For example, Kobe Bryan may shoot 4 of 14 and score 14 points because he made 6 of 8 free throws.  According to my statistic, he scored 14 points out of 18 possessions (or 20 possessions if you count his two turnovers).  I would be interested in comparing Kobe, LeBron, and Durant with this statistic.  
  • Football – time-of-possession.  Virtually every commentator thinks that time-of-possession is a significant statistic, whereas I think it is easily inferior to the total number of plays.  I concede that a football team wants the offense on the field because they can score easier than a defense can and because defenses tend to get worn down, but it shouldn’t matter whether the clock is running (because of running plays and short passes over the middle) or is stopped (because of sideline passes or incompletions).  Furthermore, running the clock may be good if you are ahead, but it also reduces the number of possessions in a game, and only the weaker team wants to reduce the number of possessions.      
  • Baseball – errors.  A batter who gets on base because of an error is charged with an out for purposes of his batting average.  That always struck me as misleading (and unfair) because, as a relatively fast softball player, I felt that my ability to run would cause the infielder to make an error and this should be reflected in my batting average. 

Interestingly, football and basketball numbers crunchers use the term sabermetics even though, technically, the term is based on the term, “Society of American Baseball Research.” 

In my opinion, managerial hunches has been have been vastly overrated; not much more than an excuse for not doing the necessary study and thinking.  With all of the money involved in professional sports, statistical analysis should be a part of Management 101.