A Little Bit of Good News

Steven Horwitz

With all the economic doom and gloom out there and folks thinking we're on the precipice of the decline of Western civilization, some good news about the bigger picture seems in order.  A new study in the British medical journal Lancet finds that mortality rates of children under the age of 5 are falling in just about every country on the planet. 

Using a new method of calculating mortality that they say is more complete and accurate than previous methods, the team at the University of Washington says the number of under 5 has plummeted from 11.9 million in 1990 to 7.7 million in 2010.

When we think about long-run human progress, the infant and child mortality rate is as good an indicator as any about how far we have come.  When we consider that almost half of children died before age 18 in the richest countries in the world 200 years ago, and that under-5 death rates 100 years ago were multiple times what we see now, the progress of humanity becomes clear.

Even as the economic challenges we face are very real, the world's increased ability to enable children to see their 5th birthday is equally real and I believe a much better indicator of where we are headed in the long run than is the price of gold or the Dow.  I'm a short-run cynic but a long-run optimist!

One side point:  some reports on this study have tried to make hay out of the fact that the US child mortality rate is 42nd in the world (having fallen from 29th).  The hay they want to make is usually about the failures of the US healthcare system.  However, that higher child mortality rate can be explained by two factors, one of which has nothing to do with healthcare and the other being an unintended consequence of how good our system is.

1. Kids in the US are more likely to die in car crashes and from violence as those are more common here than elsewhere.

2. Because the US healthcare system is so good at caring for very premature babies, more babies are born alive in the US pre-term than anywhere else in the world.  In the rest of the world, those babies would be stillborn or perhaps even aborted.  Because they are born alive in the US, they count in the denominator of the infant/child mortality rate.  And despite medicine's best efforts, a fair number of those premies don't make it, increasing the numerator.  The result is a higher infant/child mortality rate than other places because we are able to save enough premies that more get born alive than elsewhere. 

So the next time someone tells you that Cuba's healthcare system is better than that in the US because it has a lower infant mortality rate, the proper response is "yes, that's what happens when your system is so awful that you can't do much of anything for children born prematurely and your only choice is to deliver them stillborn.  If you think a system with more dead babies is better, you can have it."  A lower infant mortality rate doesn't mean you have fewer dead babies.  You just have fewer babies born alive.

Bonus Econ 100 point:  it's amusing how the reports note that the rate of decline in the infant mortality rate has leveled off in the advanced countries and the reporters gloss this as an indictment of those countries.  Rising marginal costs anyone? 

Comments

[Daniel Kuehn]

Rising marginal costs, not to mention a fairly insurmountable truncation on that variable!

[Roger Koppl]

This is huge. Steve, do you have sources on your two explanations for the low rank of the US? #2 sort of makes sense, except that I wouldn't expect the US to do a much better job with live births than most other rich countries. #1 cuts against my intuitions. If we make enough progress on other causes of child deaths, then car wrecks will eventually rise to the top of the list. Have car wrecks would drive our relative ranking so low? My intuition doesn't like that one little bit. And if it is true . . . wow, have we got to reconsider our transportation policies!

[Roger Koppl]

Oh, sorry for the double post, but I meant to point out that the *number* of such deaths per year is falling, not just the *rate*. That is really impressive.

[Jeremy H.]

This paper has a good discussion of the live birth data, as well as many other health indicators:

June E. O'Neill and Dave M. O'Neill (2008) "Health Status, Health Care and Inequality: Canada vs. the U.S.," Forum for Health Economics & Policy: Vol. 10: Iss. 1 (Frontiers in Health Policy Research), Article 3.
http://www.bepress.com/fhep/10/1/3/

ungated: http://mcadams.posc.mu.edu/blog/w13429.pdf

Several more sources in this article:
http://www.slate.com/id/2161899

[Mario Rizzo]

A little cold water. Sometimes huge amounts are spent to keep pre-mature babies alive. (Some of the premature births are due to fertility drugs.)
Often taxpayers or hospitals absorb the costs (meaning the rest of us). Technology is one thing. The payment mechanism is another.

[Roger Koppl]

Jeremy H:

I hastily glanced at the O'Neill & O'Neill study. They seem to say that teen pregnancy, obesity, and so on are excluded from the healthcare system. Did I get that right? That seems inappropriate to me.

If we have legal restrictions that make it hard for poor people to get healthcare services, including information on, e.g., birth control, shouldn't we score that fact as a negative of our system? If legal restrictions on public transportation put a visit to the doctor out of my reach, should we say that fact "has nothing to do with healthcare"? I realize that advocates of "singe payer" make hasty correlations. I'm not defending shoddy analysis! I am wondering, though, if we don't miscalculate when when we explain away some of these poor health outcomes in the US.

[Jerry O'Driscoll]

Roger,

Please name the "legal restrictions that make it hard for poor people to get healthcare." Planned Parenthood is readily available to the poor. You seem to be decrying the scarcity of public transportation, which is not a legal restriction.

Teen pregnacy and obesity are lifestyle decisions. According to Jennifer Roback, most teen pregnacies are the product of conscious decisions.

[Roger Koppl]

Jerry, I think you are momentarily forgetting that the healthcare sector is generally recognized as heavily regulated. Here are a few examples that spring to my mind right away, and I'm hardly an expert in this area:

1. Licensing restrictions on physicians
2. Licensing restrictions on nurses
3. Licensing restrictions on physicians' assistants
4. Because of these restrictions, paramedics who patch up soldiers on the battlefield in Iraq would be breaking the law if they did the same thing in most American cities.
4. The favorable tax treatment given to employer insurance plans, which prices most people without good jobs right out of the health- insurance market.
5. Many states have burdensome, cost-increasing regulations discouraging walk-in clinics.
6. Insurance regulations. Public choice theory suggest the likelihood that state-level insurance regulations tend to favor large suppliers at the expense of poor people. As of last year Blue Cross had 90% o the market in Alabama. Do you think that's because they were really good competitors?
7. restrictions on the dispensing of pharmaceuticals
8. control of the pharmaceuticals market by the FDA

Now if we move outside of the healthcare market, other relevant legal restrictions come into view:

1. Restrictions increasing the monopoly power of taxicabs and municipal bus lines make it harder for poor people to get to and from healthcare providers.

2. Restrictions on schooling make it harder for poor people to acquire the academic skills that would help them negotiate the complicated American healthcare system

3. The minimum wage and other labor market restrictions make it harder for poor people to the wealth and income that would increase their access to healthcare.

Even if we somehow say that the second sort of legal restriction "doesn't count," there are plenty of the first sort that really do make it harder for poor people to get healthcare.

I'm sure you agree that market forces tend to generate favorable outcomes and the unfavorable outcomes are often caused by regulations and restrictions imposed federal, state, and local governments. I don't think healthcare represents an exception.

[Jerry O'Driscoll]

Healthcare is heavily regulated, but you are presuming rather than proving that the net effect is less healthcare for the poor. There are lots of subsidies for providing medical care to the poor. In many cases, hospitals cannot turn people away because they can't pay. So those costs are shifted up to others. then there is Medicaid, etc.

And you overlook my specific point that reproductive healthcare is subsidized by Planned Parenthood and others (no coincidence if you know the history of PP). And you don't address my contention that teen pregnancy and obesity are often lifestyle choices. There is an underlying presumptionin you rorginal argument that teens are having babies because they don't know how not to. Not proven.

Your second #1 point is a good one. I just would not have called jitneys "public" transportation. But I agree on that one. Restrictions on jitneys definitely hurt the poor disprortionately. The late Ross Eckert wrote about this.

[Roger Koppl]

Jerry,

Do you really think licensing restrictions on physicians are not reducing services to the poor?

[Jerry O'Driscoll]

Roger,

Do you really think that subsidies for healthcare to the poor do not increase access? In urban areas, the poor have access to worldclass healthcare at major teaching hospitals.

This issue can't be decided apriori.

[Roger Koppl]

Jerry,

Sure, it is an empirical question. But I hadn't really thought there was any serious dispute about the proposition that poor people get less care and worse care than the rich and middle class. It sure seems like legal restrictions are a big part of the problem.

You mention "lifestyle choices," but such choice are made under constraints, which differ for the rich and the poor. De gustibus non est disputandum.

I don't really know anything about Planned Parenthood today, but I checked out their website. Their only facility in Manhattan is in the Village near Bleeker & Lafayette. That's not so convenient for a lot of poor Manhattanites. And the website complains of protesters. That complaint seems to suggest that you have to get past a bunch of protesters to get service from PP, which raises the cost. I don't know, however, which PP sites have how much of a problem that way.

Hospital emergency rooms can't turn you away. But that means that you have to queue up for service. The "full price" of such care is quite high. The usual interpretation is that many poor people end up ignoring ailments until they are acute. Plus, that doesn't give you a regular relationship with a doctor or much in the way of preventive care.

Finally, I have always had a bad impression of Medicaid. Perhaps it delivers lots of high quality healthcare. Precisely one week ago, however, something called the "Cato Institute" releases a statement touting a study that finding that Medicaid provides lower quality care:
http://www.cato-at-liberty.org/2010/05/17/study-medicaid-provides-lower-quality-care/

They quote the study saying,

"we find that uninsured and Medicaid patients are treated by lower-quality physicians both because of the hospitals these patients attend and because of sorting within hospitals…Our study concluded that patients in government hospitals that treat large numbers of uninsured and Medicaid patients are least likely to be treated by a board-certified or top-trained physician."

(Yes, they also note limits to the study, but it's a favorable cite overall.)

All in all, it seems pretty clear to me that legal restrictions of various sorts reduce the availability of healthcare to poor Americans. In fact, it seems pretty clear that they make the real relative price of healthcare higher for poor Americans than it need be and higher than it is for the rest of the US population.

[Jerry O'Driscoll]

Roger,

The working definition of being poor is you have less than those who are rich; and you will on average consume lower quality products than the rich (e.g., more ground chuck and less prime sirloin).

If you provide "free" medical care to the indigent, how else would you price it other than by queuing? At zero nominal price, there is excess demand by definition.

All this may be "pretty clear" to you, but not to me. You just keep attributing things you don't like to "legal restrictions," when poverty and scarcity would lead to the same results.

[Roger Koppl]

Hi Jerry,

It seems I misunderstood when you said to me earlier, "you are presuming rather than proving that the net effect is less healthcare for the poor." I thought you were questioning whether the poor were getting less and inferior care.

We still may have some residual disagreement, however, on whether legal restrictions are needlessly amplifying such differences in healthcare. I recognize that some legal restrictions have the effect of bringing care to the poor, the two big examples being Medicaid and requirements that emergency rooms treat all comers. Medicaid, however, comes in the context of many restrictions on the insurance industry. In many states, for example, it is illegal for employers to offer “portable” plans to their employees. And the emergency-room rule comes in the context of licensing restrictions that increase the price of physician services. I suppose it is true that I am not “proving” anything here; we’re exchanging comments on a blog. But I gotta admit that I don’t really see where it’s all that ambiguous that legal restrictions in healthcare, transportation, and elsewhere are more harmful to health outcomes for the poor than for others.

[Arne Fischmann]

One further point to mention is the way how child mortality is counte:
In some countries (and I am not sure if Kuba is among them) children dying in the first weeks of life are counted as stillbirth not as child mortality, while the US in some statistics even count in perinatal death in children after week 36. So a lot of these children dying in their first week of life add up to the US statistic and are removed from statistics elsewhere.

Arne

[AJ Brazier]

http://www.ncbi.nlm.nih.gov/pubmed/11862950

Paediatr Perinat Epidemiol. 2002 Jan;16(1):16-22.
Registration artifacts in international comparisons of infant mortality.

Kramer MS, Platt RW, Yang H, Haglund B, Cnattingius S, Bergsjo P.

Department of Pediatrics, McGill University Faculty of Medicine, Montreal, Canada. michael.kramer@mcgill.ca
Abstract

Large differences in infant mortality are reported among and within industrialised countries. We hypothesised that these differences are at least partly the result of intercountry differences in registration of infants near the borderline of viability (<750 g birthweight) and/or their classification as stillbirths vs. live births...International comparisons and rankings of infant mortality should be interpreted with caution.

Click on the link above for the full abstract.

[Steve Horwitz]

Excellent AJ, thanks.

[topills.com review]

If we have legal restrictions that make it hard for poor people to get healthcare services, including information on, e.g., birth control .