Medicine, Food, and Health

Since health care has been in the public eye recently, I thought I'd post some links and a few thoughts on the nature and possible solutions to rising costs of medical insurance and medical care.

First we have James Hamilton outlining some key issues in the public health care problem:

And there are three ways to determine which medical services don't get provided.

• (a) The government can limit the procedures it will pay for and the people who are eligible to receive them.
• (b) The insurance company or other third party can limit the procedures they will pay for and the people who are eligible to receive them.
• (c) If (a) and (b) both say no and you don't have the money yourself to pay for it, then you do not receive the treatment.

Each of those options is morally troubling to many of us. But reality forces us to choose some mix of the three. Pretending that there are no tough choices just digs us deeper into a debt that can't be repaid.

When facing the intersection of difficult moral and economic decisions, I know what you're all wondering: What would Robin Hanson do? Unsurprisingly, the supreme advocate of "health care isn't about health" would cut medical spending... in half:

King Solomon famously threatened to cut a disputed baby in half, to expose the fake mother who would permit such a thing. The debate over medicine today is like that baby, but with disputants who won’t fall for Solomon’s trick. The left says markets won’t ensure everyone gets enough of the precious medical baby. The right says governments produce a much inferior baby. I say: cut the baby in half, dollar-wise, and throw half away! Our “precious” medical baby is in fact a vast monster filling our great temple, whose feeding starves our people and future. Half a monster is plenty.

Am I being too allegorical? Then let me speak plainly: our main problem in health policy is a huge overemphasis on medicine. The U.S. spends one sixth of national income on medicine, more than on all manufacturing. But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status. Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. To their shame, health experts have not said this loudly and clearly enough.

What's that? Medicine costs a lot, but doesn't improve health? How can this be??? As Mark Bittman points out, it's because a huge portion of what we're spending money on is 'lifestyle diseases':

A sane diet, along with exercise, meditation and intangibles like love prevent and even reverse disease. A sane diet alone would save us hundreds of billions of dollars and maybe more.

This isn’t just me talking. In a recent issue of the magazine Circulation, the American Heart Association editorial board stated flatly that costs in the U.S. from cardiovascular disease — the leading cause of death here and in much of the rest of the world — will triple by 2030, to more than $800 billion annually. Throw in about $276 billion of what they call “real indirect costs,” like productivity, and you have over a trillion.

So what does this have to do with food, as my title suggests? Well, much of the problem of 'lifestyle diseases' comes from diets steeped in fast food and sixty-four ounce soft drinks, shelf-stable ready-to-eat meals, and feed lot meats, among other things. Things that even the providers of these services will say should not be consumed 'in excess,' yet the average American diet includes far more of them than anyone (with the possible exception of the sellers of these services) considers advisable. And, as Jill Richardson reminds us, there are reasons to think government food policy is part of the problem:

As for the direct payments, since those are based on historic production, there is still an incentive for max yield and max production, it's just a less immediate one because you'll receive the benefits from it later. It depends on which years the USDA bases your direct payments on, and if they allow you to change which years they use to tabulate your payments. [...]

The WTO says that we can't have market-distorting subsidies so our government is trying to get away from our traditional subsidy system. So they essentially outsourced - privatized - their subsidies. The government now subsidizes crop insurance, which farmers can choose to buy (or not) but it seems like a good many - if not most - buy it. If you don't buy crop insurance, you're ineligible for any disaster relief from the government, should you need it.

Rather than trying to defend everything in the above links (and I disagree strongly with some points), here are some general thoughts of mine on the subject.

Large agricultural firms like Monsanto, along with cooperatives of smaller players and anyone else in the business who manages to accumulate enough funding, spend enormous amounts of money on lobbying the right people at the local, state, and national levels. Some of that lobbying influence buys them subsidies, some of it buys them insurance, some of it buys them protectionist legislation restricting international competition, some of it buys them the ability to obscure information about food products, etc. Ultimately what it buys them is small advantages of one commodity over another (what matters here is not whether ag prices in general are up or down, but whether corn and soy are cheaper than they would have been compared to other beans, sweeteners, and sources of calories) on the one hand, and freedom to market food products they develop without revealing more information about the products than they would like on the other.

Farm subsidies, to the extent they exist, are a problem, whether they are the biggest problem or not. Eliminating them actually saves taxpayers money, although it would hurt those receiving the transfer and their favorite politicians. Sales taxes on food (and by this I mean ingredients, not prepackaged food products) bring in revenue, but can also provide advantages to food producers willing to cut corners (and able to obscure it). The same is true for tariffs on foreign agriculture. Government is a non-trivial part of the problem here, and when we factor in the effect of 'lifestyle diseases' on programs like Medicare, these programs are almost certainly a net loss for taxpayers.

But ultimately the problem isn't government. Ultimately the problem isn't even 'Big Agriculture' (despite the personification of the corporate system via the use of capital letters clearly demonstrating that it's just evil). The problem is consumers. 'Big Ag' is like any other business--it's selling what the people want to buy (granted, it's also trying to keep people wanting the same kinds of things). Part of this is an information problem. We don't put much work into buying high quality meats because it's almost impossible to determine the exact conditions under which the animals were raised. We buy prepackaged foods because buying fresh costs more, and no easy mechanism exists for comparing the quality of the foods. Counting calories, checking food pyramids, watching for 'organic' labels, and any other simple metrics can be manipulated, and can lead us astray as easily as point us in the right direction. If there's no way to insure quality, nobody will ever pay what it takes for the highest quality, which means nobody sells the highest quality and a lower quality becomes the new highest quality (and the cycle begins again).

But most of the problem is a matter of priorities. We don't believe the quality differences out there are worth paying for (and because we think this way, we are often correct). We want our food to last in our refrigerators and cupboards, and we don't think about (or necessarily even believe in) a tradeoff between shelf life and nutritional content. We have no interest in learning how gut flora work until we already have Seliac disease. We consider it inconvenient to worry about feeding children things their digestive systems are unprepared to process. We don't want to have to sort out whether what we're eating was fried in trans fats / hydrogenated corn-soybean-canola oils, or if we can find a version cooked with unprocessed animal fats or tropical oils. Like James Bond taking care of his liver, we have other things on our minds.

And until our preferences change--preferences over the kind of lifestyle we want to lead, and the kinds of foods that go with it--McDonald's and Walmart will continue to sell us the products we want at the lowest cost they can manage; 'Big Ag' will continue to lobby for withholding information that would mostly worry, bewilder, and frustrate us out of our grocery aisles; government will continue to provide small bonuses to a few domestic producers in a few industries over others, and especially over world competition; and the costs associated with chronic, lifestyle-related health problems will continue to rise. It's just basic economics.

We have met the true burger king, and he is us.