Comments From the Unknown

One of my favorite blogs is Worthwhile Canadian Initiatives, for they are clear, to the point, and do not seem to carry the strong one-sided political views of the American economists. The Canadians have a sense of balance, and somehow avoid the extremes. Thus I was saddened to see the need to ask for some sens of common decency, my words, in the comments posted.

Now I am not an economist, although I have my views on many, that is part of the patois, yet for the reason that they have requested a tone down is why I have deferred any comment. I did at the beginning but alas all too soon it reverted into alias name calling. When I say something I do so in my name, why hide, the only way to judge what I say it a combination of the argument and whatever credibility I gain from experience. I believe that both count. My best wishes to my Canadian friends, I hope, and perhaps demanding real names is a solution, with read return emails.

I do know I used my Irish wit, some may say otherwise, when I satirized the comments one one of their contributors a few months ago but it was all in fun, besides I was in New Hampshire on Thanksgiving weekend and it was snowing, I had not a great deal to do that day other than wait for turkey. So again, keep moving forward to those folks just to the north!

The Baloon Proposal

Now I do know something about cell phones, built a few networks and have kept my hand in for some fifty years. Even wrote a few papers and the like. So today when I read the Rand proposal in the NY Times I had to shudder!

They state:

Fortunately, there is an easy step the United States and its allies could take to help: deploying cellphone base stations on aircraft or tethered balloons. The calls could then be routed to Navy ships equipped with satellite communications terminals. 

Base stations are small and cheap. Indeed, this kind of portable system, though not used, was already available in the aftermath of Hurricane Katrina, and in the years since the hurricane, the equipment has shrunk even further. 

Ideally, a commercial cellphone operator would provide direct access to its network, and either the operator, the American government or the international community could foot the bill.

What’s more, establishing such a network would present minimal risk to pilots, who could loiter safely over the Mediterranean and still provide coverage to the coast, where the overwhelming majority of Libyans live and where most of the fighting is. 

Now let me present a few facts:

1. The effective radius of a hand held cell phone cell, a mobile phone outside the US, is at best 3 miles. Thus you need cell site centered about 5-6 miles from each other, consider the standard chess board. That is lots of cell sites.

2. Now cell sites need power, lots of power, there is lots of stuff there.

3. Cells need stable antenna, balloons are not generally stable platforms. They pitch, roll and yaw, and unless you find a way to stabilize them, like I did when I worked on Apollo launches using gyros, then you have a real tough antenna problem.

4. Then you need back haul circuits, that is quite complex, and eats up a ton of bandwidth!

5. Then you need replacement etc.

6. We assume no billing and we assume some smart radio so it carries multi band stuff and the like.

7. Then you assume that no one jams the stuff, or say shoots the balloon.

Frankly this idea was proposed a dozen or so years ago and did not get airborne then, in a benign environment. One wonders why this ever got in the Times, but then again it is the Times!

Unemployment: Better or Worse

The DoL has released employment stats for February. Again a warning, they always are adjusted and the pattern seems to be the first release is always the most optimistic. Their summary is:

The number of unemployed persons (13.7 million) and the unemployment rate (8.9 percent) changed little in February. The labor force was about unchanged over the month. The jobless rate was down by 0.9 percentage point since November 2010.

Now we will briefly look at the data:

First the raw data of employed non-farm seasonally adjusted. It has continued to rise but so has the total population. It should be remembered we are using total population rather than 16 and over which is what DoL uses. We argue that although we get the same end results that the metric is a stronger reflector.

The chart above shows the workforce as a percent of the total population. It continues to decline. That is a major concern because it means that DoL is reducing the denominator and thus allowing for lower unemployment rates. The difference is now quite material! On the other hand they show unemployed as decreasing but the problem here is that are adjusting for long term although they are now arguing that they somehow have accounted for them.

Finally we have the stats. One can see the DoL rates decreasing but the actual pegged rate is still above 12% and that means we are not getting rid of the problem.

An Interesting Proposal

The WSJ wrote about the two Senators who are requesting the opening of the Medicare Data Base so that fraud can be detected.

They state:

Last year The Wall Street Journal, together with the nonprofit Center for Public Integrity, obtained from the government limited access to the database. Despite severe restrictions on the data, the paper was able to mine it and expose through a series of articles how doctors and other medical practitioners appear to be gaming Medicare to increase their profits. One physical therapist identified by the Journal as having suspicious billing patterns was indicted last month on charges of defrauding Medicare....Republican Sen. Chuck Grassley of Iowa said he was prompted in part by the Journal's stories to introduce legislation Wednesday. That legislation states that the government must "make available to the public" data on Medicare "payments made to any provider of services or supplier…." The bill also includes other provisions designed to fight Medicare and Medicaid fraud.

So why not do the following:

1. Open the database so that fraud may be detected.

2. Offer a reward of say 10% like the IRS for any fraud detected.

3. Allow US entrepreneurial efforts seek out the fraud and make them wealth if they do.

This is the American Way, and by doing it in a non Governmental manner you get rid of the problem of slow working Government workers.

Over-Diagnosed; A Review

Over-Diagnosed, by Welch et al, is an interesting tale. At first I approached this with some concern as if it was just another one of those trend setting books by some physicians seeking to push the latest idea. After a few pages I was hooked and saw that Welch was in my opinion spot on. Yes there is too much diagnosis. As anyone who is in the medical area knows one of the most costly machines ever invented was the CAT scan. I recall that the second such machine went into Mass General I believe in 72 or 73, and was immediately put to use in determining if a stroke was a block or a bleed. In those days this was a real issue and the CAT scan allowed for a rapid and accurate determination and helped save lives. Then its use expanded. Today with a CAT scan as Welch states we can find things that we never ever suspected, and then what?

Chapters 1 and 2 set the scene for what the authors intend to present. Namely that there are lots of over diagnosis out there and for lots of reasons. Part of the author’s presentation is that we have defined more disease. Take the example of Diabetes, it was fasting blood sugar of 140 and now we start treatment at 100! The reality is we should really look at the average over some period of time, using say HbA1c which is a metric measuring average blood sugar over 60-90 days. It is a good measure but still not perfect. We also should remember that HbA1c follows BMI, namely the fatter you are, the greater the chance of having Type 2 Diabetes, and then of course all the sequelae. The authors give a good overview of this idea.

Chapter 3 is the one which details the issue of if you look you shall find. I have seen many examples of this. Take a 70 year old woman, goes to her local physician with what may described as a vague tightness in her abdomen. Off to the CAT scan. Then we see shading in the right ovary, then off to the OBGYN, then ultrasounds, looks like a cyst, and the CA 125 is low, so the scans are repeated, and CA125 redone, remains low, but he insists on a recent mammogram, which gets done with some questions, then for an ultrasound and follow up, then they find a nodule on thyroid, but it was there before, and then Endocrinologist fortunately had old records, ten years earlier and at that point everyone stopped and she went home told not to wear that tight belt anymore! How much did that cost! Welch has many tales like this. Then there are the ones he misses, what I have seen as a small industry, the Lyme Disease group, where they are getting gamma globulin transfusions at hundreds of thousands of dollars, adding to costs with questionable results. Thus Welch is understating the problem, but he is spot on!

Chapter 4 is the lynchpin chapter for several reasons. It is the prostate cancer chapter and here I may differ with the authors but not by much. The rule of thumb is that 50% of men in their 50s have prostate cancer, PCa, 60% in their 60s, 70% in their 70s and so on. This is a really rough rule of thumb but the author makes the point that most PCa is indolent, slow growing and not the cause of death. The problem is we do not know how to differentiate between slow and fast growing so we tend to deal with all of them assuming the worst. In addition the author on p 59 discusses the American and European Trials and he discusses their conclusions. If one were to look deeper into the trials one would see major defects. The American used a fixed 4.0 PSA over the 10 year period even though the number was shown during that period to require substantial age related adjustments. Thus the problem with the American Trial was that they asked the wrong question. The asked did a PSA of 4.0 show significant reduction in mortality? The proper question should have been; what level of PSA at what age brackets shows a significant reduction in mortality. The European Trial was defective in that measurements were also at 4.0 but the time between was considerable or not at all. Thus I would argue with the author that these results have merit. The other problem with PSAs is that they lead to biopsies which have some morbidity. But frequently we see HGPIN, which has been assumed a precursor to PCa but we also see HGPIN and then its total regression. Why? Genetics, immunological, a result of the first biopsy, or perhaps there was a PCa stem cell and they got it the first biopsy. Or a million other things. Notwithstanding the authors phrase the issues quite well.

Chapter 5 looks at several other cancers and screening. I will focus on one, melanoma. In the late 60s when we saw a melanoma we were ready to amputate a limb if that was where it was located. That generally was because it was detected late in the stage. However today with increased sensitivity to one of the deadliest cancers known, we can detect it earlier. On p 68 the authors show a curve which shows incidence and mortality versus time. Mortality is almost constant whereas incidence is increased. In the prior chapter on PCa the argument made is that we can now determine PCa at much lower levels and at levels where mortality is not changed. That is we are detecting non-lethal PCa. The author tries to make the same nexus here, not exactly, because he readily recognizes the deadly nature of melanoma, but to the casual reader it may look that way. There is a true increase in the incidence of melanoma due to lifestyles, excessive ultraviolet exposure, and the good news is mortality is slowly decreasing. That I believe is a point needing better clarity.

Chapter 9 is well done and hits a significant fact. Genetics which is expressed in your DNA is interesting but only in a small set of diseases is it the causative factor per se. Take obesity and diabetes, not discussed in detail by the author, but of significant interest since its costs are currently well over $250 Billion per year in current 2011 medical costs. There is the desire on the part of many to find the genes which cause this. Obesity is in almost all cases a disease where the patient violates a law of nature, input less output equals net accumulation, they just consume too much. Type 2 Diabetes in more than a majority of cases is driven by obesity and its related inflammatory state. The attempt to blame genes may be fruitless. The same goes regarding say cancer. Vogelstein in a now classic demonstration showed twenty years ago that colon cancer was the result of 4 genetic hits. What caused the hits was unknown but they were almost always the same and always in the same sequence. Recent work on PCa has attempted to do the same there but it appears that PCa is a multi-hit cancer but sometime they are not the same set of hits, genes for PTEN, Akt, c-Myc etc are all affected but in a yet to be determined manner.

Chapters 10 and 11 speak towards facts and systems. The authors does a superb job here as well. Simply, it discusses the issues related to gathering data and looking at it systematically. This is more than just having electronic medical records and the like.

The conclusion is well done. What would have been useful especially since the author states he was trained as an economist, would be some detailed discussion regarding what costs could be saved by the recommendations he makes. That would be a major contribution to the overall discussion. The new health law for Medicare patients will be issuing multiple Comparative Clinical Effectiveness guidelines and these, albeit a potential rationing mechanism, may also be a potential cost increaser. It would be very useful if the author could put dollars to his recommendations. He has set out a well structure framework for that, it would be a great follow up.

Will The Government Replace Unions?

Let me start by saying that my father was a member of the IBEW and my brother was in IBEW Local 3 in New York. Also once I write this someone in IBEW Local 3 will hist this page, good work guys, let's see if it takes more than three hours. My grandmother headed the Socialist Party in New York and ran for Senate and NY State Treasurer. So politically I have some exposure to the issues.

Now there is an article by a left wing economist in The Fiscal Times which states:

If unions aren’t the answer in a global economy, then what is? Will global labor organizations replace domestic unions? Perhaps someday, but this would require global institutions that do not presently exist, and that do not look likely to materialize anytime soon. 

The only institution powerful enough to protect workers now is government. By providing the things unions once fought for on behalf of workers, government can help to correct inequities and reduce the insecurity workers face. Ensuring that working-class households have the health and dental care they need, security in old age, a safe place to work, insurance against job loss, higher education that is essentially free, and the benefits of a tax policy that redistributes income so economic gains are shared more equitably would go a long way toward remedying what workers have lost since the 1970s

Now how is that for a mouthful! Get the Government to tell business what to pay people and furthermore ensure Government redistributes the wealth the people who took the risks created! Now unlike these non-productive academics I really started businesses and did so in Russia and throughout Eastern Europe. I did so on my own nickle and not with any corporate rubric. The result was wealth creation for many, including many old communists. When my old communist friends read this utter nonsense they wonder what has happened to the land of opportunity. Perhaps the oligarchs in Russia have it right. Perhaps we should annex Russia and elect Putin as a natural born citizen!

Entrepreneurs create wealth by taking substantial personal risk, total risk. I had a handful of plan tickets on my credit cards and went and built companies in 20+ countries. What if I had to tell the Russians, Greeks, Thais, Koreans, etc that the US Government would control my work conditions? No value creation. It is bad enough that we have the second highest corporate taxes, it drives business out of the US, I moved to the Czech Republic!

Yes workers need good working conditions, yes wages should be fair, but no, Government should not take the place of unions or be in the business of health care!