4 ms·

> This argument uses average income as proxy for what health care spending in the US should be. > That seems clearly wrong given that with US now having a GINI

> This argument uses average income as proxy for what health care spending in the US should be. > That seems clearly wrong given that with US now having a GINI coefficient, high level of income inequality, median household income would be a better thing to measure health care spending, since every individual has to spend money on staying healthy. The author responds to that criticism in the following comment[1]: >> Two, I don’t understand why you’re using mean rather than median AIC throughout. > Several reasons. > 1) We don’t have good internationally comparable statistics for income or consumption at various points in the distribution... > 2) When I’ve looked into this I have not found measured differences in the distribution or the median to be particularly informative... > 3) This makes sense because there is approximately no relationship between individual income and health spending in the developed world, including the United States... As for your second argument: > The argument generally seems wrong too. The need for health care isn't elastic - if someone need care, they need care and people going without needed health care is a humanitarian crisis (a situation that the US is arguable in - see the people giving free dental in a stadium a few years back). I'm not sure I follow your argument. RCA is saying that, as a country, the U.S. spends more on healthcare because we consume more health care than other countries. The U.K. kept their prices low for a long time only because the NHS engaged in intense rationing[2]. [1]https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/#comment-1231 https://randomcriticalanalysis.com/2018/11/19/why-everything... [2] https://i1.wp.com/randomcriticalanalysis.com/wp-content/uploads/2018/11/rcafdm_uk_nhs_trend_2015_comparisons_aic.png?ssl=1 https://i1.wp.com/randomcriticalanalysis.com/wp-content/uplo...

joe_the_user 7y ago
1) Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic. Unless you use a good statistic, your argument isn't justified. (cue story of drunk looking for glasses under lamp post etc). Also, if there's no measured difference in individual household income versus health care spending, well then maybe his pet theory comparing average household income and health care spending isn't very applicable either. 2) "RCA is saying that, as a country, the U.S. spends more on healthcare because we consume more health care than other countries." That argument is either wrong or tautological. The US spends more on health care for worse outcomes, as many studies have shown. If this person means we buy better outcomes, they are wrong. If they are saying we buy more stuff labeled health care, maybe true but that's because the system is bad, not good.
- lliamander 7y ago
  > 1) Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic. Unless you use a good statistic, your argument isn't justified. (cue story of drunk looking for glasses under lamp post etc). You're not responding to the complete argument. RCA has looked into finding median measure of income, and not found them relevant to the discussion because (as he says in the third point of the argument) the rich do subsidize health care for the poor. > Also, if there's no measured difference in individual household income versus health care spending, well then maybe his pet theory comparing average household income and health care spending isn't very applicable either. But again, mean income is relevant because the important thing is how much a society as a whole puts into the healthcare system. Average is meaningful when the rich subsidize the poor. > 2) "RCA is saying that, as a country, the U.S. spends more on healthcare because we consume more health care than other countries." > That argument is either wrong or tautological. The US spends more on health care for worse outcomes, as many studies have shown. If this person means we buy better outcomes, they are wrong. If they are saying we buy more stuff labeled health care, maybe true but that's because the system is bad, not good. According to RCA, AIC isn't just correlated with spending, but also "the vast majority of socially relevant outcomes and their covariates." [1] [1] https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/#rcatoc-these-measures-are-also-superior-predictors-of-just-about-every-socially-relevant-metric https://randomcriticalanalysis.com/2018/11/19/why-everything... EDIT: fixed wording in my first response ADDENDUM: There are charts that show life expectancy to be lower in the U.S. than other developed countries, but that has to do with factors other than the quality of healthcare[2]. [2]https://randomcriticalanalysis.com/2016/11/06/us-life-expectancy-is-below-naive-expectations-mostly-because-it-economically-outperforms/ https://randomcriticalanalysis.com/2016/11/06/us-life-expect...
- rcafdm 7y ago
  > "Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic." As lliamander already mentioned, I addressed this on my blog. Several quick points: 1) International comparisons of health spending overwhelmingly relate directly to mean health expenditures (e.g., per capita, % of GDP, etc). Even if you know nothing of this area it seems most reasonable to compare mean health spending to mean material living conditions (disposable income or consumption)! 2) Individual income and health expenditures on behalf of individuals (i.e., not just OOP) are effectively uncorrelated within countries in the developed world (including the United States). There are clearly large national level effects independent on one's place in the national income distribution, which are exceptionally well correlated with mean income (r^2>0.9), and we shouldn't expect to income of the median person to be terribly informative. 3) We know healthcare to be heavily socialized in the United States and throughout the developed world. Mean income is a much better indicator of overall financial wherewithal than median income. The median just doesn't make much sense from a theoretical point of view. Moreover, estimates of the income distribution and the medians are surely subject to greater measurement error and issues of comparability between countries, so there are practical issues with this as well. 4) More practically speaking, I've run many different regressions using medians, various indicators of income inequality, etc and found little to nothing to suggest the income distribution is an important independent predictor. The r-squared and various goodness of fit indicators suggest these metrics perform less well than the National Accounts-based means I have used for disposable income and consumption. In multiple regression on these necessarily smaller samples (which are easy to over-fit) the coefficient/effect size of these distribution-related indicators are rarely significant, don't significantly improve model fit, and would almost certainly be rejected in lasso or the equivalent. https://randomcriticalanalysis.com/2018/01/20/on-the-relevance-of-the-income-inequality-to-expected-health-expenditures/ https://randomcriticalanalysis.com/2018/01/20/on-the-relevan... 5) With other aggregate consumption/expenditure statistics, such as food, housing, transport, entertainment, etc the fit is also (unsurprisingly) much better with my statistics than cross-sectional comparisons of median income, so I'm not sure why you would expect one of the most socialized and most elastic categories of expenditure at a national level (~1.4 as a function of GDP) to be any more favorable for the distributional perspective. https://rpubs.com/random_critical_analysis/oecd_2014_consumption_elasticities_nonvolume https://rpubs.com/random_critical_analysis/oecd_2014_consump...

joe_the_user 7y ago

1) Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic. Unless you use a good statistic, your argument isn't justified. (cue story of drunk looking for glasses under lamp post etc). Also, if there's no measured difference in individual household income versus health care spending, well then maybe his pet theory comparing average household income and health care spending isn't very applicable either. 2) "RCA is saying that, as a country, the U.S. spends more on healthcare because we consume more health care than other countries." That argument is either wrong or tautological. The US spends more on health care for worse outcomes, as many studies have shown. If this person means we buy better outcomes, they are wrong. If they are saying we buy more stuff labeled health care, maybe true but that's because the system is bad, not good.

lliamander 7y ago
> 1) Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic. Unless you use a good statistic, your argument isn't justified. (cue story of drunk looking for glasses under lamp post etc). You're not responding to the complete argument. RCA has looked into finding median measure of income, and not found them relevant to the discussion because (as he says in the third point of the argument) the rich do subsidize health care for the poor. > Also, if there's no measured difference in individual household income versus health care spending, well then maybe his pet theory comparing average household income and health care spending isn't very applicable either. But again, mean income is relevant because the important thing is how much a society as a whole puts into the healthcare system. Average is meaningful when the rich subsidize the poor. > 2) "RCA is saying that, as a country, the U.S. spends more on healthcare because we consume more health care than other countries." > That argument is either wrong or tautological. The US spends more on health care for worse outcomes, as many studies have shown. If this person means we buy better outcomes, they are wrong. If they are saying we buy more stuff labeled health care, maybe true but that's because the system is bad, not good. According to RCA, AIC isn't just correlated with spending, but also "the vast majority of socially relevant outcomes and their covariates." [1] [1] https://randomcriticalanalysis.com/2018/11/19/why-everything-you-know-about-healthcare-is-wrong-in-one-million-charts-a-response-to-noah-smith/#rcatoc-these-measures-are-also-superior-predictors-of-just-about-every-socially-relevant-metric https://randomcriticalanalysis.com/2018/11/19/why-everything... EDIT: fixed wording in my first response ADDENDUM: There are charts that show life expectancy to be lower in the U.S. than other developed countries, but that has to do with factors other than the quality of healthcare[2]. [2]https://randomcriticalanalysis.com/2016/11/06/us-life-expectancy-is-below-naive-expectations-mostly-because-it-economically-outperforms/ https://randomcriticalanalysis.com/2016/11/06/us-life-expect...
rcafdm 7y ago
> "Using average income, a clearly bad statistic, can't be justified by saying you could not find a good statistic." As lliamander already mentioned, I addressed this on my blog. Several quick points: 1) International comparisons of health spending overwhelmingly relate directly to mean health expenditures (e.g., per capita, % of GDP, etc). Even if you know nothing of this area it seems most reasonable to compare mean health spending to mean material living conditions (disposable income or consumption)! 2) Individual income and health expenditures on behalf of individuals (i.e., not just OOP) are effectively uncorrelated within countries in the developed world (including the United States). There are clearly large national level effects independent on one's place in the national income distribution, which are exceptionally well correlated with mean income (r^2>0.9), and we shouldn't expect to income of the median person to be terribly informative. 3) We know healthcare to be heavily socialized in the United States and throughout the developed world. Mean income is a much better indicator of overall financial wherewithal than median income. The median just doesn't make much sense from a theoretical point of view. Moreover, estimates of the income distribution and the medians are surely subject to greater measurement error and issues of comparability between countries, so there are practical issues with this as well. 4) More practically speaking, I've run many different regressions using medians, various indicators of income inequality, etc and found little to nothing to suggest the income distribution is an important independent predictor. The r-squared and various goodness of fit indicators suggest these metrics perform less well than the National Accounts-based means I have used for disposable income and consumption. In multiple regression on these necessarily smaller samples (which are easy to over-fit) the coefficient/effect size of these distribution-related indicators are rarely significant, don't significantly improve model fit, and would almost certainly be rejected in lasso or the equivalent. https://randomcriticalanalysis.com/2018/01/20/on-the-relevance-of-the-income-inequality-to-expected-health-expenditures/ https://randomcriticalanalysis.com/2018/01/20/on-the-relevan... 5) With other aggregate consumption/expenditure statistics, such as food, housing, transport, entertainment, etc the fit is also (unsurprisingly) much better with my statistics than cross-sectional comparisons of median income, so I'm not sure why you would expect one of the most socialized and most elastic categories of expenditure at a national level (~1.4 as a function of GDP) to be any more favorable for the distributional perspective. https://rpubs.com/random_critical_analysis/oecd_2014_consumption_elasticities_nonvolume https://rpubs.com/random_critical_analysis/oecd_2014_consump...