Beauty of Gray

Friday, January 10, 2003

A quick note on Lomberg and the Sketpical environmentalist

Instapundit has drawn a stark contrast between Lomberg and Bellisiles, while Andrew Sullivan makes basically the same point:

No factual errors have been found in Lomborg's book; no unethical scholarship; only provocative arguments designed to get people to think again about their assumptions about how best to protect and preserve our natural inheritance.

Actually, this is simply wrong. In the area that I'm most interested in and most knowledgeable about, extinction rates and biodiversity, there were factual errors, misquotes of sources, and the sorts of misleading misuse of statistics that could be comfortably chalked up to innumeracy, except for the inconvenient fact that Lomberg was a professor of statistics.

Unfortunately, the union of Conerned Scientists has taken down its page that had a series of very well written and balanced critiques of several chapters in the book. There was a great rebuttal by E.O. Wilson to his chapter on biodiversity there, as well as the best and most balanced discussion of his chapter on global warming that I've seen anywhere. But absent the ability to simply link that, I'll have to go from memory here and could have specifics wrong.

The statistics that Lomberg cited for bird extinctions in one region (I believe the Eastern United States) were simply wrong, with his claiming only one extinction compared to the actual number of 5 or 6 listed in the paper he cited. He also discussed the situation in Puerto Rico, citing the loss of habitat without the subsequent loss of species predicted by the species area theory (a theory well established from both a wide range of experimental results and from theoretical considerations.)

He didn't note that of species unique to Puerto Rico, the extinction rate matched closely with experimental predictions, while other birds didn't go extinct on the island because populations existed on neighboring islands to allow for re-introduction. He also exagerated the extent of habitat loss by quoting primary forest loss numbers, ignoring regrowth of secondary forest (the same bait-and-switch he later accused environmentalists of in his forestry chapter, so he's obviously aware of the issue. Deliberate dishonesty in this case seems to be the conclusion left by Occam's razor.)

His forestry chapter drew graphs based on surveys that had changing definitions during the time period graphed, making any such time series plot meaningless, as well as odd definitions, like considering a clear cut area a forest if it was scheduled to be replanted. In this section, when convenient, he ignored the distinction between different types of forest (old growth, new growqth, and single species tree farm), and lumped together world statistics to disguise the problems of deforestation in rain forests with the planting of tree farms and new growth forests in the US and elsewhere.

I don't know that everything he said was wrong, and I think the underlying viewpoint--that environmentalism needs to be considered through a cost-benefit prism--is valid. Too often, environmentlists assume an infinite value for all things green, and fail to consider the costs of protecting them. And much of the criticism of the book was sad, sloppy, and ad hominem. But that his critics were often off the mark does not thereby mean that he was always on it. And given the numerous errors in the sections that I have some knowledge of, I'm skeptical of the rest of his book, myself.

Link posted by Doug Turnbull at 2:44 PM

A couple of questions

Why is it that, when talking about the Israeli-Palestine war, the “yes, but…” formulation of condemning terrorist attacks is considered sign of terrible moral blindness. But when talking about US foreign policy adventures--support for dictators, oppressive regimes, overthrowing governments we didn’t like, etc.--the “yes, but…” formulation is considered eminently reasonable?

Why is it that Sen. Frist, a doctor whose family is involved in the health care business, a business he owns millions in stock in, is looked to as an authority, the last word on health care issues, rather than being considered hopelessly biased by this conflict of interest? I don’t see the same approach being used towards trial lawyers and tort reform, or teachers and school reform. Why then is a doctor and health care scion considered more reliable when it comes to health care reform?

Link posted by Doug Turnbull at 2:24 PM

Thoughts on medical malpractice, Part II

So, it seems to be the case that malpractice rates really are becoming prohibitively high for doctors. Again, there are three possible explanations for this state of affairs. First, the awards on suits could be too high—plaintiff’s are getting too much money, driving up costs. Second, there could be too many frivolous cases being filed—the lawyer’s are getting too much money, driving up costs. Or third, the system could be working just fine—there aren’t too many frivolous cases and the awards aren’t too high. But the cost-benefit calculation of the health care industry is starting to push over into the costs, with the current set-up.

Are there too many lawsuits? The evidence here is mixed. According to this report, studies from the Harvard School of Public Health and an independent study from the New England Journal of Medicine (it doesn’t list the study authors) estimate that only a small percentage of patients who are harmed by malpractice actually file suit—from 12% down to as low as 2% (without about half of these cases resulting in payouts.) So if anything, it seems like there ought to be many more lawsuits than there already are. On the other hand, according to statistics cited in this report:

According to closed claims data, 1985-1999, reported by 20 companies that belong to the Physicians Insurer's Association of America, of the 155,671 claims examined, 29.4 percent were settled in favor of the plaintiff. There were court verdicts in only 6.7 percent of medical malpractice cases and, of those, 19.1 percent were decided in favor of the plaintiff. The vast majority, 62.3 percent, were dismissed, dropped or withdrawn in favor of the defendant.

So it’s true that there is a significant fraction of frivolous lawsuits—almost 2/3 of those brought, assuming that you class every one of the cases dismissed, dropped, or withdrawn as frivolous. But there is sure to be some such overhead in any civil court scheme, and I was unable to find a breakdown of overall costs for insurers to see how much would actually be saved even if you could eliminate all frivolous lawsuits. I couldn't say for sure, but am skeptical that it is practical to eliminate this overhead without unduly discouraging patients from bringing valid cases, and am further skeptical that there are enough savings to be had in this area to solve the problem.

The second possibility is that in those lawsuits where the plaintiffs do win, the awards are too high. This is the main target of tort reform, with the usual proposal being to cap possible awards at a certain amount above court costs and lost income. (Things like mental anguish, etc.) But, according to this report, only 1.1% of all cases which are won by the plaintiff involve an award of punitive damages. While the damages in these cases can be substantial, in the millions of dollars, if the occur in only 1% of the cases, they don't drive costs up that much.

According to this previously cited report (from an insurance group, so it's not biased against tort reform) report, the median medical malpractice award was 1 million dollars. Further:

About 52 percent of all medical malpractice awards, based on Jury Verdict Research data, now are over $1 million, compared with 34 percent during the period 1994-1996. However, medical malpractice awards are subject to considerable volatility and very large awards are often reduced on appeal. Jury Verdict Research data also show that while death was the most frequent claim, brain injury was the second most frequent and by far the most costly, with the median award at $4.3 million and the probable range of awards from $1.5 million to $12 million.

Assuming the highest possible award cited here as probable--12 million dollars. Further, assume the entire 12 million was a punitive award. If this occurs in 1% of all cases, with a mean value of approximately 1 million dollars per case (this is actually the listed median--the mean could be as low as $500,000), these high punitive awards contribute a grand total of 13.2% (or an absolute maximum of 26.4%, assuming the phenomenoally unrealistic mean of 500,000) of total jury awards. And that is the absolute highest possibility, with quite a few unreasonable assumptions to get there. So the crisis isn't being driven by punitive awards, although they do get lots of press attention. Reforming this could lower costs slightly, but it's not going to really solve the problem, assuming the statistics I've found are accurate.

Which leaves the third possibility. That if there's a problem, it doesn't lie with the number of lawsuits, with the size of malpractice awards, or with the greedy insurance companies. Rather, everything outside the medical industry is working just fine, and just as it should. So if there's a crisis, it's internal to the health care industry and will require either restructuring there, or else some outside assistance. But this post is getting very long, so I'll hold off on that until part III of this series, coming soon.

Link posted by Doug Turnbull at 1:52 PM

Thoughts on medical malpractice, Part I

I’m surprised that the doctor’s “strike” in West Virginia hasn’t gotten more national attention. I guess the looming war with Iraq is taking attention away from it, but since tort reform has been a Republican party staple since the Contract with America and before, I would have thought they’d be all over this story, trumpeting it as a failure of the judicial system. It is an interesting case to unpack, though, with a few non-obvious wrinkles to it. Here's a good article from the Washington Post giving an overvview of the problem.

There are three possibilities here. The first is that the doctors are lying. Malpractice premiums aren’t that bad, and they’re just trying to squeeze some more money out of people or out of the government. I don’t think this is the case. The Post article linked above quotes malpractice rates of $80,000+ per doctor per year for many specialties. Doctors make a lot of money, but that is extreme. They really are feeling the pinch here.

A second possibility is that insurers are overcharging. The insurance companies are gouging the doctors in order to boost their profit levels. This is possible, but seems counterintuitive to me. Competition ought to keep costs down. For an existing insurance company with solid financial reserves, there is no barrier to entering the malpractice market, and no existing expertise that would allow any company to overcharge. The field is completely level—the only determinant for rates are actuarial calculations, and the service provided by any insurer is practically indistinguishable from any other. Unless there are factors I’m missing, it seems like this is a market where competition ought to drive prices down. [The statistics in this link agree, although it should be noted its an industry source, suggesting that medical insurers are actually losing a lot of money in the current climate.]

Which leaves the third option, that the cost of malpractice really has become prohibitive for doctors, and this cost is starting to drag down the entire health care industry.

Part II will consider the possible causes for this state of affairs, and potential solutions.

Link posted by Doug Turnbull at 12:51 PM

A Renaissance blog: Politics, sports, literature, history, and whatever else strikes my fancy.


Sneaking Suspicions
Crooked Timber
Unqualified Offerings
Asymmetrical Information
Cranky Professor
The Poorman
newsrack blog

Powered by Blogger