412 (11 March 2020)

Welcome!  The articles below caught my attention this week.  Relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription.

The Covid-19 outbreak continues to dominate the news and it is increasingly affecting day-to-day life even in areas where no cases have been found.  I’m sitting at home on a Sunday morning, rather than attending church and shopping, because today there is virtual church and I shop after real church.  Everyone will have a story to tell.  My disruption is tiny.

            What struck me the most this week was the phrase “flatten the curve.”  The basic idea is that the peak of an epidemic can be lowered by a variety of actions.  The Guardian touches upon this idea in its article  (10 March 2020)Covid-19 outbreak: what do health experts mean by ‘flattening the curve’?”  What really caught my attention—I saw it first in The Wall Street Journal, although I’ve lost the reference—was the figure that introduced capacity into the mix.  Here is the diagram.

In the very short run—more conventionally called the market period, a period of time when neither health-care facilities nor health-care personnel can be varied—health care capacity is effectively fixed.  (In reality, health-care personnel expand their work hours dramatically.)  Thus interventions aiming to “flatten the curve” reduce peak demand so that quantity demanded is closer to quantity supplied (capacity).  In other words, flattening the curve reduces the “excess demand” for health care by reducing the need for health care.  This would give rise to fewer deaths and cases, while also extending the time that the deaths and cases are with us.  In relation to this, here are some things to read:

Conventional economics looks at price as a means of equilibrating quantity demanded and quantity supplied.  But in the present situation, health policy is the means for equilibration.  In fact, I’m having a hard time thinking about how price adjustment would work in the time of coronavirus.  Perhaps this situation suggests something broader.  What do you think?

(27 February 2020)Abortion Clinics Are Getting Nickel-and-Dimed Out of BusinessBloomberg Businessweek

********Abortion provides an opportunity to examine all of the invisible forces—hand (economic), foot (legal and political), and handshake (social and historical).  Many abortion providers are businesses and they will cease operating if they can’t make a profit.  That profit is dependent upon the legal and political context in which they are operating.  And that context is highly dependent upon cultural values that are socially and historically influenced.  All this is seen clearly in the following excerpt.

——–“Anti-abortion activists have adopted a two-part strategy.  On one hand, they lobby for the continued passage of laws like . . . [those that] Court-abortion rights advocates refer to . . . as TRAP (Targeted Regulation of Abortion Providers) laws.  And on the other, they try to raise providers’ operating costs directly or otherwise pressure clinics out of existence.  It appears to be working.  The number of independent clinics, which account for 60% of U.S. abortions, was down to 344 as of November, one-third fewer than in 2012 . . . In the parts of the country most hostile to abortion, rates are declining sharply.”

********As the article notes, abortion providers have faced a host of actions that increase their direct costs, for example, requiring that facilities be designated as “surgery centers” and mandating extra clinic visits for women seeking an abortion.  Closely related, vendors of clinics are sometimes “targeted by protesters” making it difficult to get work done at the clinics, so security guards are often hired, too.  Although “abortion is one of the safest possible things that a health provider can” do, insurance can be hard to find as many providers don’t want to bear the perceived risk.

            Aside from the clear intention of anti-abortion activists, I was fascinated by how little abortions cost and how little those costs have increased over the years.  The article notes: “In an era of high medical cost inflation, abortion is an outlier.  A first-trimester abortion might cost between $400 and $1,000, depending on the method and the clinic.”  Nikki Madsen, the executive director of the Abortion Care Network, “calculates that in her 15 years in the field, the price of an abortion has gone up only $50.”  Why?  “Prices remain static because abortion exists largely outside the traditional health insurance model.”  Frequently, no insurance coverage is available, and when available, often not affordable; low-income women got 3 out of 4 abortions in the U.S. during 2014.  As a result, abortion is “largely a cash business, with doctors charging what they believe a patient, rather than an insurer, can pay.”  There is a bigger lesson here.

Be well!

Bruce

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