Orszag on health cost containment

It's an issue that from the outside has appeared to have practically been buried amid other event, but this week's New Yorker gets OMB director Peter Orszag to talk about health insurance reform.

His chief perspective appears to be that the lack of much cross-sectional correlation between health spending and health outcomes in the U.S., as reported by the Dartmouth Atlas of Health Care, is evidence of suboptimal decision making or waste. In other words, if the more bucks you spend doesn't get you more of a bang, it's evidence you shouldn't have spent them. Not an unreasonable assertion to be sure, but also not one that is likely to go over easily with folks unaccustomed to the relatively raw logic of economic thinking.

Moms, infants, choices, and our knowledge

Judith Warner writes about breast feeding today in the Times, and she makes the important point that much of our knowledge about what matters for infant outcomes is circumscribed.

Informed consent from infants to participate in a scientific study, in which there are control and treatment groups, is inconceivable. We'll often never really know what a particular treatment in isolation really does to kids, because it would be unethical to find out.

I remember when the question of breast feeding came up among a group of health economists some time ago. While the prevailing wisdom seems to be that it's good, none of us knew of any science that could really sell anybody on it.

In terms of social welfare, a troubling aspect indeed is that breast feeding is much more costly for low-income moms. It would be nice to know the benefits with some degree of certainty.

Feel like moving for tax reasons?

It's only updated with state tax data through 2006, but the NBER's TAXSIM can still give you some insight about income tax rates you'll pay in different states. Gotta love that 3%+ New York City income tax!