Tech Change Essay Draft

Is Technological CHange Worth It? Essay Start.. 1st draft

In the early part of the course we watched webcasts of two seminars, and I asked you to read the transcript of the seminars and journal articles associated with each seminar. Choose one of the two presenters/authors (Eisenberg or Cutler-Mclelland) and write a short essay (max 1000 words) that critically explains and summarizes the key-ideas and arguments of the author(s) about the "value of medical innovations".

My Essay
Intro

Cutler and McClellan use the cost benefit approach to analyze the value of medical technology in 5 conditions. They conclude that medical spending as a whole is worth the increased cost of health care today. On the whole I agree with the approach used by the authors in coming to this conclusion, but I would like to discuss some of the assumptions and assertions made by the authors as I think some of them lack saliency.
Overall, the cost benefit analysis approach is the most rigorous test currently known that the authors could apply to the conditions: it is effective vehicle to examine this difficult question. The values the authors give to the various costs and benefits may be somewhat more questionable. The simplified answer to the question ‘is technological change in medicine worth it?’ I think is a resounding ‘yes’. However, this assessment doesn’t look at the efficiency or otherwise of the healthcare system, which as a budding economist I feel is a more salient and vital question. It is clear that public and private payers may still be a long way from an efficient allocation of health care spending. Healthcare innovations are worth is, but is the massive cost of r &d and bringing these new technologies efficient? Probably not.

Para 1
Weaknesses include the lack of discussion on the future costs and benefits including discounting and how this affects the analysis.

The authors coin the terms treatment substitution effect and the treatment expansion effect, *rather like the value of additional available spending to an individual and its income and substitution effects. The two measures seem useful ways to start to break down some of the cost and Treatment expansion may be of benefit when the treatment is highly beneficial, but not if the treatment is marginal or the patients receieving it are of marginal needs.
Dranove talks about the importance of making the correct cost benefit analysis as even using the same raw data very different implications be found. He highlights that a series of articles published in the 1990's reporting on biennial mammograms for women between 40-49. The reported costs per life-year saved ranged from $10,000 to over $100,000, most of the studies all being based from the data of the same sample of Swedish women. this caused international concern from the US and Canada and abroad, who asked the Swedish researchers for access to their data.

Para2..
The value to which an medicine or treatment will be sponsored by the payer is generally $50,000US. In the article Taking Account of Future Technology in Cost Effectiveness Analysis, published in British medical journal September 2004, Solomon et al. states that cost effective analysis interventions having incremental ratios of $50,000 per QALY in US, or 30,000 pounds in the UK ($55,000) are usually held to be cost effective. Given that treatments have become more expensive over time as well as more effective, the authors could have addressed the question of how effective new technologies are in terms of cost and efficiency versus before. They also made the point that cost-effectiveness analysis does not usually take account of future possible advances in treatment, but taking these future possible advances into account would greatly alter a cost benefit analysis. The authors gave a conservative value of $100,000 to a life year, and didn’t take into account future benefits of the treatments, which would both have improved their statistics. This shows restraint on their behalf, as the information published was enough to support the conclusion that technological change, analysed their way is worth it.

Para3
Choice of 5 specific diseases, what can i say about them?
Measuring the costs and benefits at the disease level, as has the studies that guided their report, as they feel health improvements in aggregate are difficult to distinguish and credit correctly.
With 5 chosen conditions there is sufficient data over a reasonable period to analyse and use these as implications for medical system more generally. They acknowledge disease level analysis is not exact but assume that they can better identify the uncertainties and limitations of the data. They confirm they do not have sufficiently large conditions to draw firm conclusions.

Para4.
Importance of mentioning the other costs involved in medical innovation, that of Research and Development, and the expensive legislative/regulation system around that. How is this relevant to the discussion?

The authors look at the end payers costs as the entire cost of health care. There are other costs that aren’t taken into account which need to be involved in the question of whether the increase costs of health care are efficient. There are costs today form the overburdened system such as waiting lists for publically and privately funded operations that can be up to years long. This cost
Need to be careful here as who is the cost gone up for, the cost of the operation is used as the cost value, but what about the other costs, the R&D costs, and high profits that are protected by patents (eisenberg). Missed a major cost in meical innovation- that is R & D. Eisenberg highlights that the dual structrures of patents and drug regulation are both increasing the costs of medical drug innovation. Beyond adding to the costs of drug developments, drug regulation does much to support the profitablility of new drugs. Beyond forestalling competition and supporting profits, the patent system increasingly threatens to divert profits away from drug developing firms towards other patent claimants. So I believe the authors took a deliberately simple approach to the question is technological change worth it, so that they could set aside the glaring costs and profits in medical innovation that are now simply inherent in the system due to the complex and highly regulated structure.

Para 5
Policy implications
1.They think the focus on waste spending reduction should be balanced against the potential for inhibiting technical growth. Policy should adjust its focus. It is clear from literature such as Dranove that there is a ceiling on health spending so that health rationing will always be required. From Trick or Treatment it is clear that there are areas of health spending where benefits are marginal or even scientifically non-existent but these treatments are becoming popularised and as a result spending has gone up. Rather like the changes suggested for risk management in Witches Floods and Wonderdrugs by Clarke, the policy analysis for health spending needs to be directed at the health system itself, its overarching structures, and the efficiency of its delivery. If the health care system in the US was completely overhauled and integrated to a truly universal system, then the beast of regulation could possibly be reigned in. Further, the potential for inhibiting technical growth in the US system is probably based more around the drug regulation system and the patent system which work together to drive up the cost of research and development (Eisenberg).

2.Better indices for medical care: They claim that their “quality adjusted” price of medical care is actually falling over time. There are so many factors to take into account when making an assertion like this, and important ones such as quality of life are difficult to measure. Introducting a quality –adjustment into time measures is moving away from the initial goal of price indices, to track changes in costs. Quality of life is perhaps something that could be and is tracked elsewhere such as in OECD research and ratings, as well as other studies such as the Economists 2005 quality-of –life index ranking 111 countries. http://www.economist.com/media/pdf/quality_of_life.pdf

Health was the second determinant of quality of life in this survey, and the US ranked 13^th, New Zealand 15^th, and Australia 6^th. There are also many difficulties and practical problems in introducing a quality-adjusted cost of healthcare, in that it may be politically antagonistic to the population, the population may not understand where the figures are derived from, deciding how to value quality of life in itself will always be subjective, and as mentioned, other studies are looking at this already.

3.They feel the National Health Accounts data should be extended to include the benefits of medical care as well as the costs. A fuller set of National Health Accounts is an interesting idea that if implemented fully could indeed guide policy makers in health care spending. This would be an extremely costly exercise to research data that covered diseases and treatments thoroughly enough to guide the policy makers. Furthermore, if spending in health is associated by a list of benefits then education spending accounts should also be balanced by education level accounting. This concept is difficult especially when applied to the US’s extremely complex health system.

i think that there is no other information about benefits in national health accounts then maybe an effectiveness index might be more appropriate. this would be a cost per QALY gained analysis.
4. Managed care and other policy reforms could be assessed using the authors same cost benefit analysis. The managed care system can be assessed almost as if it is a condition (overall health) and the managed care system is the treatment. The authors seem to be calling for a balanced review of the costs and benefits of the managed care system, to see if , on the whole, it has been successful.

The authors conclude that though they haven’t considered enough diseases to reach firm conclusions, they acknowledge that generalising to answer their original question with an overall evaluation is not possible. They use the idea that medical spending has increased by $35,000 over the lifetime of a person and life expectancy has increased by 7 years. The authors claim their results show the good and bad of technological change.

QALY essay draft

Paragraphs

1. Yes use cost effectivenesss as a measure, yes use $50,000 k . outline the benefits as opposed to moral hazard, demand inducement, and different practices across doctors, regions etc. outline how it works using double blind randomized strategy

2. Talk about how I’d like the national health system to provide recommendations on what goods it will support and which it wont. Talk abou the political pressures which will happen

3. Problems with cost effectiveness ratings from my personal experience

4. Cost effectiveness measures as impersonal as a whole

5. cost effective ness compared to cost benefit and utility analysis, brief comparison

Dear Helen

I am an undergraduate student studying health economics. Recently I have learnt about various health systems and different approaches to health care rationing. As an economics student I understand that scarcity is a constraint under which all decisions are made, and government spending on health care is no different. As health spending is approximately 10% of the governments’ expenditure, there is a huge incentive to spend this money most effectively. I absolutely believe that a scientifically rational approach to spending requires an investigation of the cost effectiveness of treatment, and that health outcomes for the population overall would increase with a clear unified treatment recommendations from government health bodies. These recommendations should be based on efficacy randomized double blind studies that take into account not just the effectiveness of a treatment but its efficacy or cost effectiveness as well.

Some of the approaches available for measuring the results of health spending are CEA, cost benefit analysis CBA and utility analysis. A researcher and writer in the area, Dranove conjectures that there should be a cost effectiveness approach as well as a cost benefit approach taken. First of all, is this the most effective use of public money compared to the other healthcare treatments where need exist, and secondly, once it is determined to be cost effecitive, does the benefit of the treatment outweigh the cost. theres may be a cost effective treatment that has marginal benefits, or an expensive treatment that has large benefit is QALY years.

I am convinced that cost effectiveness and cost benefit analysis is the most appropriate way to measure whether a treatment should be made available. It came to my attention that health care is special. It is a privately consumed good that is largely funded with public money, especially in New Zealand. As such the approach taken must be similar principles for other public goods, that is maximisation of the possible benefits at least cost. I accept that health care will need to be rationed and should be, and because of the scarcity of funds, the more thorough and scientific the analysis can be the better. I accept that marginal treatments like acupuncture that I adore may fall below the funding threshold to treat me as a cancer patient, because I have faith in the cost/benefit approach, that it is fair way of allocating funding for treatment.

Reasons for funding only cost effective treatments. You reduce the inefficiencies caused by moral hazard, demand inducement and practice variations. This reduced the inequality in the system. All citizens should have equal opportunity to access health care, and be provided with the correct information.

My Essay Outline

Cost effectiveness must also be taken into account with cost benefit assessment as well.

I am convinced that cost benefit analysis is the most appropriate way to measure whether a treatment should be made available. It came to my attention that health care is special. It is a privately consumed good that is largely funded with public money, especially in New Zealand. As such the approach taken must be similar principles for other public goods, that is maximisation of the possible benefits at least cost. As Dranove mentioned there should be a cost effectiveness approach as well as a cost benefit approach taken. First of all, is this the most effective use of public money compared to the other healthcare treatments where need exist, and secondly, once it is determined to be cost effecitive, does the benefit of the treatment outweigh the cost. theres may be a cost effective treatment that has marginal benefits, or an expensive treatment that has large benefit is QALY years.

I accept that health care will need to be rationed and should be, and because of the scarcity of funds, the more thorough and scientific the analysis can be the better. I accept that marginal treatments like acupuncture that I adore may fall below the funding threshold to treat me as a cancer patient, because I have faith in the cost/benefit approach, that it is fair way of allocating funding for treatment.

• CEA and CBA. cea ranks alternative expenditures on the basis of bang for the buck. CBA directly asks whether the bang is worth the buck. . Used as the basis in Eng, Aus and Oregon.

• Costs- must be cost of providing service not what end payer pays

• NIH reports say diseases like diabetes and asthma may have higher indirect costs than direct costs. so need to take into account indirect costs.

• Question about where to stop anticipating costs. some researches believe that CBA CEA should take into account all future non medical costs. thats too far.

• Discounting- researchers discount the future costs of health care. Medical researchers usually give less weight to future costs than to current costs. if your willing to pay $5250 for a tv that next eyar that costs 5000 today, then your discount rate is 5%. Discouting futre benefits raises an interesting question, do we discount the value of future lives? yes, we have to, but debate over how much to discount the future life, usually about 5%.

• pharmaceutical industry-sponsored studies report benefit/cost ratios that are on average three times higher than benefit/cost ratios reported in govenrmrnt sponsored studies.

Rationing is essentially important to improve situation- incorrect spending moral hazard, demand inducement and differentpolicies.

• The problem is that we spend our healthcare dollars inefficiently, due to maoral hazard, demand inducement and practice variations.

Would like to see NZ advising like the UK Nice do but avoid the temptation to give in to social pressure on certain drugs etc like viagra

Australia and England blatantly use cost benefit discrimination to determine which treatments are recommended/approved for use. This has been seen as callous and politically can be a problem when social pressure mounts on certain issues. The situation is even worse when an advisory board gives in to the public pressure and reverses its stance, as shown in the cases of Viagra and Zyban. The PBAC struggled to contain spending on these two drugs while trying to keep the balance of social pressure from overflowing. These systems however are somewhat more successful in containing costs than the US. granted the US have a juggernaut

Using the relative scale, standard gamble approach and Time-Trade-Off approach, i came up with different valuations for each health state.

This says to me that i cannot reliably assess my own valuation of various states of health. If i cannot do it , how can I provide a guide to the health authorities by answering surveys. I find that the more information is before me about the health state, and it is negative information, then the smaller the QALY i assign to this state, but if the state is compared more explicitly with a chance of death then i will generally assign a higher QALY rating to the state. Further, the way i am feeling on the day will affect how i rate things. Mostly, it is incomprehensible for the human mind to hold and weigh all the physical discomfort and social, financial and relationship discomfort as well as all the emotional discomfort associated with all of this and make such a specific judgement. I cannot hold it all at one time, so in a survey situation, i am governed by where the information is leading me and my feelings at that time.

I found i was able to order health states with a little more success.

I found every person in my economics class came with their own beliefs and preferences that effect their ratings. health is a personal thing.

We also discussed that we cannot really rate a health state until we have experienced it.

The individuals preferences do not matter

• under All QALYs are equal AQAE, your access for treatment for a specific condition depends on what others think about the condition, your opinion does not count.

QALY possible faults.

1. individual concerns are not revevant

2. there is evidence that QALY disadvantage those who are elderley, or disabled. This is because

3. the way in which surverys are carried out. my personal experience. however, perhaps this issue has been so thoroughly looked at this if we use international standards and learn from all the QALY knowledge available, then we can move forward without this being mch of a problem.

Cost Benefit Analysis

Yes

1. Healthcare as a private good but publically funded, therefore, individual concerns are not the most important, but the fairest usage of the funding will have to be determined scientifically, objectively, based on medical research.

2. Differences in cost benefit analysis with discounting and looking over long time periods

3. cost benefit has to work with cost effectiveness

MY ESSAy outline

Clark contends that improving risk management is essentially not a problem of science but of improving management response to risks through policy analysis. Risk management has been referred to as a 'quasi science' and as a 'trans-science' and also a 'social science', and so the debate rages. Clark puts aside these labels as of limited assistance and addresses the central need he sees, which is to evaluate, order and structure uncertain and incomplete knowledge so that the management acts can be chosen with the best usage and possible understanding of current knowledge. Considering risk management as policy analysis with the aim of better guiding management acts would align risk management to a range of established analytical norms, and also turn the spotlight on the institutions that have the ability to run risk investigations. As Clark points out this is a lesson that can be learnt from witch hunting, where little or no members of the church or governing institutions ever had accusations made against them.

Clark looks at the difficulty of establishing a useful perspective from which to assess risk management, fears and our involvement in such, and how this has meant the past risk management is directed to wasteful ends by these underlying perspectives. Risk problems arise from human perceptions, and their fears. He argues that when you are affected by a risk you are unable to evaluate it critically, and if you remove humanity from the analysis then it becomes sterile and unimportant. I would go further than Clark’s argument and suggest that as an assessment risk is based on and created out of human fears, the field is subject to all human flaws. That is, human affliction such as selfishness, greed, prejudices, as well as fears all affect the direction and influence of the risk industry on citizens. An institution is in the position to exploit fears, gaining support and political following by controlling the direction of risk assessment.

Though risk management is not a science per se, there is a need for a fair test within risk assessment. Clark clearly supports a more scientific approach to risk management. With a scientific approach Clark believes we can avoid confusing the feasible from the desirable, as well as avoiding a risk management policy that will only terminate or succeed when a risk is identified. Both these outcomes direct resources in wasteful manner and lead the public and management alike further from any understanding of real risk. Risk assessors of the witch hunt ended up incinerating 500,000 citizens because of a lack of clear framework for such a judgment. This result was probably nothing like what the citizens would consider the aim of the witch hunt was. From my knowledge of econometrics it is clear that in scientific terms, a hypothesis to be tested must have two possibilities, so that when risk assessors look for risk they conversely also investigate for no risk. However, evidence can be interpreted many ways. Data can point towards completely different results depending on how it is filtered, classified and presented. Simply stating that scientific approach should be taken does not mean that the objective results of the risk assessment will ever be revealed. As Liverry shows in his book Making Decisions, the simpsons paradox can result. In the case of uncertainty just one data set analysed in different ways can come up with a variety of conflicting results. With witch hunting, being accused of being a witch was tantamount to conviction, and your only way of disproving being a witch was to survive torture by some means. There was no inbuilt system of defense for the accused, no stopping rule. Clark argues that in risk assessment today often the only stopping rule is discovery of the sought-after affect, and a fair scientific testing method would better control the direction of a risk investigation.

Clark also investigates another way in which risk assessment could be improved through using a grand jury system and implementing rules of evidence would be a significantly more rigorous way of dealing with risk assessment when humans are the risk subject. In thinking this over, I realised that humans would seldom be the object of risk analysis, so this is somewhat more difficult to apply to the possiblity say of a new drug being harmful. This last insight is implied from the historical demise of witch hunting as a profession where y Frias carried out an extensive analysis of witch huntings in and area. He used an approximation of these principles to show most of the accustions were incorrect, and the process had created witches were there was none. Rather than applying the rules of evidence in a court, there should be rules of evidence within risk managament. Formal rules of evidence constitute formal hypothesis on how to best cope with the unknown. Clark points out that there is a highly political background in which risk assessment is operating, which is a brave step, and very important to keep in mind. In the case of witch hunting, institutions benefited from withes being made a scapegoat on which to blame the problems of the day. In the case of medical science, if citizens worship researchers and medical institutions there is the risk of a witch hunt continuing. This can be seen with the boom in alternative medicine, when books like Trick or Treatment critically disprove the scientific value of treatments but the industry continues to grow rapidly. Pharmaceutical companies gain large profits from medicines that may be no more than pure placebo. Further, when politicians use a scientist’s research to speak out on an issue, scientific peer review cannot easily penetrate that arena. Scientists may also be encouraged to speak more confidently on their conclusions than would be warranted within te scientific community, and the reality can be misrepresented/exaggerated to the public without rigorous debate. The findings of risk assessment are easily exaggerated in the media, and a highly politicised society means risk assessment can be skewed in their direction as well as in the representation of the findings.

The issue of causation, witch hunting breeding witches, trying to control pests causing pest related crop losses Clark toys with the idea that there is causal issues within risk management, with the hunt for risks proliferating the risks, but he falls short of making his own determination on whether this is a fundamental problem within risk management. He cites the examples that If risks are indeed created by the hunt for them, isn’t the industry a somewhat unnecessary waste of time? As I will discuss in the next paragraph, the tradition of coping has meant no further risks are created by risk reducing strategies, as nature is left to take its course. This is an inherently pleasing concept which fits with the medical mantra first do no harm. If western society still acted this way the proliferation o the risk management industry would not have been seen to the extent it is. It would be hard to reverse the past Clark refers to the human tradition of coping with unexpected events in comparison with current risk assessment policies. Without providing much evidence as to the efficacy of our old coping techniques, he suggests some improvements that could be made to risk assessment by policy change back towards a policy that is capable of accepting uncertainty rather than trying to beat it. He shows, quite rightly that nature often has the one up on humans, and will always have a twist that policy makers are unprepared for. The point that Clark is making is that this should be taken as given and that the area for improvement here is policy’s ability and management ability to then respond to these unexpected twists. Clark points out that regulating versus not regulating is a pointless debate, and in looking at the US and UK drug regulation industries he supports the approach taken by the latter. Clark emphasises the medical drug industry's interest in increased risk taking abilities rather than decreased risk per se as being a more constructive perspective and meaningful aim for risk management.

Clark’s assessment of current risk management models is that prevailingly they use knowledge-presuming prospective rationality to develop policy. Concepts such as social optimisation and best possible decision making is based on rationality of social acceptance and expert consensus, and is expected to work just because it fit this idea of rationality. This is the opposite of the view clark supports where rationality is a policy that is always self checking and is accepted as the best model because of this fact. Clark supports this with evidence of well established reconstructive approaches taken in other fields such as social psychology and economic theory. Throughout the examples Clark gives us, he notes the progress of risk management away from an individualistic endeavour to something that is now provided by administrative arms of the institutions, for the collective good. Clark suggests that the thousand flowers approach of decentralised policy making and the ability this will give us to learn from a variety of risk responses is valuable. This concept while intriguing and certainly something that appeals, is perhaps too forward thinking and difficult for a sociiety to accpet who feel safer when a collective body looks after them. Further, the idea would not appeal to institutions and central bodies that hold the power to decide overreaching policy. I would suggest willingness to reduce this power is unlikely to be in evidence.

Tufte, adds to the debate hands on policy creation, how data has a central and influential role. He promotes scientific approach also, to both the approach behind gathering data, and how data is graphically presented. How it is presented is critical in a

Is Technological CHange Worth It? Essay Start.. 1st draft

My Essay
Intro
1. The cost benefit analysis approach is a good one.

Para 1
Weaknesses include the lack of discussion on the future costs and benefits including discounting and how this affects the analysis.
Talk about the treatment substitution effect and the treatment expansion effect, *rather like the value of $1 spending and its income and substitution effects. Treatment expansion may be of benefit when the treatment is highly beneficial, but not if the treatment is marginal or the patients receieving it are of marginal needs.
Dranove talks about the importance of making the correct cost benefit analysis as even using the same raw data very different implications be found. He highlights that a series of articles published in the 1990's reporting on biennial mammograms for women between 40-49. The reported costs per life-year saved ranged from $10,000 to over $100,000, most of the studies all being based from the data of the same sample of Swedish women. this caused international concern from the US and Canada and abroad, who asked the Swedish researchers for access to their data.

Para2.
Further weakness includes the use of $100,000 as a value for a year of life, when literature is overwhelmingly favouring an amount around $50,000US.
The value of one healthy life year is more commonly discussed around the value of $50,000US, not the $100,000 benefit that Cutler and McClellan use.
In the article Taking Account of Future Technology in Cost Effectiveness Analysis, published in British medical journal September 2004, Solomon et al. states that cost effective analysis interventions having incremental ratios of $50,000 per QALY in US, or 30,000 pounds in the UK ($55,000) are usually held to be cost effective. They also made the point that cost-effectiveness analysis does not usually take account of future possible advances in treatment, but taking these future possible advances into account would greatly alter a cost benefit analysis

Para3
Choice of 5 specific diseases, what can i say about them?
Measuring the costs and benefits at the disease level, as has the studies that guided their report, as they feel health improvements in aggregate are difficult to distinguish and credit corrrectly.
With 5 chosen conditions there is sufficient data over a resonable period to anylise and use these as implications for medical system more generally. They acknowlegde disease level analysis is not exact but assume that they can better ientify the uncertainties and l;imitations of the data. They confirm they do not have sufficently large conditions to draw firm conclusions.

Para4.
Importance of mentioning the other costs involved in medical innovation, that of Research and Development, and the expensive legislative/regulation system around that. How is this relevant to the discussion?
Need to be careful here as who is the cost gone up for, the cost of the operation is used as the cost value, but what about the other costs, the R&D costs, and high profits that are protected by patents (eisenberg). Missed a major cost in meical innovation- that is R & D. Eisenberg highlights that the dual structrures of patents and drug regulation are both increasing the costs of medical drug innovation. Beyond adding to the costs of drug developments, drug regulation does much to support the profitablility of new drugs. Beyond forestalling competition and supporting profits, the patent system increasingly threatens to divert profits away from drug developing firms towards other patent claimants. So I believe the authors took a deliberately simple approach to the question is technological change worth it, so that they could set aside the glaring costs and profits in medical innovation that are now simply inherent in the system due to the complex and highly regulated structure.

Para 5
Policy implications
1.They think the focus on waste spending reduction should be balanced against the potential for inhibiting technical growth. Policy should adjust its focus.
2.Better indices for medical care: They claim that their “quality adjusted” price of medical care is actually falling over time.
3.They feel the National Health Accounts data should be extended to include the benefits of medical care as well as the costs.
i think that there is no other information about benefits in national health accounts then maybe an effectiveness index might be more appropriate. this would be a cost per QALY gained analysis.
4. Managed care and other policy reforms could be assessed using the authors same cost benefit analysis

Conclusion

My Essay Outline- Witches Floods Wonderdrugs

Clark, critical essay.
Summarise, explain key concepts, lessons implications. Additional ideas from Tufte

MY ESSAy outline

Clark contends that improving risk amangement is essentially not a problem of science but of improving management response to risks through policy analysis.
Risk management has been refered to as a 'quasi science' and as a 'trans-science' and also a 'social science', and so the debate rages. Clark puts aside these labels as of limited assistance and addresses the central need he sees, which is to evaluate, order and structure uncertain and incomplete knowledge so that the management acts can be chosen with the best usage and possible understanding of current knowledge. Considering risk management as policy analsis with the aim of better guiding management acts would align risk management to a range of established analytical norms, and also turn the spotlight on the institutions that have the ability to run risk investigations. As Clark points out this is a lesson that can be learnt from witch hunting, where little or no members of the church or governing institutions ever had accusations made against them.


Clark looks at the difficulty of establishing a useful perspective from which to assess risk management, fears and our involvement in such, and how this has meant the past risk management is directed to wasteful ends by these underlying perspectives.
Risk problems arise from human perceptions, and their fears. He argues that when you are affected by a risk you are unable to evaluate it critically, and if you remove humanity from the analysis then it becomes sterile and unimportant. I would go further than Clarks arguement and suggest that as an assessment risk is based on and created out of human fears, the field is subject to all human flaws. That is, human affliction such as selfishness, greed, prejuduces, as well as fears all affect the direction and influence of the risk industry on citizens.


Though risk management is not a science per se, there is a need for a fair test within risk assessment. Clark clearly supports a more scientific approach to risk management. With a scientific approach Clark belives we can avoid confusing the feisible from the desirable, as well as avoiding a risk management policy that will only terminate or succeed when a risk is identified. Both these outcomes direct resources in wasteful manner and lead the public and management alike further from any understanding of real risk. Risk assessors of the witch hunt ended up incinerating 500,000 citizens because of a lack of clear framework for such a judgment. This result was probably nothing like what the citizens would consider the aim of the witch hunt was. From my knowlege of econometrics it is clear that in scientific terms, a hypothesis to be tested must have two possibilities, so that when risk assessors look for risk they conversely also investigate for no risk. With witch hunting, being accused of being a witch was tantamount to conviction, and your only way of disproving being a witch was to survive torture by some means. There was no inbuild system of defense for the accused, no stopping rule. Clark argues that in risk assessment today often the only stopping rule is discovery of the sought-after affect, and a fair scientific testing method would better control the direction of a risk investigation.


Clark also investigates another way in which risk assessment could be improved through using a grand jury system and implementing rules of evidence would be a significantly more rigorous way of dealing with risk assessment when humans are the risk subject. This last insight is implied from the historical demise of witch hunting as a profession where y Frias carried out an extensive analysis of witch huntings in and area. He used an approximation of these principles to show most of the accustions were incorrect, and the process had created witches were there was none. Rather than applying the rules of evidence in a court, there should be rules of evidence within risk managament. Formal rules of evidence constitute formal hypothesis on how to best cope with the unknown.

Human factors, fear Political backdrop within which risk assessment is operating
Clark points out that there is a highly political background in which risk assessment is operating, which is a brave step. In the case of witch hunting, institutions benefited from withes being made a scapegoat on which to blame the problems of the day. In the case of medical science, if citizens worship researchers and medical institutions there is the risk of a witch hunt continuing. This can be seen with the boom in alternative medicine, when books like Trick or Treatment critically disprove the scientific value of treatments but the industry continues to grow rapidly. Pharaceutical companies gain large profits from medicines that may be no more than pure placebo. Further, when politicians use a scientists research to speak out on an issue, scientific peer review cannot easily penetrate that arena. Scientists may also be encouraged to speak more confidently on their conclusions than would be warrented within te scientific community, and the reality can be misrepresented/exaggerated to the public without rigorous debate. The findings of risk assessment are easily exaggerated in the media, and a highly politicised society means risk assessment can be skewed in threir direction as well as in the representation of the findings.

The issue of causation, witch hunting breeding witches, trying to control pests causing pest related crop losses
Clark toyes with the idea that there is causal issues within risk management, with the hunt for risks proliferating the risks, but he falls short of making his own determination on whether this is a fundamental problem within risk management. He cites the examples that If risks are indeed created by the hunt for them, isnt the industry a somewhat unneccessary waste of time? As I will discuss in the next paragraph, the tradition of coping has meant no further risks are created by risk reducing strategies, as nature is left to take its course. This is an inherently pleasing concept if you have spiritual beliefs in the land, or religious beliefs that god moves in mysterious and all powerful ways.


The absense of tradition of coping, and how uncertainty is inherent. Clark refers to the human tradition of coping with unexpected events in comparison with current risk assessment policies. Without providing much evidence as to the efficacy of our old coping techniques, he suggests some improvements that could be made to risk assessment by policy change back towards a policy that is capable of accepting uncertainty rather than trying to beat it. He shows, quite rightly that nature often has the one up on humans, and will always have a twist that policy makers are unprepared for. The point that Clark is making is that this should be taken as given and that the area for improvement here is policys ability and magamement ability to then respond to these unexpected twists.


Clark points out that regulating versus not regulating is a pointless debate, and in looking at the US and UK drug regulation industries he supports the approach taken by the latter. Clark emphasises the medical drug industry's interest in increased risk taking abilities rather than decreased risk per se as being a more consturctive perspective and meaningful aim for risk management.

Rationality of risk management policies is still backwards, needs to be retrospective to be adaptive and learn
Clarks assessment of current risk maagament models is that prevailingly they use knowledge-presuming prospective rationality to develop policy. Concepts such as social optimisation and best possible decision making is based on rationality of social acceptance and expert consense, and is expected to work just because it fit this idea of rationality. This is the opposite of the view clark supports where rationality is a policy that is always self checking and is accepted as the best model becaue of this fact. Clark supports this with evidence of well established reconstructive approaches taken in other fields such as social psychology and economic theory.

Suggested decentralisation of risk management policies
Throughout the examples Clark gives us, he notes the progress of risk management away from an individualistic endeavour to something that is now provided by administrative arms of the institutions, for the collective good. Clark suggests that the thousand flowers approach of decentralised policy making and the ability this will give us to learn from a variety of risk responses is valuable. This concept while intriguing, is perhaps to forward thinking and difficult for a sociiety to accpet who feel safer when a collective body looks after them. Further, the idea is

Tufte, adds to the debate hands on policy creation, how data has a central and influetial role. He promotes scientific approach also, to both the approach behind gathering data, and how data is graphically presented. how it is presented is critical in a

exam questions to start working on

In the early part of the course we watched webcasts of two seminars, and I asked you to read the transcript of the seminars and journal articles associated with each seminar. Choose one of the two presenters/authors (Eisenberg or Cutler-Mclelland) and write a short essay (max 1000 words) that critically explains and summarizes the key-ideas and arguments of the author(s) about the "value of medical innovations".

Imagine the NZ Minister of Health has before her a proposal to make existing tax dollars go farther by funding only "cost effective" surgeries/drugs/medical devices, where cost effectiveness is defined operationally as those with a cost per QALY of $NZ50K. Based on this week's readings and class discussions write a short essay critically summarizing what you have learned about using cost benefit/utility/effectiveness analysis to measure and to value your own personal health (or possible lack of it) in $ terms, then use that to advise the Minister of Health on her decision. (Don't go overboard in terms of your writing here).

As we did in week 1: Clark uses 3 images - witches, floods , and wonder drugs - in his paper on risk and risk management. Write a critical essay summarising and explaining the key concepts, lessons and implications for “Risk as a people problem” he draws from each of these images, taking each one separately, and overall. and as a whole. What additional ideas does Tufte contribute to Clake's analysis of risk and risk management? (A good answer will contain not only a thorough critical exposition, but your thinking about connections with other material in the course or discussions in class or in blogs ).

Based on the discussions and analyses we do here, you can begin to develop an answer to one exam question in your blog is: Write a critical essay summarising and explaining the key concepts, arguments and implications about making decisions about diagnoses and treatments for important health issues identified by Gigerenzer in the assigned chapers from his book Calculated Risks. Briefly discuss how the concepts of uncertainty and risk management used by Gigerenzer relate to those used by Clark and Tufte [ you can refer back to your answer to the writing task in the previous week].(Note: connections with other material in the course or discussions in class or in blogs will be rewarded.)