R&D in Agriculture

Research article notes that globally, most of the increase in agricultural production over the past 50 years can largely be attributed to rising crop and livestock yields rather than to the expansion of acreage devoted to farming.

Private sector investments comprise a greater and growing share of overall R&D spending. “Agriculture is more dependent on scientific innovation than any other industry,” said Catherine Woteki, USDA’s Chief Scientist and Under Secretary for Research, Education and Economics. “This study shows the great job that private industry is doing in research, much of which was built on the genetic technology USDA scientists have been working on for decades. It’s crucial that we continue supporting this kind of R&D.”

Reliable estimates of publicly funded agricultural research have previously been available, and studies have established strong links between these investments and the long-term growth of the productivity of American agriculture. But the ERS (Economic Research Service) study is the first of its kind to provide comprehensive estimates and analyses of private sector R&D for agricultural input industries, even for global companies with R&D endeavors in different countries and sectors. The report defines agricultural inputs as animal genetics; animal nutrition; animal health; farm machinery; fertilizers; crop seed and biotechnology; and agricultural chemicals.

Findings reported in the Science article include:

  • Globally, about half or more of all private investment in food and agricultural research and development have been devoted to food manufacturing, not toward input industries and other areas that directly increase agricultural production.
  • Recent increases in private agricultural input research have mostly centered on crops, including farm machinery and some biofuels investments; livestock-related research and crop protection chemicals have experienced less growth.
  • Research into biofuels has become increasingly important, with estimated global investments by private companies at approximately $1.47 billion in 2009.
  • In both crop seed and animal breeding, biotechnology research was an important driver of consolidation in these industries.
  • Private spending contributed to the overall growth in R&D for agricultural in the face of slowing or stagnant public R&D resources, but addressed a narrower set of research topics and input industries than publicly funded R&D.
  • Public policies have a major influence on private-sector incentives to invest in agricultural research. Intellectual property protection, regulatory frameworks, and especially, public investments in basic science that opens up new technological opportunities, have been important drivers of the growth of private agricultural R&D.

The article can be found at: http://www.sciencemag.org/content/338/6110/1031.full

Food Waste in America

Americans waste an unfathomable amount of food. In fact, according to a Guardian report released this week, roughly 50 percent of all produce in the United States is thrown away—some 60 million tons (or $160 billion) worth of produce annually, an amount constituting “one third of all foodstuffs.” Wasted food is also the single biggest occupant in American landfills, the Environmental Protection Agency has found.

What causes this? A major reason is that food is cheaper in the United States than nearly anywhere else in the world, aided (controversially) by subsidies to corn, wheat, milk, and soybeans. But the great American squandering of produce appears to be a cultural dynamic as well, enabled in large part by a national obsession with the aesthetic quality of food. Fruits and vegetables, in addition to generally being healthful, have a tendency to bruise, brown, wilt, oxidize, ding, or discolor and that is apparently something American shoppers will not abide. For an American family of four, the average value of discarded produce is nearly $1,600 annually. (Globally, the United Nations Food and Agriculture Organization estimates that one-third of all food grown is lost or wasted, an amount valued at nearly $3 trillion.)

The Atlantic: July 15, 2016

While US consumers were aware that wasted food is a problem, those surveyed tended to blame others. Nearly three-quarters said they wasted less food than the average American, and 13 percent claimed they didn’t waste any food at all. “Tossing food that spoiled in the refrigerator has become habitual behavior so that people don’t necessarily see that as waste, because once something has spoiled it’s not seen as food anymore.”

Worry over food poisoning was the most popular reason for discarding food, leading Neff to conclude that consumers could use additional guidance to explain factors beyond age that can make food unsafe to eat, such as contamination and improper storage. One policy change she suggests: Encode the sell-by dates on perishable food labels so that only grocers can read them. “In the survey, a fifth of the people said they threw out food—especially milk-based food—on the sell-by date, which we know has nothing to do with whether that milk is safe to drink,” she says. Sell-by dates are merely the manufacturer’s estimate of peak freshness, not deadlines for safe consumption. A desire to “eat only the freshest food” was the number two reason respondents gave for wasting food. One reason for this, Neff thinks, is a foodie culture fostered by celebrity chefs and cooking programs that has convinced many to seek only perfect, unblemished food.

 John Hopkins Magazine, Fall 2015

Challenges facing Healthcare

Health care spending in the U.S. far exceeds that of other high-income countries, though spending growth has slowed in the U.S. and in most other countries in recent years. Even though the U.S. is the only country without a publicly financed universal health system, it still spends more public dollars on health care than all but two of the other countries. Americans have relatively few hospital admissions and physician visits, but are greater users of expensive technologies like magnetic resonance imaging (MRI) machines. Available cross-national pricing data suggest that prices for health care are notably higher in the U.S., potentially explaining a large part of the higher health spending. Finally, despite its heavy investment in health care, the U.S. sees poorer results on several key health outcome measures such as life expectancy and the prevalence of chronic conditions. Mortality rates from cancer are low and have fallen more quickly in the U.S. than in other countries, but the reverse is true for mortality from ischemic heart disease.


U.S. Healthcare Ranked Dead Last Compared To 10 Other Countries


Hospital Inefficiencies

Source: Healthcare Dive

Hospital inefficiencies not only interfere with workflow, but also cost hospitals billions of dollars each year. Some of the most common hospital inefficiencies are:

  1. Inadequate communication methods – The results of the Ponemon Institute survey found that the primary reasons for communication challenges were the inefficiency of pagers, the inability to use text messaging and lack of Wi-Fi availability.
  2. Duplicate documentation requirements – Eliminating inefficiencies in documentation methods will allow clinicians to spend more time with patients and also helps with patient flow.
  3. Poor patient flow – Dealing with a large number of patients moving in and out of the hospital and from one department to another will inevitably lead to patient flow issues.
  4. Inappropriate hospital admissions and lengths of stay – Practitioners sometimes admit patients to the hospital or keep them longer than necessary because they don’t have an alternative place to send them.
  5. Incomplete medication reconciliation – One of the reasons hospitals have difficulty with medication reconciliation is that patients are often poor historians when it comes to their medications, which makes it difficult to develop a complete ‘entry’ list.

Healthcare: Follow the Money

One of the key reasons we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. As a result, administration consumes one-third (31 percent) of Americans’ health dollars, most of which is waste.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $400 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.


Waste in Healthcare Spending

The April 2012 study by former Centers for Medicare and Medicaid Services (CMS) administrator Donald M. Berwick and RAND Corporation analyst Andrew D. Hackbarth estimated that five categories of waste consumed $476 billion to $992 billion, or 18 percent to 37 percent of the approximately $2.6 trillion annual total of all health spending in 2011. Spending in the Medicare and Medicaid programs, including state and federal costs, contributed about one-third of this wasteful spending, or $166 billion to $304 billion (Exhibit 1). Similarly, a panel of the Institute of Medicine (IOM) estimated in a September 2012 report that $690 billion was wasted in US health care annually, not including fraud.


Concentration of Healthcare Expenses

According to Agency of Healthcare Research, in 2010, the top 1 percent ranked by their health care expenses accounted for 21.4 percent of total health care expenditures with an annual mean expenditure of $87,570. Overall, the top 50 percent of the population ranked by their expenditures accounted for 97.2 percent of overall health care expenditures while the lower 50 percent accounted for only 2.8 percent of the total.


Electronic Health Records (EHR)

Who are the leading healthcare IT vendors in the U.S.? Most of these companies are all but unknown outside of the healthcare field. Meditech, a privately held Boston-area company, holds more than a quarter of the market; McKesson and Cerner, numbers 2 and 3 on the list, control another 27 percent. All told, the top six companies — excluding in-house systems — are responsible for three-quarters of the EHR installations in hospitals around the country.

A study by the New York-based Commonwealth Fund found that growth in use of EHRs in the U.S. is well behind other developed countries and that – at current rates of adoption – it will take at least 30 years to get such clinical support tools in use with the majority of the doctors in America.

While no country (big or small) has 100% EHR implementation, a few are very close, and some are finding innovative new ways to get past the hurtles of early adoption, lost productivity for training, software flexibility (or lack thereof) and other roadblocks to integrating millions of pieces of paper into one database.

According to soliant.com, the countries leading in EHR implementation are Australia, Canada, Estonia, Denmark, Finland, the Netherlands, Sweden and United Arab Emirates.


Drug Price Discrimination

Source: Wikipedia, Slate.com
Why is the same drug much cheaper in Canada than in the United States? The simple answer is price controls. A Canadian law authorizes a review board to order a price reduction whenever the price of a drug exceeds the median of the prices in six European countries plus the United States. Since all the European countries intervene in various ways to hold down drug costs, Canada in effect piggy-backs on other countries’ price controls.

The U.S. government has taken the position (through the Office of the United States Trade Representative) that U.S. drug prices are rising because U.S. consumers are effectively subsidizing costs which drug companies cannot recover from consumers in other countries (because many other countries use their bulk-purchasing power to aggressively negotiate drug prices). The U.S. position (consistent with the primary lobbying position of the Pharmaceutical Research and Manufacturers of America) is that the governments of such countries are free riding on the backs of U.S. consumers. Such governments should either deregulate their markets, or raise their domestic taxes in order to fairly compensate U.S. consumers by directly remitting the difference (between what the companies would earn in an open market versus what they are earning now) to drug companies or to the U.S. government. In turn, pharmaceutical companies would be able to continue to produce innovative pharmaceuticals while lowering prices for U.S. consumers. Currently, the U.S., as a purchaser of pharmaceuticals, negotiates some drug prices but is forbidden by law from negotiating drug prices for the Medicare program due to the Medicare Prescription Drug, Improvement, and Modernization Act passed in 2003. Democrats have charged that the purpose of this provision is merely to allow the pharmaceutical industry to profiteer off of the Medicare program, which is already in imminent danger of becoming financially insolvent.

Healthcare Fraud and Abuse

Unnecessary health care (overutilization or overtreatment) is when medical services are provided with a higher volume or cost than is appropriate. In the United States, overutilization is the predominant factor in its health care expense. Factors that drive overutilization include paying health care providers more to do more (fee-for-service) and covering patients’ costs by a third-party (public or private insurance) payer. These factors leave both doctors and patients with no incentive to restrain health care prices or use.

It is projected that fraud and abuse account for between 3 to 15 percent of annual expenditures for healthcare in the United States. The National Healthcare Antifraud Association Report (March 2008) suggests that the cost ranges between 3 to 10 percent; the GAO 2008 and the Congressional Budget Office place the estimated cost at 10 percent; and the U.S. Chamber of Commerce Report places it at 15 percent. Using these data as a base, the estimated cost of fraud and abuse ranges from $100–170 billion annually.

According to ezinearticles.com:
• Medicare and Medicaid billing errors resulted in improper payments of $108 billion.
• Fraudulent claims for Medicare accounted for $33 billion in losses.
• Improper private-pay payments cost about $100 billion.
• Health insurance fraud costs us about $68 billion.
• Fraudulent insurance payments cost us $50 billion.
• Payments for medical errors run about $38 billion.
• About 10 percent of prescription drugs are counterfeit, costing about $12 billion a year.

According to Managed Care:
As much as $850 billion spent on medical care each year “can be eliminated without reducing the quality of care,” says a 2008 report (“Waste and Inefficiency in the U.S. Health Care System,” subtitled “Clinical Care: A Comprehensive Analysis in Support of System-wide Improvements”) by the New England Healthcare Institute. That is enough to extend insurance coverage to more than 30 million people, according to the Congressional Budget Office.

Misuse and overuse run from simple antibiotics to sophisticated surgeries. More than $58 billion is spent on inappropriate drugs, such as antibiotics for upper respiratory infections that do not respond to medication, according to the institute report. About $21 billion is spent treating nonurgent cases in the emergency department, where physicians rely more on duplicative and costly tests because they are unfamiliar with their patients’ histories. The largest potential area for savings — up to $600 billion a year — is the variation in hospital procedures such as the number of Caesarean sections and coronary bypass surgeries performed. Vaginal delivery is far safer than a C-section, and prescription medications can stabilize many heart patients without dangerous surgical complications, Rosof told the Post. Less invasive and risky alternatives are also less expensive.