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Can Government Play Moneyball?

Stashed in: Big Data, economics, America, Economics, Moneyball, Medicine

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The moneyball formula in baseball—replacing scouts’ traditional beliefs and biases about players with data-intensive studies of what skills actually contribute most to winning—is just as applicable to the battle against out-of-control health-care costs. According to the Institute of Medicine, more than half of treatments provided to patients lack clear evidence that they’re effective. If we could stop ineffective treatments, and swap out expensive treatments for ones that are less expensive but just as effective, we would achieve better outcomes for patients and save money.

Both parties should find much to like in such an approach. It would offer Republicans a way to constrain the growth of government spending and take pressure off private businesses weighed down with health expenses. And it would offer Democrats a means of preserving the integrity of Medicare and Medicaid and thereby restoring faith in a core government function.

And yet getting funding for the research needed to assess and compare medical treatments has been like pulling teeth. As a rule, legislators seem to lack a natural affinity for economists and budget analysts (alas, they are hardly alone). But Peter (Orszag) made himself exceptionally unpopular with some Democrats and many Republicans by insisting on such funding in the 2009 stimulus bill, and then working to expand it in the 2010 “Obamacare” legislation. Despite these modest successes, less than $1 out of every $1,000 that the government spends on health care this year will go toward evaluating whether the other $999-plus actually works.

That's really unfortunate. Without analysis and feedback, how can things get better?

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