Malpractice liability, along with medical technology and payment system distortions, regularly figures among the most-cited reasons for escalating health-care spending in the United States. On the one hand, Harvard economist Amitabh Chandra conservatively estimates that upwards of $60 billion, or 3 percent of total health care costs ($1.8 trillion), is spent annually as a result of direct litigation and indi­rect defensive medicine costs. On the other hand, tort reform advocates place the figure at $200 billion by extrapolating, to the entire U.S. population, the results of research conducted by Stanford professor Dan Kessler and Mark McClellan. Their 1996 study shows that tort reforms reduced provider liability costs for Medicare heart patients by 5 to 9 percent.

At the heart of these debates is the following question. Does medical malpractice liability achieve its dual goal of compensating victims of medical injuries and deterring medical errors, or does it merely encourage wasteful defensive medicine without improving patient health? Despite considerable empiri­cal research, there is little evidence that malpractice litigation deters medical negligence. The evidence is much stronger—though still hotly debated—that malpractice fears actually encourage physicians to engage in defensive medicine.

The newest release in the Asia health Policy Program working paper series, AHPP working paper #13 by Brian Chen, explores whether malpractice pressures affect physician behavior, patient health, and health care costs in Asia. Studying physicians’ response to legal changes in Taiwan, he finds that greater malpractice liability may, under certain circumstances, prompt physicians to perform more services without necessarily improving patient health.

Dr. Chen investigates how physicians’ test-ordering behavior and propensity to perform cesarean sections were affected first by a series of court rulings in Taiwan that increased physicians’ liability risks, and then by a subsequent amendment to the law that reversed the courts’ rulings. He finds that physicians faced with higher malpractice pressure increased laboratory tests as expected but unexpectedly reduced cesarean sections. The reduction in cesarean deliveries may be due to the fact that liability risks were more closely aligned with physicians’ standard of care after the court rulings. After the law was amended to negate the court decisions, physicians reversed their previous behavior, reducing laboratory tests and increasing cesarean deliveries. This pattern of behavior strongly suggests that physicians in Taiwan practice defensive medicine.

In mid April, FSI convened a special conference on Technology, Governance, and Global Development, to examine how technical innovation solves, or fails to solve, the problems of chronic global underdevelopment.  Experts from business, medicine, philanthropy, academia, government and non-governmental organizations, along with young Stanford alumni, addressed technology's ability to help secure gains in health, economic development, agricultural innovation, food security, and human development.

With a wealth of expertise and on-the-ground experience, panelists tackled central issues and engaged in spirited debate, animated by moderator Philip Taubman.  "The Promise of Information and Communications Technology" examined whether technology can transform lives of individuals, even in poorly governed countries, finding encouraging evidence in technology-based medical and health services and novel approaches to economic development, including sharing vital information and banking via mobile phones. 

A panel of young Stanford alumni discussed their entrepreneurial efforts that led to the development of a low-cost, lifesaving incubator for low birth weight babies, the FACE AIDS program begun at Stanford that now has 20 chapters and has contributed some $2 million for treatment of people with AIDS in Africa, a new Global Health Corps to train health care workers, and other innovations to save lives in underserved areas.

Condoleezza Rice, former Secretary of State and National Security Advisor, gave the lunchtime keynote with a focus on why democracies are more effective and ultimately more efficient in delivering economic development. Democracies are better at protection of rule of law and property rights, she noted. Democracies are less corrupt, more in touch with their people, more stable, and better able to deliver the benefits of human capital development, health, and education to their population as a whole.

A third panel on "Governance, Innovation, and Service Delivery" addressed how innovative institutions and technologies could overcome poor governance and deliver needed services in underdeveloped regions. "Despite extraordinary growth in our technical capacity to prevent and treat child illness and death, we are seeing stagnation or a rise in mortality rates of children under five in some areas," said pediatrician Paul Wise. "This reflects gross failures in delivering highly efficacious health interventions." Some 9 million children still die each year, and 65 percent of child deaths in unstable areas are preventable, he noted. Wise has launched a new program to improve child health in areas of unstable governance through new integrated technical and political strategies.

A fourth session on "Creative Markets for Technical Innovation" honed in on the institutions, innovations, and incentives needed to stimulate development of products and services that address the needs of the poor. Panelists focused on pharmaceuticals, agricultural innovation, use of mobile technologies to share information on best practices, improved food security through innovative technology - such as solar-powered irrigation to expand growing seasons, crops, and incomes, and the development of human capital in China through rigorous evaluation, field trials, and nutritional intervention.

Among the experts addressing these vital issues were Google.org's Megan Smith, BP Solar's Reyad Fezzani, Center for Global Development President Nancy Birdsall, Gates Foundation Director of Agricultural Development Sam Dryden, Gilead Science's Clifford Samuel, dynamic Stanford alumni Nava Ashraf ‘97, Jared Cohen ‘04, Jane Chen ‘08, and Jonny Dorsey ‘07, and FSI's Coit D. Blacker, Joshua Cohen, Stephen D. Krasner, Paul H. Wise, Rosamond L. Naylor, and Scott Rozelle.

FSI Payne Lecturer Bill Gates, Co-chair of the Bill & Melinda Gates Foundation and Chairman, Microsoft, gave an address on "Giving Back: Finding the Best Way to Make a Difference."  He urged students to become involved in the central issues of global health—including the need to reduce child mortality through more vaccines and better delivery systems—and education, saying we need to find out "what works" and use the Internet to share lessons learned globally.

"We need to shift talent toward bigger needs," Gates said, urging students to provide the passion and ideas to drive us forward in health, education, and energy.  To make a difference, Gates advised, "Get your hands dirty, do the hard work in the actual environment, early in your career."  Telling students that he is looking for "great ideas," he challenged them to post answers on the Gates Foundation Facebook wall to three questions: What problems are you working on? What draws you in? How will you draw other people in to work on solutions to the world's great challenges.

In early spring, historic health reform passes, extending insurance to millions of uninsured. Despite problems with workplace-based coverage, controversy over government subsidies for insurance premiums, and disparities across a large and diverse nation, dramatic shift to a single-payer system was seen as impractical.

Instead, reforms focus on expanding current social insurance programs as well as new initiatives to cover the uninsured, improve quality, and control spending. They provide a basic floor, subsidized for the poorest, but preserve consumer freedom to choose in health care. No government body dictates choice of doctor or hospital; investor-owned and private not-for-profits compete alongside government-run providers like community health centers and rural hospitals.

Left to be addressed in later phases are the difficult questions of how to slow the relentless pace of health care spending increases -- driven in part by technological change and population aging, but also perverse incentives embedded in fee-for-service payment and fragmented delivery. Pushed through despite multiple crises confronting the leadership, the final landmark health reform works in conjunction with measures enacted as part of the fiscal stimulus package to strengthen the healthcare system. Some provisions take effect immediately; others will take many years to unfold.

President Obama’s triumph on his top domestic priority? Actually, there were no votes along partisan lines, no controversy over abortion. I am describing health reform in China, which was announced almost exactly a year ago.

We do not hear much about the parallels in the US and Chinese social policy. But we cannot fully understand each other if we ignore these commonalities. We do not hear much about those who, in both societies, have been rendered destitute merely because they or a family member became sick or injured in a system with a social safety net full of gaping holes.

It will surprise many Americans to know that government financing as a share of total health spending was lower in socialist China over the last decade than in the United States. Now China has pledged about US$124 billion over 3 years to expand basic health insurance, strengthen public health and primary care, and reform public hospitals.

In China, the injustice of differential access to life-saving healthcare had sparked cases of social unrest. The April 2009 reform announcement was the culmination of years of post-SARS (2003) soul searching for a healthcare system befitting China’s dynamically transforming society. Special interests block change. (Sound familiar?) The CPC Central Committee and the State Council acknowledge that successful health reform will be “an arduous and long-term task”.  

If the US can pass sweeping health reform despite an unprecedented financial crisis, and China can envision universal health coverage for 1.3 billion while “getting old before getting rich,” then together we should be able to look past our many differences to focus on our common interests. Our two proud nations must work together to confront numerous challenges, such as upholding regional stability (e.g. on the Korean peninsula); redressing global economic imbalances (increasing health insurance can help spur China towards more domestic consumption); and investing in “green tech” for a warming planet and “grey tech” for an aging society.

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When searching for insights about how other countries deal with similar challenges, Americans often look to Europe and Canada. Rarer is the comparison to counterparts across the Pacific. Yet President Obama has clearly articulated the vision of the US as a Pacific Nation, and there are developments around the Pacific Rim that merit consideration in our debates.  

Australia pioneered cost-effectiveness in health care purchasing, while the US continues to debate whether cost should be part of comparative effectiveness research and policy decisions.

Both Japan and South Korea, like Germany, have enacted long term care insurance to smooth the transition to an aging society. Their experiences might be fruitful as we implement the first national government-run long-term care insurance program, a little-heralded component of the newly passed legislation (and a fitting legacy of Senator Edward Kennedy).

Japan and Singapore provide universal coverage to older populations than ours with health systems that, although surprisingly different from each other in terms of public financing and role of market forces, both ranked among the best in the world -- and far higher than the US -- in the World Health Organization’s ranking of health systems in the year 2000. Although one may quibble with the ranking, it is indisputable that Japan spends a much smaller share of GDP on healthcare than the US does, despite being one of the oldest and longest-lived societies in the history of the world and having (like the US) a fee-for-service payment system.

Japan and South Korea are also democracies, where health policies occasionally engender heated debates. In South Korea, physicians went on nationwide strike three times to oppose the separation of prescribing from dispensing. Although Japan’s incremental reforms rarely spur such drama, the passions aroused by end-of-life care – embodied in the bizarre “death panels” controversy in the US health reform debate of 2009 – has its counterpart in the bitter nickname for Japan’s separate insurance plan for the oldest old: “hurry-up-and-die” insurance.

Yet Japan, Singapore, and Hong Kong all offer health systems that provide reasonable risk protection and quality of care for populations older than ours, with a diverse range of government and market roles in financing and delivery, while spending far less per capita than the US.

No system has all the answers. But the US and our neighbors across the vast Pacific have a common interest in sharing what we’ve found that works for health reform. Despite divergence in our political and economic systems, we all value long, healthy lives for ourselves and our children -- and we’re united in health reforms that try to further that goal.

The impact of global warming on food prices and hunger could be large over the next 20 years, according to a new Stanford University study. Researchers say that higher temperatures could significantly reduce yields of wheat, rice and maize - dietary staples for tens of millions of poor people who subsist on less than $1 a day. The resulting crop shortages would likely cause food prices to rise and drive many into poverty.  

But even as some people are hurt, others would be helped out of poverty, says Stanford agricultural scientist David Lobell.

Lobell discussed the results of his research on Feb 19 at the annual meeting of the American Association for the Advancement of Science in San Diego.

"Poverty impacts depend not only on food prices but also on the earnings of the poor," said Lobell, a center fellow at Stanford's Program on Food Security and the Environment (FSE). "Most projections assume that if prices go up, the amount of poverty in the world also will go up, because poor people spend a lot of their money on food. But poor people are pretty diverse. There are those who farm their own land and would actually benefit from higher crop prices, and there are rural wage laborers and people that live in cities who definiztely will be hurt."

Lobell and his colleagues recently conducted the first in-depth study showing how different climate scenarios could affect incomes of farmers and laborers in developing countries.

Household incomes

In the study, Lobell, former FSE researcher Marshall Burke and Purdue University agricultural economist Thomas Hertel focused on 15 developing countries in Asia, Africa and Latin America. Hertel has developed a global trade model that closely tracks the consumption and production of rice, wheat and maize on a country-by-country basis. The model was used to project the effects of climate change on agriculture within 20 years and the resulting impact on prices and poverty.

Using a range of global warming forecasts, the researchers were able to project three different crop-yield scenarios by 2030:

• "Low-yield" - crop production is toward the low end of expectations.
• "Most likely" - projected yields are consistent with expectations.
• "High-yield" - production is higher than expected.

"One of the limitations of previous forecasts is that they don't consider the full range of uncertainties - that is, the chance that things could be better or worse than we expect," Lobell said. "We provided Tom those three scenarios of what climate change could mean for agricultural productivity. Then he used the trade model to project how each scenario would affect prices and poverty over the next 20 years.

"The impacts we're talking about are mainly driven by warmer temperatures, which dry up the soil, speed up crop development and shut down biological processes, like photosynthesis, that plants rely on," he added. "Plants in general don't like it hotter, and in many climate forecasts, the temperatures projected for 2030 would be outside the range that crops prefer."

Results

The study revealed a surprising mix of winners and losers depending on the projected global temperature. The "most likely" scenario projected by the International Panel on Climate Change is that global temperatures will rise 1.8 degrees Fahrenheit (1 degree Celsius) by 2030. In that scenario, the trade model projected relatively little change in crop yields, food prices and poverty rates

But under the "low-yield" scenario, in which temperatures increase by 2.7 F (1.5 C), the model projects a 10 to 20 percent drop in agricultural productivity, which results in a 10 to 60 percent rise in the price of rice, wheat and maize. Because of these higher prices, the overall poverty rate in the 15 countries surveyed was expected to rise by 3 percent.

However, an analysis of individual countries revealed a far more complicated picture. In 11 of the 15 countries, poor people who owned their own land and raised their own crops actually benefited from higher food prices, according to the model. In Thailand, for example, the poverty rate for people in the non-agricultural sector was projected to rise 5 percent, while the rate for self-employed farmers dropped more than 30 percent - in part because, as food supplies dwindled, the global demand for higher-priced crops increased.

"If prices go up and you're tied to international markets, you could be lifted out of poverty quite considerably," Lobell explained. "But there are a lot of countries, like Bangladesh, where poor people are either in urban areas or in rural areas but don't own their own land. Countries like that could be hurt quite a lot. Then there are semi-arid countries - like Zambia, Mozambique and Malawi - where even if prices go up and people own land, productivity will go down so much that it can't make up for those price increases. In the 'low-yield' scenario, those countries would see higher poverty rates across all sectors."

Under the "high-yield" scenario, in which global temperatures rise just 0.9 F (0.5 C), crop productivity increased. The resulting food surplus led to a 16 percent drop in prices, which could be detrimental to farm owners. In Thailand, the poverty rate among self-employed farmers was projected to rise 60 percent, while those in the non-agriculture sector saw a slight drop in poverty. In Zambia, Mozambique, Malawi and Uganda, poverty in the non-farming sector was projected to decline as much as 5 percent.

Risk management

Lobell said that, although the likelihood of the "low-yield" or "high-yield" scenario occurring is only 5 percent, it is important for policymakers to consider the full range of possibilities if they want to help countries adapt to climate change and ultimately prevent an increase in poverty and hunger. 

"It's like any sort of risk management or insurance program," he said. "You have to have some idea of the probability of events that have a big consequence. It's also important to keep in mind that any change, no matter how extreme, will benefit some households and hurt others."

The Program on Food Security and the Environment at Stanford is an interdisciplinary research and teaching program that generates policy solutions to the persistent problems of global hunger and environmental damage from agricultural practices worldwide. The program is jointly run by Stanford's Woods Institute for the Environment and the Freeman Spogli Institute for International Studies.