The (Relative) Risk in Misinterpreting Health Spending Statistics
February 15, 2018
Humans are generally lousy when it comes to understanding statistics. We tend to panic over remote risks (shark attacks are on the rise!) but dismiss larger but more mundane dangers like pedestrian deaths (2016 was the deadliest year on record in the U.S.). And that’s especially true when those risks are presented as relative risks, rather than absolute numbers.
We’re seeing the same statistical phenomenon — where the focus goes in the wrong direction — in discussions of health system spending. Recent reports on relative spending increases can sound huge, but we need to step back and understand the rest of the study before the results and conclusions are used to argue for radical solutions that would reduce innovation in health care, particularly around new medicines.
National Pharmaceutical Council Chief Science Officer and Executive Vice President Robert W. Dubois, MD, PhD, explains in his column in STAT that the absolute numbers tell a different story than the headlines. Dr. Dubois provides context and analysis to recent health spending numbers, and suggests that complex health policy questions can’t be solved until we back away from comfortable — and misleading — relative risk narratives.