Tag Archives: Trends

Why is Health Care So Expensive?

According to Steven Brill, whose 26,000 word article in Time is getting all kinds of attention, one big factor is price negotiation. An uninsured patient can’t negotiate at all, so they get charged $1.50 for a single Tylenol in a hospital. Insurance companies negotiate on their customers’ behalf, so they get charged less. And Medicare, which is the biggest player of all, negotiates hard — volume discounts and all, just like any big customer anywhere in the world — and thus pays the least for the same products and procedures.

Interestingly, Brill steps away from one obvious solution — have Medicare cover everyone — because he says it will leave doctors underpaid. Felix Salmon takes him to task for this, pointing out that Brill never states what “underpaid” is. Since my greedy doctor post remains my most read and commented of all time, I feel a certain obligation to chime in here. I have never seen any analysis that tries to show what doctors might get paid in an all-Medicare system. Maybe it would be pretty low; if GPs maxed out at $50,000 per year, they probably wouldn’t spend all that money and time at medical school. But maybe doctors would still get paid what they do now, and it would be hospital administrators (whose multi-million dollar salaries are the true villains in Brill’s piece) getting a pay cut. Or maybe it will be CEOs of drug companies getting paid less; who would complain about fewer $78 million severance packages being paid to CEOs?

You can read more commentary regarding Brill’s article here and here.

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Emerging Diseases and Forest Fires

I have been interested in emerging diseases ever since reading The Hot Zone by Richard Preston, which was so intense that it kept me awake during an entire overnight train ride from Boston to Washington DC. So I was very psyched at Christmas to receive a copy of Spillover by David Quammen. I just finished it, and know a lot more now about how diseases jump from animals to humans.

Scary cover, great book!

Scary cover, great book!

Quammen uses the book to explore theories about why there seem to be more frequent incidents of humans being infected by animal diseases (think SARS, Ebola, Hendra, Avian Flu, etc.). One of the theories he discusses concerns how increased human development is breaking up large contiguous ecosytems into smaller ecosystems separated by cities, farms, etc.

For example, a large forest might be full of bats that could be carriers of some nasty virus. This forest contains metapopulation of bats, or a series of smaller populations that meet and mingle at their edges. In a metapopulation an infection is likely to be constantly present, but at a low level of incidence. If each smaller population becomes isolated, however, that population will likely go through a boom and bust cycle of infection, with periodic epidemics infecting most members of the population.

If that highly infected population runs into humans, there is increased likelihood of the infection passing to the humans. In other words, if 90% of bats are infected, then there is a higher probability of bats passing their disease to humans than if only 10% of bats are infected.

As development has broken up formerly vast forests into smaller forest segments surrounded by cities and suburbs, we have seen metapopulations of natural disease reservoirs (bats, rats, mice, etc.) broken up into the isolated populations that are more likely to transfer diseases. Hence the increasing number of obscure infections jumping into humans.

What struck me about this theory is the parallel to forest fires. Current wildfire thinking holds that if you put out wildfires, fuel loads will build up and eventually you will get a catastrophic fire that can’t be controlled (like the 2002 Biscuit Fire in Oregon, which burned nearly 500,000 acres; I drove through the edge of that fire, and the smoke turned day into night). But if you let natural fires burn, they will clear out the fuel load and not turn into conflagrations.

So you can have small, more frequent fires, or rare, catastrophic fires. Much like you can have frequent, low levels of infection in your animals, or rare, but massive levels of infection. And in both cases, human intervention in the environment is what moves things from low-level balance to a high-level cyclic system.

Spending Too Much on Brand Names; BMW, Coach, etc.

Interesting that it’s a car webzine (thetruthaboutcars.com) that has written the best commentary I’ve seen on the trend of the past few years in which young people have been spending well beyond their means on brand-name cars, purses, clothes and other consumer products. There was a time when buying a BMW, or an Armani suit, or $1,000 purses and shoes, was something done by people in their 40’s and 50’s, who had been well paid for decades. Now 25 year olds PR account executives making $40,000 are buying Jimmy Choos and putting them on their credit cards. Or as the article says, a few years ago “the idea of spending four figures on a handbag when one worked at an entry-level white collar job would have been seen as irresponsible and reckless at worst, crass at best.” The pre-financial crisis debt binge wasn’t just about mortgages. People were overspending on all kinds of goods, and they still are.

One Reason to Limit Access to Guns

With a renewed national dialog about gun safety (I am adopting James Fallow’s nomenclature; let’s focus not on controlling guns, but on improving gun safety), I want to point out that stupidity and aggression are not constitutionally protected, and when you combine them with guns, bad things can happen. Things like:

  • A 6th grader bringing a gun to school for “protection,” and then pointing that gun at other children
  • A man forcing another man to do the moonwalk at rifle point
  • A man shooting and killing his roommate in an argument over how to cook pork chops
  • A man pulling a gun on a furniture delivery man in an argument over paying a delivery fee
  • A man going to his apartment and bringing out a rifle after having his penis size insulted in his apartment building pool

No 2nd Amendment exegesis here. Just noting that people can do a lot of awful things, and when you put killing devices in their hands, those awful things can get even worse.

Of course, 60% of my examples took place in Florida, so maybe the answer is to have tougher gun laws in that state, but leave the rest of the country alone.

One Reason Startups Fail

Come on, people! At least try to make your apps more than punch lines for blogs like mine. Just days after posting about the shakeout among mediocre consumer technology companies, I see a review of three apps designed to help you split the bill with friends/roommates: Billr, SplitWise and OpnTab. As regular readers know, I think that any company with a name like Billr is destined to fail. When it’s an app that does nothing you can’t do with a calculator (which is built into your phone), then its chances of success are even lower. In addition, despite the savage failure of Blippy, the app that shared with your social graph the details of all your purchases, here we have the launch of Mine, which shares with your social graph the details of all your purchases. Venture-backed technology is at its best when it solves big problems. Three apps that help you divide by seven are not solving problems at all.

Will Enterprise Startups Require Different Entrepreneurs?

VentureBeat ran an interesting article today about how startups are learning that the “Dropbox Effect” is a myth. That is, corporate IT departments will not adopt a consumer-driven solution just because users like it. There are too many issues around security and support for CIOs to be swayed by consumer products, no matter how sexy they are.

In this article, CEOs from very hot Silicon Valley startups are talking about the need to add executives with enterprise experience, from established companies like IBM and EMC. My question is whether, if going after the enterprise requires traditional enterprise approaches — security, support, sales & marketing — does that mean that we’ll see a move away from the 25 year old entrepreneurs who are currently the rage in Silicon Valley? I don’t know; part of the reason young folks can make good entrepreneurs is that they are willing to break the product mold, and that can be just as valuable in the enterprise as in the consumer market. But as the VentureBeat article points out, and as our QWERTY keyboards remind us on a daily basis, the best products don’t always win. If the way to sign enterprise customers is to have an enterprise-ready organization, maybe entrepreneurs will need to have enterprise experience.

Outsourcing Parenting to Technology?

I was at an event the other night featuring a panel of education technology entrepreneurs talking about how their companies teach kids skills beyond the traditional three R’s of the school curriculum. For example, Class Dojo is supposed to use gamification to improve kids’ behavior, with the founder talking about the importance of improving self-control (the famous marshmallow experiment). EverFi teaches kids financial literacy and Mindset Works is meant to change the very mindset, or self-conception, of children.

Then I got home, and saw on TV that Verizon commercial in which a kid’s family can’t be at his French horn recital, but they can watch him via connected devices. It’s a sweet commercial, for sure, and someone sitting on my couch (not me) got a little misty eyed. But it got me thinking that maybe we are outsourcing too much parenting to our technology.

I mean, yes it’s sweet that the kid’s dad uses a tablet camera to watch the recital, but wouldn’t it be better if the dad were actually there? And to the extent that self-control can be taught, shouldn’t parents be teaching it rather than some technology company? Especially since most of these education tech companies are started by entrepreneurs, not educators or child psychologists (except for Mindset Works).

I’m not trying to criticize any of these companies or entrepreneurs, all of whom are doing good work trying to help kids. And I’m not criticizing parents or teachers who use these tools. I’m not even definitively saying that I think using these tools is bad. After all, leveraging technology is something that we all do. When I use Excel instead of green ledger paper, am I outsourcing my financial analysis to Microsoft? No, I’m just using a tool that makes me more efficient. So why does it feel different when it comes to parenting?

Perhaps I am just hopelessly retro, thinking that parents should manage kids themselves, instead of using every tool available. Perhaps it is because I am not (yet!) a parent, so don’t fully appreciate the desire to do everything you possibly can to improve your children’s lives. Or perhaps I fear that parents who outsource teaching their children aren’t using the found time to be with their kids, but on themselves. I can’t rationally pin down why this parenting technology makes me uncomfortable; it just does.

Readers, what are your thoughts?