Healthcare Stagnation

Healthcare Stagnation

We are facing a disastrous healthcare stagnation in the United States. Our hospitals are getting older, Medical providers are aging with too few young providers to replace them, and the quality of care that many of us experience is not getting much better. Despite this, the cost of healthcare has been soaring. Healthcare expenditures, including the costs of our deductibles, co-pays, and what our insurance pays out, has been going up at a rate reliably above inflation.

 

In The Opioid Crisis Wake-Up Call, Dave Chase writes the following about our healthcare stagnation, “Unlike virtually every other item in our economy, where the value proposition improves every year, the norm in health care for decades has been to pay more and get less. Also, unlike nearly every other industry, healthcare hasn’t had a productivity gain in 20 years.”

 

Productivity is how much we produce per unit of time spent on production. A factory that makes 5,000 widgets per hour is more productive than a factory that makes 1,000 widgets per hour. Automation and new technologies have helped factories and offices become more productive, but our healthcare stagnation is evidence that we are not seeing the same gains in healthcare. Technology has improved, but not in areas that seem to produce more healthy patients given the same amount of time and effort from our medical providers. We have some new technologies, but somehow those technologies have not translated into a healthcare system that supports the same number of people with fewer resources.

 

Chase continues, “In other words, for the last two decades, there has been a redistribution tax from the working and middle class and highly efficient industries to the least productive industry in America.” 

 

As your job has become more efficient and more productive, your healthcare costs have risen. Chase equates this healthcare stagnation price increase to a tax. Factories that can work with fewer employees, software engineers, and other employees form highly productive sectors are paying more in healthcare for services that haven’t kept the same pace as the industries of the patients they treat. This is the cost of healthcare stagnation that chase wants to push back against by demanding better systems and structures from healthcare providers, insurance companies, and benefits brokers. Chase believes we can find a way to improve our healthcare system and help people live healthier lives for less cost, if employers are willing to make real investments in their employees healthcare, and are willing to hold their brokers and insurance providers accountable for the value their products provide.
Medical Technologies

The Problem with Healthcare Technology

In my last post I wrote about hidden costs of the healthcare system in America. I wrote about tax breaks for employers who offer health benefits, and I wrote about third party insurance preventing the healthcare system from working like a pure market. This post introduces one consequence of the hidden costs of our system and the ways in which our system fails to act like a market: the high cost of medical technologies.

 

In The Opioid Crisis Wake-Up Call, Dave Chase writes, “We ended up focusing on a certain type of high-technology, acute medical care – which we financially reward far more than lower-level preventive and chronic care – without regard for the quality of the outcomes or value of the care.”

 

When I took a healthcare policy and administration class along with a healthcare economics class for my graduate studies, I was surprised to see a critique of advancing medical technologies as part of the problem of American healthcare costs. I live in Reno, under the sphere of influence of the Bay Area, where technological solutions to global problems are hailed as the cure-all, deus ex machina that we need for a peaceful and prosperous world. I always thought that better medical technology saved lives, made us healthier, and ultimately reduced cost by being more efficient and precise than older technologies.

 

As it turns out, new medical technologies are incredibly expensive, and often times the benefits that patients receive are only marginally better than what existing technology offers. In some instances those marginal improvements make the difference between life and death, but in many instances, the new technologies might only add a few months of life to a terminal diagnosis, a few additional months lived in pain and fear. In other instances, the new technologies might add a little more comfort or certainty in a patient’s procedure or diagnosis, but it is fair to question whether its really necessary and worth the additional cost.

 

The quote from Chase reveals that when we are shielded from the costs of care, and when we remove market aspects from the healthcare system, we adopte a mindset that healthcare equals expensive interventions with high cost technology. I had clearly bought into this narrative prior to my graduate studies. The alternative that Chase highlights in his book, which we have underdeveloped in the United States, is to move upstream, and take care of people at a preventative level before they are sick and before they need expensive technological interventions. Developing systems, structures, and norms for healthy lifestyles will do more to reduce costs than the development of new magical cures and technological fixes. Our priorities and the focus of our system is flawed, and a as a result we focus on high cost interventions within a system no one is happy with. Rather than develop a system that actually supports healthy living, we have fished around for quick, high-cost technological solutions to our health woes.
Technology & Pain

Questioning Our Confidence in Technological Solutions

Sam Quinones interviewed Alex Cahan, a pain medicine specialist in New York, for his book Dreamland. He is quoted in the book talking about the approach that most people have toward pain and alleviating their pain. Many people want an immediate solution that comes from technology and allows them to continue living their life as they always have.

 

Quinones writes, “Cahana saw stuff [Author Note: unproven medical treatments, more surgeries, more pills, etc…] as the problem. Our reverence for technology blinded us to more holistic solutions.” The holistic approach is not one of mystic arts or managing ones energy, but is an approach focused on how we live and what health habits we have. Smoking, minimal exercise, and living with stress that we can’t regulate are all parts of our life that can make the physical pain that we experience much worse, or can lead to worsening health and pain developing from other real medical conditions. An approach to pain medicine that doesn’t consider our actual lifestyle cannot help address the root of our pain.

 

Quinones continues with a quote from Cahana, “We got to the moon, invented the internet. We can do anything. It’s inconceivable to think there are problems that don’t have a technological solution. To go from I can do anything to I deserve everything is very quick.” 

 

Cahan’s argument is that our technological innovations and the stories we tell about our scientific progress blinds us from the reality of the human body. We are not machines, we are not our own technological innovations, even if we like to believe that we can all be Iron Man. The reality is that we have to think about how we live, about the things we do, and about what could be changed, adapted, or included in our lives to help us be more healthy and experience less pain. We don’t have to believe in a mystical energy around our bodies. We don’t have to turn to medical treatments that are not proven to be safe or effective. But we do have to think about what is important in our lives, what values we hold, and how we can make changes that help us align with  those values in a healthy and reasonable way. Once we have seen where we can make changes in our actual lives and what habits can help us improve our health and reduce our pain, it is up to us to live accordingly, not up to technology to instantly solve our problems.
Disruptive Innovation

The Basics of Disruptive Innovation

In his book Deep Work Cal Newport shares a story about Clay Christensen, the Harvard Business School professor who coined the term disruptive innovation. Its an idea I like quite a bit, especially since it is a big concept in healthcare right now, and I focused quite a bit on health policy and dabbled slightly in healthcare economics during my graduate studies.

 

Newport describes the basics of disruption like this, “entrenched companies are often unexpectedly dethroned by start-ups that begin with cheap offerings at the low end of the market, but then, over time, improve their cheap products just enough to begin to steal high-end market share.”

 

In this model, Uber wouldn’t be a disruptive innovation. Uber didn’t do anything to dramatically change the world of taxis. They sidestepped a lot of entrenched thinking and decided that laws and regulations didn’t apply to them while introducing badly needed technology to the world of taxis, but they didn’t offer a new cheap version of the service to gradually build upon and improve.

 

An example of disruptive innovations that I like, that I learned about in a healthcare economics class, is Bose headphones. Bose is producing headphones that have impressive noise cancelling, noise isolating, and noise amplifying technologies. They are certainly not cheap consumer products, but compared to highly technical, very expensive, and highly individualized hearing aids, they are. They don’t do everything that a hearing aid does now, and they don’t provide quite as good of a hearing experience for someone who relies on hearing aids, but they do seem to be able to compete at the lower end of the market. For people who are currently priced out of hearing aids and people who don’t have complete hearing loss but maybe should start considering hearing aids, Bose headphones seem like they can help. They can cancel competing sounds and provide just enough amplification and isolation to improve some people’s hearing…even if hearing aids would be a better long term solution.

 

The concept is important for several reasons. If you are a business executive, you need to know what is happening in your market space, and you need to know when someone is coming along to provide a cheaper service that might one day compete with you directly, or steal your market share. Also, from a regulatory standpoint, understanding disruptive innovations and where they may be occurring is important. If people are ditching their pricey hearing aids for less effective Bose headphones, are they putting themselves at risk while driving or navigating busy environments? What happens if a disruptive innovation guts an industry, and leaves people with disabilities who relied on the high priced product’s level of support and customization without a suitable product or service?

 

We should keep disruptive innovations in mind because they can unlock new potentials (we do a lot with our phones in ways that are quicker but not always as user friendly as old standard alternatives) but can also be dangerous for individuals and markets (should we really allow anyone to use a phone to scan their eyes to get a new glasses prescription?). Thinking about disruptive innovations helps us think about current social and economic trends, and it also forces us to be more considerate of others. We have to balance and weigh the interests of business, the interests of new consumers, and the interests of vulnerable populations when we think about where a disruptive innovation could push a market.

To Wear a Sweater or Not?

There is a story that I hear from time to time in different contexts. Depending on the context, it is framed as either positive or negative, with different ideas about what our future holds and how we should behave. The story manages to hit political and social identities, aspirations and fears for the future, and concerns over self-sufficiency and parochialism. The story is about a president who encouraged us to wear sweaters during the winter.

 

I’ll start off with the negative view, one perspective of which Tyler Cowen expresses in his book The Complacent Class. He writes, “Jimmy Carter put on a sweater and urged Americans to turn down the thermostat, representing a new era of lowered aspirations. In other words, the American response to economic adversity was to seek to restore comfort more than dynamism, and Americans pushed their culture in this direction all the more in the 1980s.”

 

Cowen’s critique is that as a response to inflation and oil insecurity from foreign oil dependence, Carter suggested we accept limitations and lower expectations. Our president at the time did not encouraging Americans to find new ways to make the world the way they want it. I think this critique is fair. Instead of imagining that the world could be better, that we could be comfortably warm and energy independent through new technology, the story suggest we should just deal with some level of discomfort.

 

I’ve heard others reflect on this story in a similar way. They criticize Carter for a defeatist attitude and for thinking small. People don’t like the parochial feeling of having an elitist person tell them to be tougher and to put on another layer rather than be comfortable but use more resources. Its easy to understand why someone might have the mindset that they deserve to run the heat, even if it is wasteful, because they worked hard to be comfortable and they can afford it.

 

I also think there is value to having our top political leaders signal that we can be more and that we can use science, technology, innovations, and a sense of purpose to make the world a better place. Perhaps encouraging us to keep the thermostats where they were, but also encouraging us to, as the line from the movie The Martian says, “science the shit out of this” would have landed us in a better place than where we are now.

 

But on the other hand, perhaps Carter was right. I have heard people praise Carter for being honest and realistic with the American public. I have heard people criticize Reagan, Carter’s successor, as being an out of touch elitist wearing a suit 24/7. I think people today desire a president like Carter who would signal that they were more in touch with America by turning down the temperature in the White House, making a personal sacrifice themselves before asking others to do the same.

 

Carter’s statement that we need to conserve resources and think critically suggest that we should not just use resources in a wanton fashion. This is a sentiment that climate activists today are trying to mainstream, and perhaps if we had listened more carefully to Carter, we could have shifted our technology to be more green, less resource demanding, and less polluting. After all, who are we to decide that the world should perfectly suit us for every moment of our existence? Isn’t a little discomfort OK, and isn’t it a good thing for us to recognize that the world doesn’t revolve around us? Is it better if we turn the thermostat down, put on a sweater, and pull out a board game to play with friends and family rather than crank up the heat and stare at our screens?

 

My takeaway from this story almost has nothing to do with the story itself. Whether we decide Carter was right probably has more to do with who we want to be, who we want the world to see us as, and what is in our self-interest than it does with whether we truly believe his attitude reflected and encouraged complacency. My takeaway is that events happen in this world, and we attach stories and meanings to the events that can be understood in different ways depending on our background and context. The narrative we create and attach to an event matters, and it shapes what we see, what we believe, and in some ways how we feel about the things that happen in the world. Think deeply about your goals, what you want to achieve, and how a narrative can help you reach those goals, and you will find the ways to tie that narrative into an event. At the same time, watch for how others do the same thing, and when you have discussions with others and want to change their mind, be cognizant of the narratives at play before you go about throwing statistics and facts at someone. Maybe a new narrative will be more effective than a bunch of economics and math.

Why Tyler Cowen is Worried About Segregation and Selectionism

Tyler Cowen’s book The Complacent Class could have been called The Catered Class, and he takes a critical look at the ways we settle for simplicity and comfort in our lives rather than strive for greatness. In the book, Cowen makes the argument that the American Middle-Class (but really all of American culture) has become complacent in our approaches to life, relationships, careers, entertainment, and more. He suggest that we are seeing a slowdown in our economic advances and in productivity because we are creating tools that make us more complacent as opposed to creating tools that fuel an ambition to grow and make the world something better than what we can imagine right now. What is worse, these complacent tools cater to our desires for homogeneity, make inaction easier than action, deplete our sense of agency, and have serious long-term consequences.

 

Much of our technology today includes an algorithm to help us select more of things that we have already selected in the past. Amazon tells us to buy shoes that are similar to the shoes we previously bought, TV streaming services auto-play the next episode of the show we just watched or start a new show that is similar to the last, real estate sites help us navigate to neighborhoods based on our preferences and the characteristics of other buyers like us. These algorithms make us complacent.

 

Rather than take a chance with a title we have never heard of, we are directed to a show or book that people like us also buy if they have similar consumption patterns. Rather than try something new, Amazon pops up with available purchase options for the same things we have always had. Instead of wandering into and exploring new parts of town (maybe this isn’t so different than having a human being show you a part of town based on your race) we scope out the perfect house in the perfect neighborhood online. We have in some ways given our decision-making abilities to machines and a result is that we are actually becoming more segregated today than we have been in the past. We don’t have to interact with people who are not like us, don’t have to experience something new if we want to avoid it, and don’t have to see headlines that don’t correspond with what we want to believe.

 

Cowen writes about the dangers of this segregation in his book, “Segregation has yet another negative consequence: It leads to more intense sorting along political lines, so that both Democrats and Republicans will be more likely to live in communities of politically like-minded individuals. That would lead to more polarization in Congress and to some extent governmental gridlock.”

 

With technology that sorts us so efficiently, we become complacent and are catered to by our devices. This allows us to become more narrow minded as our catered news sources, entertainment options, and food delivery reinforce the idea that complacency is the ideal standard that everyone else should live up to. The idea that we would actively participate in making the world a better place has disappeared behind the veil that the world should be catered to our desires. Rather than working to understand things that are different from our own preferences and rather than working with others to create a world that actually improves our happiness and well-being, we prefer a world that tells us we are special and delivers the safe and comfortable things we want directly to our homes. Our complacency is catered to us, and it has serious consequences as we segregate ourselves and our interests, and as we give up a willingness to dream big about the possibilities of the world.

The Challenge of Trying to Enlarge the Pie

I often feel that we are moving so fast toward the future that we are advancing beyond our means. I think we are in some ways exceeding the capacity that we have evolved to fit, and this is creating great challenges for humans across the globe. We have new technologies, new social structures, and new understandings of our places in the world and in the universe more broadly that exceed the type of living that we evolved to succeed within.

 

A passage from Kevin Simler and Robin Hanson’s book The Elephant in the Brain highlighted this for me. They write, “Despite the fact that it’s possible to cooperate, politically, in ways that “enlarge the pie” for everyone, this is the exception rather than the rule – especially for our distant ancestors. In most contexts, for one coalition to succeed, others must fail. Importantly, however, members within a coalition can earn themselves a larger slice of the pie by cooperating – a fact that makes politics such an intoxicating game.”

 

The line about our ancestors being incapable of expanding the pie for everyone is important. Without much technology, without shared languages and translation, and in a state of constant threat from nature, it is easy to see why our early ancestors were limited to a state of competition with each other for social status, sex, and resources. There simply were too few humans, too few easily accessible resources, and too few scalable technologies for everyone to be sufficiently comfortable and connected.

 

We now live in a new world, where literally 7.5 million people in the San Francisco metropolitan statistical area are constantly thinking about ways to build new technology to scale to improve the lives of all people, not just the people they are connected with. We understand that our actions can have global manifestations, and that we need global solutions to address climate change and other existential threats. Our technology and ways of thinking have surpassed the world our ancestors lived in, and have created a new game for us to play, however, we are still stuck in the zero-sum mindset of our ancestors, asking what we can do to get a bigger share of the pie for our narrow coalition.

 

Understanding why we fall into thinking about narrow coalitions is important. Recognizing the way our brains work and why they are limited helps us see new potentials. Understanding how we can change our thoughts and how we and others will react in a world that offers so much more is key to actually living up to our new potential as a global species.

The Challenge of Trying to Enlarge the Pie

I often feel that we are moving so fast toward the future that we are advancing beyond our means. I think we are in some ways exceeding the capacity that we have evolved to fit, and this is creating great challenges for humans across the globe. We have new technologies, new social structures, and new understandings of our places in the world and in the universe more broadly that exceed the type of living that we evolved to succeed with.

 

A passage from Kevin Simler and Robin Hanson’s book The Elephant in the Brain highlighted this for me. They write, “Despite the fact that it’s possible to cooperate, politically, in ways that “enlarge the pie” for everyone, this is the exception rather than the rule – especially for our distant ancestors. In most contexts, for one coalition to succeed, others must fail. Importantly, however, members within a coalition can earn themselves a larger slice of the pie by cooperating – a fact that makes politics such an intoxicating game.”

 

The line about our ancestors being incapable of expanding the pie for everyone is important. Without much technology, without shared languages and translation, and in a state of constant threat from nature, it is easy to see why our early ancestors were limited to a state of competition with each other for social status, sex, and politics. There simply were too few humans, too few easily accessible resources, and too few scalable technologies for everyone to be sufficiently comfortable and connected.

 

We now live in a new world, where literally 7.5 million people in the San Francisco metropolitan statistical area are constantly thinking about ways to build new technology to scale to improve the lives of all people, not just the people they are connected with. We understand that our actions can have global manifestations, and that we need global solutions to address climate change and other existential threats. Our technology and ways of thinking have surpassed the world our ancestors lived in, and have created a new game for us to play, however, we are still stuck in the zero-sum mindset of our ancestors, asking what we can do to get a bigger share of the pie for our narrow coalition.

 

Understanding why we fall into thinking about narrow coalitions is important. Recognizing the way our brains work and why they are limited helps us see new potentials. Understanding how we can change our thoughts and how we and others will react in a world that offers so much more is key to actually living up to our new potential as a global species.

Connecting with Technology

It is easy to become wrapped up in the criticisms and shortcoming of technology, especially when criticizing technology also allows us to criticize younger generations and place our age cohort on a shining pedestal, but we should also consider how technology is at times neither good nor bad, but just different. Author Colin Wright provides a unique view into the use of technology for connection and communication in his book, Come Back Frayed.  He writes about the freedom that technology provides him and how it allows him to live a life that previously was not possible.

 

“I can be whomever I want because there’s no one to regulate me, to passively or intentionally box me in, to pressure me into becoming an archetype of myself.
    In real life, the line is not so clear.”

 

His quote comes after he explains the freedom granted to him by technology and his life style. The technology allows him to produce content from anywhere on the planet and to sell his work across the globe. It allows him to get away from typical work schedules, and allows him to have any office anywhere he has decent internet connections. His life is no longer dictated by demands that many people face like mortgages, regular job hours, or a commute. Without a family Wright is also able to explore and live without expectations from others allowing his work to take the shape that he wants wherever on the globe he lives.

 

On its own, the above paragraph is not very insightful. After having read much of Wrights work however, additional possibilities  provided to Wright by technology begin to jump out. He describes himself as a major introvert, preferring time to himself over time with others. Before technology he probably could have managed his time on his own well, but he certainly could not have had the same experiences and freedoms. When we criticize technology for allowing people to communicate and interact without ever truly meeting and knowing each other, we are ultimately just criticizing people for not communicating the way we want them to or expect ourselves to communicate. For those who would struggle without technology, there is a real power in the communicative possibilities provided. Perhaps these individuals would have adjusted and still found success in the pre-internet communication world, but we should recognize the new opportunities it provides to interact in the world and be active and engaged human beings despite shy tendencies.

Technological Change

Colin Wright reflects on his place in the world in his book Come Back Frayed, which is about his time living in the Philippines at the requests of his fans and readers. During his time outside the United States, he commented on the technology he used to document his experiences, the changes he has seen in information technology over his life time, and the uneven distribution of technology between places like the United States and the Philippines. Regarding technical change, Wright writes, “The internet revolution happened when a technology was made common, cheap, and widely available to people of the world.”

 

Wright focuses on the last part of his quote and highlights the fact that not everyone is operating with equal tools, “Which brings me back to the smartphone,” continued Wright, “Science fiction author William Gibson famously said, “The future is here already, it’s just not evenly distributed.” So what happens when it is?”

 

I really enjoy the way that Wright introduces technology, technological change, society, and social change. In the United States we tend to be so focused on our technology that we forget how much of the world goes without the basic necessities we take for granted. Much has been written and many have made better comments than I can on the inequalities that exist between countries, but Wright brings up a point not often considered. When the rest of the world is in possession of game changing technology, what will we think of the technology? How will societies react? What will it mean for political regimes in rich  countries? The United States has seen debates about how information is handled on public versus private email servers over the last two years, and currently has a president who often has a questionable use of direct social media platforms. How could these same technologies impact less developed and less wealthy countries?

 

Wright’s thoughts aline with a passage I recently read in a public administration class at the University of Nevada. Joseph Nye Jr. in 2002 wrote for the Brookings Institute a piece titled Information Technology and Democratic Governance and he highlighted the role of technology as an agent of social and political change. Nye wrote that social and political change often lag behind the technological change, with political change falling in behind social changes. Combining his thoughts with Wright’s, we get a sense that the large changes that seem to dominate American life, are still building toward their greater impact. Once the technology we enjoy in the United States has become more commonplace around the world, we will begin to see more social change, which will be slowly followed by political change.