Status quo No More

Know someone who doesn't manage their money well? Doesn't pay bills on time, has a lot of credit card debt, maybe loans that are piling up? What happens if you give that person Quicken or some sort of personal finance software? Does that help?

The expected answer is yes. Financial awareness alone has to help in some way. Knowing that you're spending $250/month on Starbucks can be an eye-opener. But over time, the effect of an IT intervention wears off. A lasting effect has to be behavioral, not just technical. Automating poor money management skills won't improve them. Habits have to change. A regular routine must be set. Moderation must be practiced. We all know it, but its tough to find the incentives to get us there.

In some ways, this is the challenge health care is facing with electronic medical records. From major hospital systems to small private practices, conversion from paper to electronic systems is happening at a rapid pace to meet Bush's 2014 deadline for all Americans to have electronic medical records. Everyone is in a state of adoption.

Yet adoption alone, as in the personal finance case, doesn't solve the inherent problem of bad habits and poor management. IT is not the panacea. Rather its the ability to respond and adapt well to change and move yourself or your organization's culture to the next threshold that will keep you competitive. The next best thing will always be around the corner. Its not what will get you there that will matter, but how well you've prepared yourself to be open to a new perspective that will make the difference.

Funding THE PLAN

NYTimes has a great article called, Health Care Expansions Hit Roadblocks, describing the latest major roadblock as cost control for a universal plan. I always thought this was THE greatest roadblock. As the California, Massachusetts, and Pennsylvania plans mature, its slowly becoming clear that unions, insurance companies, politicians all pale in comparison to cost when it comes to providing health insurance for all. The article's flow is choppy, so I chopped it up to make sense out of it. Excerpts are below.

"The downside, and one noted by states with widening budget gaps, is that the program is expected to exceed its first-year budget by at least $150 million. And state officials are struggling to prevent double-digit premium increases next year."

"And though the rate of growth has slowed, the cost of employer-sponsored premiums still rose by 6.1 percent in 2007, more than double the inflation rate, according to the Kaiser Family Foundation."

"[The Plan] would raise money to subsidize policies for low-income residents through what Mr. Schwarzenegger calls shared responsibility — a tax on hospital revenues, a hefty increase in tobacco taxes and assessments on employers who do not contribute to their workers’ health care."

"Illinois’ Democratic governor, Rod R. Blagojevich, got nowhere with his proposals to pay for universal access to insurance by taxing gross business receipts and assessing employers who do not offer coverage to their employees."

“It remains incredibly difficult for states by themselves to get all the uninsured covered,” said Robert Blendon, a Harvard professor of health policy and political analysis. “There just is not a consensus on who should pay.”

Kids being Dangerous

Gever Tulley says there are 5 dangerous things you should let your kids do.

1. Play with fire
2. Own a pocket knife
3. Throw a spear
4. Deconstruct appliances
5. Drive a car

I see what he's getting at, but I remember doing most of these things in technology or gym class. Then again, I also remember the school discontinuing technology because of changing budgetary priorities. So maybe his Tinkering School does have its place.

Check out the full presentation on TED. And because of my thrill for 4a, here's howstuffworks!

The Mitchell Report on Healthcare

Baseball's Mitchell Report has already become infamous for naming names of baseball elite who took or were somehow involved with steroid use. A bit of a formality as most fans are already well aware that baseball players juice up. Home runs fill the seats, and filling the seats means more money for everyone in the MLB.

Not so different from what brings in outpatients to clinics. A little bit of supply induced demand, a dash of fee-for-service, and a (generous) pinch of cost subsidization all generate large sums of revenue for the health care system.

But what is the fundamental issue? Quality. What makes a hit a hit in baseball? Does it still count if Barry Bonds hits the home run or is Edgar Renteria's HR% more real?

Same with quality in health care. What determines quality of care in medicine? What are the metrics? The standards? AHRQ has a lot to say but very little is agreed upon, let alone applied.

The Mitchell Report as I said earlier is a formality, just like all the quality boards and insurer rating systems. They make people aware of the issue, but don't do anything about it. Change happens through culture! Naming names, installing IT systems, ranking doctors are not the solutions, they are the precursors to a solution. They're advertising. But are they really doing a good job of getting our attention?

Get to the Source

"Not everyone in medicine can be constantly making calculations about the value of the information. You'd go crazy. But if you are in a subspecialty field, as you train, you not only need to know what people know, but how they know it. You have to regularly question everything and everyone."

-Dr. James Lock from How Doctors Think by Jerome Groopman

A Trend in the Mass Conscience

Google Alerts basically allows you to search for a given keyword or phrase say, "education", "the war on terror" or "justin timberlake" and sends you alert emails with a comprehensive list of links from news, blogs and the web. Its a really great way to keep track of what you're interested in or curious about.

I've had a google alert for "health care" on since the alert function began earlier this year. I'm used to getting about 5 links for every email alert I get, but recently it has grown exponentially to 10 and sometimes more than 20 links at a time. I assume this means that more people are writing about health care and more people are searching for it as well.

Unsurprising as health care is one of the hottest topics in the upcoming election, yet an unexpected discovery within the google alerts application.

What does Art have to do with Health?

A lot, if you think about it. Asian cultures have been stressing the importance of environment and ambiance on one's health and happiness for ages; feng-shui from China and vastu shastra from India being a few examples. Makes sense that the setup of our room, apartment, or house has a lot of effect on us. So why not the same for patients in hospitals? Get rid of the bland, pasty, grey walls and put in some color!

That's exactly what Women & Children's Hospital in Buffalo is doing. Through grant funding from the Oishei Foundation, the hospital is collaborating with the local Center for the Arts to sponsor

"an intensive training program facilitated by the University of Florida's CAHRE program where local invited visual artists, musicians, poets, dancers, and storytellers will be trained to work with patients, families, and staff in health-care settings as integral members of the healthcare team."

"...studies have shown that integrating the arts into these settings helps to cultivate a healing environment, support the mental and emotional recovery of patients, communicate health and recovery information, and foster positive working conditions for caregivers to improve satisfaction and retention."

The Pebble Project conducts similar health design studies on a much larger scale with multiple hospitals. I got a chance to view first hand some of the benefits when I worked at Weill Cornell Medical College in NYC. In fact, a new building called the Greenberg Center was specifically built with the findings of the project in mind. The goal is

"to create healing environments [that] can impact patient satisfaction, staff satisfaction, nurse retention, medical outcomes, safety, quality, financial performance, and more."

Antibiotics face the Tragedy of the Commons

The evolution of antibiotic resistance is just scary. Through careless prescribing and poor compliance, we've gotten ourselves into a trap referred to as the tragedy of the commons. While each individual faces to gain a large benefit, the cost of that individual benefit is shared across the entire population. Since the individual doesn't see or bear the cost, he/she will continue to do whatever is necessary to reacquire that benefit without public conscience. Hence the tragedy.

Every time an antibiotic is prescribed, the risk of resistance increases. Does this mean we shouldn't be prescribing them? Of course not. But their usage should be governed by special circumstance or how effective they'll be for that individual. Offhandedly prescribing antibiotics for the cold or flu (for which they have no effect because they're viral, not bacterial) has frankly become dangerous. Same with not completing the full regimen prescribed. The FDA provides a brief, informative fact page here.

MRSA or Methicillin-resistant Staphylococcus aureus is a great example of this phenomenon. Methicillin's the antibiotic and S. aureus is the infectious bacteria. This type of staph has become resistant to the antibiotic that killed it and is causing the most havoc in hospitals where bacteria and its killers are in a constant battle. In this case, the bacteria won and now we're recouping for another fight where we've lost the higher ground. This is serious and current!

There's a great sidebar in this USA Today article, "Hospitals marshal resources to wipe out MRSA", that describes how to avoid MRSA. Below are a few excerpts.

"...hospitalizations related to MRSA nearly doubled between 1999 and 2005, from 127,000 to almost 280,000."

"At the University of Texas Medical Branch in Galveston, the main battle strategy against MRSA is what it calls the "search and destroy" method. The hospital screens all adult intensive-care-unit patients each week for MRSA and places those testing positive in isolation."

"Watch before and after an examination. Do doctors wash their hands? If not, ask them to do so. Look around. Is the hospital clean?"

"After any procedure, be persistent about cleanliness. If a catheter is in place, inquire whether it's still needed. Bacteria can enter the device and quickly spread through the body."

The Arbitrageur Next Door

On my flight down to DC a couple weeks ago, I met an arbitrageur. It was in fact the guy sitting next to me, a Canadian driving to Buffalo to take a flight down to North Carolina to buy a truck that he planned to drive all the way back home to...Canada. He was casually indifferent about the whole thing, as if this was a run-of-the-mill endeavor. But really, why go through all this trouble?

At the time, the US$ was worth 92 cents Canadian (CAD). Yet car salesman in Canada hadn't adjusted to the new rates. They were still selling cars at rates about 1.5x the US dollar, which matched the exchange rate almost 4 years ago! A Chevy Silverado that cost around 42,000 CAD was selling for $30,000 in the U.S. My fellow passenger looked to save over $10,000, no matter how you measure it!

That's arbitrage for you; exploiting a price differential between markets. Just because the Canadian auto market is inefficient doesn't mean a consumer needs to lose out. Simpler examples of this concept can be seen at checkouts where all the lines are usually the same length because if one was shorter, someone would leave their spot in the longer line and move to the shorter one. Or in traffic, where all the lanes move at about the same speed, because if one moved faster enough people would switch over until the speeds matched once again.

This is also a great reason not to buy into all the investment advice by so-called "experts" (who are no better at picking stocks than monkeys anyway). If they really knew about the "hot" stock, wouldn't they have told their families and buddies first before informing you!? I'm sure the suggested stock is doing well, but who catches the windfall? The first people to get there. The first to find the shorter line or the faster lane. After that, any major gains are absorbed into the market leaving very little benefit behind.

So my friend in the seat next to me saves $10,000 and enough people will do what he did until Canadian car salesman realize they're losing out, or American car salesman raise their prices.

Pay for Preference

Greyhound's new priority seating option is another example of good economics. If you've ever ridden on Greyhound (especially from NYC!) you know how bad the lines can get and as a result how irritated people can get. In some senses, I think they're replacing poor management with a cost-benefit exchange, but that doesn't change the fact that it makes sense.

Movie theaters in major urban centers do the same thing by allowing movie-goers to reserve seats in prime locations of the theater, sometimes even with a snack/beverage service. Its been this way on Broadway and stadiums and airlines all along, so why not?

Repugnancy costs originating from cultural mores. That's the answer. But is it a good one?

As the Wii is to Canada, the PS3 is to America

The demand for Nintendo's Wii has not diminished since its revolutionary arrival last Thanksgiving. Yet Nintendo is still hesitant to increase its supply or raise the price of the Wii to reach some form of market equilibrium. This has led to long waiting lines outside toy and gaming stores, sometimes at odd times like Sunday at 8 am to weed out the casual gamer.

For some reason the Wii is being rationed, similar to how health care is rationed in Canada or the UK. There is ample demand in Canada, yet few monetary or policy incentives to increase supply. With limited (funding for) clinics, hospitals and new technologies, doctors have little motivation to open up shop and patients sometimes have to wait 3-6 months for a surgery or visit. Its one of the best representations of the saying, "there's no such thing as a free lunch". Government-regulated single-payer health care may seem "free" on the surface. But you end up paying for it in time and taxes.

Now take the PS3. Sony's debut of the PS3 occurred at the same time as the Wii, but (due to marginal cost) it was priced 3x higher (originally $799, now $399). No waiting lines here! In this case, the exorbitant price left only the hardcore gamers interested and not until the cost of producing such a high-end system went down did consumers see a reduction in price.

In this way the PS3 is akin to the American health care market. A quality product rationed by price. The high-end users (the sickest patients) are most indifferent to price and will purchase care at any cost simply because they need it (its the job of the insurers to reduce the financial burden in such a time of need). Other medium to low-end consumers can make a personal decision based on price and predicted value.

This simple analogy gives a brief glimpse of why international health care markets differ and how single-payer systems ration care. The PS3-America analogy wouldn't be complete without mentioning third-party payers though. Health insurance in the U.S. doesn't function like car or life insurance. Rather than providing catastrophic coverage and raising premiums based on client risk, health insurance subsidizes cost of care at the episodic level. This breeds overuse. It would be similar to someone giving you the PS3 at half the price when it just came out!

Pricing matters, whether its through premiums or taxes. When presidential candidates hint at universal health care, they should provide more than just hints about how much it will take out of your paycheck each time to support the high-end system we are fortunate to have in the U.S.

EDIT (12/14/07): PS3 sales have skyrocketed by 300% since the price changes in mid-October. Here's the article.