Archive for February, 2014
Synthesis, systems, and relationships
Recently I have been pondering whether my daughter should try to become a physician. She’s expressed some interest, but remains undecided. I am ambivalent about the prospect.
We overestimate things that have produced benefit in the past, and underestimate things that will produce benefit in the future. I think that often, as I am coming to understand more and more that we are the product of emotional decision-making, and not rational decision-making.
When I was growing up, there was no question that becoming a physician was a good thing to do. I think that our parents were absolutely convinced that education was the way to a better financial living, and therefore of a happier life. And indeed, I got a degree in medicine, and that improved my standard of living over theirs. Whether that makes me happier or not, it’s hard to say. I look at my 86 year old mother, and think that she looks pretty happy. And indeed, she has lived a life that allows her to appreciate the relative economic security she now enjoys. She has been dirt poor, living in New York’s Chinatown, next to the Bowery. She experienced living with a rich physician uncle in her childhood, on a large estate. And she experienced living in the middle class, as a draftsperson in the suburbs of Chicago. She has seen the gamut, and I think it helps her be grateful for where she is today.
The research on wealth and happiness says that my mother did a lot for her happiness once she advanced from living hand to mouth in Chinatown to a lower middle class existence. This happened for my family when my father took a job with a cousin in his laundry in Fort Wayne, Indiana. The data say that once worrying about food, shelter, and clothing is no longer the prime concern, we rise in happiness. But becoming more wealthy after that doesn’t seem to add much to our happiness.
What does seem to make us happier is relationships and experiences. This seems to be especially true when you combine the two, experiences that create and deepen relationships.
Against this backdrop, I see my daughters’ generation as struggling to find the kinds of jobs that would allow them to exceed my standard of living, to enjoy an economic security comparable to my own, just as my parents invested in my education to better my economic security.
But it seems that our economy is plateauing, from the booming growth that characterized the half century following World War II, to the Internet boom and bust, to the relative stagnation of the last ten years. It is not surprising that this era of relative stagnation followed the Internet boom. One of the major consequences of the increased productivity that came with computerization is the elimination of jobs that could be done by computers, faster and with near zero errors. A whole class of jobs that dealt with the classification, storage, and recall of information was eliminated. In the beginning, these jobs were obvious: filing clerks, typists, newspaper writers and editors. Remember what my mother did in Chicago? She was a draftsperson. Ask anyone under 30 what that is, and you’ll get blank stares. That job was obliterated by computer-added drafting (CAD).
But increasingly, other jobs that involve knowledge management are finding the same fate. These include what we call professions now, ones that took advantage of knowledge scarcity and obscurity. This includes attorneys, physicians, architects, professors, consultants, and others. Any field that relied on years of training to store masses of information in the imperfect repository we call human memory is now under fire for the cost of that process and the imperfection of its recall. Remember an obscure court decision that could bear on the current situation and bring it to bear in a lawsuit? Google will do that in a millisecond, and recall it more perfectly than any human brain. Cost to do that search? Even calculating in a contribution to fixed cost, it’s pretty close to zero. (This is why search is such a lucrative business: once you set up the infrastructure, marginal cost is almost zero, making marginal profit almost 100%. It’s a highly scalable business.) Search and recall is cheap.
Which brings me back to my daughters’ generation. In my college days, most of the smart kids aspired to be doctors, lawyers, and professors. But these days, the business advantage of acquiring the body of knowledge to enter any of these professions is eroding at a steady rate. Watson, the IBM computer that became Jeopardy champion a few years ago, is now being purposed to practicing medicine. While Martin Kohn, the scientist who is responsible for its development reassures us that it will simply be a tool that humans use to deliver better care, it seems highly likely that it will suggest better decisions than the unaided human doctor will be able to render alone. So what is the marginal value of the human in this equation?
I think the answer to this may be in the emotional decision-making I talked about at the beginning of this piece. Recent neuroscience tells us that our default mode is social. From mirror neurons to the ventrolateral prefrontal cortex, we are hardwired to detect and react to other humans in our environment. First we assess whether they are an outright threat, but then we do more subtle calculi, estimating what their motives are, and how we might either harmonize with or oppose those motives.
This means that the professional roles I’ve talked about that rely on information storage will likely transition into information interpretation and counseling. The first part of this is the incorporation of right-brain subtleties that might not be easily conveyable through data (although this domain may be shrinking because of Big Data); the second part is the building and maintenance of trust channels to through which the data flows. In medicine we term this “the doctor-patient relationship”. This is archaic as this dyad doesn’t begin to describe the complexity of this interaction, based in the future on terabytes of information.
What are the implications of this for my daughters and their friends?
- Professions as the royal road to prosperity will probably underperform. If professions were a stock, we would probably be rating them as “underperform”, or likely to be worth less in the future relative to the broader market of jobs that currently exist. The barriers to entry remain high and are getting higher (Google “average medical student debt”), and the marginal benefit of their certifications is diminishing (Google “percent of law graduates who get jobs requiring bar passage”). Cost/benefit ratio is getting worse steadily.
- Many of the middle class jobs that remain will require tech literacy. I actually think that tech is the new English, a knowledge domain that underlies all other areas. The ability to understand how tech makes your ideas known and your effort valuable to the market will be critical in this generation. Even jobs that we think of as blue collar, like truck driving and heavy machinery operation, are now requiring some understanding of the computers that are increasingly built into those jobs.
- Schumpeter’s creative destruction will require them to reinvent their value proposition every few years. You say to-may-to, I say to-mah-to. What you call proprietary knowledge, I call a market inefficiency waiting to be commoditized. Remember when the iPhone was the “It Girl” of gadgets? Now Apple’s stock is flattening out because of Google’s Android platform and the various manufacturers who are producing hardware to exploit it. They in turn will be disrupted by someone else with a better mousetrap, say a neural interface device that will make touching icons just so first-decade-of-the-twenty-first-century. The point here is that the cycle time of the destruction of perfectly good knowledge caches is shortening, so that obsolescence that used to take a generation takes a few years now. So what makes us think that the ideas that we base our livings on are somehow so special that they won’t be disrupted in the same way?
- If teamwork skills were a stock, it would be a “buy”. The skills that come from a well-developed social brain will be increasingly important. This is because being able to work in teams that match the complexity of the task/service experience required by purchasers will be more and more prized. The machines have linked together vast amounts of left brain inputs, to draw inferences about very complex systems. Now the challenge is to match that complexity in our social systems to improve outcomes. Content knowledge? Sure, still valuable. But relative to relational skills that allow teams to perform at a high level, that latter are appreciating in value.
- If search and synthesis were a stock, it would also be a “buy”. The ability to find the right dirt cheap content knowledge on the Web and then reassemble it in ways that bear on specific circumstances someone with money will pay you to understand, this will be big. Recently I read a book that says that some people see numbers as colors, and have other unusual sensory experiences. This is because they have connections in their brains the rest of us don’t have. This variant is overrepresented in creative professions by a factor of eight. Synthesis is the essence of creativity and innovation, and as translating ideas into reality becomes easier, the thinking of the ideas gets relatively more important.
So how should this inform how we shape society going forward? What it says to me is that the following skills are going to drive the next phase of our development: information recall and restructure, rather than information storage; teamwork skills vs. solitary production; and synthesis/creativity vs. static mental model care and maintenance.
See the pattern? All of the obsolete characteristics above are present in our current mental models of professions. Think about the small group family medicine doc, hopelessly trying to keep up his knowledge with the unaided human brain, and working detached from a system of knowledge management. That person works according to obsolete protocols, engages in little continuous learning, and uses a largely static knowledge base. While they may work in teams, most of the time those teams aren’t about generating new and improved management systems continuously, they’re more likely unidirectional vehicles for physician knowledge implementation, knowledge that can be decades old.
Medicine, law, and other professions based on information storage are in the process of changing to recognize the value they actually produce. A good deal of that value has been eroded by the massive power of computing to make information storage and recall amazingly cheap. What’s left will be about synthesis, systems, and relationships. And if my daughter can be good at those things, then she can probably make any profession work for her.
CVS stops selling cigarettes
CVS/Caremark announced last week that it will no longer sell cigarettes in its drugstores, which has been widely hailed as progress in the war against tobacco. Many now expect its competitors to follow suit, and potentially make it less convenient to buy cigarettes overall. This remains to be seen, as cigarettes remain widely available through other very convenient outlets, like grocery stores and gas stations. So why is this a big deal?
First, this represents a real amount of revenue for CVS, about $2 billion annually. With that amount of money on the line, you know they didn’t make this decision lightly. Ultimately deciding to stop selling something with such a reliable stream of customers has to have a real purpose behind it.
At first glance, that purpose might be to be/appear to be more moral than its competitors. While this might be the case, the more revealing reason might be this: the public feels health care companies shouldn’t create their own business. Imagine what people would say if the Cleveland Clinic had cigarette machines in its lobby, or a bar in its cafeteria. You get the picture: it wouldn’t go over well.
What this reveals about CVS is its intent. CVS is trying to morph from a provider of drugs to a provider of care. CVS has nearly 7,500 drugstores, but more importantly, owns Minute Clinic, the largest walk-in chain of clinics in the U.S., with 570 locations inside its drugstores. In a classic disruptive innovation, Minute Clinic is providing basic primary care an aisle over from the ibuprofen and cough syrup. Staffed by nurse practitioners, this care can be provided more cheaply and conveniently than its status quo competitors can, the primary care physicians. Think about it: which did you visit last, your PCP or your drugstore? How many visits do you make to your PCP a year? How many to the drugstore? For availability and convenience, its hard to beat something that close to where you live and work, and that’s in some cases open 24/7.
I’ve had this conversation many times with PCPs, many of whom continue to poo-poo Minute Clinic and its peers as “a flash in the pan”, or “inferior care”. They can do that, but they should also be nervous. The 40th largest company in the world just gave up $2 billion in revenue annually, because it’s betting that Minute Clinic is the future, and that unless traditional primary care changes radically in the next few years, it’s the past. And CVS is polishing its image to accomplish just that.
Debt, data, and deciders
A version of the following first appeared in Colorado Medicine earlier this month. It was directed at the physicians of Colorado, but I think has wider applicability:
It’s a privilege as a representative of the Center for Improving Value in Health Care (CIVHC) to write this article about the changing landscape in American health care, and how it affects us here in Colorado. Just for anyone who still doubts that health and health care in Colorado will be different in the future versus the past, a few facts, from a recent article in JAMA1:
-In 2000, 53% of physicians practiced independently, and 18% were hospital-affiliated. In 2010, the proportions had almost completely reversed: 23% independents, 48% hospital-affiliated. The macro trends favor further vertical and horizontal integration, for reasons I’ll go into later in this piece.
-The trend toward consolidation affected many health care sectors in the last decade, including insurers, pharmacies, and office-based physicians. The proportion of office-based physicians practicing in groups of six or larger rose from a third to nearly half.
-Nearly three-quarters (72%) of physicians today practice on an EHR, as do nearly seven hospitals out of eight (87%), as of 2012. Contrast that with earlier in the last decade when less than half of both groups were on an EHR.
The big question is: why is this happening? And how should physicians in general adapt?
At CIVHC we talk about three major trends in American health care, three tsunamis of change that are affecting every aspect of American life, not just health care. These are debt, data, and deciders. Let’s look at each of them.
Debt
Debt is at every level of our society today. As a generation, we Baby Boomers were raised in an environment where we could always count on future growth to bail us out of unreasonable debt obligations today. Big mortgage? Don’t worry, you’ll get raises later on that will make it affordable. Student loans? No problem, good jobs available upon graduation.
But then the Great Recession hit, and the Big Reset is taking place. People in my daughters’ generation are working at Starbucks while looking for work in the field of their choice, often to no avail. We’ve gone through a series of asset bubbles, from technology to banking to housing. Credit, which fueled the illusion of Infinite Growth That Hides All Sins, is only now starting to become available again, this time on more disciplined terms.
Debt, and particularly debt that prevents further borrowing, drives a search for value. As long as you think you have infinite resources, you care little about value, or more specifically, you are insensitive to the cost of things in order to get the benefits you want.
But once we perceive resources to be limited, it’s a whole different ballgame. Now suddenly, we are looking at price tags, and ratings by other consumers, others like ourselves. I notice this difference when I travel. If someone else is paying my expenses, I tend not to shop for my hotel, but to stay at the conference hotel for convenience. If I am paying with my own money (which I perceive correctly to be limited), I go to TripAdvisor and try to find a lower price for a similar hotel, close to the meeting. I read carefully about the pros and cons of that particular hotel, to predict whether I’ll like it.
What’s this got to do with health care? Before, nothing. Now, everything. Because of insurance, before we acted like the traveler with the expense account. We didn’t have to pay more to stay in the conference hotel, someone else did. We didn’t comparison shop for medical services, because it didn’t make a difference to us financially. We didn’t experience costs (much), only benefits. So why wouldn’t we metaphorically try to stay at the Ritz vs. La Quinta? If we stayed at La Quinta, we’d be saving money for someone we don’t like (the insurance company) and in doing so, worry that we shorted ourselves. Who does that?
I like to say jokingly that being out of money has an amazing clarifying effect on thinking, but there is truth in that. And being out of money on so many levels as Americans is clarifying our thinking about health care costs. It’s making us ask for the first time, “What are we actually getting for $2.7 trillion, and 17% of our economy?” And it is our debt, personally, corporately, and nationally, that is compelling us to do so.
Data
Remember what I did when shopping with my own money for a hotel? I went to TripAdvisor. Why? Sociologic studies show that the aggregated opinions of others in the same situation more strongly predict my satisfaction with a product or experience than I can alone. But that’s only possible because I can read their ratings and opinions online. In essence, massive computing power has allowed people to compile data about many experiences they have daily, and to make choices about those that involve giving other people money. Which brings me to a guy named Gordon Moore.
Moore was an engineer at a company called Fairchild Semiconductor, a strange name in the 1950s when people we just discovering uses for transistors. He figured out something cool working there, and it was this: Moore’s job involved making microchips, and cramming more and more transistors onto chips as fast as he could. He noted that he could double the number of transistors on a chip about every 18 months, effectively halving the cost of computing power. This became Moore’s Law, and the exponential trend he noted then continues today, half a century later. Moore also went on to found another little company with a funny name: Intel.
Why should you care? Think about how you picked a hotel in a strange city before TripAdvisor. You asked around at work, or got a recommendation from your spouse’s cousin who lived there ten years ago. Pretty hit or miss. But now, with TripAdvisor, finding a hotel in your price range that people love is a snap. Technology, and in particular, Moore’s Law, makes this information cheap, nearly free in fact, and cheaper every year from now until forever. Data makes shopping effectively really, really cheap. Which brings me to deciders.
Deciders
Okay, now we’ve got the average American family of four deeply in debt, with no additional help from their employers or governments coming any time soon, and massive and growing amounts of data available to them on their smartphones. Their employers are providing health plans to them that have $10,000 deductibles, so they’re spending their own money for anything beyond preventive care. Some health plans have reference pricing as a feature, in which when the plan does pay, it only pays the lowest price offered by a good quality provider, and you the patient get to pay the difference between that amount and what your chosen provider charges.
Remember TripAdvisor? There are companies that are starting to do the same thing in health care. Sometimes employers are giving their employees subscriptions to these companies so the best value in knee replacement shows up on their smartphone when they click the search button. So what will the average consumer think? “I’m spending a lot of my own dollars and I have access to information to choose the best bang for the buck. While I still worry about making good choices, I can read online what people just like me think of the doctor and hospital I’m about to choose. Hey, remember when I used to have to ask my spouse’s cousin who he chose when he had the same operation ten years ago? That was so twentieth century.”
There’s more to this story, but these three trends, debt, data, and deciders are bringing to health care what already existed in most other sectors of our economy: functional markets. Markets are places where consumers can compare prices and benefits, and choose for themselves where to spend their money. And for arcane reasons, they’re just now catching on in health care, because of these three forces.
And consumers these days don’t buy products so much as experiences, complete experiences where they can. That means they don’t like buying the parts of the car and assembling them themselves; they like buying the fully assembled car off the lot, and expect to be able to drive it without a lot of training. So the thought they’d have to pay for and assemble a surgeon, a hospital, a rehab center, physical therapist, etc., and manage them because they don’t really talk to one another? And get separate bills for what seems like the same thing? That’s not how people will shop for this stuff in the future.
Implications
Now we’re to how this plays out for you. Despite a massive trend over the last half century toward equating specialization and segmentation with expertise, increasingly consumers are going to recognize that this segmentation makes them buy pistons and catalytic converters separately, and hope the parts fit together in a way that makes the car run in a predictable way. Because teams that communicate and coordinate action well can create coherence for patients and consumers, they have a definite advantage over depending on, say, the random chance that all the players in a care plan will all do the right thing at the right time in the right way. I pointed out at the beginning of this article a growing trend toward doctors working for hospitals. This is because hospitals believe they need to control every phase of a patient’s experience to be successful in the future. They believe this because people who buy their stuff are starting to tell them that. While for many physicians this is anathema, and there is no rule that says hospitals have to be in control of the combined enterprise, there is no question in my mind that any entity that can actually create whole, coherent, and successful experiences for patients at a competitive price will be winners in the next decade. Personally I hope those entities are provider-led, but the hard truth is that value-driven consumers with good information will buy the better car at the better price, no matter who built it.
At CIVHC we are helping people get their teams together, measure their performance, and then improve it so they can sell a higher value experience. Currently my colleagues there are working on helping people construct bundles of care; increasing discharge reliability and thereby reducing readmissions; creating reports out of the All Payer Claims Database to inform providers of the cost and the quality of the experiences they create for patients; and many other things that we hope will enable providers to create greater value. And that will be good for everyone–except those who insist that delivering care in a disorganized way is the best we can do.
This, therefore, is the choice before you. You can either continue to contend that disorganized care is best, or you can acknowledge that you and others will do a much better job for people as teams that communicate well. You can continue to see only your piece of someone’s care, or you can try to understand how you fit into that patient’s total experience, from their perspective. And you can continue to imagine that we as a state get to spend from someone else’s infinite health care expense account, or you can acknowledge that in this area as in all others, the money is limited, and we need to find ever increasing value to make health care sustainable again.
At CIVHC we hope that Colorado’s providers will choose to find their place in teams dedicated to better clinical and financial outcomes for patients; to understand their own performance though others’ eyes; and to work in those teams to deliver value for people who have not a dime more to spend on care, and who increasingly know what they’re getting when they check into the health care system.
1The Anatomy of Health Care in the United States, JAMA, 2013; 310(18):1947-1963.
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