Book review: Enchanted objects

In my last post I briefly mentioned the book Enchanted Objects which is an interesting book about how the future of technology might go. I’ll tell you this up front, the book is biased without a doubt. You can tell this from the beginning. That being said, I think the bias is a fair one and not subtle and really, if you’re reading a pop technology book and you don’t expect bias, then you’re kind of an idiot. This book is pretty full of technoptimism, which if that’s you’re thing you’re going to absolutely love this book. I mean, it really gives some great ideas about how to take an ordinary object add an app to it, connect it to the cloud and other devices and it will realyl solve a lot of problems.

I think this is a really great approach for a limited scope of objects. Not to say that the scope of objects is small, but more that it’s limited to the scope of objects. In some ways, it’s small thinking. I don’t think that’s a limitation on the potential. No, David Rose (the Author) actually does a good job making arguments that this could be a massively connected network that could be part of an even larger network. He envisions using enchanted objects to help manage diabetes care in such a way that it continually informs doctors, patients, hospitals, and insurers of the status and well being of the patient. Even so far as to tell the patient what foods to eat when in the event of a diabetic shock.

The big holistic vision is there, but I really can’t but think that a lot of these ideas he covers, Ambient Orb for example, are really first world problem solving tools. His idea around a garbage can that will automatically reorder a good when you throw it out seems to push consumerism rather than conservation (to be fair he does talk about trying to turn the garbage cans in a neighborhood into a game where the “greenest” or smallest waste house wins).

The major problem I see with these enchanted objects, isn’t that there’s a lot of potential to make them, it’s more what is the additional value gained to the consumer by having these enchanted objects? Rose argues that we need to move away from the swiss army type devices, like a tablet which is an attempt to do everything, towards more specialized devices. For example an umbrella that connects to the local weather to glow and recommend taking it with you when you head out the door. I could see some value in this, living in Portland, Oregon, but I hate umbrellas so I’d never use it (too many of them have hit me in the eye, so i think they should all be destroyed). Other people likely will find value in this product. However, is that enough to make you buy the special one, or do you think that you’d just still buy the $10 one that when you lose it, you won’t morn its demise? Maybe a connected umbrella stand would be more appropriate.

I think the biggest problem with this book, isn’t the general idea. I think connected objects will happen and I think there is something of an air of inevitability around them. My largest concern, however, is the lack of concern over safety and privacy within these applications. It’s likely that this umbrella will have to have a GPS radio in it. Which suddenly means, I’m carrying about multiple GPS radios. My phone, my tablet, my umbrella, my watch, and probably my running shoes (so I can share my results on mapmyrun and then Facebook, of course!). All of these devices will likely end up following under the purview of law that will require them to store that data for some amount of time. In many cases, App designers also tend to requet access to a larger portion of a phone or tablet than they strictly need. This opens end users up to greater risk than really neccessary. If I bought a product, shouldn’t that information be under my control? If it’s free how is that company using my data once they requested access for it?

These answers are lacking. I don’t really believe it’s because the author doesn’t think they are important questions. I think he just doesn’t know how to answer them. He actually mentions some of these topics in the book, but doesn’t have a statisfactory answer to them. I would like to see him work with Evgeny Morozov to answer many of these questions. I think then, I’d feel more comfortable purchasing these enchanted objects.

I’d recommend this book to anyone in design, aspiring to be an entrepreneur, or that really loves technology. It’s not as blind in its faith in technology the way that “What technology wants” but it has the right level of optimism to help keep someone that is trying to change the world keep trying and to hopefully make the design of that product just a little bit more magical. I do plan on using what I’ve learned in this book to help with my projects and any sensor based device my wife designs on her side projects.

Overall, I give this book a 4/5 

Work, Lean, and Health

I just visited a nutritionist today. I’ve had issues with Gluten for years and I’ve also been diagonosed with Hypoglycima which is a condition where my blood sugar levels aren’t well regulated by my body. The combination of the two has caused me no end of issues. At this point, it’s been difficult to tell the difference between a glutening and low blood sugar, at least a low level glutening anyway, a serious glutening it’s pretty obvious. I feel drunk within a few hours and then have the shits the next day or two. It’s pretty bad. Anyway, the combination has been pretty difficult to pull a part. When i have spikes in my blood sugar it makes me feel out of it as well. So, I’m going to really address both of these issues through better nutrition and probably more working out as well.

How does this connect to work and lean process improvement though? Well, at Cambia, we get a discount for eating salad’s and other healthy foods, so I’ve already been doing that, but that’s not the work connection I’m talking about. I just started reading a book called “Lean is Healthcare” which I picked up because I thought it was actually a book on Lean in Healthcare – pretty understandable confusion I think. I’ve only read a few pages, but as a lean practitioner it really ressonated with me. The premise is that Lean is a way of improving your employee’s health. Thinking about it now, it’s pretty obvious, but it definitely was an Ah HA moment when I read that.

Lean helps create flow in work. This is for both the product as well as the worker. Flow can be described as feeling you get when everything is just clicking. It’s like when a basketball player can’t miss a basic, they are in a state where they are relaxed and feeling good. It’s similar to a meditative state – think about any of the projects that you’ve gotten into and time just flew by. When you think about work, you never think about flow like that. I’m sure you’ve had bits and pieces of flow – but they don’t last very long. However, imagine if you were able to get into a job where everything you did flowed like that. Where you walked into the office and you walked out feeling accomplished, got things done, and excited to come back tomorrow.

I think there are a few companies that encourage that – companies that encourage creative coding and design are likely the best at this type of work. Why? Because they are all about thinking and connecting ideas and concepts to each other. It’s easy to get into a meditative state when you’re really jamming away at code. I feel a similar mode of thought when I’m blogging with a keyboard that works.

Work like this makes you feel better. It’s better for your health, better for your life balance, and better for your confidence. With that in mind, shouldn’t it be a moral imperative for a company to shift to enabling work like this? Work that makes you feel accomplished, healthy, and productive? Isn’t it also a financial imperative as well as all these things increase the value the company gets out of you as an employee?

I think the answer is yes to all these questions. I will be thinking about this as I work at Cambia continually driving towards for productive work and healthier stress balance for the employees.

Healthcare Exchanges offer a way forward

In my last Healthcare blog¬†I argued that because of the structure of our payment system, the network effects of the providers, and reimbursement rules healthcare isn’t a free market. I believe that the exchanges in the Affordable Care Act aka Obamacare, actually offer a path forward that may take us closer to a freer market for healthcare than anything we currently have.

First I need to say that they are not an immediate silver bullet the exchanges only offer a way forward and do not guarantee any changes in the market. Furthermore, if the exchanges do provide the changes I’d like to see it will take time, several years in fact, for those changes to have a broader impact on the market.

What are the exchanges? They are essentially a market place where a customer can select a type of insurance with a specific network that meets their needs. How is this different than what we have had in the past? Well, typically health insurance has been only offered through your employer and you get what they offer. If you don’t have a full time job, you’re basically out of luck and paying a huge monthly premium. The exchanges level that playing field by increasing the pool of people that will be using those types of insurance and allowing across state competition for health insurance. For example, there’s only one Blue Cross Blue Shield provider across all the exchanges in the US. That’s a pretty big change.

Because there is competition based on meeting the needs of the customers there will be much faster feedback to the “plans” as they are called. If members don’t like a specific offering, they won’t make any money and the next year will be forced to make a different offering to attract more members. Furthermore, there will be switching across the plans as people realize they dislike certain features. I believe this will happen for several years until a “dominate” plan design emerges based on the success of those plans. Healthier members, low turn over, and acceptable level of revenues for the insurers. Expect these metrics to be similar to the mobile industry in the US (ARPU, Churn, etc..).

Because of the relatively fast feedback on the products in the market and the possibility to have at least three offerings on the exchange (Gold, silver, bronze), insurers can experiment with different types of plans and benefits. The most popular one at this point is something called Accountable Care Organization, which is somewhat similar to an HMO, but is supposed to be better (we’ll see). ACOs as they are called will have to keep track of the overall quality and re-admission rates with a goal of continually driving up quality of care and reduce re-admissions. Additionally, these are narrower networks of care than a traditional PPO that most people have become accustom to.

That’s fine, but that doesn’t really help with the fact that it’s a networked economy and that there’s still a huge imbalance of knowledge. Well, here’s where the insurers can changes things up. Instead of focusing on the narrow set of providers in their region, they can look to create a network based upon the specific of the member’s conditions and have those members go to the specialty providers that offer the best care for those conditions. Even if they are out of state or out of the country.

Granted this data is a bit out of date, however it’s likely to be accurate, according to the Innovator’s Prescription (pg 96) there are facilities that have become so specialized in certain conditions (hernia repair) that their cost to treat those conditions is $2,300 while a general hospital costs an average of $7,000 and has a much lower re-admission rate than the general hospital. With this in mind an insurer could use these specialty clinics and even fly their members to receive treatment and still save money.

This would dramatically change the shape of the network for the members of those insurers and improve overall care and results. It would also dramatically change the interaction with providers in the member’s region as well. Some hospitals are already feeling the pain in this such as Seattle’s Children’s Hospital (which is suing over being excluded).

I don’t think being exclusive it the right direction, I think creating a strong partnership with members through health coaching and care management can help drive better results and education between the provider, insurance company, and member.

This will require continual experimentation with the types of networks, the way the insurance companies interact with their members to take it from a confrontational interaction (from the member’s perspective), and how the providers plan to engage with insurers. There needs to be incentives to encourage providers to recommend non-traditional recommendations. Incentives to support healthy living for the members. Only experimentation in all of these areas can inform the insurers how to engage better to dramatically improve the health and reduce the cost of our nation.

Advances in Healthcare science will change our lives

We are at the very beginnings of a healthcare industrial revolution. Perhaps, we’re beyond just the beginnings, we’ve seen huge leaps and bounds in diagnosis and treatment in the last 20 years. In my life time Aids has gone from being a quickly terminal disease to a disease where people are able to live relatively healthy lives which also last nearly as long as the average person. This is all without needing to have the sums of money of Magic Johnson.

This alone is something to celebrate, but there’s a lot more work to be done in easing the pain of suffering patients. Many Americans suffer from dibilitating heart diseases, which in some cases require heart transplants. Transplants are extremely risky procedures because the body can and does reject the new hearth. So, even after receiving the new heart, many patients are on immune system suppressing drugs. This increases their risk of infection and contracting other diseases, which can of course reduce the quality of life and inreases the risk of premature death due complications of the transplant. Recently, there’s been a serious break through in building a heart scaffold.

What is a heart scaffold? This is essentially a structure that allows your own cells to re-build your heart. In the case of this breakthrough, another heart had all of the specific cells that would have been rejeted by the transplant patient. The underlying structure remains because it is generic tissue that is transferrable between species. This break through allows patients to use their own stemcells and heart cells to convert the scaffolding into a function heart that is the patient’s own heart, not a transplant heart. This reduces the likelihood of rejection by the patient, eliminates the need for the immune suppressing drugs, and improves the results.

In the paragraph above, I said transferrable between species. The heart that is being used isn’t even a human heart, it’s a pig heart. This greatly increases the supply of hearts, because the number of hearts that can be transplanted is based on the number of peole willing to donate a heart and that are in good enough condition to be transplanted into another patient. We can hope for future advances for other types of organs as well.

This isn’t the only type of advancement we’re seeing along this vein. There is a pen that can draw cells on bone, and there are 3D printers that are being developed to print organs, like livers.

We live in exciting times for sciene in healthcare. We just need to figure out how to have medicare and insurers pay for the next.

Healthcare is not a free market

From the obvious department, amIright? Yes, but not for the reasons you think. Healthcare cannot and never will be a free market. There are several reasons for this that I will elaborate on here.

Healthcare consists of micro-regulation in the form of the reimbursement structure. This is an artifact of two different systems combining to make things worse. First, because the Federal Government is big and has two different programs one for Federal Employees and one of those in need Medicare/Medicaid (I’m combining them here for simplicity), there’s also the VA, but that has much less influence on healthcare. These two programs set the terms on how the government will reimburse or even pay providers for care provided. These are based on Current Procedure Terminology (CPT Codes) and not based upon your diagnosis. Essentially the government sets a price they are willing to pay for a procedure. As one of the largest market players, this influences all of the other payers (IE insurance companies). Many insurance companies use Medicare payment rates to set their own, which drives down the cost of a procedure to the point, in many cases, where it’s below the cost of the actual care. This drive providers to select more expensive and more procedures in many cases to make up the short fall. This payment model also makes it hard for new procedure methodologies to be adopted as they may not be paid for.

Healthcare is a network economy – nearly all care happens close to home. This is why groups like the ACLU argue that driving more than an hour for an abortion is an unnecessary burden on women. Because of the proximity of the majority of care (10.2 miles) this creates a local network of care based on the original provider a patient sees. When you receive a referral, there are a few different routes this can go, best doctor the the referrer knows, another doctor in the same clinic, or in the same care network (such as UPMC in Pittsburgh or Kaiser Permanente in CA). This drives an incentive to send patients within the network leading to mutual referrals or money staying within that care network even if there are better doctors for that specific patient outside of that care network. In addition to the Doctor’s network there is, of course, your insurer’s network which may be in direct conflict with the professional network that your provider has.

Imbalances of knowledge – in typical free markets there’s an assumption that everyone has the same amount of knowledge. In Healthcare, it is abundantly clear that this isn’t true. Most patients have little to no understanding of their diseases when they are first diagnosed. On the other hand, both their insurer and provider has an extensive knowledge of the disease. This limits how well the patient is able to correctly make decisions about their healthcare. It also pushes reliance to the provider whenever there is a disagreement between insurer and provider. The member can’t effectively participate in those conversations about care. Furthermore, there maybe little penalty to the patient if they fail to follow the prescribed course of care until much later where neither the insurer or provider can enforce a change of behavior to reduce costs for the entire system now through treatment rather than later when there are more complications.

These are but three cases that highlight the lack of free market mechanisms in healthcare. Even in cases where a patient wants to seek the best care it’s typically the patient’s responsibility to pay for it if it’s not with in the insurer’s network. In many cases these clinics can reduce systemic costs through lower point of care and lower likelihood of readmission after care.

Over the course of the next few weeks I will discuss Exchanges and their potential, how healthcare can be made more affordable using process improvement tools and other mechanisms. I plan on writing weekly on healthcare. If you have any topics that interest you please comment and let me know!

Tools that will help disrupt Healthcare

I’ve been reading this really interesting book on healthcare – it focuses on the potential Hows that healthcare can be disrupted. If you aren’t sure what disruption and/or disruptive innovation is then check out my last blog about some of the industries where it’s occurring and you’re likely part of the disruption.

If you buy your own health insurance you may have noticed a new type of insurance. It was new to me whenever I joined my health insurance company in the North West. Neither AMD nor Samsung had similar plans so when I first signed up for it, I was extremely ignorant of what it was and just signed up for something that looked good. This type of insurance is called HDI w/ HSA.

HDI: High Deductible Insurance. This means that you’ll likely have a high deductible (obviously) and will have to pay out of pocket.
HSA: Healthcare Savings Account. This is an account that allows you and your employer to make pre-tax contributions. You will also be able to pay for healthcare tax-free and accrue interest tax free as well. This is great in terms of how much money you actually gain from this. When you pay for a healthcare service like a Doctor’s visit, you’ll have to pay all $150, however, since you didn’t pay taxes on that $150 you end up saving money. Further, your employer can contribute to this account in the same fashion as your 401(k) and your account will be invested in a similar fashion as a 401 (k).

Of course there are some draw backs to this type of health insurance. First, until you reach your deductible you’re going to end up paying out of pocket. You could potentially have a deductible as high as $5,000 which is highly undesirable. Your employer might not contribute to your account, which places more of the burden on you, which sucks.

How can this contribute to disrupting healthcare? Well, you’re going to start really shopping around for your day to day medical expenses. You’re not going to go to a specialist unless you really think you need to. You’re not going to go straight to the hospital for care. You’re going to try to find another place to get the care you need. This will open up the possibility for care givers to provide healthcare in other fashions. This will potentially change the way that insurers will begin to pay out to providers as well.

There is also a push for Accountable Care Organizations, look for those as well, which are paid based on outcomes rather than the type of service being provided. These organizations will help disrupt incumbent firms and will likely capture the attention of insurance agents. I believe that in many cases this is where a lot of Exchange insurance programs are going.

Personally, I’m excited about the potential to work within an insurance company to disrupt the industry. I believe that there are changes that can be made internally, through educating on what metrics are and how to improve based on these metrics. I also believe that we’ll be in a position to help enable providers to be more efficient and effective care.

Healthcare: the Value Stream of care

In Lean process improvement, one of the first steps you ever take is to walk the process. For manufacturing this means to go down to the floor where the product is made and walk with one piece from beginning to end. This provides the manufacturer insight into where there’s a great deal of waiting for product to come, leading to idle workers, where there’s a lot of inventory piled up – a bottle neck, if there’s a lot of rework – fixing defects like re-etching a person’s name on the back of an iPhone, and how the material flows around the floor. This works pretty well with doctor’s offices too. You can draw a map to all the different places the Dr. walks, the nurses walks, and where the patient walks. Any transportation in a Lean system is waste, so reducing that is important.

Mapping value streams essentially take this to the next level. You map all the major steps that the material that goes into your product step through before and after you. This allows a manufacturer to see all the waste before and after them, enabling them to partner with their suppliers and customers to reduce waste and unnecessary processing. For example, many of us have worked retail. Some times when you do stocking you’ll find shirts that are in bags that are in a box. This is non-value add because it’s highly unlikely that the bag would protect the shirt from getting wet in the case of a flood. So, it’s a waste of plastic for the bag, putting the bags on the shirts, and removing the bags from the shirts are all waste. Which increases the cost of a shirt. However, there’s a beginning and end of the value stream likely starting with cotton and ending with the final sale to the customer. In the case of a can of cola, it takes 319 days from the mining of bauxite to the consumption of the cola with only a total of 3 hours of actual processing of the material (Lean Thinking, Womack).

Value Stream for a can of cola through bottling (Womak Lean Thinking)

Why such a long introduction? Well, the value stream for healthcare is completely different. The beginning is when you’re born and the end is when you die. Otherwise, every activity you partake in impacts your health and the eventual cost of any episode of care. An episode of care is what happens when you directly interact with a provider, hospital, or health insurer. Arguably, these are the exception to your normal behavior and take you out of your normal routine.

Thinking about health in a value stream like this is non-intuitive for providers and insurers alike. As both have accounting practices and treatment plans that focus mainly on the episodes of care and minimize the remainder of the activities a member does. Thinking in this manner places more importance on preventative care, longer term plans for mental and physical rehabilitation, and care networks for long term diseases. This is a serious shift that is starting to occur in many insurance organizations, but aren’t very effective yet. The most effective portion of those three are the networks of patients that have a similar disease, such as Crohn’s Disease.

I believe that looking at care in this fashion will help redesign the manner that care is designed as it will focus on different portions. As my friend Rachel pointed out, behavioral health issues are typically undervalued in the value stream of healthcare. However, with this model long term care issues should be given priorities as they impact the highest percentage of the value stream. It would also force insurers and providers to look at addressing care holistically and providing the best care in the best way when they can. Sending patients to clinics that can quickly treat conditions as cheap as possible.

I’m extremely interested in how this will play out at my company as we think more holistically about value streams for health care. Checkout my last two blogs about health care:
http://scitechkapsar.blogspot.com/2013/11/heathcare-how-insurance-company-decides.html

http://scitechkapsar.blogspot.com/2013/11/healthcare-why-do-we-need-medical.html