Curious Times and Curious corporate bedfellows

Dear Jeff, Jamie and Warren

We haven’t met, but each of you express a candor that suggests you are open to informal input.

Image result for Dimon bezos buffett

Naturally, I was not alone in my surprise over  your companies- JPMorgan Chase, Berkshire Hathaway and Amazon announced plan to enter the healthcare marketplace.  The cover story I saw, explained your unified commitment to contain, if not reduce employee healthcare costs, without mentioning  any specifics.

My first thought was perhaps this was a prelude to a presidential bid.  The announcement’s bold leadership play has garnered great public enthusiasm.  My second thought recognized  the power vacuum that followed the failure of the national government to make change. Your united commitment, and unspoken appeal for other CEOs to join you could create further momentum for market driven change.

These thoughts still didn’t feel quite right. I remain optimistic and root loudly for other change agents to shift the tide.  As we all know, the challenge to deliver healthy outcomes and affordable healthcare for all are not one dimensional. The complicated systems presently in place fail to address the larger complex inter-relationships between community and individual health.

Have you read David Freedman’s recent assessment of US healthcare system conundrum?  It’s not that long, and should be a required read for every team  contemplating entering this space. He writes

“It’s easy to think of “health” as just another category of social-service spending. But a great deal of modern research suggests that it might be more accurate to think of it as the payoff of all the other services put together.

Are you Seizing advantage or opportunity?

I do hope this announcement, in spite of subsequent commentary suggesting otherwise, that your three musketeer esprit de corp adds up to more than a pure group purchase power play. Elizabeth Rosenthal commentary in the NYTimes explains

“Together, these three behemoth corporations will be able to wrest great deals and discounts in their negotiations from hospital systems, drug manufacturers, medical device makers and doctors’ groups.”

OK, it’s why I’m asking you to widen your goal. Don’t  settle for negotiating a better deal than what  present healthcare arrangements are able to wrangle.

To Jeff, I wondered why you sought out Jamie and Warren to play in an arena internally Amazon team’s have been working, and compromise your reputation and general industry slaying capacity? Amazon’s platform successfully  delivers efficiency and value to end users. Are you suddenly squeamish about squeezing healthcare providers and yes, your employees too?  Scott Galloway, the NYU Stern faculty describes in The Four  your outsized vision has long exceeded the pure e-commerce play that is Amazon today.  Galloway further empathizes your tireless advocacy for technology  touched by realism about automation’s impact and downstream effect on wages.

These last points makes Jamie a strange bedfellow, as the banking business depends on individuals’ with incomes.  But that’s a different letter and article.  Jamie, under your leadership JP Morgan Chase offers expertise in compliance, as well as payments and savings that can create some cost saving synergies in Healthcare.  More importantly, both industries service and needs are intensely local and subject to state regulations.  The consolidations in both banking and healthcare had to rethink bricks and mortar location and staffing. Increasingly, financial services delivery via un-staffed, self-standing kiosks/ATMs and/or rely on mobile enabled applications. Banks, relative to healthcare, historically leveraged technology savvy to fuel growth balance risk and reward effectively and efficiently.  Jamie your investments and innovation, though slow starting, and less evenly distributed across the investment, consumer and commercial bank–they do suggest you can leverage the to deliver greater opportunities and create value in  Healthcare.

Warren,  I’m also hoping these are a few of the elements of value you spotted too.  Again, several closer observers of your group planning reiterate that limiting your collective primary intention to lowering employee healthcare costs, reduces the life value of the proposal. That shortsighted objective is certainly not likely to deliver the return on investment necessary to make a dent.  I’m counting on you Warren, and your experiences creating larger and profitable opportunities from reorganization.

The flaws in a hasty solution

I’m equally certain you all noticed the dramatic rise of Net Income among healthcare insurers.  If you haven’t finished a deeper analysis, start with this one by the Leavitt group that reveals a more complex picture.  “[I]nsurers made money in the Medicare, Medicaid and group health insurance markets and lost money in the individual market, which is why some of them exited the individual market in many states.” 

As early as 2006, Michael Porter summarizes the strategic dynamics and cost challenges associated with creating quality healthcare outcomes in   Redefining Health Care: Creating Value-Based Competition on Results.  The environment he  describes of dysfunctional competition leads  players to “strive not to create value, but to capture more revenue, shift costs, and restrict services.” Porter felt that healthcare lacked discipline and a management and business focus.

Jeff, Jamie and Warren is that your take too?

I don’t know if it was conversations at Davos and chats with deeply knowledgeable wranglers of this problem that inspired you to act.

I’m inspired by data. As the Affordable Care Act continues to make available additional data, it’s possible to learn more about what works.

Since 2006, researchers in both social and medical science enable more models of service and extends understanding of human health at the individual and population level. Much of healthcare activities used population data to allocate resources. Efforts to reduce costs associated with an individual can now take into consideration individuals’ behaviors.  Continued use of aggregate process and success measures mask the affects of too many associated care conditions and reactive activities.

There’s a complex relationship among these issues, and how they are translated into interventions and dosage appear to prevent rather than deliver consistent beneficial outcomes. Hilary Hatch the CEO of Vital sign offered this explanation:

“Population health puts people into categories by conditions (diabetes, hypertension, depression), age, lab results and medical billing data. These categories presume their own importance. When in fact, psychosocial, behavioral and environmental factors determine individual health far more.  Patient goals, preferences and barriers to care tell us what stands between that patient and better health. Without this data, population health efforts are undermined.

The explosion of personal health monitoring devices correspond with more data that contribute to advancing understanding of the workings of the human body.  Another entrepreneur, Mario Schlosser recognized that “no entity in healthcare  has enough data visibility to help you[individuals] navigate the system.”

Is this your collective aspiration too?

Why not just partner with Success?

A few weeks ago, I attended a presentation at Chicago Booth’s Rustandy Center by the Chief Medical officer for Oak Street Health, Griffin Myers  This new medical group does not serve everyone, but the patient population they do serve have consistently better outcomes.  The business model that Oak Street Health adopted throws out the traditional fee for service model insurers favor. Instead they get paid when they deliver services that work, the successful outcomes embodied by Accountable Care Organizations as specified in the Affordable Care Act.   Oak Street established a value-based care delivery model exclusively serving  Medicare (and Medicaid dual-eligible) patients in low income areas. They presently operate 24 clinics across Illinois, Indiana, and Michigan.

This intereview with Griffin Myers on Tasty Trade gives a great overview

Another alternative model of care that should inspire the three of you is Oscar Health, whose estimated valuation of $2.7billion, and claims to be the first technology-based insurance company. Mario Schlosser, an immigrant from Germany realized before the birth of his first child an opportunity to put his own special skills as a data scientist to work.  His first hand experience navigating the complexity of  the healthcare system led him create Oscar Health in 2012. The company “uses data and product design to guide you through your health care and get you healthy.” As of Oct 2017, he has raised over $720 million and  delivers over 100,000 patients  concierge style team care in New York, New Jersey, San Francisco, Cleveland, Nashville, Austin, San Antonio, LA and Orange County.  Note, many of these cities feature innovative health care service providers but  boast a volume of technology talent too.

This interview with Mario on Techcrunch Disrupt in 2017 is a good overview.


Both these approaches recognize that healthcare requires high touch, and a constellation of services to produce the desired outcome.  Both of these innovative for profit companies are heavily invested in use of  data and  technology.

So Jeff, Jamie and Warren under your leadership, will you be equally committed to  facilitating connections between traditional care givers, services and systems or just cut out the human to human touch?

Whatever you do, it will be interesting and I’d be happy to help.


Understanding ain’t believing and yes there are economic consequences!

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Recently, I came across this academic article differentiating belief and understanding and it triggered an explosion of thoughts.   When I teach, I  often encounter students who fail to grasp the topic and naturally their puzzled looks make me try to explain the idea again, differently.  I  never considered the possibility it wasn’t  my explanation that confused them, but maybe the ideas themselves.

Lost in Space

Our brains are wired to discard irrelevant information and to some degree if the new information doesn’t jive with what we know or believe–the ultimate cognitive dissonance occurs. Or as the Lost in Space robot would say: “That does not compute!”

As a teacher, I found the article unsettling on multiple levels.  First, because I never considered the potential conflict when preparing my lessons.  Second, what I confirmed talking to a High school math teacher in a large public school in Berwyn, IL:  Teaching helps students meet standards not to understand.

Personally, my limited experience as a public school teacher proved deeply challenging. In choosing to help students understand  not merely to pass.  I taught a vastly diverse population of 4th graders in a suburban Chicago classroom.  Student  IQs ranged from 5-95% on the chart, and the socio economic status of their families were equally diverse with many receiving subsidized breakfast and lunch. One student was severely ADHD, had lost his mother and his medication was constantly being adjusted. I had my hands full and could never figure out how to insure that every kid understood.

My own preference for immersive learning as a young student, in which my students allowed us to  play it out and learn by doing made school fun.  An approach, I actively sought to replicate in my teaching.  Returning to study education later in life, I was first dumbfounded to learn that so little was understood about effective teaching methods.  This isn’t really as mysterious a problem as I pose.  One of the oldest professions remains mysterious becasue the  purpose or objectives of education continue to evolve.  Sure there is wide agreement that everyone should have a command of the basics, the three Rs–Reading wRiting and aRithmetic.  How do you measure competency in these subjects?  what methods make it possible for students to gain competency or even mastery? If you have had a child in school, then you are familiar that new methods continue to be introduced.  Similarly, schools are held accountable to new standards and competency measurements.  Yes, the rules for private and charter schools differ from those demanded by the public.
Surprise, understanding information and knowing something are not the same thing. There are somethings you understand but could never articulate and vice versa some things you know but don’t necessarily understand.  For example, we know or learn how to drive without ever understanding how the car we drive actually works.  We may understand what someone else may be feeling without knowing precisely.
The areas where our understanding and knowledge most align come from ideas that involve multi-sensory learning experiences. It’s one thing to watch someone do something or find the results and another to reproduce them.  I can watch Tiger Woods, study his swing, stance and then when I attempt to hit the ball I discover just how much I don’t know.
This post won’t be able to address the issues fully.  I’m wondering where and how we might be able to resolve some of these contradictions and do it to help more people achieve. Sure high scores matter, but don’t we also want higher understanding that makes it possible for more people to solve more problems  when and where ever they encounter them? Teaching for understanding should count, in fact it’s a great book too!  But I’m also making a quick case for multi-sensory learning that allows more of us to connect what we know to things we understand.
Take history.  The recent Steven Spielberg movie on Abraham Lincoln attempted to show us more of the reality of the politics during the Civil War, but it also brought to life the words Americans are frequently taught.  We know about the civil war, we know that it was about slavery and we may know the Gettysburg address too.  But how does knowing that help me understand the world I encounter today?  How does learning history help me?
Imagine  learning history by role play? Being asked to study and recite the lines of Gettysberg address makes it easier for us to recall them and ponder them. Playing out the issues allows us to wire our brain to make our own meaning, personalize the lessons to connect to our pre-existing experiences.  The challenge may be that owning and personalizing the results takes time but it also complicates the  expectation of a singular correct answer or take on history.  Personalized meaning may prove more useful, stickier and authentic but it makes passing a standardized test much more difficult.
In fact, the accumulation of specific representations of  ideas and details are the only measures of learning that society at large respects and values. Today we value a passing grade and top performance measurable on a singular dimension.  Daniel Goleman‘s work on multiple intelligences increased the appreciation of talents beyond traditional accumulation of facts, but don’t celebrate them as equal achievements. High scoring SAT,  ACT and GPA scores open doors to further academic study and elite higher education opportunities.
This little monograph published in 2006 warrants more attention. In part, our system reflects the consequences of  the larger failure by the education system to differentiate student responses based on their belief and understanding versus answering according to the expectation of the testers.  The consequences of teachers teaching students to pass the test  may help some students further their schooling and many of them may gain understanding in the process.  But what about the others , where school material doesn’t match their knowledge of what matters  outside of school?   Teaching without understanding fails them and represents a failure of the investments to realize the returns of a capable society.
But there’s more.  Personally, this piece opened two divergent avenues of thought.  One,  given the growing research into the workings of the human brain how might cognitive processes  guide our behavior in the face of two truths. Two, findings by the economist James Heckmann whose work focuses on the development of human skills, abilities and health capacities for example demonstrate  the different values of those who graduate highschool and those that pass the GRE.

Two truths

T​he concept of holding two truths at once parallels the paradox of knowing what is right and yet believing it wrong​.

The FMRI of psychopaths who suffer from false delusions or paranoia, found their brain processes to differ from the general population. Interestingly, FMRI scans of democrats and republicans show each population to process information differently.  Both research illustrates the power and influence of different beliefs and explain the differences in our thinking and actions.  The reconciliation or rationalization process literally works differently based on early wiring of beliefs.
Carol Dweck, a noted childhood development scholar’s research explores the opportunities that emerge to rewire in adolescence.  Writing a response for the Boston review to research by James Heckmann that emphasized the value of larger emphasis on interventions to foster huma skills ad capacities, she writes:
“The success of the adolescent interventions derives from their laser-like focus on particular non-cognitive factors and the beliefs that underlie them—knowledge stemming from psychological theory.”
I often explain that my life changed when I began graduate work at the University of Chicago​.  I discovered what thinking felt like relative to merely learning.  I experienced integration of knowledge I was accumulating, the adding to and reconciling of my previous understandings with new, deeper understanding  of how things worked.
Many things I believe don’t require me to defend or explain.The best explanation I can muster extends from the recognition by the researchers on the primacy of self-centered meaning making.  My truth, what I know and what I believe begins with discovery.  The child who asks incessantly why seeks to make more sense of what they encounter.  The information they receive forms a foundation that like the sand on the beach slowly gets replaced with each new wave of information.  The emotional issues that cloud our thinking
 I’m sharing this article with the hope that you may have some additional insight into the topic or further my own knowledge surrounding  the significance of reconciling belief and understanding.


Are you ready for the honesty in the mirror?

It appears that Social Media shows signs of maturity and its appetite can be fierce if not fearsome.  A year ago, the Arab Spring signaled the power of social media to rapidly help like minded individuals with shared frustrations meetup and act in solidarity against institutions. The speed of the social sharing had been seen before but not on this scale and not for this serious a level.

I happened to come across two examples in which social media has begun to provide real levers of change,and illustrate what Scott E. Page, at the University of Michigan and other behavior modelers, recognize as the power, not just the wisdom of the crowd to change outcomes. 

When I say levers, I’m talking crow bars, not mere  shoe horns.

Estimates by the Pew Reseach Center Internet American Life project show that  “two online activities that are nearly universal among adult internet users, as 92% of online adults use search engines to find information on the Web, and a similar number (92%) use email.” Shoehorn persuasion tactics. Email being the easiest and direct persuasion tactic. Its free and so the more they write the more they hope I’ll respond.  Crowbar tactics are when the audience flips the lever back on the sender.  This isn’t the same as the Arab Spring, or if I’m wrong I hope you’ll tell me.

Case #1 Candidate Accountability

Without the benefits of stats, I’d estimate the savvy of the presidential campaigns’ use of social media –getting out their messages to voters, and pulling in donations and volunteers–even with the public and niche user communities’ scrutiny of the candidates claims.

Its human nature  and certainly consistent with the American capitalist tradition to expect something in return, the exchange of effort and value.

Candidates have always been aware of the double-edged exchange of access to voters. More importantly, they also need influence to get favorable results.   I live in Chicago whose rich history of machine style politics used patronage as reward to its soldiers who helped register and then turn out the votes. Social media in 2008 was young,the candidates who took it by the reigns and broke in the users learned how the new media drove influence and when relationships mattered.  Pelting your audience with emails needed a little finesse, to prompt sharing.  Give them something worth sharing and your audience will provide the influence. The voters would be the muscle standing behind the message.  Remember Sarah Silverman’s hit video, that encouraged grandchildren to go visit their grandparents in Florida and get out the vote for Obama?

Again, I’ve no stats, but Jon Stewart’s team as well as Stephen Colbert among others at Comedy Central, provided ample video clips worth sharing.  They also did something else. They reminded their viewers that, like Dorothy they too had the power all along to take on a candidate’s claim and hold them accountable.

Fast forward to 2012.  I receive a ridiculous amount of email pleas for donations and offers to win a chance for dinner with the president.  It’s a little like publisher’s clearing house, and I don’t care about their fundraising deadlines.

Here’s the case that John Souza writing for Fast Company yesterday mentioned.  VP candidate Paul Ryan appealing to potential voters shared, maybe even boasted that he had run a marathon in 3 hours. The effort intended to build solidarity, open up  and reveal a little about him.  But remember this is 2012, and social media’s two-way lever, makes the public more powerful.  Sure, a candidate needs to appeal to the voting population, and leverage common affinities to his favor. How did he fail to realize that this audience had pride in their efforts and might take offense? The savvy campaign staff didn’t anticipate the indignation his boast would draw, nor that it would prompt greater scrutiny.  Rather than drawing them close he found himself suddenly at a huge distance.  [Read the fuller story here, Obama and Romney’s Biggest Social Media Fails courtesy of Fast Company.]

Souza identifies three signs of social media’s crowbar power all made possible by people’s ability to find and then share content that they ultimately can’t control.  No surprise when Facebook has 1 billion users, or  92%, and growing, of american adult internet users use search and email.  Souza points  out how  social media “by shining a continual light, from every possible direction, on every move a high-profile candidate makes,”  has made it impossible for candidates to control their campaign and message.

Elected officials don’t get any more of a break than candidates.  Arguably, few institutions are beyond the reach of social media.  Anyone rewrite the updated version of the Emperor with no clothes yet?   Which brings us to case #2.

Case #2, the messiness of governing.

In early September, the Chicago Tribune launched a useful interaction with the crime data that the City of Chicago has made public. I dropped by the local Datapotluck meetup and met the staff responsible for its launch and learned more about the data challenges.   Six weeks of 3 programmers full-time and the results are very impressive.  I especially appreciate the context they went out of their way to include.  Judge for yourself Crime in your community.

Great that they are more eyeballs analyzing the data, that’s one value to the city.  But more eyeballs analyzing the data is also what a) prevents the mayor’s office from providing all of its available data in real-time; and b) sharing the parallel data of police responses.

What happens when we make people more aware?  Joe Germuska who designs the news applications for the Tribune,  shared some of the insights gained in designing the crime site by sitting with people in various communities to understand what data was useful and why. Parents who want to insure the kids got to school safely use the interactive maps to plan the safest routes. Or the context alters the image of a community area when you the crime stats appear in proportion to the population.

Getting more people to think and act is one of the oldest games on the planet.

There’s no place to hide anymore, and whether you share the data or not, people will hold others accountable.  That  return lever has always been there, but rarely exercised by lesser known individuals raising their voice, surprised to find it carried by strangers. We all benefit from learn how to use these tools more effectively, to motivate, incent or  engage people constructively not merely destructively.

Democracies are messy, but the shot of more people benefitting increases the more transparent and visible the decision-making process.  So Rahm, good job on learning and sharing but you’ve got more to do!

Spreading Optimism in Data analysis, can it save us?

Last night, I ventured out of my normal routine and headed off to a “Meetup” with folks who sought to “create space and opportunities for ongoing collaboration of non-profit data partners and data enthusiasts to explore interesting data sets for the greater good.”

Four Ways to Slice Obama’s 2013 Budget Proposal,

[Note, the full interactive graphic can be found at The New York Times ]

Big data and Business intelligence or applying analytic and visualization tools to explore and understand data have been steadily gaining their share of business headlines in the last few years.  If I was more deft, I’d be able to show you a graphic illustration.  But that’s the point of why I went to the meetup.  To learn where and how to do exactly that!

I met several people, bolder than I, willing to put their ideas out in front of others before they were fully baked. Even better, these individuals were bold enough to push their initiatives in spite of the usual skepticism.

Compelling policy action with data

For example, the overlap of homeless people in neighborhoods with vacant buildings and apartments, sounds like a solution begging for grease to make happen.  One attendee, a researcher, wanted to document the problem and then find folks willing to help change the situation. The grease might be converting the vacant properties to low-income housing, or an unemployment  PLUS housing voucher system.  Better yet, why not offer training in home and building maintenance,  a program for home repair that puts the homeless to work to earn their rent? The researcher came looking for help to find the data and see what if anything could be done in Chicago.  I happened to have investigated this questions briefly (see my post on the Rosenwald homes) and shared with her that indeed there were lots of organizations and public private partnerships working on this issue.  For her, the meetup proved useful and helped her further her interests.

Policy wonk that I am, I recognize wider issues these simple ideas overlook.  What I applaud however, is the willingness and gumption of technically skilled, many highly educated PhDs who have voluntarily bound together to tackle the status quo.  In spite of my own experiences and deeper understanding of the problem, the Data luck meetup tapped my ever-present optimism and willingness to engage, and I guess that’s what prompted this post.  I too, sense  a good argument, made with honest data,  can and should sway people to correct problems.  Don’t you?

It’s certainly hard to roll back a policy after it’s been implemented.  When new information or new insights emerge, typically the absurdity of the original solution only manages to compromise best intentions.  The results represent the flaws or misconceptions of the original framers of the problem.  The revelations of more problems, as in the example public housing created of co-dependence and how it helped sustain poverty for people who grew up in these projects.  The emergent data just as easily undermines the willingness of lawmakers to find a better solution.  Instead the aggregate data leads them to impose more rules and regulations to prevent cheating which does little to correct the underlying problem.

How is it that we have growing government? Adding rules to correct for the limitations of the original legislation, like any patch, is easier than starting over and addressing the problem from scratch.

Amending vs legislating

The Constitution, of 1789 was an overhaul within 10 years of the final ratification by all 13 colonies of the first constitution, or the Articles of Confederation which had effectively bound the states after the American revolution. Beginning with 10 amendments, in two centuries, Congress has amended the constitution only17 times, while it enacted numerous laws.

Today, Congress appears to be passing less legislation, as illustrated in the following summaries featured by Ezra Klein in the Washington Post and govtrack.

The scare of governmental encroachment, or interference in our lives may be the rallying cry of many; additional data however, suggests other factors.

Congress                       No Action  Action      Failed      Enacted # and %

106th (1999-2000)            7460            922           28           558 (6%)

107th (2001-2002)            7750             841           5              350 (4%)

108th (2003-2004)            7045              932         13           476 (6%)

109th (2005-2006)           9141             930         22           465 (4%)

110th (2007-2008)            9218           1382       39           442 (4%)

111th (2009-2010)            9239             998        26           366 (3%)

112th (as of 8/4/2011)    3956               305         7              20 (0.5%)

(source:  )

Drafting a bill, as the blog points out certainly requires some thought, and the leadership in each party tends to only let those bills with a chance at passage actually reach the Congressional floor for votes.  This explains the relative low # of fails, in spite of the discrepancy between the number enacted and those receiving some action.

Not clear how to interpret the relatively low proportion of enacted legislation.  Is it a sign of efficiency, or the complete log jam that makes progress impossible? Anyone know whether repealing a piece of legislation , such as the repeal of Glass-Steagall would be tallied as enacted?

The challenge

One thing is clear, having more volunteers who are not part of a political action committee, or beholden to a particular ideology other than honest analysis, can only help.  The value of new tools and data visualization certainly helps, but as the presenters at last night’s Data luck meetup reminded, you still have to clean the data before beginning the analysis.  I’m eager to learn how to use some of these tools, and access more data to help tell a different story.

I’ve got no problem using shame to illustrate the inadequacy of a policy, or the stranglehold of private interests that stand in the way of progress.  What do you think? Any and all suggestions are welcome.

Medicare, time to replace the model

Problems, by in large are man-made.  Humans, among all living beings, are the only ones who actively make their own environment, and specifically the cultural constructs of that environment.

Sure animals show similar behaviors, birds build nests and ward off other intruders; but animals don’t prosecute killers, nor does the animal kingdom employ different species  to build out their environment.

Unemployment or the Federal Deficit are both human problems  of our own making.  Irrespective of the choices made,  passive or  active, logically motivated or merely “the right thing to do,” problems arise from some break down  in objective  reality.

Today David Brooks , New York Times column  entitled Where Wisdom Lives, describes the philosophical choices the Republican Party and Democratic Party must face to resolve the Medicare problem and present political  logjam.  For all his brilliance and clear understanding of the interdependent pieces that have brought Medicare to this looming state of insolvency, he uses his answer to define the problem.   Good  technique for effective communication, but not a good fit for problem solving.   His mention of  Medicare’s basic structural flaw–reimbursement as pay for service model, suggests an alternative assessment.

What problem exactly was Medicare intended to resolve?  Wikipedia describes Medicare simply as a social health insurance, providing those eligible to receive “covers 80% of the Medicare approved amount of any given medical cost.”   So is the problem the insurance or the costs? or social coverage?

The Pay for Service model, a wonderful cultural construct and mental model of  healthcare delivery  matches the model used in the care and health of automobiles.  Auto insurance policies are structured very similarly to health insurance plans.  Correspondingly, these models also shape government regulations that curb the practices of the insurers, mandate coverage and resolve claims.  Fundamental differences between cars and people seem  entirely irrelevant when choosing or defining the problem that Medicare in its current model solves.

Cars are disposable and replaceable; and the marketplace  determines both reimbursement limits and clear, directional prices that consumers and insurers incorporate in their choices.  Where is the human depreciation schedule, or  the human after market and blue brook valuation equivalent  to those that exist in the automobile market?  No matter how abhorrent an idea, these do exist in part created by Medicare and the Federal government.  In the automobile insurance market, there’s no philosophical debate about when to send a  car to the junkyard or rebuilt.  Not all body shops’ repair or service estimates match nor do every insurer’s reimbursement.  The insurer establishes the limits of what it will pay, and the insured chooses replacement or repair.

In the healthcare system, insurers may expect a co-payment or ask that you obtain  pre-certification before a procedure, but people rarely, if ever, are given a cost estimate.  Most health practitioners couldn’t give one  if they wanted to.  Billing departments set the price and the invoice reflects what Medicaid, or the insurers have negotiated for reimbursement.   At the auto shop, if it’s an insurance related claim, sure there is some pricing adjustments.  But for the majority of service, maintenance or repairs, the repair shop provides the estimate. Then based on an understanding of the cost and relative perception of value, its possible to negotiatewhat work  is done   When our body may  need “repairs,” or “servicing” doctors increasingly review the pros and cons of the different alternatives with us, but cost does not enter the conversation., other than whether insurance may or may not cover the procedure.

In short, the pay for service model is NOT the model of healthcare in the US , because the choices we make are not based on price, they are based on a higher ethical or moral standard of care.  For Automobile service, price is directly linked to the  election of a transaction for service.  Choices for obtaining healthcare services are often made for us, not by us.  Who is making the choice for whom?  Perhaps the idea of Medicare was to make it clear that eligible people would get the healthcare they need.  Philosophically the burden for charitable care was shifted to society, the public and off the care providers…for both medicare and medicaid.  The arrangements for payment preceded the mechanisms for pricing and though adjustments have been made,  the absence of clear market signals compromise the objectivity of any proposed change. Market signals may be inappropriate for healthcare services, and the recent downturn have demonstrated that even a well established market system like the automobile industry couldn’t respond swiftly enough and required governement assistance.

David Brooks  points to the  two parties opposing philosophies that pit wider market driven control against central planning.  What it doesn’t do however is help us use our experiences with a very broken pay for service system to recognize how badly this model fits the consumption process of health care delivery. Rather than getting stuck in a philosophic debate, or stoking the fire of fear, can’t we find a better fitting model?

Goodness of fit test for a model?

Ever been asked to solve a story problem?  Fit, is crucial  when  choosing a method, or evaluating which  different math  model best matches  the information and situation presented in the story or problem.  Wikpedia on solving math problems explains :

“This question can be difficult to answer as it involves several different types of evaluation.”

Likewise, here is a more complete explanation of matching models and problems that teachers:

” In this step a chose of how to solve the problem will have to be made. The choice could be as simple as writing a math equation. More complex problems may require the formulation of an algebra problem or the use of a problem solving strategies. Strategies such as guess and check, draw a picture and work backwards can be used on many types of problems. Sometimes more than one strategy will work on problem in which case the solver can select their favorite strategy or use the easiest one.
Read more at Solving a Math Story Problem: Five Easy Steps for Completing Any Problem

Much of the debate continues to focus on philosophy. The  insurance model  doesn’t fit the larger understanding of the problem.  Evidence points to runaway costs, or services untethered to a cost based evaluation where there is no market mechanism  to help providers and recipients  make a service choices. Just as a car that goes in for regular maintenance is cheaper then the breakdown on the road, the missing cost signals have also compromised  both our attitudes and service mechanisms to provide lower cost maintenance health regimens.  Likewise, it is difficult to discuss quality of care in the absence of cost.  Not every investment to prolong life may prove qualitatively appropriate, yet insurance companies are making the call for us.  If that is morally repugnant, then let’s find a some common ground and then move forward before it’s too late.

Costs of Care , a social venture non-profit organization committed to greater transparency of costs in healthcare delivery offers this model:

In the American political system, our ability to get mired in philosophic debate is  ever present.  Our ability to find the best frame , or clarify our intentions and find the best model match is imperfect at best.  But there’s no time to waste if we are serious about tackling ticking time bombs like Medicare.

I’d be pleased to hear further thoughts or  suggestions that might help either redefine the problem or be a better fit for the problem as defined.

Fostering intersections for value creation

Intersections are some of my favorite haunts.  Maybe it’s because I have a bird’s-eye view of a vibrant intersection in West Town, just at the SE edge of Chicago’s First Ward.

Intersections aren’t just about studying traffic patterns; rather they are a wonderful place to watch and engage in value creation.  Major thoroughfares mean lots of traffic, people exiting one bus in exchange for another, drivers changing their heading from east/ west to head north/ south.  But if all they did was merely pass through and keep their focus on their destination, there would be no story.

In my neighborhood  a tiny specialty pie shop has managed to not only make people stop but now brings lots of new people into the neighborhood, as it has become a destination.  Similarly, the now open Senior center and local library branch in  a rejuvenated old department store, complete with WiFi, has also helped alter the mix of people on the street.  Of course, the pre-existing establishments call to other regular patrons, such as  the MoneyGram, the live chicken store or the competing packaged liquor stores.  It is precisely that intersection of the old with the new that marks the evolutionary changes in the few blocks of my local community area.

In the virtual world, Twitter creates  intersections too.  I happen to follow  @HelenWalters, who last week tweeted  a direct response to another tweet. A reference inside the sufficiently roused my curiosity; and made me stop and track down the originators. After a few steps off my beaten feed, pleasantly I found the following link:  From STEM to STEAM.  The story describes the vitality possible when inserting Art into a more technical engineering setting and system.   A tweet  furthered my own connections to others and the emerging value interdisciplinary efforts make possible.  As the soft electronic murmuring of the Chicago Ave bus announced itself to the corner passers-by floated through my open window,  the convergence of virtual intersection and reality struck me as similar experiences.

In my own tangible geographic circle of connections, I  recently connected two Chicago academic champions/leaders, one representing   medicine, economics and public policy, the other Design.  In this case, I created an intersection by introducing independent journeymen, both of whom had noticed and were open to the exchange of value, but the opportunity had not arisen. Sad, how two very prominent institutions in the same geography with similar social goals have no simple means to connect and share. Why aren’t there more established venues for sharing, where it is as easy for the pie minded and the seniors to engage with the high school students as they change direction and catch their transfer bus?  Or the leading institutions don’t have a little more shared summits, or at the very least a central bulletin board.  In the virtual world, there is more than one of these…yet that takes more intention than providing a simple intersection like my corner.

Community development whether it is tangible or virtual needs some birds eye perspectives and active connectors.  Maybe it’s culture and maybe it’s just people, but our primary motivation seems focused on the prospect of gain, or advancement of our current position and not sharing for mutual gain.  There has been a series of conferences held in Chicago that all describe the richness of the region.  The city of Chicago’s boundaries make clear how far its services extend; yet Chicago is also a metropolitan area whose residents pay Federal taxes. In exchange, the region benefits from ngoing infrastructure connections, such as our interstate highway system, support for the electricity grid, our national currency and bank wire system etc.  Public private planning partnerships in Chicago extend  back to the first Burnham plan, which produced shared rewards and fostered the character and physical attributes that make Chicago a world-class destination.

Personally, it’s no longer enough to hope that good intersections will foster community development.  My corner is a good example of what can happen from limited or case by case planning.  Synergy doesn’t happen by itself, it needs more than the road bed for people to connect and it is through connection that exchange happens and with it community development.  I’m cheering on adding art into the traditional venues where science, technology, engineering and math are highly concentrated and can’t help but bump into each other.

My  hope in the coming weeks is  to share more  stories, especially those that relates to my growing efforts  in Design Policy.  With the help of students and colleagues, I am actively trying to set about laying plumb lines to connect different perspectives and help lay solid foundations to further intersect  public policy and design.  Happy to have you join me, or share your own stories and experiences in engaging people around natural intersections.

Policy makers, are human and far from perfect planners.

For all the resources and knowledge that the markets seemingly digest with great efficiency and timeliness,  business and government leaders both stop short of taking on the problem of rare events.  Perhaps it’s for the reasons that John Camillus outlined in HBR May 2008, that

“Companies… can’t develop models of the increasingly complex environment in which they operate.”

Certainly when stakeholders have competing interests, decision-making is often difficult.  But I’m wondering in light of the number of “unimagined,” or “unpredictable” events  whether it is merely the  impossibility of predicting a rare event that leads to blindness and wreak havoc on balance sheets.  BP recently estimated that the DeepHorizon Well disaster would cost a total of $40bn, a record loss for the company that knocked down its pre-tax profits but did not knock the company out.

The ever-changing environment further seems to diminish our willingness and resolve, as a society to be proactive and tackle the possible train wreck in our future. Public policy and governments intentionally move slowly, often requiring at least one of three pressure points to force an issue: a pressing problem, politics or the clear consensus on a particular agenda item. Oddly this is often characterized as the Garbage can approach to Policy making shown here:

In the US the debate and legislative agenda setting process is quite contentious.  The Congressional Budget office is no longer universally viewed as the objective arbiter ;and even the supreme court’s  independence  appears tainted by  partisanship.

Who leads and who follows is difficult  to figure out in the best of times, with consensus  rarely making it easy for us to gain some clear forward movement on a variety of locked issues.

Commentary on the vaunted aftershocks printed in the New York Times as the disaster first unfolded, characterizes the problem in Japan as one of hubris.

Japan’s vaunted scientific and technical prowess has taken on the character of a kind of myth, and that myth has deluded the nation’s politicians and business leaders. But it has been obvious all along that science and technology can deal only with things that fall within the range of what may be expected. And also that it is all too likely that some things that happen in our lives will indeed be “beyond all expectations” — and that it is precisely for this reason that we are able to live those lives. What, after all, would be the meaning of a life in which everything that happened was “within expectations”?

The philosophical issue is a luxury in the face of true uncertainty.  At this moment, no one knows, or can know, what the consequences of all these changes will be.  The markets continue to fill this void and do what they do best– provide clear interpretative signals of hope, faith or despair.  They churn out at amazing speed, bite-size digestible cues devoid of emotion, the technical analysis that crunches large quantities of data often sends out a  beacon to guide future activity or give a verdict on the event.

But something is different.  Today, the message is not directional.  Perhaps we have hit a new realm of complexity.  Certainly the market research reports keep coming; but the outlook is one of vast uncertainty.  The hyper-kinetic global market is confronting the cross currents of disrupted supply chains rendering the models incomplete and making impossible their estimation of  just how far, or how long the economic shocks will reverberate.  Again, the echoes printed by the NY Times:

“The outlook is unusually uncertain, ”  Mohamed El-Erian of Pimco characterizing the market fall out of Japan’s crisis.

” Uncertainty hangs like a cloud over the future of the global and American economy, ”

“The uprisings, the Persian Gulf, Japan: It’s very likely that the global economic impact will be larger than most people now imagine,” Bernie Baumohl, of the Economic Outlook Group said. “Electricity and gasoline prices will stay high and consumers are nervous. Guess what, that’s not an atmosphere conducive to corporations wanting to hire workers.”

If ever there was clarity and a clarion call for clear vision, faith and leadership from Washington, that time is now.  But  public policy process offers no clear resolute answer.  The routine or over reliance on patterns that repeat to help us plan are insufficient.  We must face the reality that our future is exceedingly less likely to  resemble the present and will differ dramatically from the past.  Some changes will continue to occur incrementally, slowly as it takes time for the impact of the events such as the absence of critical parts or the shortage of oil to work its way to our shores.  Our over confidence in yesterday’s routines and outcomes is understandable.  In the face of disaster, however our instincts have to kick in and we hope that whatever plans we’ve made they will help sustain us going forward.  Insurance for our cars, homes, health and business insulate us from the unexpected costs.  The Federal government continues to respond and step in when business or people find it impossible to fully underwrite the risk of rare events, it’s why the government sells flood insurance and offers guarantees to our bank deposits.

The Science-policy Gap

Note that the level of confidence in a particular model tracks differently for the scientific community than it does for society at large. Scientists rely on the dissemination and debate of inferences drawn from various model representations that largely occur in publication, with citation and competitive grant process.  In contrast, social policy typically requires a weight of evidence or a strong threshold of agreement within the scientific community before confidence arises.   Further details are  available in the original article entitled Uncertainty as Information: Narrowing the Science-policy Gap, published in the Ecology and Society Journal.

The verdict is out

My own uncertainty stopped me from publishing this last week,  so I decided the first step was to hit the button and let it go.

In spite of the change in the headlines, the  atmosphere of doubt continues to make us feel unsteady and every foothold  appears loose.  This past week, uncertainty forced itself front and center with the headline Air Strikes in Libya, questions back home.  In this  New York Times story described President Obama’s decision  as ” a new dynamic whose consequences were especially hard to predict.”

In the last few years, the world has lived through, the unthinkable, surviving more than one “beyond all expectations” disaster. It certainly is not merely a testament to our resilience, but at every occurrence, I’m disturbed by  the absence of credible back up plans or adequate preparations .  In the US, complex financial trading  was not the cause for the financial meltdown of 2008. Rather than sustaining the myth of their mastery, the titans of finance when finally caught playing hot potato amidst an ever-widening, global market,  managed to  shatter the illusion that they were prudently managing and pricing ever-present risks.

In the Middle East, I share Thomas Friedman’s mixed sentiments

” As one who has long believed in the democracy potential for this part of the world, color me both really hopeful and really worried about the prospects.”

Yes, the situation raises both fear and hope as the future of the region,  abruptly severs itself from the past, is just too wide open. We’ve seen how Japan’s greatest natural disaster is quickly being dwarfed  by another event, the unfolding nuclear power crisis.  All in all, the odds are favoring unpredictability.

In each case, the initiating event was a difficult problem to predict, as limited occurrences make each nearly impossible to model the timing of their occurrence with accuracy.  Were these events inevitable? No, there was no certainty that they would occur, but there was a small but distinct possibility and yet we deferred plans and preparations for this rarity.

My Father, 20 years ago began to sell Long term care insurance.  At the time, he was in his 70’s and incredibly healthy.  He himself saw no merit in buying it, but believed strongly in the merits and value of the products.  As it turned out, he died abruptly so he was right, he didn’t need it.  In the US, we stopped building and authorizing new nuclear power plants after mistakes in the control room at Three Mile Island raised the nation’s consciousness to the consequences of a serious error.

Only in the midst of concerns about global warming and rising global demand for scarce fossil fuels that have increased the risks associated with extraction from more complex environments has nuclear power been considered a possible alternative. But the news from Japan has  reawakened the consciousness of  the lasting threats of an error outweighing the possible benefits.

History of the use of nuclear power (top) and ...

Image via Wikipedia

In the face of uncertainty, our response is merely to rely on what we know, and accept the current system limitations and downsides  Policy wise, to satisfy the  increasing appetite for energy and electricity, the US remains dependent on fossil fuels and small investments in alternatives.

At the end of the day, it’s not the complexity associated with rapidly accelerating changes that we can’t seem to face.  Maybe, like my father, it’s our unwillingness to apply the logic to ourselves, and believe that it’s a risk we actually might have to face in which case the costs outweigh the potential benefits for the possibility we can’t imagine as real.  Or, maybe it’s merely the  magnitude of some risks, the rare ones that we can’t hedge, can’t contain and so we  fail to even address.   I’m not merely wondering why so  many miss  Nassim Taleb’s analysis of Black Swans.

I suspect we will need something else.  For example, a little more focus and outrage than what we have manage to muster domestically in the aftermath of these disasters.

There are always consequences

Whatever your politics, health care was on a collision course and few players have willingly taken on these challenges in the last 10 or 20 years, or even attempted to create and champion  true innovations in care. That’s what I concluded from last night’ s consulting round table at Chicago Booth on the meaning of health care reform.

From a series of short presentations by local  healthcare consultancies, SG2 and Kaufmannhall, and providers,Advocate Healthcare and Northwestern Memorial Hospital,   I learned how major players in healthcare are both  unprepared and ill-equipped  to usher in the changes embodied in the recent passage of Federal legislation.    Last night, the brief overviews shocked me. I was disappointed to hear that the information technology revolution has somehow skipped the health care sector, that major providers appear largely unaffected in the basic information delivery and  back office processes.  The health care delivery system has largely been observers, not leaders, in adopting or championing  technology applications   used in other sectors  to spearhead  change, drive enormous efficiencies as well as disrupt the fundamental economic structure.  Today,  deadlines to carry out electronic health records are forcing health care providers to face challenges that other prominent industries resolved decades ago. We don’t think twice about the ubiquitous acceptance and the ease of using bank cards anywhere.  The  transaction systems , payment processors and equipment long ago reached an agreement on standards.  Similarly, moving data from any PC to another and across the Windows, APPLE divide to effortlessly transmit  data in voice, or digital format over the telephone or cable lines.  But  the platforms that some doctors, and or hospitals, have used to record patient visits, tests and physician notes are untested at scale necessary and need to evolve much further to allow the ready transmission of data.

As this realization penetrated, I began to consider the broader implications.  For years, this ”  interoperability gap” prevents  basic efficiencies and simple improvements in service .  Pharmacies have managed to overcome this with insurers and even their suppliers, the natural extension of retail market supply chain efficiencies.  So why haven’t the core of the health care system–hospitals and provider systems followed?  Can we really blame these failures on the government’s failure to spend more of our tax dollars to upgrade  basic computer hardware and platforms upon which Medicare and Medicaid reside?  If you recall Y2K as the IT industries shortsighted take on date formats and what a  big deal investment that cost to repair.  Well, healthcare has its own upcoming crisis in records management.

Analytic thinking won’t save us

Now Booth and of course the University of Chicago’s unwavering belief  in market theory, is synonymous with their reputation for applied analytics to problem solve.  All but one of last night’s five presenters were Chicago schooled (one Harris, my alma mater, and the rest Booth). As I listened,  I hearkened back to another recent discussion of Booth alums that I chair and focuses on issues in strategic management practices. Last week, we reviewed Michael Porter’s Competitive Five Forces Framework,  and wondered why so few managers seem to take the strategic offensive and proactive approach.  Last night’s  emerging insights into healthcare, helped me understand how the very qualities that make doctors incredibly good diagnostician is exactly what keeps them from taking a broader systemic approach. The US relies on an evidence based medicine framework.  This approach is used by physicians to treat patients, how pharmaceutical companies win FDA approval, and how insurance companies compute their reimbursements. I’m not suggesting this is a poor model, but it is not a management model. One of the respondents made this point clearly when he asked “What other industry gets away with charging at every turn as you make your way through the system?” When we shop at a store, the price we pay  assumes and integrates the total operating costs from labor to distribution to supply chain and technology support. In health care, provider service fees rarely integrate or absorb  other related costs. Instead , the activity or related service  charges  are billed  individually, often by multiple parties. No accountability, no coöperation and no integration of activities toward  the outcome  merely increase the overhead for each provider in the chain, driving up the inefficiencies and resulting in ever rising costs.

IT needs outstrip available resources and the impact on GP

Accenture estimates, on average, that the technology spend in most industry sectors approximates 7-8% of their annual expenditures. In contrast, physicians spend only 2-3%.  Accenture also  estimates that  medical records will make up 50% of all data storage by 2020 . This is a sea change that will impact not just the health care sector, but begs larger questions about available programming and maintenance resource support, and raises security and privacy concerns.  In health care the availability and anticipated ease of record transmissions across the health care delivery network will usher in changes that few providers have fully imagined, or begun to plan. All the panelists agreed, that no one has thought through what a connected health care delivery systems looks like.  Well I think IBM has, or at least they have smart technology videos that suggest they do. But IBM doesn’t deliver the care, they merely sell the systems that I’m speculating few health care providers have bought.

What is most incredible to me is that systems and technology providers who specialize in health care systems are poorly equipped to support the ramp-up of the technology upgrades  funded by the stimulus package and health care reform legislation. Today, there is no interoperability across platforms…what? These problems, long ago addressed by banking and many other industries show how far  health care systems lag behind. I guess the market was to blame. Doctors weren’t spending and developers weren’t getting enough volume to test and improve their offerings. All I can say, is thank goodness for Health care reform. Nothing was making this sector realize the benefits and processing efficiencies,  data security and  fraud prevention solutions that have been a significant growth sector for other industries especially the technology sector. If you are worrying and agonizing about what health care reform is costing the  American taxpayer, take a look at how much its delay  has reduced the overall GDP. Why is it a tragedy for doctors, or  cardiology specialists to experience a downturn in their income when they squandered their advantage  rather than in investing in change or the future delivery of care?  We should be crying and outraged at the dearth of innovations in how patient care is delivered, or the missing standards for sharing medical information . OK, maybe that is too much to ask from any one profession, but it is precisely the arrogance and  culture of  the medical profession that has prevented the growth of capable management and innovation.  So I’ll hold my tears as the doctors undergo the inevitable consolidation and shakeout and begin to experience what I and many other professionals and laborers  in other sectors underwent in an earlier era or are currently experiencing.

The market will continue to drive the face and structure of health care delivery

Guess what, it seems that  few, if any, health care provider teams are capable, or know how to give care in the information connected world.   Health care is close to 20% of the US GDP. The sources of innovation in health care  have been in the corridors of the equipment manufacturers who continue to push the envelope.  The rapid advances in  digital imaging, diagnostic and even mobile monitoring tools continue to enhance quality diagnostic support and treatment tools but where is the advancements in the actual delivery of care?  The minute clinics are a start, and progress in remote monitoring is another; but the vast majority of services are controlled through the same channels and it’s time resources were put to re-imagining them in the internet era.    Advocate explained how little an impact the passage of health care reform made on their strategy;  because nothing in the bill changes these wider market dynamics.   The anger unleashed by the recent passage appears  misdirected at the government when the same providers who have ignored the larger , less sexy innovations happening in the back office  stymied the advances in  efficient payment and patient record transmissions. Why aren’t we as outraged when we have to pay for a xerox hard copy of our medical records or be responsible for  keeping copies of old x-rays or  mammogram films to share with the technicians when we return for followup or annual screenings?  The costs of our visit increases because few providers were willing to apportion more of their income stream to invest in developing these systems and championing the delivery of care in a fully connected world.  You may have seen and heard how little of Medicare and Medicaid’s budget goes into research and development. That means those systems have not been updated to take advantage of the tools and efficiencies that we take for granted daily when we use our ATM or credit cards.  The fairness of whether doctors should or shouldn’t get improved reimbursements for these patients is not the question.  Doctors need to look at the larger picture, and not obsess about the current and impractical fee based approach to service but to roll up their sleeves and address the much more challenging systemic issues in the overall system that brings suppliers and providers to collaborate and find or create alternatives that are economical for everyone.

I’m merely reiterating, that whatever your politics, the familiarity of the collision course to other  industry sectors has spared health care and cost us plenty.  Doing nothing was the plan for the majority of  players when it came down to willingly assume the risk and challenge to automate,or even attempt to create and champion  true innovations in care. Like the banks, not all the providers were capable or had the size, scale  and spare resources to effect  these changes.  Like banks, only government payment incentives and regulations are helping hospitals  to meet the needs of customers in riskier and less desirable neighborhoods.  The rise and crash of the HMO marketplace and managed care efforts of the early 1980’s made them all gun-shy. The American public reacted as visceral as they did this past summer. But sometimes we don’t have a choice, we have to endure some pain see improvements. If you have a broken limb that is hurting, a doctor may have to inflict more short term pain to reset it. If the doctor has complete information about you and at his fingertips imagine how quickly you might be able to get treated, and how much more assurance you have that there will be less post op risks and even better, you’ll get one bill not a series of separate ones from the surgeon, the hospital the radiologists and the pharmacist. It will take a lot of bravery to get us through what is the inevitable and long overdue system changes. Stop fighting and start cooperating.

OK, I didn’t read the book but…..

I had looked forward to the Mobium lecture –unraveling the mysterious experience effect; and yesterday was no exception.  I was eager to hear new insights from the featured author Jim Joseph.

We all share a duality as consumer, and in my case, business strategy and marketing consultant. I had been aware of the “experience” hook, and coupled with other Mobium lecture experiences, my expectations were pretty high. I anticipated a vivid, imaginative, engaging  presentation including a series of insights new to me.  It wasn’t the vivid slides that disappointed; but the experience was flat.  I was not engaged, encouraged to be imaginative or offered new insights. It is that tragedy, that goes well beyond my own wasted hour, and the gap between expectation and experience that I’m sharing this story.

Jim Joseph began by telling his story– how he became a marketer, the brands he worked for and the brands he loves. His approach to experience is to view marketing as spectator sport. There are always opportunities to learn by observation, and yet spectators are in it for the experience. If this was the valuable insight, well no wonder I felt his presentation over promised and failed to deliver. I certainly did not feel any experience effect, in spite of his sharing of the obvious about Lady GaGa –whose very notoriety is widely reported.

Do you remember the cool teacher, or can you imagine one who dressed a little more hip than the average teacher? Who was interactive by walking around the classroom, inviting students to share their experiences and always supported and never criticized student comments. They showed you the new hip music, or knew the latest hip lingo. But how much insight was ever offered? Our positive memories of the teacher and classroom suggest the teacher’s style was truly different. There may have been a marked contrast between “the cool” and their peers.   But today? Interaction has a completely different feel, in fact computers and mobile communication devices have changed the nature of interaction…we don’t have to have a visible partner, we can interact virtually with real or fictional, scripted characters, or both. If you don’t know Joe Pines, co-author of  The Experience EconomyThe Experience Economy; work is theatre & every business a stage, let me be the first to introduce you. His neat summary, presented at Ted was, not “cool,” but the content was powerful.  In particular I want to share two of his clear insights.

First, Pines’ three column chart, duplicated below, expresses the evolution of commerce over time.  For each stage in economic output, a particular business imperative ensues to respond or heighten a consumer sensibility.  This progression in economic history begins with simple commodity trading at the bottom and rises to the current stage of economic output which is Experiences.

Economic Output





EXPERIENCES Render Authenticity
SERVICES Improve Quality
GOODS Control Costs
COMMODITIES Supply Availability

Second, Joe Pines elaborates on authenticity. The example and definition references Lionel Trilling’s work that in turn references Shakespeare.  In the famous speech of Polonius to Falstaff

This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

I offer both these citations to iterate that experience and authenticity does matter. Sadly, what Jim Joseph, for all his experience as a brand marketer and agency director, his false real interactivity lost him more than one sale. By not buying his book I may miss out on his insights; but, he missed his opportunity to persuade me to take that step. As Joe Pines would say, he was authentic to himself, but offered me no experience to support his credibility and thus I was unmoved to buy.

In ratcheting up the experience quotient, at the very least we need to push beyond standard presentation formats–see my post Thinking, sadly, is often under-rated . I don’t expect that every day I’ll be surprised; or that something unexpected will cross my path.  But I do expect it from the people whose role and livelihood depends on them having a  handle on Experience, the phenomenon, to offer or deliver  something authentic! It’s not merely about using creativity, or craft, because  experience when authentic is never overrated.  How do you over rate a memory?  or the foundations upon which we have constructed the way we see the world?  Spectators are part and parcel of an experience.  If you plan to produce, create or  play the talent requirements vary and so are the measures of success. But, to pull off an experience worth watching, or waiting to happen requires that your audience be fully engaged. That IS what Lady GAGA does and what Jim Joseph, if he were to internalize it in his presentation, might be able to help further our understanding and sensitivity to the effects of experience.

My takeaway? To create impact  the type, style of medium and quality of my presentation matters but I also need to consider scale, audience and what will really engage  not merely satisfy them.  No approach guarantees learning and yet  they are experiential. Is it impact, aka memorable that I’m after, or just  getting the job done?  As I sat listening to Jim Joseph in a room full of marketers who spend much of their time helping to frame brand images and perceptions, I heard no big Ahas  and no further clarification of experience as process or value delineated.  Oh, the importance of the value proposition came up, but Jim Joseph never delivered that value.  In short, I walked away with no clearer idea of  The Experience Effect.

OK, I didn’t read Jim Joseph’s book, but after hearing the man, I wouldn’t waste my time.  I’d rather go back and reread, or listen again to the end of Joe Pines’ TED talk, with these business recommendations:

“Don’t say you are authentic unless you really are.
It’s easier to be authentic, if you don’t say you are.
if you say you are authentic…you must be.
Consumers will increasingly be happy spending our time and money satisfying our desire for authenticity.”