My Phillipino/Indian/Canadian Nurse.
We have been doing a lot of work in the healthcare industry recently. So, we have been thinking about what needs to be improved in the US healthcare system.
The statistics attached to the US healthcare system are stunning. We spend 30% more than any other country. Yet. approximately, 25% of the US population has no insurance. Plus, patient outcomes and satisfaction are well below acceptable standards across the industrialized world. A whopping 70% of health care costs stem from preventable chronic diseases. For example, 91% of diabetes cases could be avoided by better eating. Diabetes cost the healthcare system $92 billion dollars each year. Imagine finding a way to save $80 billion dollars a year.
Obviously, the system has lots of problems. Here is one solution that provides a huge bang for the buck.
I want my family to have our own nurse for 5-10 minutes a day, average 2 days a week, 12 months per year. My estimate is that we will need our nurse's time for no more than 12-20 hours per year.
For a little background, one of the fastest growing job descriptions in healthcare is the telephonic triage nurse. Thousands of nurses are sitting behind phones right now talking to patients recovering from serious illnesses or dealing with chronic conditions. They are trying to keep these sick folks from getting sicker.
We should all have access to a telephonic wellness nurse. In Massachusetts, our family's health insurance costs more than $15,000 per year. The annual rate increase is 10%. So, does spending approximately $500 per year to provide my family access to a nurse who gets to know us make any sense.
There are 4 people in my family.We are blessed to be healthy with no serious, chronic, or complex issues. We are not heavy users of the health care system. Does this personalized wellness service make financial sense for our HMO?
Lets say our family makes a couple of unnecessary trips to our primary care physician each year. Could we saves $300 on preventable visits? Do we always get the most cost effective prescriptions? Could we try off the shelf medications instead? I know that Doc's don't pay attention to the unit cost of prescriptions that they write. Lets just say the savings are $200 per year on drugs?
By my estimates for a healthy family, this telephonic wellness nurse is a break even proposition for the first year. For a family with serious illness or chronic conditions there is certainly a very strong use case for this system.
My point is that this system would work wonders for most families over time. The truth is that most of us don't drop dead, we rust away, or eat ourselves to death having developed poor lifestyle habits.
If I lose 25 pounds thanks to my wellness nurse's regular questions and information can I eliminate the need for cholesterol or blood pressure medication? Can this service prevent 20 years of dependency on medications? Does it prevent one visit to the ER or a stay in the hospital. These would be huge successes. The savings start to add up when lifestyles are changed for the better. I haven't even mentioned the most important emotional benefits of improved wellness for my family. Who knows maybe I would pay a premium for this service?
There are some challenges with this idea.
First, there are not enough nurses in most big cities across the US. However, there are plenty of nurses outside the US and willing young people wanting to be educated. As you can tell, the level of service that I am asking from my family's wellness nurse is not extraordinary. It may be an LPN or health nutritionist on the phone. My assumption is my nurse will have access to lots of current healthcare information and additional experience when a tougher issue comes up.I am also assuming that my wellness nurse has access to my family's relevant medical history and is able to communicate with our physicians when needed. I'm also assuming that the labor costs are fair but not at the same rate of big city US nurses. Yes, this service could be outsourced to the very countries that are currently sending us nurses on immigrant visas.
What is extraordinary about this concept of a wellness nurse for every family is the technological requirements to support this service are non factors when it comes to the overall business model. Modern telephony and web based tools allow this type of service infrastructure to begin with a model and scale incredibly well with costs that are 90%lower than just a few years ago. The industry specific and business efficiency limitations that we face going forward are no longer technical but entirely creative or organizational.
Start doing the math, my guesstimates of potential costs and savings could be way off; yet any HMO that implemented this concept for all its rate payers would still be considered brilliantly innovative,highly profitable, and loved by all.
We must start changing our assumptions about what is possible.
Monday, June 18, 2007
Wednesday, June 13, 2007
Web 2.0 to Enterprise 2.0- Suiting up
Although there are probably a few naysayers left, anyone surfing around ProgrammableWeb, ThomasHowe.com or VOIPMASHUPS.com expect that mashup technologies will get integrated into the Enterprise business process in a huge way before this decade ends.
Why will this happen?
Mashups make businesses faster
Mashups make businesses more efficient
Mashups make customers happier.
Now, of course, we feel that our little horizontal slice of the mashup world -real time communications- will help to leverage the broad range of Web 2.0 technologies across multiple APIs. Simply, this is because all businesses are using telephony now. They are comfortable with it and so "customizing" their communications infrastructure doesn't stretch the corporate culture in a huge way.
The obstacles that need to be overcome so the Mashup evolution can become a true revolution have little to do with the technologies. The revolution will be won when more business and organizational leaders start to have conversations about the ideas generated by Andrew McAfee of Harvard Business School and Erik Brynjolfsson of the MIT Sloan School. They are a couple of the thinkers behind the Enterprise 2.0 discussion.
Here is a working definition from Professor McAfee's blog.
Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.
Social software enables people to rendezvous, connect or collaborate through computer-mediated communication and to form online communities. (Wikipedia's definition).
Platforms are digital environments in which contributions and interactions are globally visible and persistent over time. Emergent means that the software is freeform, and that it contans mechanisms to let the patterns and structure inherent in people's interactions become visible over time.
Freeform means that the software is most or all of the following:
Optional
Free of up-front workflow
Egalitarian, or indifferent to formal organizational identities
Accepting of many types of data
To all the mashup makers and technologists, the rapid pace of change shows that we know how to walk the walk. However, we all need to spend some time getting better at talking the talk.
Why will this happen?
Mashups make businesses faster
Mashups make businesses more efficient
Mashups make customers happier.
Now, of course, we feel that our little horizontal slice of the mashup world -real time communications- will help to leverage the broad range of Web 2.0 technologies across multiple APIs. Simply, this is because all businesses are using telephony now. They are comfortable with it and so "customizing" their communications infrastructure doesn't stretch the corporate culture in a huge way.
The obstacles that need to be overcome so the Mashup evolution can become a true revolution have little to do with the technologies. The revolution will be won when more business and organizational leaders start to have conversations about the ideas generated by Andrew McAfee of Harvard Business School and Erik Brynjolfsson of the MIT Sloan School. They are a couple of the thinkers behind the Enterprise 2.0 discussion.
Here is a working definition from Professor McAfee's blog.
Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.
Social software enables people to rendezvous, connect or collaborate through computer-mediated communication and to form online communities. (Wikipedia's definition).
Platforms are digital environments in which contributions and interactions are globally visible and persistent over time. Emergent means that the software is freeform, and that it contans mechanisms to let the patterns and structure inherent in people's interactions become visible over time.
Freeform means that the software is most or all of the following:
Optional
Free of up-front workflow
Egalitarian, or indifferent to formal organizational identities
Accepting of many types of data
To all the mashup makers and technologists, the rapid pace of change shows that we know how to walk the walk. However, we all need to spend some time getting better at talking the talk.
Wednesday, June 6, 2007
Demographics aren't sexy.
Demographics will drive new business processes (not technology)!
As a founding partner in a cutting edge technology consultancy, I should NOT start out an editorial with a title that questions the primacy of all things technical. However, it is easy to see that technology is sexy and demographics are not.
But, truthiness according to Stephen Colbert suggests most of us will quietly admit that demographics are becoming more important now. The lucky thing about my opening statement is that amazing numbers and very bright commentators can back me up.
My favorite author Malcolm Gladwell wrote a long piece for the New Yorker that described a term, dependency ratios, which I believe defines the primary driver of business process innovation for the rest of my life.
This relation between the number of people who aren't of working age and the number of people who are is captured in the dependency ratio.
The following seems to be the most relevant excerpt.
" In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland's dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country's extraordinary economic surge.
Demographers estimate that declines in dependency ratios are responsible for about a third of the East Asian economic miracle of the postwar era; this is a part of the world that, in the course of twenty-five years, saw its dependency ratio decline thirty-five per cent. Dependency ratios may also help answer the much-debated question of whether India or China has a brighter economic future. Right now, China is in the midst of what Joseph Chamie, the former director of the United Nations' population division, calls the "sweet spot." In the nineteen-sixties, China brought down its birth rate dramatically; those children are now grown up and in the workforce, and there is no similarly sized class of dependents behind them. India, on the other hand, reduced its birth rate much more slowly and has yet to hit the sweet spot. Its best years are ahead.
The logic of dependency ratios, of course, works equally powerfully in reverse. If your economy benefits by having a big bulge of working-age people, then your economy will have a harder time of it when that bulge generation retires, and there are relatively few workers to take their place. For China, the next few decades will be more difficult. "China will peak with a 1-to-2.6 dependency ratio between 2010 and 2015," Bloom says.
"But then it's back to a little over 1-to-1.5 by 2050. That's a pretty dramatic change. Thirty per cent of the Chinese population will be over sixty by 2050. That's four hundred and thirty-two million people." Demographers sometimes say that China is in a race to get rich before it gets old.
Economists have long paid attention to population growth, making the argument that the number of people in a country is either a good thing (spurring innovation) or a bad thing (depleting scarce resources). But an analysis of dependency ratios tells us that what's critical is not just the growth of a population but its structure. "The introduction of demographics has reduced the need for the argument that there was something exceptional about East Asia or idiosyncratic to Africa," Bloom and Canning write, in their study of the Irish economic miracle. "Once age-structure dynamics are introduced into an economic growth model, these regions are much closer to obeying common principles of economic growth."
That's enough with the academic economic speak. Bottomline, as I looked around my Boston College 20th reunion party last weekend, it is obvious that we are getting old and there are plenty of older folks in the workforce ahead of us. This fact is true in all of the "rich" countries in the world. Thanks to advances in healthcare few of us actually drop dead anymore but we all tend to slowly rust away over many years.
So, my point, there is a huge business requirement to deal with this dependency ratio at so many levels. Never before in the history of the world has demographic change at such a massive level been seen. Given the hugely discussed wave of baby boom retirements this requirement to improve business processes is hitting the US over the next decade. It is estimated there will be a net loss of 30 million workers in the US alone.
To bring the challenge down to a granular level,by the time every 6 year old in the US gets to be a vital member of the work force they will need to become 100% more productive than every 40 year old currently in the workforce.
How we go about changing business processes to deal with this challenge becomes a very interesting question. The cool thing is that technically most of the pieces of the solutions including light weight programming methods,customizable communications tools, and Web 2.0 perspectives, are already available to us. We just need to be creative in how we put those pieces together. Innovation that solves the challenges presented by our rapidly evolving dependency ratios will be in high demand and maybe even considered sexy.
As a founding partner in a cutting edge technology consultancy, I should NOT start out an editorial with a title that questions the primacy of all things technical. However, it is easy to see that technology is sexy and demographics are not.
But, truthiness according to Stephen Colbert suggests most of us will quietly admit that demographics are becoming more important now. The lucky thing about my opening statement is that amazing numbers and very bright commentators can back me up.
My favorite author Malcolm Gladwell wrote a long piece for the New Yorker that described a term, dependency ratios, which I believe defines the primary driver of business process innovation for the rest of my life.
This relation between the number of people who aren't of working age and the number of people who are is captured in the dependency ratio.
The following seems to be the most relevant excerpt.
" In Ireland during the sixties, when contraception was illegal, there were ten people who were too old or too young to work for every fourteen people in a position to earn a paycheck. That meant that the country was spending a large percentage of its resources on caring for the young and the old. Last year, Ireland's dependency ratio hit an all-time low: for every ten dependents, it had twenty-two people of working age. That change coincides precisely with the country's extraordinary economic surge.
Demographers estimate that declines in dependency ratios are responsible for about a third of the East Asian economic miracle of the postwar era; this is a part of the world that, in the course of twenty-five years, saw its dependency ratio decline thirty-five per cent. Dependency ratios may also help answer the much-debated question of whether India or China has a brighter economic future. Right now, China is in the midst of what Joseph Chamie, the former director of the United Nations' population division, calls the "sweet spot." In the nineteen-sixties, China brought down its birth rate dramatically; those children are now grown up and in the workforce, and there is no similarly sized class of dependents behind them. India, on the other hand, reduced its birth rate much more slowly and has yet to hit the sweet spot. Its best years are ahead.
The logic of dependency ratios, of course, works equally powerfully in reverse. If your economy benefits by having a big bulge of working-age people, then your economy will have a harder time of it when that bulge generation retires, and there are relatively few workers to take their place. For China, the next few decades will be more difficult. "China will peak with a 1-to-2.6 dependency ratio between 2010 and 2015," Bloom says.
"But then it's back to a little over 1-to-1.5 by 2050. That's a pretty dramatic change. Thirty per cent of the Chinese population will be over sixty by 2050. That's four hundred and thirty-two million people." Demographers sometimes say that China is in a race to get rich before it gets old.
Economists have long paid attention to population growth, making the argument that the number of people in a country is either a good thing (spurring innovation) or a bad thing (depleting scarce resources). But an analysis of dependency ratios tells us that what's critical is not just the growth of a population but its structure. "The introduction of demographics has reduced the need for the argument that there was something exceptional about East Asia or idiosyncratic to Africa," Bloom and Canning write, in their study of the Irish economic miracle. "Once age-structure dynamics are introduced into an economic growth model, these regions are much closer to obeying common principles of economic growth."
That's enough with the academic economic speak. Bottomline, as I looked around my Boston College 20th reunion party last weekend, it is obvious that we are getting old and there are plenty of older folks in the workforce ahead of us. This fact is true in all of the "rich" countries in the world. Thanks to advances in healthcare few of us actually drop dead anymore but we all tend to slowly rust away over many years.
So, my point, there is a huge business requirement to deal with this dependency ratio at so many levels. Never before in the history of the world has demographic change at such a massive level been seen. Given the hugely discussed wave of baby boom retirements this requirement to improve business processes is hitting the US over the next decade. It is estimated there will be a net loss of 30 million workers in the US alone.
To bring the challenge down to a granular level,by the time every 6 year old in the US gets to be a vital member of the work force they will need to become 100% more productive than every 40 year old currently in the workforce.
How we go about changing business processes to deal with this challenge becomes a very interesting question. The cool thing is that technically most of the pieces of the solutions including light weight programming methods,customizable communications tools, and Web 2.0 perspectives, are already available to us. We just need to be creative in how we put those pieces together. Innovation that solves the challenges presented by our rapidly evolving dependency ratios will be in high demand and maybe even considered sexy.
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