Smart Ideas For Fixing Healthcare
Clayton M. Christensen is a professor of business administration at the Harvard Business School. He is the bestselling author of five books, including his seminal work, The Innovator's Dilemma, which received the Global Business Book Award for the best business book of the year, and most recently, The Innovator's Prescription, which examines how to fix our healthcare system. Christensen serves on several public and privately traded boards and is the founder of a successful consulting company and an investment management firm. He holds a B.A. with highest honors in economics from Brigham Young University and an M.Phil. in applied econometrics and the economics of less-developed countries from Oxford University, where he studied as a Rhodes Scholar; he received an MBA with high distinction from the Harvard Business School in 1979, graduating as a George F. Baker Scholar, and was awarded his DBA from the Harvard Business School in 1992.
Topic: Healthcare Solutions: Past, Present and Future.
Clayton Christensen: About half of the healthcare that is provided in America is really unnecessary.
I’m Clayton Christensen. The Robert and Jane Cizik, Professor of business administration at the Harvard Business School.
Question: Why are healthcare costs so out of control?
Clayton Christensen: It’s difficult to measure the extent to which the healthcare cost or out of control because in some markets the prices are controlled. In the United States, where they are not, prices are increasing at 10 to 12 % per year, roughly triple the rate of inflation.
In other countries where they have a nationalized healthcare systems, you have the same sort of inflationary pressures, but a cap on costs based on the government’s budgets. As a consequence they control costs by offering less and less healthcare. But that mismatch between what healthcare costs and what people think they can afford is a plague that affects everyone in the world.
Question: What drives the cost of healthcare in the United States?
Clayton Christensen: A major driver of the cost of healthcare in the United States is a compromise that was reached with the American Medical Association in the 1960s when Medicare was first established.
In order to buy off the doctors, the government agreed to compensate doctors on a fee-for-service basis, and what that means is the more services doctors provide, the more income they make. And the more complicated and expensive the services that they provide are, the more income they make.
The fee-for-service system essentially pours gasoline on the fire of healthcare cost inflation because when we guarantee that we will reimburse them for whatever they do and whatever it costs, they are just incentivized to offer more and more and more.
Question: What are the free-market solutions?
Clayton Christensen: There is a tremendous benefit in enabling lower cost venues of care, such as homes or retail clinics with devices that enable them to do more and more sophisticated things.
For example, the cost of end-stage renal care for patients with kidney failure is enormous. At the beginning, those patients had to go to a dialysis unit in a hospital and then free standing dialysis clinics have been created. But now the ability to dialyze your blood has been transferred to the home in the form of machines that are about the size of a bread maker. And every night, patients can plug themselves into this home dialysis equipment and scrub their blood clean so that they don’t have to go to the higher cost venues of care.
Retail clinics are able to care for about 36 disorders now at very low cost and minimal inconvenience; where a nurse practitioner is able to just follow the rules of when you have a precisely diagnosable disease, what the therapy needs to be. These are high quality interactions.
When you make something simple and rules-based, you take the judgment out of the care. Whereas you would think that a retail clinic’s staffed only by a nurse practitioner would be more subject to malpractice lawsuits; it’s not the case. No retail clinic has ever yet been sued for malpractice because everything they do is rules-based and as long as you follow the rules, there’s no basis for malpractice lawsuits.
Those lawsuits are all focused on the misinterpretation of data or making the wrong intuitive bets or the right answer wasn’t yet known. That’s where lawsuits arise and they're focused on the doctors, not on retail clinics or in home care.
And so it’s a little bit counter intuitive but as we distribute care by using technology to drive the disruptive decentralization, we actually improved the quality of care in terms of the certainty of its efficacy and we improve the cost of care by enabling lower cost places and lower cost caregivers to become more capable.
Question: How can the government play a role?
Clayton Christensen: Change in regulation is going to play a big role in the disruption of the healthcare industry. Let me describe what kind of changes need to be made by describing three phases through which the care of any disease must pass.
At the beginning because the disease isn’t well understood and it’s hard to precisely diagnose the disease by its cause and therefore you can’t have any rules based therapies—we call that the practice of intuitive medicine and their efficacy really depends upon the ability of the physician’s themselves to draw upon their training and expertise and intuition to formulate a pathway of care for each individual patient and each individual disease.
In that world, the government should regulate the qualifications of the caregivers. In most of many the regulations in the United States today have that character because they were put into place when medicine was really intuitive medicine. But as we learn more and more about diseases, the care of those diseases moves into what we call empirical medicine. That is, there are real patterns in things and there are no cook books to tell you what to do step by step to guarantee the result but their patterns are clear enough that you can express the outcomes probabilistically.
If you follow this procedure, the probability of the cancer going into remission or the probability of recurrence of this disorder was going to be this, whereas if you follow this procedure the probability of these problems will be that. And because you can express outcomes probabilistically, you need to control at that point not the qualifications of a caregiver but the extent to which the providers follow the best practice, and that should be the focus of regulation, when regulation is in a pattern recognition or empirical medicine rule. And then as diseases become very well understood so that they can be precisely diagnosed by their cause which then enables you to develop a predicatively effective therapy you regulate by outcome because anybody with minimal training is able to diagnose the disease, recommend the solution and so no longer do you need to regulate the qualifications of the provider or the process that is followed because that is so rules based that you just need to focus on ensuring that the outcome is delivered time after time.
So we need a much more flexible regulatory scheme in intuitive medicine you regulate the qualifications of the providers, in empirical medicine, you regulate the processes that are followed and in precision medicine or rules based medicine you regulate the outcomes, holding all the providers to the standards that is achievable.
Question: How important are public-private partnerships?
Clayton Christensen: I really do think that government funding, used in the right partnership way, can help drive the system where it needs to go disruptively, but it really does require that the government to distribute this funding in the right way.
Funding that is focused on the ability to diagnose diseases precisely will just have inestimable value because that’s the gate through which precision medicine has to go. Unless you can diagnose the disease precisely, care has to remain in the hands of expensive institutions and expensive caregivers. So that’s one good focus for government funding.
Another focus for government funding is on the kinds of devices that are disruptive that enable lower cost caregivers and lower cost venues of care to do progressively more sophisticated things. Government funding targeted at those technologies that enable disruptions is another good target, But generally, if government funding is used to subsidize existing institutions or to fund sustaining growth, it’s not productive in terms of the direction at the healthcare industry has to go.
Clayton Christensen on how public-private partnerships can fix the healthcare system.
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Long before Alexandria became the center of Egyptian trade, there was Thônis-Heracleion. But then it sank.
Before Alexander the Great established Alexandria around 331 BCE, one of Egypt's primary ports on the Mediterranean Sea between the sixth and fourth centuries BCE was a place called Thônis-Heracleion.
Now researchers from the European Institute for Underwater Archaeology (IEASM), the same organization that first found the city in 2001, have announced the discovery of a couple of fascinating items from the city's heyday. Pinned beneath fallen temple stones is a surprisingly intact Egyptian military vessel from the second century BCE, and researchers have excavated a large cemetery from the fourth century BCE.
Thônis-Heracleion was one of the two primary access points to ancient Egypt from the Mediterranean. (The other, Canopus, was discovered in 1999.) For millennia, experts assumed Thônis-Heracleion were two different lost cities, but it's now known that Thônis is simply the city's Egyptian name, while Heracleion is its Greek name.
Thônis-Heracleion had been the stuff of legend before it was located, mentioned only in rare ancient texts and stone inscriptions. Herodotus seems to have been referring to Thônis-Heracleion's temple of Amun as the place where Heracles first arrived in Egypt. He also described a visit there by Helen with her lover Paris just before the outbreak of the Trojan War. In addition, 400 years later, geographer Strabo wrote that Heraclion, containing the temple of Heracles, had been located opposite Canopus across a branch of the Nile. Today we know Thônis-Heracleion's location as Egypt's Abu Qir Bay. The sunken port is about 6.5 kilometers from the coast and lies beneath ten meters of water.
Both Thônis-Heracleion and Canopus were wealthy in their day, and the temple was an important religious center. This all ended when the Egyptian dynasty created by Ptolemy set out to establish Alexandria as Egypt's center. Thônis-Heracleion and Canopus' trade — and thus wealth — was diverted to the new capital.
It was perhaps just as well, given that natural forces eventually destroyed Thônis-Heracleion. Located on the Mediterranean, the ground upon which it was built became saturated and eventually began to destabilize and liquefy. The temple of Amun probably collapsed around 140 BCE. A series of earthquakes sealed the cty's' fate around 800 CE, sending a 100 square-kilometer chunk of the Nile delta on which it was constructed under the waves. The Mediterranean's rising sea level over the next couple thousand years completed the drowning of Thônis-Heracleion.
Researchers have recovered a large collection of Thônis-Heracleion's treasures revealing an economically rich culture. Coins, bronze statuettes, and over 700 ancient ship anchors have been pulled from the waters. Divers have also identified over 70 shipwrecks. A giant statue of the Nile god Hapi took two and a half years to bring up.
An ancient vessel and a cemetery
Gold mask found in a submerged Greek cemetery.Credit: Egyptian Ministry of Tourism and Antiques
The newly discovered ship was found beneath 16 feet of hard clay, "thanks to cutting-edge prototype sub-bottom profiler electronic equipment," says Ayman Ashmawy of the Egyptian Ministry of Tourism and Antiques.
The military vessel had been moored in Thônis-Heracleion when the temple of Amun collapsed. The temple's enormous blocks fell onto the ship, sinking it. The boat is a rare find — only one other ship of its period has been found. As underwater archaeologist Franck Goddio, one of the scientists who found the city, puts it, "Finds of fast ships from this age are extremely rare."
At 80 feet long, the boat is six times as long as it is wide. Like its dually-named city, it's an amalgam of Greek and Egyptian ship-building techniques. According to expert Ehab Fahmy, head of the Central Department of Underwater Antiquities at IEASM, the boat has some classical construction features such as mortar and tenon joints. On the other hand, it was built to be rowed, and some of its wood was reused lumber, signature traits of Egyptian boat design. Its flat bottom suggests it was built for navigating the shallows of the Nile delta where the river flows into the Mediterranean.
Also found alongside the city's submerged northeastern entrance canal was a large Greek cemetery. The funerary is adorned with opulent remembrances, including a mask made of gold, shown above. A statement by the Egyptian Ministry of Tourism and Antiques describes its significance, as reported by Reuters:
"This discovery beautifully illustrates the presence of the Greek merchants who lived in that city. They built their own sanctuaries close to the huge temple of Amun. Those were destroyed simultaneously and their remains are found mixed with those of the Egyptian temple."
Excavation is ongoing, with more of Egypt's ancient history no doubt waiting beneath the waves.
We are likely to see the first humans walk on Mars this decade.
- Space agencies have successfully sent three spacecraft to Mars this year.
- The independent missions occurred at around the same time because Earth and Mars were particularly close to each other last summer, providing an opportune time to launch.
- SpaceX says it hopes to send a crewed mission to Mars by 2026, while the U.S. and China aim to land humans on the planet in the 2030s.
Spacecraft from three of the world's space agencies reached Mars this year.
In February, the United Arab Emirates' Hope space probe entered the Martian orbit, where it is studying the planet's weather cycles. That same month, NASA's Perseverance rover touched down on Mars, where it will soon begin collecting rock samples that could contain signs of ancient life. And in May, China successfully landed its Zhurong rover on the Martian surface, becoming the second nation to ever do so.
All three missions launched in the summer of 2020. The timing was no coincidence: once every two years, Earth and Mars come especially close together because their orbits are "at opposition," which is when the Earth-Mars distance is smallest during the 780-day synodic period. It is an opportune window to send spacecraft to Mars.
The handful of spacecraft currently exploring the Martian surface and atmosphere are scheduled to conduct their experiments for periods ranging from months to years. Some even plan to collect materials to return to Earth. For example, NASA's Perseverance will store its rock samples in protective tubes and leave them behind for a smaller "fetch rover" to pick up on a future mission.
Photo of Martian surface taken by the Perseverance roverNASA/JPL-Caltech
If all goes well, an Airbus spacecraft dubbed the Earth Return Orbiter (ERO) will carry the samples back to Earth in 2031. It would be the first time a space mission has returned Martian matter to Earth. But before the decade's end, space agencies have some other missions that aim to study the Red Planet.
Europe & Russia
NASA is not the only space agency aiming to find evidence of life on the Red Planet. In 2023, Roscosmos and the European Space Agency plan to land their Rosalind Franklin rover on the Martian surface, where it will drill into rock and analyze soil composition for signs of past — or possibly present — alien life.
The joint mission is part of a long-term Mars project that began in 2016. This second phase was initially planned for 2020, but due in part to the COVID-19 pandemic, the space agencies decided to postpone the launch to 2022.
"We want to make ourselves 100% sure of a successful mission. We cannot allow ourselves any margin of error. More verification activities will ensure a safe trip and the best scientific results on Mars," said ESA Director General Jan Wörner.
In 2022, the Japanese Aerospace Exploration Agency (JAXA) plans to send to Mars its TEREX lander, which will "precisely measure the amount of water molecules and oxygen molecules, and search for water resources and the possibility of life on Mars," JAXA wrote.
In 2024, JAXA also plans to launch a uniquely bold interplanetary mission that will involve sending a probe to orbit Mars, landing on the Martian moon Phobos, collecting surface samples, and then returning those samples to Earth in 2029. JAXA says the mission has two main objectives: (1) to investigate whether the Martian moons are captured asteroids or fragments that coalesced after a giant impact with Mars; and (2) to clarify the mechanisms controlling the surface evolution of the Martian moons and Mars.
Following the successful landing of its Zhurong rover this year, China released a roadmap of its plans for additional Mars voyages. The first is an uncrewed mission scheduled for 2030, with crewed missions planned for 2033, 2035, 2037, and 2041. As the International Space Station project is coming to a close, China is in the process of building its own space station; earlier this year it launched into orbit the first part of its station, which will take 10 more missions to assemble.
Elon Musk's California-based aerospace company has its sights on two Mars voyages: a cargo-only mission in 2022 and a human mission by 2026. The crewed mission would involve building a propellant depot and preparing a site for future crewed flights. Getting to Mars will first require an orbital test of SpaceX's Starship rocket, which the company hopes to conduct this year.
Regarding the long-term future of humans on the Red planet, Musk once told Ars Technica:
"I'll probably be long dead before Mars becomes self-sustaining. But I'd like to at least be around to see a bunch of ships land on Mars."
In 2014, the Indian Space Research Organization executed its first interplanetary trip with its Mars Orbiter Mission. It marked the first time an Asian nation reached Martian orbit and also the first time a nation successfully reached the Red planet on its maiden voyage. India has plans for a follow-up Mars Orbiter Mission 2, but it remains unclear when that will occur and what the mission will entail.
In February, the chief of the Indian Space Research Organisation said the nation would only launch a Mars mission after Chandrayaan-3, India's upcoming mission to the Moon, which is expected to launch in 2022.
Geologists discover a rhythm to major geologic events.
- It appears that Earth has a geologic "pulse," with clusters of major events occurring every 27.5 million years.
- Working with the most accurate dating methods available, the authors of the study constructed a new history of the last 260 million years.
- Exactly why these cycles occur remains unknown, but there are some interesting theories.
Our hearts beat at a resting rate of 60 to 100 beats per minute. Lots of other things pulse, too. The colors we see and the pitches we hear, for example, are due to the different wave frequencies ("pulses") of light and sound waves.
Now, a study in the journal Geoscience Frontiers finds that Earth itself has a pulse, with one "beat" every 27.5 million years. That's the rate at which major geological events have been occurring as far back as geologists can tell.
A planetary calendar has 10 dates in red
Credit: Jagoush / Adobe Stock
According to lead author and geologist Michael Rampino of New York University's Department of Biology, "Many geologists believe that geological events are random over time. But our study provides statistical evidence for a common cycle, suggesting that these geologic events are correlated and not random."
The new study is not the first time that there's been a suggestion of a planetary geologic cycle, but it's only with recent refinements in radioisotopic dating techniques that there's evidence supporting the theory. The authors of the study collected the latest, best dating for 89 known geologic events over the last 260 million years:
- 29 sea level fluctuations
- 12 marine extinctions
- 9 land-based extinctions
- 10 periods of low ocean oxygenation
- 13 gigantic flood basalt volcanic eruptions
- 8 changes in the rate of seafloor spread
- 8 times there were global pulsations in interplate magmatism
The dates provided the scientists a new timetable of Earth's geologic history.
Tick, tick, boom
Credit: New York University
Putting all the events together, the scientists performed a series of statistical analyses that revealed that events tend to cluster around 10 different dates, with peak activity occurring every 27.5 million years. Between the ten busy periods, the number of events dropped sharply, approaching zero.
Perhaps the most fascinating question that remains unanswered for now is exactly why this is happening. The authors of the study suggest two possibilities:
"The correlations and cyclicity seen in the geologic episodes may be entirely a function of global internal Earth dynamics affecting global tectonics and climate, but similar cycles in the Earth's orbit in the Solar System and in the Galaxy might be pacing these events. Whatever the origins of these cyclical episodes, their occurrences support the case for a largely periodic, coordinated, and intermittently catastrophic geologic record, which is quite different from the views held by most geologists."
Assuming the researchers' calculations are at least roughly correct — the authors note that different statistical formulas may result in further refinement of their conclusions — there's no need to worry that we're about to be thumped by another planetary heartbeat. The last occurred some seven million years ago, meaning the next won't happen for about another 20 million years.
A new episode of "Your Brain on Money" illuminates the strange world of consumer behavior and explores how brands can wreak havoc on our ability to make rational decisions.
- Effective branding can not only change how you feel about a company, it can actually change how your brain is wired.
- Our new series "Your Brain on Money," created in partnership with Million Stories, recently explored the surprising ways brands can affect our behavior.
- Brands aren't going away. But you can make smarter decisions by slowing down and asking yourself why you're making a particular purchase.
How Apple and Nike have branded your brain | Your Brain on Money | Big Think youtu.be
Brands can manipulate our brains in surprisingly profound ways. They can change how we conceptualize ourselves and how we broadcast our identities out to the social world. They can make us feel emotions that have nothing to do with the functions of their products. And they can even sort us into tribes.
To grasp the power of brands, look to Apple. In the 1990s, the company was struggling to compete with Microsoft over the personal computer market. Despite flirting with bankruptcy in the mid-1990s, Apple turned itself around to eventually become the most valuable company in the world.
That early-stage success wasn't due to superior products.
"People talk about technology, but Apple was a marketing company," John Sculley, a former Apple marketing executive, told The Guardian in 1997. "It was the marketing company of the decade."
So, how exactly does branding make people willing to wait hours in line to buy a $1,000 smartphone, or pay exorbitant prices for a pair of sneakers?
Branding and the brain
For more than a century, brands have capitalized on the fact that effective marketing is much more than simply touting the merits of a product. Some ads have nothing to do with the product at all. In 1871, for example, Pearl Tobacco started advertising their cigarettes through branded posters and trading cards that featured exposed women, a trend that continues to this day.
It's crude, sure. But research shows that it's also remarkably effective, even on monkeys. Why? The answer seems to center on how our brains pay special attention to information from the social world.
"In theory, ads that associate sex or status with specific brands or products activate the brain mechanisms that prioritize social information, and turning on this switch may bias us toward the product," wrote neuroscience professor Michael Platt for Scientific American.
Brands can burrow themselves deep into our subconscious. Through ad campaigns, brands can form a web of associations and memories in our brains. When these connections are robust and positive, it can change our behavior, nudging us to make "no-brainer" purchases when we encounter the brand at the store.
It's a marketing principle that's related to the work of Daniel Kahneman, a psychologist and economist who won the 2002 Nobel Memorial Prize in Economic Sciences. In his book "Thinking Fast and Slow", Kahneman separates thinking into two broad categories, or systems:
- System 1 is fast and automatic, requiring little effort or voluntary control.
- System 2 is slow and requires subjective deliberation and logic.
Brands that tap into "system 1" are likely to dominate the competition. After all, it's far easier for us as consumers to automatically reach for a familiar brand than it is to analyze all of the available information and make an informed choice. Still, the most successful brands can have an even deeper impact on our psychology, one that causes us to conceptualize them as something like a family member.
A peculiar relationship with brands
Apple has one of the most loyal customer bases in the world, with its brand loyalty hitting an all-time high earlier this year, according to a SellCell survey of more than 5,000 U.S.-based smartphone users.
Qualitatively, how does that loyalty compare to Samsung users? To find out, Platt and his team conducted a study in which functional magnetic resonance imaging scanned the brains of Samsung and Apple users as they viewed positive, negative, and neutral news about each company. The results revealed stark differences between the two groups, as Platt wrote in "The Leader's Brain":
"Apple users showed empathy for their own brand: The reward-related areas of the brain were activated by good news about Apple, and the pain and negative feeling parts of the brain were activated by bad news. They were neutral about any kind of Samsung news. This is exactly what we see when people empathize with other people—particularly their family and friends—but don't feel the joy and pain of people they don't know."
Meanwhile, Samsung users didn't show any significant pain- or pleasure-related brain activity when they saw good or bad news about the company.
"Interestingly, though, the pain areas were activated by good news about Apple, and the reward areas were activated by bad news about the rival company—some serious schadenfreude, or "reverse empathy," Platt wrote.
The results suggest a fundamental difference between the brands: Apple has formed strong emotional and social connections with consumers, Samsung has not.
Brands and the self
Does having a strong connection with a brand justify paying higher prices for their products? Maybe. You could have a strong connection with Apple or Nike and simultaneously think the quality of their products justifies the price.
But beyond product quality lies identity. People have long used objects and clothing to express themselves and signal their affiliation with groups. From prehistoric seashell jewelry to Air Jordans, the things people wear and associate with signal a lot of information about how they conceptualize themselves.
Since the 1950s, researchers have examined the relationship between self-image and brand preferences. This body of research has generally found that consumers tend to prefer brands whose products fit well with their self-image, a concept known as self-image congruity.
By choosing brands that don't disrupt their self-image, consumers are able not only to express themselves personally, but also broadcast a specific version of themselves into the social world. That might sound self-involved. But on the other hand, humans are social creatures who use information from the social world to make decisions, so it's virtually impossible for us not to make inferences about people based on how they present themselves.
Americus Reed II, a marketing professor at the University of Pennsylvania, told Big Think:
"When I make choices about different brands, I'm choosing to create an identity. When I put that shirt on, when I put that shirt on — those jeans, that hat — someone is going to form an impression about what I'm about. So, if I'm choosing Nike over Under Armour, I'm choosing a kind of different way to express affiliation with sport. The Nike thing is about performance. The Under Armour thing is about the underdog. I have to choose which of these different conceptual pathways is most consistent with where I am in my life."
Making smarter decisions
Brands may have some power over us when we're facing a purchasing decision. So, considering brands aren't going away, what can we do to make better choices? The best strategy might be to slow down and try to avoid making "automatic" purchasing decisions that are characteristic of Kahneman's fast "system 1" mode of thinking.
"I think it's important to always pause and think a little bit about, "Okay, why am I buying this product?" Platt said.
As for getting out of the brand game altogether? Good luck.
"I've heard lots of people push back and say, "I'm not into brands,"" Reed II said. "I take a very different view. In some senses, they're not doing anything different than what someone who affiliates with a brand is doing. They have a brand. It's just an anti-brand brand."