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Clinical Waste (or “I went ahead and threw rust proofing in with that physical”)

Jan 9th, 2010
by Greg.
1 comment

This is the second in a three part overview of the major contributors to “wasteful” healthcare spending in the US (estimated to be in the ballpark of $1 trillion annually). This installment cues up more in-depth discussions to come regarding complications which spring from poor decisions and policies at the time of treating disease (i.e., defensive medicine to avoid medical prosecution, medical errors, preventable readmissions, etc.).

Overview: The clinic is where the rubber meets the road in healthcare. This is where tests are run, surgeries go down, prescriptions are written, and where invaluable motivation, instructions and advice are dispensed by physicians. These are crucial touch-points that can lead to weak performance across the healthcare system or serve as sites of massive cost sinks if mismanaged. The waste in the clinic can be thought of in a couple ways: the extra spending due to defensive medicine (typically driven by rather unconscionable trial lawyers) and costs due to a lack of standards of care and sharing of best practices (where physician associations, hospital administrators, and government agencies are all responsible for their inability to generate the data or drive necessary to reach and share these standards).

Defensive Medicine

The biggest estimated source of waste that comes out of the process of treating patients springs from the widespread practice of “defensive medicine.” You can’t really blame physicians for testing the heck out of their patients – there is an army of trial lawyers in the US like this guy waiting to pounce on any potential physician misstep (real or otherwise) to line their pockets. Americans are known worldwide for a lawsuit-happy culture. I recall riding a tour bus out of London, listening to our guide tell us to “Buckle your seatbelts. I repeat – just for the Americans on the bus – buckle your seatbelts: I told you twice: now you can’t sue me!” In terms of medical malpractice, this stereotype is more than warranted. (By the way, this tour guide was the man. He shared some very funny Winston Churchill quotes. Is it just me, or are all British people genuinely hilarious. How do people that never laugh get to be so funny?)

The costs to the system here are threefold: costly and unnecessary tests, increased malpractice insurance costs, and actual settlement payouts resulting from bogus cases. These things all directly or indirectly raise the cost of healthcare. So why not take a shot a tort reform? Well, why not take quit your job, move to Hawaii and buy your own island paradise? Because of money: Congress (primarily Democratic lawmakers) has been bought by the trials lawyers that profit from medical malpractice suits, so much so that tort reform was effectively off the table during the current round of healthcare reform (see more here). All despite a Congressional Budget Office report that stated tort reform could save the federal government billions of dollars per year.

The solutions to unlock savings here can be approached through three waves:

  • Near-term (Government/ Voter-led solutions): State and federal governments should enact tort reform : i.e., demand special courts with medically knowledgeable judges making decisions (as opposed to juries with no expertise deciding cases on emotion over science), as well as caps on noneconomic damages like pain and suffering.
  • Medium-term (Government/ Physician-led solutions): Physician associations and government bodies should take the lead to gather extensive data and determine definitive answers regarding what treatments are most effective for specific patient sets and disease states. By providing proof of following these instructions, or a justifiable rationale for not doing so as set out in their guidelines, physicians could be better defended in the court of law.
  • Long-term (Startup/ Enterprise-led solutions). Medicine must evolve from art to a science: better tests and knowledge of the patient should dictate a more perfect, indisputable treatment that a physician can’t be faulted for performing. Advances in robotics and medication efficacy should also lower incidents of actual physician error where malpractice cases are warranted.

Other types of clinical waste

Whereas defensive medicine is more of a “woe-is-me” tale for doctors, the other types of clinical waste can largely be attributed to them and others in the medical profession – medical errors, poor coordination amongst they and their peers, treatment variations due to an inability to hold themselves to common standards, etc. I’d also argue that several doctors engage more generally in ‘over-testing’ and ‘over-treating’ at times, where instead of being defensive, they simply want to gain reimbursement for a quick though unnecessary task (which further highlights the perverse dilemma that US doctors make more from keeping patients sick than making them healthy).

There are quite a few smaller (relatively speaking!) buckets here, and each is worthy of its own dissection. But generally, solutions to these issues must include:

  • Agreed-upon standards of care (Government/ Physician-led solutions): As above, physician associations and government bodies should agree upon most effective treatments, and under what conditions one may override them. This should also include public health decisions which restrict the overuse of antibiotics and widespread adoption of techniques to avoid staph and other typical hospital-bred infections.
  • Better front-line care (Physician/Patient/Payer/Startup-led solutions): A stronger reliance on primary care physicians, along with better doctor-patient communication, can help prevent unnecessary ER visits and help ensure ideal ongoing treatment of chronic disease to avoid complications and hospital readmission. Interestingly, several startups (see here and here) are also tackling the task of connecting patients with primary care physicians via web- and phone-based systems in an attempt to increase the levels of communication and lower the cost and time required for a medical checkup.
  • Improved technology (Startup/ Enterprise-led solutions): More effective, targeted treatments can actually help physicians agree on obvious standards of care. And innovations in things like surgical robotics can cut down on the incidence of medical errors.

Diagnostic and Therapeutic Innovation

Something not included in the chart above given it would be impossible to size, but should technically be considered in this category, are cost savings possible through better treatments versus those common today. This would include better diagnostics to determine when expensive treatments are not necessary, better patient information (lifestyle factors, genomic details, and treatment histories) to better diagnose diseases and gauge treatment efficacy, and new low-cost, high-efficacy treatments that work better than current ones and deliver lower likelihoods of disease recurrence. These solutions will almost surely come from well-funded startups built around exciting new innovations most likely growing out of academic labs. The personalized medicine revolution and associated disruptive medical technologies fit this mold.

Next Steps: We’ll go in depth into each of the big sources of wastes and potential solutions, calling out more specialized considerations, and give some examples of trend-setting entrepreneurs.

Discussion Topic: What do you think about these problems and potential solutions? Are you or someone you know involved in startups operating in this space? Please feel free to let me know!

Posted in: American Health Care, Business Idea, Market Overview, Uncategorized.
Tagged: · · · · · · · · · · ·

Boeing 787 Dreamliner: Sweet Looking Inside and Out

Jan 7th, 2010
by Greg.
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After continual set backs, Seattle’s*Chicago’s finest jet maker came through with the first successful test flight of its 787 Dreamliner last month. (By the way, if you want to see where the test craft is right now and details on its latest flights, click here). Around the time of the 787 virgin takeoff, I discussed some planned and hypothetical innovations to airliners to improve the flying experience. Well, Boeing appears to be targeting an improved in-flight experience with its new bird as a key way to differentiate itself from rival Airbus. And Wired got a first look inside the new jumbo jet just prior to Christmas. 

Welcome to the Boeing Ultra Lounge: where the security line out front is slightly LESS effecient than your typical NYC/Miami/LA club.

Some of our suggestions appear to be incorporated: cabin air should be more agreeable, and the design is meant to provide more open space to overcome the claustrophobic feel almost all of us get to some extent on an airplane. One interesting innovation is around lighting. Both the windows and the artificial lighting in the cabin will be tightly controlled to provide the best possible environment — conducive to sleep at night and gently waking up in the morning — showing the engineers at Boeing cosidered our circadian rhythms when designing the plane and did them a great favor. Though honestly, some shots of this advanced lighting don’t look too different from what Virgin America does today.

It’ll take a few flights with real passengers until we hear how well these changes pan out and what’s still missing (e.g., greater legroom, good food/ service, the ability to meet and socialize with passengers). That said, I applaud Boeing for making interior design changes which reflect an understanding of our bodies and an effort to minimize the toll taken on them when flying. 

*My hometown might have recently lost the Sonics but we haven’t forgotten about this travesty yet, either.

Posted in: Just For Fun, Response Post.
Tagged: · · · · ·

Behavioral Waste (or “Put out the cigarette, tubby”)

Jan 5th, 2010
by Greg.
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This is the first part of a three part overview of the major contributors to “wasteful” healthcare spending in the US (estimated to be in the ballpark of $1 trillion annually). This installment cues up more in-depth discussions to come regarding complications which spring from poor patient decision-making (i.e., smoking, unhealthy nutrition, failure to stick to prescription drug regimens, and alcohol abuse).

Overview: PriceWaterhouseCoopers estimates poor patient decision making necessitates ~$500B of otherwise unnecessary American health care spending each year. Obesity and smoking* are estimated to comprise a bulk of this figure (~$200B each), with non-adherence to prescription drug or physical therapy regimens contributing about $100B. Alcohol abuse makes up a much smaller figure (comparatively) at only $2B.

*For some reason, the smoking figure is given as a range of <$1B-$190B. That’s a pretty big range! My understanding is that the $200B figure reflects unrealized income due to possible higher cigarette taxes, where the ~$1B figure is the possible savings from a realistic reduction in smoking rates.

Issues at Play

Fighting behavioral problems are tricky: you’re basically hoping to override peoples’ cultural norms, comfort zones, and in some cases, addictions. Any government restrictions or attempts to influence behavior may be viewed as a threat to civil liberties. And finally special interests supporting these poor behaviors are massive, powerful, and resistant to anything that may encourage their customers to give up on them (just think of the restaurant chains, soda makers, massive grain processors, Big Tobacco, alcohol brewers, etc. – each group has a lot to lose and a very strong voice with lawmakers).

However, the war on tobacco is a great example of how concerted efforts can have a massive and positive impact on personal behavior. Smoking rates are way down in the US over the past few decades, with a lot of that likely driven by government steps to discourage smoking. Drugs like Chantix and nicotine replacement therapies and counseling are widely available. And start-ups are even at work designing tools to support positive behaviors. It feels like learnings from the anti-smoking revolution could be applied more widely to fight obesity and alcohol abuse, and to some extent, help encourage patients to adhere to trying medical treatments.

Conflict with the American Way?

Treating problems stemming from poor behavior lead to one of the most fundamental points of friction in the US surrounding the adoption of a more socialized form of medicine: should people leading healthy lifestyles have to subsidize the high healthcare costs of those leading unhealthy ones? Jon Stewart recently interviewed Cabinet woman Kathleen Sebelius, the head of the Department of Health and Human Services and former Kansas Governor. He pointed out that he’s in the top bucket of earners and may have to pay an additional income tax to offset the cost of expanded patient coverage. As a result, he joked, “Can I then stop poor people from smoking and eating ice cream? If I see them on the subway can I say ‘Hey dude – you’re costing me money’?’” While responsibility for one’s own decisions is paramount, there is a fine line between denying healthcare and demanding one pay for their own poor decisions: the CEO of Whole Foods found this out the hard way when he was roasted by his left-leaning customers for his apparent support of Republican obstructionism of healthcare reform after authoring a piece suggesting we should hold people accountable for their nutrition. Moreover, who is to say that someone more genetically inclined to be diagnosed with diabetes or heart disease should have to bear the cost of their own treatments when the bar to getting their disease was lower than those of others?

Some have called for taxes on unhealthy snacks like sugary soda. Indeed, such surtaxes are in place and expanding in the world of tobacco. And the taxes may be working. It’s arguable as to whether the drop in US smoking rates are due to better knowledge of the longer-term repercussions of tobacco use, a media-led blasphemication of Big Tobacco, or higher prices per pack. But something is clearly having an impact.

Healthcare + Productivity Drain

Finally, it’s important to note that other costs not shown here impact the economy more broadly – PWC says other costs due to “lost productivity, absenteeism, and presenteeism, can be three to four times higher.” Ironically, once the economy gets moving again, we’ll need as many people working as possible to generate tax income to pay off the Baby Boomers drawing from Social Security and Medicare. It’ll be imperative that we keep our workforce healthy and productive to do just that, and thus ensuring people make the right health decisions will be even more important.

 What Can Be Done?

Generally speaking I can think of a few ways to tackle these problems:

  • Education (Government/ Parent-led solutions): As early as possible, teach students about the importance of nutrition, good health, and obeying doctor’s orders. Reinforce these messages over time and through as many channels as possible.
  • Disclosures at Point of Sale (Government-led solutions): Place notices, like the surgeon general warnings on cigarettes packs, on packaging or menus that outline the risk of alcohol and Calorie-rich food. Moreover, governments can force restaurants to display nutritional data like Calorie counts on their menus (they are increasingly doing so, to some effect, in pioneering cities like NYC).
  • Taxes (Government-led solutions): Tax unhealthy vices (e.g., cigarettes, alcohol, or fast/ sugary food) to discourage their consumption, fund educational programs explaining why they’re so bad, and pay for the increased healthcare costs they cause.
  • Drugs (Enterprise/ Startup-led solutions): A slew of biopharma pipeline drugs aim to get people to quit smoking, abusing alcohol and overeating (though unfortunately are often associated with the adverse effect of depression). It’s hard to think of these drugs as ‘disruptive,’ as drug companies typically find a way to squeeze out as much profit as possible to recoup R&D costs, and it’s hard to equate smoking quit rates or lower Calorie consumption during a clinical trial to lifetime healthcare cost savings. But if these drugs work well at getting people to live healthier they could easily be cost-effective to prescribe. Let’s just hope anyone prescribed these drugs actually take them (as non-adherence is the one behavioral issue you obviously can’t design a drug to treat)!
  • Personal Behavior Support Tools (Startup/ Enterprise-led solutions): Here’s where entrepreneurs are best suited to get into the mix. Imagine mobile apps that remind you to take prescription pills, tell you how many Calories are in your lunch options, track what you ended up eating each day, or measure your weekly workout performance. Or social networking tools which encourage you to challenge friends and family to live healthy. Given entrepreneurs in this realm can sell directly to patients, but provide value to healthcare payers and employers, their ability to monetize their products and services are strong.
  • Just Live Healthy (Patient-led solution): The old fashioned way of staying healthy. Putting this on here because if it worked for my grandparents’ generation it theoretically is still effective.

Next Steps: We’ll go in depth into each of the big sources of wastes and potential solutions, calling out more specialized considerations, and give some examples of trend-setting entrepreneurs.

Discussion Topic: What do you think about these problems and potential solutions? Are you or someone you know involved in startups operating in this space? Please feel free to comment or let me know.

Posted in: American Health Care, Business Idea, Market Overview.
Tagged: · · · · · · · · · · · · · · ·

Interesting trends in spending on healthcare vs. other basic necessities

Jan 3rd, 2010
by Greg.
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Here are some old but interesting data exhibits taken from Deloitte’s 2006 report “The Catalyst for Health Care Reform” (though original source of the analysis appears to the Bureau of Economic Analysis). Since 1950, spending per $1000 of Americans’ discretionary income has decreased for food and clothing, remained constant for housing prices, and increased considerably for healthcare. 

Trends in healthcare spending undo productivity gains elsewhere

I’m somewhat curious about a couple things:

  1. How much longer can this continue?
    The trend in increased healthcare spending is alarming, especially as productivity gains start to level off in other sectors and certain areas of spending not shown (e.g., technology and telecom connectivity) become increasingly important. Where will new wealth come from to support healthcare costs?  
  2. Is the drop in food prices actually contributing to the increase in healthcare spending? (And if so, how much is it driving?)
    As foreshadowed in a recent post, patients’ behavioral decisions which lead to health issues like diabetes squeeze hundreds of billions of dollars out of our healthcare system each year. It’s great that the fast food revolution provides cheap and tasty food very quickly. But how much of the savings leak out when it comes time to repair the damage it wracks on our cardiovascular or endocrine systems?

This analysis is further proof of just how badly healthcare costs are spiraling out of control in the US and how quickly we’ll need to act to counteract them.

Finally, to those who watched football today: what a day! Some good games and a lot of playoff implications. As far as who I want in the Big Game, I’m going to go with my heart and say: “Anyone but the Pats!” And of course, my Seahawks will have to wait until next season (when hopefully the offensive line will finally gel and Justin Forsett becomes our featured back).

Posted in: American Health Care, Response Post.
Tagged: ·

Ambitious news (featuring T-Pain)

Jan 2nd, 2010
by Greg.
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In the face of the continued healthcare debate on Capitol Hill, I’d like to launch a project on this site where we explore ways in which we can reduce healthcare spending and improve quality by eliminating waste and inefficiency. While politicians claim to be lowering cost through winning concessions from biopharma, medical device, and insurance companies, this may (arguably) stifle technological and business model innovation in the long run. Even if it doesn’t, this reform attempt still only attacks profiteering in one part of the system – it leaves many bastions of wasted spending untouched.

The main purpose of these bills is in fact to force people to get insurance (pressuring them with the carrot/ stick combo of tax credits or the threat of jail time and requirements that their employers to provide it for them). If anything, a new law requiring increased insurance coverage without a public option will be a boon to US insurance companies, partially offset by the legislation’s requirement that they no longer drop coverage or raise prices for sick people or deny coverage to people with preexisting conditions. The same ‘business as usual’ waste will now be extended across almost all Americans.

It’s great that more Americans are likely to be covered by health insurance in the years ahead, but it seems sensible to think about ways that we can make the system truly more cost-effective – an area where our healthcare system stinks. While switching to a single payer/ government-run system could likely do more than anything to encourage cost savings, it’s unlikely to happen soon given the divisiveness of the issue.

My idea is that we’ll approach the big buckets of waste in the healthcare system over time and suggest solutions. The initial framework that makes sense to me for organizing this project is Price Waterhouse Coopers’ categorization of health care waste in “the price of excess.” They outline three major buckets of waste, with the following sub-breakdowns :

Annual wasted spending in health care (Source: PWC)

I wouldn’t put too much weight into the actual numbers they’ve calculated here (e.g., jump into their document and check out the range on the smoking figure…), but generally speaking I think they help prioritize the biggest causes of wasted spending in the system.

 Changes to the healthcare system will not be easy. Any innovation will undoubtedly stumble due to the following:

  • Regulation: Healthcare is regulated, as it should be, but this means certain businesses can’t get off the ground without appropriate spending on approvals, certifications, etc. Compliance with reporting guidelines, inspections and other laws also make healthcare businesses costly to run.
  • Public Policy: Healthcare and medical research policies are divisive (e.g., single payer systems, stem cell research, cloning, genetic code processing, etc.). As the current debate illustrates, if political winds change, entire business opportunities can arise or vanish overnight.
  • Special Interests: Some doctors prefer the current wasteful setup that pays them for any surgery or test they provide (as opposed to paying others for keeping patients healthy in the first place), trial lawyers certainly appreciate the chance to sue the pants off the same doctors in instances where they didn’t test for every potential complication a patient could have had and missed an unlikely disease state, biopharma loves the ability to market directly to consumers, and insurance companies love to exist. Other groups are enablers of bad health (just follow the unnatural fatty food chain from Monsanto to ADM to General Mills to McDonald’s), and will push anything that infringes on their ability to maximize profits by fattening our stomachs and hardening our arteries. All of these groups will need to give ground to reform our healthcare mess, and pushing them around will not be easy.

I invite you to send me business plans, concepts, or vague ideas you have to tackle these issues (greg@biorebellion.com). Or just feel free to post comments on the site. From time to time I’ll target a specific bucket of waste and summarize my own ideas, companies I know to be targeting the space, and will try to involve experts’ opinions in the space. Meanwhile, I’ll keep a repository of our findings in a new location on the website.  I’m looking forward to this and think it should be a lot of fun.

By the way, for something only minimally related to the healthcare debate, but is hilarious and features the world’s greatest mobile phone and app, check this out.

Posted in: American Health Care, General Site Overview.
Tagged: · · · ·

A Very Merry BioRebellion Christmas!

Dec 25th, 2009
by Greg.
No comments yet
Merry Christmas, everyone! Hope you enjoyed your time off with family, giving/ receiving gifts and some sort of puppet people playing basketball. The year is (thankfully) almost over, but there have been some huge and divisive developments in American healthcare policy in 2009 that are likely to shape the next decade of medicine and beyond. The jury is out on whether the healthcare changes, which are very likely to pass into law next month, will be a net positive on the cost and quality of our healthcare. It will take several years to get at the answer.

I've asked Santa for a new decade since X-mas 2001...and he finally delivered.

Luckily, innovative solutions to the problems persistent in our healthcare system continue to coalesce, and the attention placed on such solutions has never been so motivated or focused. I’ll do my best to stay on top of such innovations — as well as some other interesting trends in industries outside healthcare that promise to apply our understanding of the life sciences to improve things. But given the emphasis placed on healthcare in the last several months, you can expect a lot of attention to be devoted to that topic.  

Merry Christmas and Happy New Year. Here’s to a great 2010 and beyond!  

-Greg

Posted in: American Health Care, General Site Overview.
Tagged: · · · · ·

Animals are much cooler than you

Dec 25th, 2009
by Greg.
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My parents and I visited Palm Desert’s Living Desert a couple months ago. We had the chance to see some cool animals and had a lot of fun. (Wow, this post is starting off like a five-year-old kid’s report on what he did last summer; I wish I could tell you it is set to get better).  Well, I recently remembered the visit upon posting some entries on the baroreceptor reflex a month back. Giraffes have some of the most widely studied baroreceptors in the world (with good reason given their neck length; if any species need safeguards to control blood flow to and from the brain it’s giraffes given the significant amount of time and work required to move blood from their hearts to their brains.

Totally BFF!

This got me thinking that certain species of animals are truly amazing, and we just take them for granted. In certain cases, we can extrapolate learnings from animals to learnings about our own biological structures and evolutionary purposes (i.e., baroreceptors). But in most cases, we just learn more about how awesome animals are. For instance (examples taken from The Book of Animal Ignorance, as assembled by the team behind the BBC’s QI – the world’s greatest quiz show):

  • Albatrosses can fly non-stop for ten years
  • Box Jellyfish have 24 eyes but no bottom
  • Cicadas can count
  • Elephants can’t run
  • Geese mourn their dead
  • Koalas don’t drink
  • Leeches have 34 brains
  • Lobsters live for a century
  • Mice sing while having sex
  • Monkeys pay to look at porn
  • Spiders can fly
  • Termites mate for life
  • Worms get addicted to nicotine

Crazy right? Check out the hilarious book for all the deets.

As humans, it’s easy to look down on animals given they don’t match our mental or social levels of intelligence. I don’t mean to go all PETA on you, but interesting and impressive feats like these shouldn’t be overlooked. And stories like these are much more likely to gauge kids’ (and adults’) interest and respect more than anything else. Teaching these kinds of facts to kids when they’re at the zoo (instead of just basic petting/ feeding) will probably mean they learn a bit more and biology, physiology, and respect for animals.

“Human beings, who are unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.” –Douglas Adams

What kind of businesses could one build around the amazing traits of certain animals? I’m guessing either education or entertainment (hello edutainment!). Zoos could potentially offer nature talks like “The Unknown World of Animal Awesomeness” to encourage field trips, but otherwise not much. The Fox Network generated quite a buzz around their special Man Vs. Beast, which pitted animals against  humans in events well suited given their amazing abilities (watching the first installment in my Freshman dorm still ranks as a top 10 college experience. Clearly I went to Johns Hopkins). And of course, the British can pump out countless books/ telly quiz show episodes on the subject and rake in as many £s as they can count (which is probably really high because they’re super smart…or at least sound they should be)…

All right – let me cut this article off before it gets too carried away: I was just looking for an excuse to post the awesome picture of me feeding a giraffe and had to write an entire post on animals to get there.

Posted in: Basic Sciences, Business Idea, Just For Fun.
Tagged: · · · · ·

BusinessWeek’s Take on Wasteful Healthcare Spending

Dec 17th, 2009
by Greg.
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BusinessWeek published a nice article last month on waste in health care spending. Apologies for the delay in getting on top of this – I didn’t even know about it upon its release, but luckily our office’s periodicals are significantly out of date (which reminds me, I should check our milk…).  One key message I took away from it was nicely summarized by the post’s author, Catherine Arnst, as follows:

“None of the health-care reform bills on the table in Washington do anything meaningful to address (wasted health care spending of) $700 billion.”   

$700 BILLION dollars in wasted spending?? That’s about a third of what we spend on healthcare, and equal to 5% of US GDP. Depressingly, PWC actually pegs this figure at over a trillion (yes, that was with a ‘t.’ Did I stutter?). But geez, $700 billion…That’s equal to the size of Treasury’s Wall Street bailout program (TARP: the gift that keeps on giving…to Wall Street). That’s over 6 times the combined net worth of Bill Gates, Warren Buffet and Carlos “Senor Telefonica” Slim. And it’s even 7 times more than Dr. Evil’s (eventual) ransom amount set in the first Austin Powers. The difference here is that US health care waste is recurring each year and only seems to be growing.

Another thing to keep in mind is that this figure has only approximated wasteful spending in our current, mostly privatized, system – not additional costs due to healthcare policy (i.e., private vs. public payers). While it’s arguable as to which system is most efficient or provides the highest quality care, there is no debate that a single public payer would drive costs down even further by setting spending caps and wringing corporate profits out of the equation (for good background, check out this helpful – albeit biased – post). Moreover, it’s likely that the American privatized system actually lends itself to more waste: frivolous lawsuits, fraudulent reimbursement for services that were either not given or paid for, ability to go straight to expensive specialists as opposed to allowing primary care physicians to coordinate the action, etc. The catch is that shifting to a single payer or hybrid approach would potentially stifle innovation by squeezing financial motivations for biopharma, medical device, and health care service providers…all of which makes the prospect very un-American and troubling. No need to get into this debate because chances are you’ll fall down on one side or the other given your political leanings and not much else.

Either way, there is a lot of waste in our system. The good news is that a lot of this waste can be demolished with simple shifts in coordinating healthcare, per the points Arnst outlines. But there still has to be opportunity here for startups to get in on the action and save payers a great deal of this wasted spending (exhibit A: $700 BILLION!). Why aren’t we focused on addressing that spending as we move to cover health costs for uninsured Americans? Surely eliminating just a fraction of this waste would pay for that coverage, and ensure the system is far more sustainable going forward. Congress isn’t proposing anything to force cost-saving policies or services into place. As a taxpayer, this is frustrating; but as a VC, I see a lot of opportunity for innovative entrepreneurs to bust on the scene with creative solutions no one sees coming. What do you guys think? And please keep the business concepts/ plans coming.

Posted in: American Health Care, Market Overview, Response Post, Venture Capital.
Tagged: · · · · · · · · · · · · ·

Quantified Self Meetup Update

Dec 13th, 2009
by Greg.
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QS-logo4

Earlier this week I attended a Quantified Self Meetup session at Wired Magazine headquarters in San Francisco. My takeaways on the event:

  1. I’m not the only one. I have a keen preference for making data-driven decisions (rather than emotional or irrational ones), after seeing the power in doing so while a management consultant at Bain & Company. For that reason I’m interested in quantifying various aspects of my life – to know myself better and make better decisions regarding finances, health, social time, etc. While that may not be the same thing that’s driving other peoples’ fascination with this field, 100+ of us turned out to discuss tools and methods for understanding ourselves better. Kudos to host Gary Wolf and Wired Magazine for making this meeting of the minds happen and the guests who presented during the “show and tell” session for quenching my curiosity in this space and by introducing me to others with similar interests.
  2. The ‘net at its best. This was the first time that I’ve attended a Meetup session (which, as the name implies, is the exact purpose of that website: to encourage offline interaction through the efficiency of online organization, event marketing, and logistical planning). The Internet gets a bad knock at times for encouraging anonymous bashing or spreading of misinformation about people, businesses, governments, etc. But it’s also an amazing way of connecting people with those of the same interests and points of view that otherwise would remain unknown to each other. I’ve had luck with this site encouraging others with similar interests to my own to reach out to me, facilitating valuable offline interactions.
  3. “Sleep” was the night’s big winner. Of the seven “show and tell” presentations, three focused on sleep. (The four others covered electronic medical records, social media influencing health habits, general life data tracking, and medical sensors for real-time handheld medical diagnostics). Of the sleep presentations, one person shared his own personal learnings on sleep habits, along with some near infrared videos of his own sleep patterns (hilarious and very interesting). Another participant shared their Zeo Personal Sleep Coach – a headband-alarm clock paired system that measures one’ sleep patterns and can be set to wake one up when at an optimal, non-deep sleep spot. (For those interested, she liked the data it provided, but was frustrated given an oversimplified interface, no description of the mechanism of action, and an inability to drill down into the data.) And finally two entrepreneurs shared their “WakeMate,” a wrist-based system measuring sleep quality based on movements of the wristband via an on-board accelerometer. Unlike the Zeo, the WakeMate transmits readings to a mobile phone.
  4. It’s early, but there is something here. Over 100 people showed up to the event on Monday and altogether 400 belong to the San Francisco-based QS Meetup group. That may not seem like much, but this was the biggest event yet (with several newbies like myself in attendance), and the movement continues to gain attention with the push toward electronic health records and the success of products like Mint.com and Nike +. Businesses have made the codification and analysis of data a priority for years. The field of “business intelligence” continues to grow rapidly. There are several reasons for why “personal intelligence” has not followed suit, but my opinion is that we simply don’t have the tools to easily codify and analyze the data most important to our lives. This will slowly continue to change over time, spearheaded by entrepreneurs like those in attendance Monday night. 
  5. A lot of fun: Perhaps driven partly by the communal interests shared in the room and the regular member meetups, there was a festive atmosphere in the room. As our Governor once said, “I’ll be back.”

Man, I’m going to miss that guy.

Posted in: Basic Sciences, Just For Fun, Response Post, Technology Overview.
Tagged: · · · · ·

Can Flying Ever Be Made People-Friendly?

Dec 12th, 2009
by Greg.
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I’m currently 36,002 feet above the Nebraska/Colorodo/Wyoming tri-state region. Thanks to my personal entertainment system, I can tell you that our ground speed is 534 miles per hour, we’re 1,022 miles from our final destination of SFO, where the current time is 7:07 pm, and that the temperature outside is -57°F. I have the option of viewing 40 films and 61 TV episodes, listening to 151 audio albums or playing 22 crappy video games. If I was on another airline, I’d be able to purchase Aircell’s gogo internet access and post this article in real-time. But none of this keeps the person in front of me from lowering their seat into my lap, the baby behind me from screaming during takeoff, or the gross guy sitting next to me from oozing into my seat. What I’m getting at is that man has not yet evolved to spend hours in a tin can several miles above the earth’s surface. While the innovation of flying has revolutionized global trade and travel, it can still suck – especially on American carriers. Given what we know about the human body and behavior, how can we make flying better?

Most recent innovations have been around in-flight entertainment. While entertainment systems may help take one’s mind off the pain of traveling, it doesn’t provide much else (and frankly, a passenger can provide themselves with a similar level of entertainment just by remembering a laptop or an iPod). When you look online for ideas on how to make flying better, you reach a bleak consensus that flying can’t be improved and thus one must employ tips and tricks to game the current system or remember creature comforts to try to minimize their suffering when onboard.

What else can airlines do to be more human-friendly? My first hunches center on improving the following:

More legroom without pulling out seats? Make seats thinner: Why didn’t I think of that?

More legroom without pulling out seats? Make seats thinner: Why didn’t I think of that?

Clearly all of these changes carry a cost. Some things are impossible: providing everyone with their own row, for instance, is just not economically viable without charging more than most are willing to pay. The deaths of business class only jetliners may be helpful case studies. Arguably it was the cost of oil that killed off those companies, but pretty convincing arguments exist as to why such airlines are not economically viable without major tweaks to their business plans.

Most changes to air travel of late have attempted to make it more affordable (or at least keep prices down in the wake of the oil price boom). As we evolve toward more energy-efficient airplanes and the economy stabilizes, I’m hopeful we’ll see some of the above innovations make their way into jetliners.  There has to be some point where the additional cost is well worth it. Foreign airlines offer superior service and comfort at practically no extra cost. What if we were actually willing to pay a little extra? Or if engineers were willing to get more creative at the risk of building something that looked weird?

How would you improve flying? Are your suggestions anything you could build a business around yourself (either a new airline or vendor cooperating with today’s airlines)?

Posted in: Business Idea, Just For Fun.
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