Yeah, What HE Said: Opportunities

Most critiques of free markets can be better phrased as business plans.
- Devin Finbarr of Intellectual Detox

I Don't Care if it's Legal or Not...

For shame, poisonous people.

Barney Frank has this one right.

What Will Tomorrow Bring: Moving Magazines

Right out of the pages of Popular Science: Entertainment Weekly will pilot embedded video screens in some of its magazines next month.

Sadly, its only for ads not articles right now, but hey - somebody's gotta pay for it ... might as well be those evil corporate world dominators over at Pepsi. Too bad we haven't nationalized the magazine industry yet ... I'm sure Barney Frank coulda seen to it that such essential live-giving technology would be used for more worthy causes like subliminally convincing inner-city youth to save less and consume more ... in the name of national progress, of course.

Oops ... did I go politico again? Damnit, I keep doing that.

Photo Credit: Caroline McCarthy/CNET

What Will Tomorrow Bring: Death to Paper Dinosaurs!

On Chris Matthews this morning, a bevy of career journalists held a pity party. Boo hoo, the world is coming to an end! We're headed off a cliff!

Were they talking about the economy? Politics? Healthcare? Afghanistan? No, all that was over on Meet the Press.

These highbrow muckrakers were singing the dirge of the whole "all the news that's fit to print (and most of it that isn't)" industry. RIP Rocky Mountain News. RIP Seattle Post-Intelligencer. RIP New York Sun.

The quotes were just so ridiculous to me:

"The Internet doesn't have the fact checking."
"The Internet dumbs people down because it's so targeted." "You'll never get that out-of-the-corner-of-your-eye story about haircuts in Cambodia."
"We're losing the group sensibility that creates stories."
"We'll just never have those good ole days of newsroom collaboration. Blogging is very solitary."
"Everyone loses when a newspaper shuts down."
"There's just something special about freezing your butt off going outside in the morning to get the paper in your jammies."

Puh-leaze. I won't rebut line-by-line; I have enough windmills. I would write it off as a generational gap, but sadly, even some younger journalists bemoan the change.

I feel almost silly making the following self-evident statements. The Internet is the salvation of journalism. It puts news on steroids, going wider AND deeper. It enables new levels of cost efficiency and simultaneously new levels of democratization/decentralization. It's vastly lower bars to entry increase entrepreneurial participation. The spectrum of available viewpoints is broader, and can be communicated more effectively via richer multimedia. Rather than damaging credibility, democratization actually ensures that sharp minds and good ideas gain much better (and quicker) visibility. They are self-propelled by the level of interest they generate. No need to support the massive old "launch" infrastructure.

These journalists need not worry. Democratization does not erode their credibility ... as long as they continue to earn it ... and invest some new synapses in figuring out what's going on.

This guy, certainly gets it. He's an Ivy League math/econ major who calls print media "the dead tree and typewriter industry." Yet he's the Web Editor-in-Chief for The Daily Pennsylvanian and is avidly pursuing a career in journalism. Why would such a smartypants peg his future to such a dinosaur? He's not afraid. He understands the new business model. Why does it not surprise me he's a first generation American?

He's not alone. Fellow Ivy-leaguer Jason Kilar is closer in age to the talking heads on Chris Matthews, yet he's not scared either. He's dragging print and TV into the 21st century kicking and screaming ... and making big bucks at it.

Sam Altman, a poster child for a bright future, and Inc. Magazine's #4 "coolest entrepreneur", told Charlie Rose that when he wants to know the most important thing going on right now, he checks Twitter. "It always scoops traditional media."

Even Al-Jazeera isn't complaining ... and in this case, that's a good thing.

When a Bad Reputation is Just Fine

For a couple of weeks, I've been following a debate on the importance of reputation.

In this entry on his NY Times blog, Paul Krugman argued that insurance companies don't give a rat's rear about their reputation or the satisfaction of their customers. He didn't say, but clearly was saying that he'd found yet another need for a governmental white knight. He explicitly launched snark at a series of Bryan Caplan Econlog posts which placed great importance on reputation in economic decisions. Bryan responded with this post, entertainingly including pirates and VDs in his case. At the end, he asked his audience:

What is your favorite example where reputation doesn't make voluntary
interaction work well? Is the problem demand, supply, or what?

As moths drawn to fire, many responders couldn't help but focus on the pirates and sex. Others have thought up niche examples such as the "fall forward" effect of bad bosses with good employees. They needn't. His question can be answered with common real-world examples. My contribution to the debate is as follows:

When doesn't it work? When there is:
1. A very large, fragmented population of consumers, most making infrequent purchases
2. A largely standardized product (ie: highly regulated or commoditized), leading to high inelasticity of demand to price ... causing price to be the major differentiator
3. And a highly transparent market in terms of price

Airlines, credit card companies, and banks are all great examples. Major players make little investment in customer retention, preferring instead to counter attrition with new customer acquisition, based largely on price, combined with creation of monopoly/oligopoly power (usually only local or short-lived). Any marketer in these industries will tell you that their key metric is the ratio of attrition to acquisition.

Said concretely, an airline can sell confirmed seats to someone else, strand 300 customers in a layover airport overnight, make us stand in line for hours to get re-booked, pack each of us between sumo wrestlers on a tiny aircraft, over-charge us for a bottle of water, and then wreck your luggage. All the while, their demoralized, unionized employees will make scant few attempts to pay attention to, much less accomodate us customers to retain our business. The airline knows it can lure most of us back next time by simply offering the cheapest fare for the route and time of our next trip.

Unsurprisingly, the story is much different in the international market where they have far less ability to secure those temporary monopolies and thus must compete on something other than price alone. Fly the same carrier domestically and internationally. You'll find it hard to believe it's the same company.

Gee, I wonder if therein lie the seeds of a real answer for both Paul and Bryan.

Yeah! What HE Said: John Mackey Edition

Sometimes I read something that just makes me go "yeah, man! THAT's what I've been looking for!" Sometimes it's even something written by someone other than myself. This is one of those times.

John Mackey, weird product of weird Austin, vegan, rancher, collector of a $1 a year salary, donor of over $1m a year, libertarian, and CEO of Whole Foods, made an appearance on the WSJ Opinion page this week talking about practical, sensible fixes for health care. Thanks Obama for finally motivating good people to talk about some really good ideas. John's are as follows:

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.
• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.
• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.
• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.
• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?
• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.
• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.

Yup.

Killing 2 Birds with 1 Stone

I am pro death penalty, pro abortion, pro assisted suicide, pro regular suicide. I'm for anything that gets the traffic moving.
- Bill Maher.

Blog Shout Out: John J. Ray, Ph.D.

This is probably as apropos a time as any for me to send a shout out to a blogger I've followed for a long time. Most curious.

You see, John's a doctor, originally from Britain where they already have socialized medicine, now way over down under in Australia where they also already have socialized medicine. And he kinda doesn't like it. And he tells us all about it as a warning to this Last Best Hope. Unlike the debate here, he presents his side in an almost painfully stoic tone, letting facts speak for themselves.

Check it out here: http://socglory.blogspot.com/

You'll run into discussions that just might make ya go "aha" like this did for me:

The reason ... is the profusion of mandatory minimum coverages state
governments require to be included in health insurance policies sold within
their states’ borders. This results in residents being forced into uniformly
high-priced, coverage-heavy “Cadillac” insurance policies as a result of state
law, not their own choice.

While there is no doubt these coverages are both useful to and desired by some consumers, all insured residents of the Ocean State are forced to pay for asthma ed and IVF insurance, even if they aren’t potential consumers of either. Rhode Islanders’ premiums are is also higher than they otherwise would be because every policy sold there is required by law to cover the cost of smoking cessation, hair prosthesis, and acupuncture – along with 65 other treatments, procedures, and conditions.

Or this one:

the drug Avastin is widely used in America to treat advanced colon cancer.
But it costs $50,000 a year -- so Canada's national-health system doesn't permit
its use. As a result, 41 percent of colon-cancer patients in Canada die each
year, as opposed to 32 percent in the United States. (Canada's average
eight-month wait for colonoscopies, another result of national-health rationing,
also contributes to the problem.)

Or this one I totally didn't expect from him:

The Post Office Factor. Americans are deeply cynical about government's ability to do anything right. Putting a man on the moon, building an interstate-highway
system, fielding history's most lethal army -- nothing has changed that. Even
Mr. Obama makes jokes about how standing in line at the post office has
convinced him he doesn't want the government running private firms.

What Will Tomorrow Bring: Concrete Ideas for Improving Healthcare

I'm sure hard on the healthcare industry (cough, cough, Land that Time Forgot, cough). Call it constructive criticism. But I'm not just full of nay-say. Allow me to offer a few very concrete, actionable recommendations to go with all the high-falutin' principles I've been throwing out lately.

On medical records and privacy:
It goes without saying that medical records must be put online. Period. Now. There is NOTHING technologically standing in the way (see here, here and here for just a taste of what's already out there). That isn't to say that all the rocks have been removed from the road of course. But we're smart, right?
Ideally, one should be able to control which individuals can see which pieces of their health record by setting policies ahead of time. For example, one might say that, in an emergency, EMT staff can see all current health info; hospitals can see more; a radiologist can see less; a pharmacist can only see current medicines and allergies.

At a national level, health data must be irretrievably separated from identifying info and then aggregated for statistical research.
On prescriptions and drugs:

Doctors should write up prescriptions on a secure iPhone/Blackberry/Palm/Android app. This isn't dreamware. The foundations already exist.

Contra-indications, genetic red flags, and bad interactions with other current meds should all be checked automatically via an online service accessing a national database (perhaps run by the FDA?). The doctor should be immediately notified of issues.
Controlled substance notifications and approvals should be automatically taken care of as necessary.
Insurance approval should be automatically collected and the billing process should be launched.
Then, the 'scrip should be sent electronically to my "pharmacy" (this is no more technologically complicated or insecure than direct-depositing a paycheck). I put pharmacy in quotes, because it would bear a closer resemblance to Amazon.com than your the local chemist of yore.
An automatic "broker" looks at my urgency as well as current drug supply to determine where the order gets filled.
Urgent orders go to the closest local drug warehouse which currently has the drug in stock. Non-urgent orders go to a national fulfillment center. Again, think Amazon.com ... come to think of it, maybe we should just let them do it.
In either case, a robot distributes the right number of pills into the right bottles. It then marries that with the right instructions and documents. A human quality control might be performed before the robot packages the whole thing up, and hands it off to the delivery system (either via local same-day delivery or simply UPS).
An email is automatically sent to me confirming fulfillment, and providing links to all the usual legal-ese, warnings, indications, and stuff required by the FDA.
If required by the FDA, a pharmacist should call me to explain the required mumbo-jumbo. If this gives lawyers fits, an alternative would be to provide this info face-to-face before the patient leaves the doc's office.
Then the 'scrip should be put in my medical record, the doc's files, and, anonymously, in national databases available for research. For one thing, this prevents me from double-dipping. For another, it provides drug companies with a much deeper source of usage and efficacy data.
If the 'scrip calls for refills, they should be automatically processed in the same way. Neither the doctor, nor I, nor a pharmacist should have to lift a finger.
On Insurance:
As I said previously, employer-provided insurance has GOT to go! Each individual or family should buy their own plan, based on their own preferences, and considering their own unique situation.

Yes, this means the end of the "one size fits all ... at one price" policies that we get from our employers. That's a good thing, because currently, we're spoiled. All the talking heads on TV keep trying to get Obama to say there will be sacrefice. He chickens out, but I won't. When it comes to your health, you should have to do your fair share. Today, we're just passengers getting taken for a ride. Instead:

• We see more and more evidence recently of just how bad people are at making certain types of decisions. Specifically, we suck at assessing extremely unlikely events. Inevitably the "won't happen to me" gene kicks in. When the inconceivable happens, we're caught unprepared and confused. Thus, the vast majority of Americans should have catastrophic insurance. Period. No excuses. It should be cheap, and should only cover the really nasty stuff. No pills for sniffles or aches ... it should only kick in once expenses are above, say $15k. With a nice scotch, a good joke, and a pat on the back, Obama could probably convince me to socialize this piece of healthcare, as long as he doesn't go Robin Hood on me.


• Today, prudent travellers take out trip insurance; prudent SCUBA divers have DAN; hikers (and extreme skiiers) get evacuation insurance. This should be the norm for all health insurance. Smokers should pay more. Skydiving injuries should not be covered unless a risky-activity premium has been paid. Conversely, people who do more than an hour of cardio a week should get a rebate. Triathletes should be damn near free.


• Folks who prefer one treatment to another should be able to negotiate this with their insurance. For example, someone with terminal cancer should be able to trade. "I'll give up chemo, but ya gotta pay for accupuncture, a home nurse, and a pain clinic." Someone with a blown ACL should be able to say "I want extra PT. In exchange, I promise to follow their advice dilligently and keep the knee in good shape so this doesn't happen again." Someone who injures their spinal cord should have the ability to agree "Let me try this experimental treatment, but if it doens't work, I won't sue, or ask you to treat any side-effects." People who are willing should be able to get treatment offshore if the cost differential is significant.
•