This video of Salman Khan’s TED talk has been making the rounds all week. Though I love the mission of his Khan Academy, I was most struck by its history.
For those unfamiliar the Khan Academy was born in 2006, not with a grand plan to change the face of education, but as a few math tutorials posted to YouTube by a hedge fund analyst in Boston for his cousins in New Orleans. His training was not as an educator and his vision was not to transform the educational system. Fast forward to TED 2011 and there he is, on stage, being praised by Bill Gates for providing a view into future of education.
Earlier in the week I read a piece by Andy Kessler in which he distinguished between two types of entrepreneurial approaches to heavily legislated or deeply incumbent markets. One he calls the “political entrepreneur”. The other he calls “market entrepreneurs”. He distinguishes them as follows:
These “political entrepreneurs” leverage their political power to own something and then overcharge or tax the crap out of the rest of us to use it. Political power instead of competition. Easy money forever. But then again, maybe not. Because for every stroke of the pen, for every piece of legislation, for every paid-off congressman, there now exists a price umbrella that overvalues what he or any political entrepreneur is doing. Real entrepreneurs, “market entrepreneurs,” recognize the price-to-value gap and jump in. Ignoring legislation, they innovate, disintermediate, compete, stay up all night coding, and offer something better and cheaper until the market starts to shift.
He then goes on to detail how Cornelius Vanderbilt used a market approach to subvert the heavily legislated steamship monopolies of his time and opening up new business models the incumbents simply couldn’t compete against. Andy’s whole piece is worth a read if you have the time.
So many of the biggest and most exciting markets are wrapped in legislation and red tape that favor incumbents and value deeply entrenched conventional wisdom. Market entrepreneurs will fail trying to play by their rules.
So don’t.
Salman didn’t meet with existing publishers in the education business to license their content. He didn’t hold focus groups to see what students wanted. He started simple. He watched how his cousins, and others, interacted with his content. He used the subversive power of the web to create a cost structure and distribution channel the incumbents couldn’t match. He kept his mission modest enough that he could easily be dismissed, until he couldn’t be ignored.
There are so many lessons entrepreneurs looking to disrupt large industries can take away from this talk. That’s why Salman Khan’s TED talk is required weekend viewing on BRYCE DOT VC.
I agree. This is medicine’s predicament. I have long felt that governments move in to regulate businesses that appear to have an inelastic demand. Look at the most heavily regulated markets: education, medicine, energy, food. They are all staples that have demonstrated a nearly perpetual revenue stream. The politicians sense this. There is little risk in jumping in to the fray. Just insert yourself into the revenue stream by force and keep your political ideology alive with the siphoned funds. It’s all done in the name of your own good,of course. Which is why it continues.
Politicians are not true risk takers in the entrepreneurial sense of the word. By that I mean, they do not risk their own capital. It is always some other person’s capital (taxed gains, forced levies etc.). Medicine will continue to fall into this trap if we continue to play by political rules. At some point the system must dislocate itself from the politically sanctioned CPT payment structure, from government subsidies and any number of legislative encumbrances in order to meet patient needs instead of third party needs.
I have no idea when this will happen in total. It is already happening in piecemeal fashion. I would like to see it happen peacefully and without giant bankruptcies of the state so that the most vulnerable and dependent are not unduly hurt. I am not so sure though. Political power is tough to unseat. A market based approach often has to be so extraordinarily efficient to beat out a state sponsored competitor that the solution never makes it to the surface.
There is hope though. Companies like Medibid, Hello Health and others are leading the way. Time will tell when (not if) they will win out
A recent excerpt from a blog post at the Touch Consult blog:
All this tells us a few things: 1) hospitals are under the gun to modernize their electronic medical records and 2) they are in a rush to implement ANYTHING that will get them a piece of the incentive pie. Remember, many hospitals receive huge federal subsidies through Medicare and Medicaid. Non compliance will not only put their incentive pay at risk but could potentially risk penalties in the future.
In the end rushing to implement such large systems as EMR’s may prove risky…
So I went to the drug store the other day to pick up some cold remedies and I noticed that Allegra (fexofenadine), a popular allergy medication was now being sold over the counter (OTC). I have used Allegra on occasion and have found it to be very effective. When I came home I told my wife about this and she lamented something to the effect that it likely won’t get covered by insurance any longer and so will now be “more expensive” (for us).
This prompted a few thoughts:
1) people universally shop for the best deal. Sometimes the best deal comes in the form of getting a drug through an insurance company. The more an insurance company offers, the more expensive the insurance, but the cheaper the offerings seemingly are. This is only because the cost is hidden in a tax subsidized employer offered benefit called “health insurance.” If insurers offered less, and we formerly had to pay full price for Allegra then the OTC designation would be a welcome change. And we would feel like we were paying less. Instead we feel cheated. The paradox of “insurance.”
2) the patent system allegedly supports the risk that pharmaceutical companies take by giving a company some exclusivity and hence allow them to recoup tremendous investment costs. But what about the consumer? If the ultimate goal of an economy (the division of labor) is to produce goods and services for consumers at the best prices, it seems to me that patents fail to serve the customer. Think of it this way, Company X has perfected a method for pumping out slightly modified versions of drugs that accomplish the same goal: allergy symptom relief. Each drug gets its own patent and a lengthy period of state sanctioned exclusivity protection. During that time period, each drug is designated a “prescription” drug. It then gets “covered” by an insurance company and offered on the cheap through a tax subsidized health insurance. Because the cost is hidden and patients do not incur the actual cost, they are less discriminant and demand the new medication. All the while the company makes a nice profit which it then pours into its new pharmacological offering. The drug comes off patent, goes OTC, and the pharm company has long since moved on to its next drug target.
Implications:
- the prescription designation seems largely artificial. I realize I am glossing over safety testing etc, but the drug one day required MD permission and the next became “safe.”
- when we buy drugs through insurance companies we paradoxically feel like we are getting a good deal. We’re probably not. Pharm companies focus their efforts where they can make a profit. But when the customer is removed as a referee in the profit loss game, his needs become secondary. Put another way, the customer was never able to discriminate between equivalent offerings and thus never able to signal back to the pharmaceutical company whether his hierarchy of needs was being met. The loss is all of the undiscovered drugs that have never been produced simply because pharmaceutical companies didn’t have to. In a less patent laden world, companies would focus less on obtaining patents for equivalent offerings (Claritin vs Allgra for example) and more on moving on to addressing a new set of consumer needs.
So besides this blog, which claims a small but loyal readership, I have begun to use Tumblr in other ways.
I have created a few private blogs.
One is a blog that I have used to keep track of the growth and development of my baby son. It is akin to the baby book that some of our mom’s kept over the years. I find Tumblr ideal for this because I am on the computer everyday and it makes it easy for me to write a quick note or two on some fun new thing that the little guy is doing. In time this will become a treasure that the family will be able to look back on. It’s valuable for two reasons: 1) if you don’t write things down as they happen, you’ll likely forget the details 2) Just the fact that you write things down shows that you took the effort to cherish your own personal family history. Pretty special.
The second personal blog is what I call a challenge blog. I started doing it in December and held off on writing about it until I saw how it would go. It’s a space where I organize thoughts, goals and plain “to-do” lists. Some days I just write the daily errands list. Other times I reflect on something that I want to improve. In short, I find it helpful to use this blog regularly, early in the morning (so that I can then refer back to it in the day) and to compile a brief summary at the end of the week. Seems to be working well for me. Although some computers at work block tumblr as a “social networking” site so it’s become less convenient lately. Writing things down definitely helps focus the mind and it gives me a sense of calm and purpose when identifying where I need to place my attention next.
I am honored to be working with the Medical Students at the Wright State Boonshoft Medical School on Radio Rounds, the only medical student produced radio show in the country. My first episode aired on Superbowl Sunday. Right now the show airs on Sundays at 12 noon on the Wright State airwaves. And it can be picked up on iTunes as a podcast.
It’s nearly cliché at this point to say but, when designing software, less if often more. Unfortunately clichés are often clichés for a reason: they are true. And truth is not ALWAYS self-evident. Even when you think you’ve designed in the most minimal, elegant format, you’re often wrong. We learned this recently…
… and cut malpractice claims. So read a recent headline out of Reuters. The article highlighted a study published recently in the Annals of Surgery which examined a checklist system used in the Netherlands. The authors found that many of the medical errors exposed by lawsuits were related directly to items covered by their checklist system. They felt that many of these error claims could have been avoided if a similar checklist was in place for those episodes of care.
Atul Gawande, famous surgeon, patient safety advocate, and best-selling author of The Checklist Manifesto agrees. Gawande of the Harvard School of Public Health has been pushing for the worldwide adoption of checklists throughout all walks of medical care as a simple, cost effective means of reducing medical errors and enhancing patient care. Malcolm Gladwell had this to say about Gawande’s book: …
“ An authority isn’t a person or institution who is always right — ain’t no such animal. An authority is a person or institution who has a process for lowering the likelihood that they are wrong to acceptably low levels. ”
I mentioned in a previous post that we have a little boy at home who has just learned to walk- now run. What is interesting about watching my son learn to walk is that there seems to have been a trade off going on. Every baby’s experience is different of course (friends of ours said that their son never crawled, just went from sitting to walking). But here is our experience.
Pretty soon after our little guy started crawling, he began pulling himself up to standing. Then he began “cruising” (walking while holding furniture for balance). I was kind of amazed how fast he went from sitting and not moving much at all to the cruising phase. Then there was a lull of a a few months. He was clearly getting better at balance, getting faster at crawling, standing more upright. But he wasn’t making that leap to walking solo. After a while it looked to me like he had the balance and strength but he just wasn’t fully doing it on his own. I noticed something: at the same time he was standing and cruising he was also learning how to crawl very quickly. Almost to the extent that his speed seemed to preoccupy him away from making advances in walking.
Now I could be totally making this up, and this could just be my warped view of what things looked like, but it drove home 2 points:
1. There was a real trade off going on. He seemed to forgo walking in favor of moving faster by crawling which, at the time was a more efficient (and less painful) means of locomotion
2. There may be long periods of real, but barely perceptible growth going on that don’t appear like milestones but are every bit as important.
About the first observation. Obviously when you first learn to walk, you fall a lot. It probably hurts. It’s clumsy and slow. At this stage, the little guy is moving with some purpose- “I want that remote control over there so I can put it in my mouth.” He’s soing to “choose” the mode of locomotion that ultimately fulfills his goal with the least effort and pain. As he continues to experiment with walking he gets better: less falls, more steps, faster motion. Because in the end crawling is less efficient than walking, and walking involves less skinned knees, he makes the transition. Eventually he rarely crawls and he’s off to the races.
The second observation is interesting as well. Our bias in this world is always toward what we can see. We don’t believe it until we see it. It doesn’t look like progress is being made until some inflection point or milestone is met. But progress is being made all of the time. Sometimes it’s just on the inside.
“ Society is a collective concept and nothing else; it is a convenience for designating a number of people. So, too, is family or crowd or gang, or any other name we give to an agglomeration of persons. Society … is not an extra “person”; if the census totals a hundred million, that’s all there are, not one more, for there cannot be any accretion to Society except by procreation. The concept of Society as a metaphysical person falls flat when we observe that Society disappears when the component parts disperse; as in the case of a “ghost town” or of a civilization we learn about by the artifacts they left behind. When the individuals disappear so does the whole. The whole has no separate existence. Using the collective noun with a singular verb leads us into a trap of the imagination; we are prone to personalize the collectivity and to think of it as having a body and a psyche of its own. ”
