Giving, Mentoring, and Financial Literacy

This morning, I had the opportunity to attend a breakfast that was hosted by the United Way and sponsored by a central Maryland for profit organization (so that the money did not need to come from United Way donations). I was able to invite guests, and I chose to invite two.  The first is someone with whom I run who is a third year law student at another local university in whose professional success I have taken an interest while I have gotten to know her over 3+ years of marathon training.  The second is a graduate of the Johns Hopkins Carey Business School who continues to look for the best matching full time job whose success is of great interest to me. I believe they both appreciated the invitation and opportunity to network, hear about the United Way, and hear the speaker. I believe it is a critical professional responsibility for me to provide opportunities like this for individuals for whom I have some mentoring role.  And it is just fun to have people I know with whom to discuss the speaker afterward.  

This morning was also great as I had a chance to meet staff from Johns Hopkins Hospital, the University of Maryland Medical System, and other local employers.  And the speaker was Peter Franchot, Maryland's state comptroller.  

He talked about many things.  Working across party lines with the governor was one of the most interesting topics.  But I was most impressed by his discussion of a financial literacy program that was originally developed in Fairfax, Virginia, and has been adopted in Prince George's county, Maryland.  He was hoping that all other jurisdictions in the state would adopt it.

I had a chance to ask him a question and he made a fascinating observation.  I asked whether there was enough long-term data from the implementation in Fairfax to know if kids later ended up with improved overall well-being or a better quality of life.  His answer was essentially that there is a lot of information supporting the idea that financial literacy leads to improved well-being.  He did not think that we needed a big study to know how many of the kids who are exposed to this particular program would retain the information moving ahead.  But he concluded by mentioning that he knows lots of people who make a lot of money but who are not happy as they do not understand how to create wealth, how to gain control of their funds, and how not to spend everything.  Thus, even for those who are highly successful he indicated the importance of financial literacy to give people piece of mind and to give them a feeling of certainty as much as possible,

That was a powerful observation.  And one that I am not sure all high income individuals appreciate.

As an academic, would I like to have a better idea of what proportion of kids retain what they learn in eighth grade ten years later and ask whether there might be an alternative program that costs less to implement and that has a higher retention rate?  Of course, that it the type of question I'd ask as an academic.  But am I just glad that someone in state leadership is promoting this important topic?  You bet.  

And this type of insight is why I like to attend these types of presentations and invite those whose professional development might benefit to join me.  Their future is longer than mine.  Hearing about important public policy, new ideas, and tough decisions (things I have heard about over the years at these breakfasts) will affect their years of work and retirement for more years than I will be affected. 

Mentoring and Parallels

I am on a committee at the University level that is looking at issues of faculty mentoring.  It is interesting to me that most faculty think of mentoring only as research mentoring.  I think of mentoring as "life mentoring."  If a person can help me improve my research, great.  But when I think of a mentor, I am really looking for someone who can help me think through decisions.  These could include decisions about:

• My career
• How to figure out how life and career fit together
• How to focus my activities or have them remain diffuse
• How to think about research, teaching, and service
• How to think about leadership

This is clearly a lot more than just research.  Does it mean that everyone should seek mentoring in all these things?  Of course not.  But it does suggest what I try to do when I mentor.

Am I good at all of these?  I like to think that I am at least decent at each of these.  But I am not necessarily great at all of them.

Today, I had the opportunity to meet with someone with whom I'd exchanged mentoring emails for a year and a half.  She was a Penn State Schreyer Honors College graduate just like I was.  (Although I graduated 23 years before she did.)  And we chatted.  What types of opportunities she has taken.  What she is looking for.  Whom I know in the DC area doing similar things.  My experiences in parts of the world she is going to travel to.  How I'd made a major transition in my career almost three years ago.  And how I'd been successful without being laser-focused.  All of this helped to answer a variety of questions she had.  Does she still have most of them?  Probably.  My story is just one example.

But sharing that example shows that it is possible to succeed and lead a full and happy life while doing a whole bunch of different things and getting to know a whole bunch of people.  I emphasized on multiple occasions how a lot of what makes me happy is imagining how exciting things can be, figuring out how to connect the dots for myself or others, and then sharing the experience afterwards.
This is what my career is about.  Not a particular line of research.  (Although I do like eye care.)  Not a particular class to teach.  (Although I do like teaching microeconomics.)  But all of the things that come along with research and teaching and developing new programs and implementing existing ones, and figuring out just how it all fits together for the benefit of those who are helping to make it happen and for the benefit of the faculty and students who make up the educational enterprise.

In an economic sense, I like to think that it is a matter of putting things together that might not be obvious to others so that efficiency can be gained.  Seeing new ways to produce more and better outcomes.  To get the best out of a situation.  

The Risks We Are Willing to Take

There was just an article in the Wall Street Journal (http://www.wsj.com/articles/poor-contact-lens-hygiene-puts-users-at-risk-of-serious-infections-1441648413) that provided a list of poor hygiene practices for contact lens wearers, talked about the proportion of contact lens wearers that take these risky behaviors, and discussed the possible impacts of these poor hygiene practices.

The numbers are notable.  According to the article there are over 40 million contact lens wearers in the United States.  And, according to a CDC survey, ninety-nine percent of contact lens wearers reported at least one questionable practice. 

For disclosure, I am a contact lens wearer and I will occasionally shower with my contact lenses in.  Why?  Because I started wearing contacts mostly due to the fact that running in glasses is not fun.  I run in the morning.  I then take my shower and get on with my day.  Since I use daily disposables, I don’t face any of the risks that are associated with wearing lenses that need to be stored.  And since I actually dispose of my lenses each day, I don’t expose myself to any of the risks of sleeping in contacts and using them too long.  I had actually not realized that just showering in contacts was a bad thing.  But I’d literally get just an hour to three hours (depending on how long I’m running) use out of my contacts if I didn’t shower with them in.  Still, there are risks associated with organisms that are in tap water that I expose my contacts to when I shower.  Seems like a pretty low risk. 

But then again, the risks described in the article also seemed pretty low to the people who experienced infections that leave them at risk of permanent damage.

And why are people willing to accept the risks?  Because, as with many behaviors, it is about saving time (not having to take the contacts in and out and deal with cleaning) and money (replacing them less often than they should be). 

So, for future contact lens development, anyone who can find a way to reduce the risk could make a lot of money.

And, it makes the discussion of a tradeoff between wearing contact lenses and undergoing laser surgery to correct refractive error and even more interesting discussion.

Finally, it gives eye health educators something to consider in how they talk with individuals who need contacts to help them grasp what the risks are and the importance of avoiding the risks where possible.

Do I expect everyone to avoid every risk?  No, that is not human nature.

What I hope is that reading articles like the one in the Wall Street Journal or hearing from health educators will give contact lens wearers a better understanding of the risks so that they can make well reasoned decisions about the tradeoffs between different types of contact lenses and different behaviors with the contact lenses in. 

Soda and Cities

The ongoing issue of how public health officials should be trying to minimize overweight and obesity in the United States brings us once again to the issue of sugar-sweetened sodas.

A piece in the Wall Street Journal shows how things are playing out in San Antonio and several other places around the country.

The soda industry claims it is being singled out.  The soda industry counters that it has made large donations to programs in cities that encourage exercise and seek to improve public health.

The key question is whether this is a good business decision and whether it is a good business decision that can overcome regulatory pressures.

Of course, anything that can be done to try to limit public employers taking away soda as an option in vending machines or taxing soda is going to help the soda industry maintain demand for its product at current levels or even higher levels.  So, as long as the choice to make a donation and get positive press leads to sufficient positive publicity to maintain or increase demand this is essentially part of the marketing budget.

The key question is whether public officials should then decide to treat soda any differently, particularly regulating or taxing it less than they would otherwise.  Whether this happens or not is truly an interesting story of regulatory capture and political lobbying.

If local jurisdictions can keep the money received and good will for the companies generated by private, for-profit companies partnering in public health efforts truly separate from any consideration of whether those same companies can be taxed then perhaps the public officials can have their cake and eat it too.  (Perhaps the old cliche should be changed to have their healthy snack and eat it too?) But if not, it may be another case of regulatory capture in which a substance that clearly contains a very large amount of sugar and clearly is associated with a large amount of sugar and calories is allowed to remain on the market and not be questioned in public health promotion efforts.

It is interesting to ponder how I would want to act if I were a member of a company that could be regulated very strictly by the federal government.  And it is interesting to consider whether cities should just turn money down to minimize even the potential for seeing this as a conflict of interest for the regulator.  

Vaccine Injury Payouts

A very interesting article in the Wall Street Journal today discussed the increase in payouts for vaccine related injuries.  This is interesting for a number of reasons:

(1) The claims are paid from a no fault system
(2) The system was designed to avoid discouraging companies from making vaccines and individuals from getting vaccines
(3) The increase in payouts has been for injuries related to the administration of the vaccines

It seems like the risk that this was supposed to deal with was a risk faced by the manufacturers of their vaccines.  If what was in the vaccine caused harm to someone (even after all the appropriate testing had been done to get the vaccine approved) the company would not suffer economic consequences.  This seems to be in line with item #2 above.  And if patients feel confident that they will be compensated for harm and not have to go through a traditional court to do so, they may be less likely to be discouraged to get a vaccine.

However, the risk of causing an injury to a patient because the vaccine is administered too high in the shoulder and may cause damage to the musculoskeletal system, is not a risk that the manufacturer has anything to do with.  This is a risk created by the health care provider (and potentially the health care system for whom the provider works.)  Covering these shoulder injuries under the same claim system reduces the risk for a very different stakeholder.

And given the actual number of cases, the trajectory in the number of cases, and the size of the awards, it is easy to imagine that these injuries will could account for a very large proportion of the payout.

Policy makers should take stock of the situation and decide whether this removing the risk from the providers and the organizations for which they work is appropriate.  While there may be clinical risks from the vaccines that show up in 1 in 1,000,000 patients that would never be detected in a clinical trial for approval of the drug, appropriate administration of the vaccination is a medical practice that is completely under the control of the practitioner and for which there are clear best practices.  Placing the risk back on the provider and the organization for which a provider works would provide a very strong incentive to vaccinate appropriately.  Unless it is determined that there is so much uncertainty that the government should also bear this risk in order to avoid discouraging the providers and organizations from administering the vaccines.

This tradeoffs here are interesting.  But the level of risk and the control over the risk seem much different.  Public policy should not be "one size fits all" for solutions. 

Owning My Position

So, I have held my position of Vice Dean for Education at the Johns Hopkins Carey Business School for a little over two years now.  Today, I felt for the very first time, that I fully "owned" the position.  I think it is worth thinking about what it means and why it took me so long.

Today was the first day for the fourth cohort of the dual degree program in which students get an MBA from the Carey Business School and the MA in design thinking program at the Maryland Institute College of the Arts.  We call it the MAMBA program.  That is MA and MBA together.  As a business school we generally emphasize the MBA part over whatever dual degree program we work with, but the pronunciation is so much easier as MAMBA rather than MBAMA that we decided to go with what students were calling it.

In any case, I was the first speaker after an introduction by the Carey Business School program manager.  While I did not have any slides to present, the screen behind me had the Carey Business School home desktop that is found on all the classroom computers.  It says "Teaching Business with Humanity in Mind."  That is a key phrase that clearly reflects the value of the school.  I did not go so far as to say, "This is my idea of what it means," but I did not attribute it to the Dean today either.  Next time, I will tell students, "This is what I think it means."  And while I mentioned the Dean a bit in the presentation (for the difference that he has made in the school), for this day I simply presented that as a useful fact for students to be aware of.  For the first time, I really focused on my story of Carey.  My ideas about Carey.  Giving credit where credit is due to parts of the school like Career Development, Student Services, Academic Advisors, and program administrators but it was my story.  Not any "standard" story.  Not the Dean's story.  But my story.  And in the process of telling my story, I had the chance to introduce myself to each student individually before my welcoming statements, and I had a chance to speak with numerous students during the first break. That included one who was interested in fashion, one who worked for Cover Girl, one who works at Under Armour, and one who was involved in a large capital campaign for Everyman Theater.  And in the future, I will talk to each of them to get a better feel for their incredible sets of interests.  This is now a class that I will begin to get to know. I will come to understand. And I will represent myself to--particularly in a case study that we will discuss on August 4.  Thus, it really is becoming my position, my set of ideas, and my set of interactions with the students whom I will then be able to follow through the entire program.

In the meantime, I do wonder why it took so long.  I believe that part of it was really taking two years to settle in to understanding all that I need to know about the field. But it is also the case that I now feel like I have a set of connections that I could ad for the students.  What do I know about Hunt Valley in the area where the Cover Girl offices are located?  What do I know about local fashion?  How about Under Armour?  How about theater?  I mean, the student said I sounded like a local theater aficionado.  I don't think of my life that way, but I do realize that I have been to see local theater maybe a lot more than others and that it is a critical part of my life.  So, this year, I truly felt that I had something to add to these students' experiences and to these students' lives rather than just giving a cursory introduction.  I could not have said that a year ago.  But I can say it now.  

And that is a good thing for staking out my place in the school.  Contributing to the success of the school. Contribution to the future success of the students.

I find it interesting to hear others' stories of how long it took them to understand their organizations well enough to feel completely comfortable in their positions--particularly when representing their organization to outside or brand new customers.  

It’s a Matter of Perspective

Sometimes, it is hard to remember that not everyone comes to the table with the same information, the same background, and the same ideas of cause and effect or automatically draws the same conclusions when presented with the same data.  Today, I had a fun example of that at the grocery store.  But it made me think—what are the assumptions that I have, what are the assumptions others bring to a discussion, and if I miss or fail to anticipate the differences what could be the impact.

As it is Father’s Day, I have three things that happen almost every Father’s Day: I run the 5K that benefits the NICU at GBMC (a local medical center at which my kids’ pediatrician is the Chair of Pediatrics); we take my middle son to his boychoir’s summer camp; and I wear my “World’s Greatest Dad” t-shirt, that really isn’t appropriate to wear any other day of the year. 

The day started off as usual.  A solid 5K run.  I was second in my age group to a guy I had been running with since the 0.5 mile mark but I couldn’t shake him and he had more than I did at the end.  My youngest son ran his best race ever by over 2 minutes and came in third among boys 10 and younger.  My good friend and training partner was second female overall.  And we won a team trophy for the second year in a row. 

And, after this entry, we will take my son to camp.

But this is a story about the shirt.  Walking to the milk/cheese/egg/yogurt aisle of the grocery store, I was greeted by an employee who mentioned that he had the same shirt (minus the foot and hand prints of my kids).  We got to chatting, and I pointed out that the shirt has only two sets of prints.  I now have three sons.  And the son whose baby or toddler feet are on the shirt now has his driver’s permit. 

I thought it was a comment about growth and long-term parenting goals and how long items of clothing that only get worn once a year last.  The employee said, “That’s a testament to you that it still fits so many years later.”  The employee was a little hefty.  I thanked him and moved on.

But I really thought about it.  I just take for granted my running and my fitness and my weight.  But there are plenty of guys my age who have put on a few pounds since their now 15 year olds were 2 or 3.  So, the fact that I have a shirt that still fits from when my kids were little makes a big impression.  Maybe he has had to replace his entire wardrobe.  His experience and assumptions are a lot different.

As an employee at the grocery store I may never see again, understanding his assumptions and impressions is not that important.  But when this happens in the workplace and people cut off conversation early and don’t explore that they may have drawn different conclusions about the same piece of data and then understand why—bad things can result. 

It’s a reminder to me to make sure that I always ask what conclusions my colleagues have drawn and if we’ve drawn different conclusions follow up with an effort to uncover what their beliefs and assumptions are and ask “Is there more” until we understand how differently we are approaching things. 

First Impressions are Key

Yesterday, I had the pleasure of meeting a member of the Department of Microbiology and Molecular Immunology for the first time.  He came to visit me in my office at the Johns Hopkins Carey Business School and was impressed by the view from the 12th floor of the building in which we rent space in the Harbor East area of the city.  He was visiting from the Johns Hopkins Bloomberg School of Public Health.  While we had been colleagues (in much different departments) for 7+ years in public health before I changed schools, we had never met.  It actually turned out that our commonalities went much further back--having graduated from the same College at Penn State in 1991.  That was how he started the meeting.

Then, I took my turn.  As an economist, I am not sure if he had any idea of what I brought to the table in terms of understanding the science and the underlying topics that he was about to discuss.  Or that I would have much room on my plate for new activities.

However, I shared with him all sorts of different projects I had worked on.  Pancreatic cysts.  Wegener's granulomatosis--studied by someone in the vasculitis center.  Surgical treatments for dysfunctional uterine bleeding and the different between ovulatory and anovulatory bleeding.  And my eye care work.  And I could speak about some of these with some degree of authority.

After I closed my 5 minutes of "isn't cost effectiveness with any type of condition fun?" I made the comment that I wasn't sure if I had told him more than he had ever wanted to know about my background.

He said, "No."  And he commented that it was actually good that I had worked on a lot of different things that obviously fascinated me and kept my attention.  It suggested to him that I might not shy away from yet another new topic.  He was coming to talk to me about genetically engineered mice.  That was new.  But it was exciting.

It was part of a two day period in which I heard about everything from mice to HPV to worrying about a student's dissertation to admissions issues to our online MBA to accreditation and many other topics. It is part of what I like about my job--so many different aspects constantly shifting.

Sometimes colleagues think I should be more focused.

But I learned (as I have many times before) that sometimes colleagues are looking for those who can be open to new ideas, think about new things, and expand their horizons.  First impressions are key.  

Business with Humanity in Mind

I have both a personal blog and a professional blog.  It is usually pretty clear to me which blog an entry belongs in.  For this one, I debated.

I don't usually think of writing about the Roman Catholic mass at which my middle was confirmed as a professional blog topic.  So, let me share a few of the interesting personal details and then give three quick lessons that tie over professionally.

First, this was by far the most inspirational Confirmation mass I'd ever experienced.  That includes my own many, many years ago, and about five or six I played for at St. Pius X over the years including my oldest son's confirmation.  Why was it so inspirational?  My youngest son was involved in ushering and helping to make sure the mass ran smoothly.  My oldest son is--as I am--an alumnus of the musical group that plays and no longer plays with them at our church, but did come to see his brother get confirmed.  And a young woman whose singing I have heard off and on for almost a decade gave the most beautiful solo for a song Sacred Silence I'd ever heard.  Plus, the gentlemen who had led this group of youth getting confirmed at the start of their journey and who had passed away in December was remembered in a wonderful way.  All inspiring enough.

But then the three other things that link to professional experiences.

First, I received the wine as part of the Eucharistic celebration from a young woman whom I had taught in religious education years ago.  It is a sign of how long I have been part of the parish.  It is a sign that the kids I taught are not just "growing up" but truly maturing.  Coming into their own.  And seeing the process is amazing.  I have helped doctoral and masters students through their studies.  I have mentored undergraduates at my undergraduate alma mater.  But this has been a year to see one of my old religious education students first become a lector and then become a Eucharistic minister.  It shows how being a part of one organization for so long can give a perspective on the growth and development of the organizations and those within it that just can't be appreciated in a year or two.  And when I appreciate the long term perspective, it also makes me think of the range of stakeholders, and to being to practice what the Dean of the Johns Hopkins Carey Business School calls "business with humanity in mind."  I like to summarize it as realizing that there can be a lot of humanity that can be affected by business decisions other than the most immediate stakeholders, i.e. customers and owners.

Second, the idea of the sacrament of Confirmation in the Roman Catholic church is about making a big commitment.  And as I think about business and business with humanity in mind, I think about commitments.  Becoming an entrepreneur is a commitment.  Becoming any type of professional is a commitment.  Becoming a leader is a commitment.  Sharing idea--commitment.  Everything about being successful requires commitment.  And thinking about business as not just focusing on the bottom line but focusing on all the stakeholders including the customers, the employees, the community immediately around the business, and the entirety of humanity requires a commitment.

Third, my son got a "shout out" from the Bishop at mass.  He was one of at least two who in their letters to the Bishop mentioned the feeding the homeless service experience.  This service experience exposed the youth in our parish to problems in the city.  These are not exactly the same problems that led to the recent unrest in Baltimore, but the roots of at least some of the problems are the same.  The gentlemen who had started the journey toward Confirmation with this year's class but passed away half way through told the children after the service experience--you fed these people today, but who will feed them tomorrow, next week, next month, or next year?  In part, there is a service answer to this question.  But in part, there is a business with humanity in mind answer to this question.  Why are there not jobs?  Why are there not economic opportunities?  Why are opportunities lacking for these people?  And what is the meaning of business?  What is the role?  How can we who train future business leaders and the current and future leaders find ways to create economic opportunities in these areas?  How can business consider all the stakeholders and help everyone?  Is it ultimately business's responsibility?  No. There is charity and there is government.  But if business stays only at the sideline and does not figure out how to contribute, there will be something missing.  At least some of the solutions to the problems that we see in the world are, in fact, ones that business can solve if we have creative leaders who can find ways to convince others of the value of their ideas, secure resources, and move themselves and those working for their organizations ahead.  

So, this year's confirmation mass illustrated three important ideas for business with humanity in mind--seeing the long horizon that gives a different and more informed perspective on the full scope of stakeholders, making a commitment to something, and having business as part of the solution to the problems of society--not just a cause of problems in society.   

Affordable Care Act and Disparities in Access

A new research brief from the Commonwealth Fund focuses on the potential relationship between the Affordable Care Act and a variety of measures of disparities.  In short, the authors of the brief used data from the Behavioral Risk Factor Surveillance System to look at the relationship between insurance and several outcomes that may be expected to change after the affordable care act.  These outcomes were not having a usual source of care and foregoing care because of cost.  The Behavioral Risk Factor Surveillance System is a survey administered by the Centers for Disease Control in coordination with state departments of health to hundreds of thousands of respondents each year.

For the two outcomes of interest, the assumption is that having a usual source of care is better and that foregoing care because of cost is not a good thing.  Before we look at the implications of the Affordable Care Act it is worth thinking just a little more about those two issues.  

First, having a usual source of care is supposed to increase the provider's awareness of the conditions a patient has and, as a result, enable the provider to offer better care. That is important for chronic conditions.  It may not be as important for purely acute events. A key question is at what point it is useful/necessary to establish a relationship with a provider who will become a usual source of care, so that when a person has a chronic condition at some point they will get the best care possible.  Does one need to have a long-term and usual source of care before the incidence of the chronic condition or would it suffice to establish a usual source at the time of the incidence of the chronic condition.  In general, the expectation is that a longer relationship is better.  

As for going without care as a result of cost, that is an even more interesting question.  Specifically, as an economist, I would say that price is supposed to lead people to forego some services.  That is the role of price in a market economy.  Some people cannot afford some things and so they do not consume them.  The trick, of course, is whether the average person can ascertain whether the care that she went without was necessary care or was discretionary care.  We want people to think about the medical and health care resources they are using and to not assume that everything has zero opportunity cost.  But we don't want people to forego necessary care now that could potentially help to control costs later.  This is a tough question to address.  But, I am willing to accept that there is an issue if people feel they are not able to get care simply because of cost.  It is a signal of something important, although economists may debate just how important.

Not surprisingly people who have insurance are more likely to have a usual source of care and less likely to fail to get care because of cost.  Not only are the negative outcomes less likely but the disparity among individuals of different races and ethnicities decreases.  

There are also reports of the Affordable Care Act leading to more insurance--not surprisingly--and diminishing the racial disparities in insurance.

Thus, if the newly insured individuals behave and have success at accessing care that is similar to those who were already insured, we would expect to see the existing racial disparities diminish.  This would be a very positive outcome.  The key question is whether the rest of the system will adapt and evolve in ways to make finding a usual source of care and obtaining care as easy for the newly insured as for those who have historically had insurance.  Even the authors of the brief are careful to title their piece in a way that reflects that the past results may not reflect future outcomes. 

Affordable Care Act and Changes in Uninsured

A press release about a Gallup poll that provides details about the number of uninsured individuals in the United States.  The number has gone down from 17.3 percent of the population to 13.8 percent of the population.  The article then provides information on several states that have had more substantial decreases in the percentage of the population that is uninsured.  In those states, hospitals have seen the proportion of patients in emergency departments or general admissions decrease.  In addition, Medicaid has increased coverage.  The hospitals have improved financially.  A key question is whether this is a causal relationship.  Even more importantly, if the law's implications are put into jeopardy by a current supreme court case and there is no contingency plan, then it is truly not clear what will happen to hospitals' financing positions.   

Comments from a Student Organization Event

[As you read this, remember that these words were meant to be spoken.  Not every sentence is necessarily complete and some repetition is useful in the spoken word that may not appear in a purely written form.]

Opening Remarks for Unlocking Healthcare Innovations and Investments

21-February-2015

To begin, I would like to welcome everyone to the today’ symposium on Unlocking Healthcare Innovations & Investments. Today was organized by the Health Care Business Association students, and I am very impressed by what they have put together.  Other sponsors include the Johns Hopkins Carey Business School, the Johns Hopkins Bloomberg School of Public Health, the Johns Hopkins Alumni Association, and Sage Growth Partners (a growing healthcare strategy, technology and marketing firm focused on solving the complexities of healthcare in both provider and payer settings.)

With introductions out of the way, let me offer a few thoughts about investment and innovation in health care.  You will find that I tend to refer to investment in innovation in health care as I think that the two are inseparable at this point.  Of course there are some things that work well that are worth further investment, but there is lots of room for investment in innovation so I will focus on the two together.

When I am asked to set the stage for today’s type of discussion, I usually try to tie in something from popular culture.  For today, I will quote and then paraphrase some lyrics from the song Closing Time by Semisonic. Until I looked for the lyrics to make sure I had the absolutely correct wording, I had forgotten just how old the song is.  It dates back to 1998.  Think about all the innovations in health care in the 17 years since that time—SARS had not happened; Ebola was not in the news; measles outbreaks were rare; Medicare Part D and several other innovations to Medicare and Medicaid have happened since; iPhones had not yet been invented; there were no “health apps”.  Also, 17 years ago was already a decade after the first time I took a course about the United States health care system in the fall of my sophomore year.  In 1988, we were just five years after the first major change in how Medicare paid hospitals; we were just passing the Medicare Catastrophic Coverage Act which would face repeal a year later; and we were approaching a time of rapid new pharmaceutical development.

Having a view of 17 years since the song I am about to quote and 27 years since my first course on the US health care system, provides me with a lot to think about in terms of where innovations are necessary, what might work and what might not, how to evaluate those potential innovations, and how we might incentivize and value investment in those innovations. 

In any case, a line that comes up more than once during Closing Time and serves as the line I will quote states, “Every new beginning comes some other beginning’s end.” In health care we could paraphrase to say, “Every innovation comes from some other innovation’s obsolescence.”  The rhythm might not work as lyrics, but let’s ponder that for a moment.  And let me repeat it: “Every innovation comes from some other innovation’s obsolescence.” 

How is this helpful?  I want to set up a juxtaposition of what we have and what we hope to get from the health care system to drive our thinking about the opportunities for investment in innovation. 

Those of us seated here this morning recognize that those opportunities are nearly endless.  That is part of what makes health care an incredibly exciting industry.  And, if we extend from just “health care” to anything having to do with individual or population health, the list of opportunities for investment in innovations to replace other obsolescent innovations grows even longer. 

The long-term horizon on health care gives insight into the fact that this message is not entirely new.  For many years, decades even, we have heard about what must be done in order to make the system work better and cost less with an impending sense of crisis.  Of course, I could have written exactly the same sentence about the sense of crisis when I took my first blue book exam in my first class on the US health care system at the start of my sophomore year at Penn State.  There were high and supposedly unsustainable levels of expenditures.  Rapid inflation.  Overutilization.  And consumers who found it challenging to distinguish between necessary and unnecessary care. 

I’ve already listed a few changes in the past quarter century.  Some relate to the consumer issue.  For example with health apps, there is much more information and it is much more easily accessible to individuals who are acting more and more like consumers when they are patients.  This may help consumers become “smarter” or learn how to use available information better.  However, sometimes the amount of information is so large that instead of differentiating between useful and not so useful care, consumers are faced with differentiating between useful and not so useful information. Innovations in financial incentives may rapidly increase the reward for better care and a better ability to understand and seek appropriate care.

Also in the 27 years, the federal government has continued to pay for more of the costs and to pay for the costs for a greater proportion of the population, and the private sector has entirely new roles.  More of the coverage that is financed by government ultimately goes through the private sector.  There are new public-private partnerships, and there are areas in which investors have found it profitable to bring their money and invest in talent to make money and improve outcomes.  All of this makes now a great time to consider the opportunities for investment in innovation in health care. 

Now, let’s ponder a little more deeply why the United States (and really the world’s) health care systems and economies make the present an incredibly rich time for innovation related to healthcare and ultimately anything having to do with individual or public health.  In other words, what past innovations are becoming obsolescent and creating opportunities and needs for new ones?

My list of reasons is certainly not comprehensive.  With the intellectual talent in this room, we could spend the entire day just listing and elaborating on challenges to individual and public health and the health care that we rely on, alongside our behaviors, to maintain and improve health.  Among my list of reasons you will find some that are clearly a matter of choice within the population and by the government, some that are inexorable given basic demographic forces in the United States and around the world, and some that are due to the system that has been set up for delivering and financing care in the United States.  Let me briefly discuss five opportunities for investment in innovation.

The first comes from public health.  In the news late last year and early this year more than at any other time in the past several decades has been the threats that arise from parents choosing not to have their children vaccinated.  With a sufficiently large proportion of individuals unvaccinated in an area, the herd immunity that protected the previously small number of unvaccinated individuals begins to disappear.  The reasons for the choice not to vaccinate are many.  I am not here to discuss or debate those reasons.  However, I want to acknowledge the threats that arise to population health from the choices of individuals.  An entire series of innovations could address mechanisms of delivery that are perceived to be safer and mechanisms for communication that are more successful in bringing to light the risk-benefit comparison for vaccination.  A return to higher levels of vaccination would decrease demands on the public health system that is forced to track and attempt to convince to vaccinate, decrease expenditures treating measles, and minimize the risk of death from measles.  All of these goals would be worthy of investment if an innovation in this area were on the horizon.  In this case, new innovations are motivated by the perceived obsolescence of vaccinations as we have known them in a subset of the population. 

A second opportunity for investment in innovation also comes from public health.  Conditions like HIV, SARS, and Ebola have captured the world’s attention as conditions that were either new to humans or that seem to return to humans on a regular basis.  The opportunities to innovate by developing vaccinations, developing cures, and implementing improved ways to control are many.  The potential economic consequences, in both high-income and low-income countries, are sufficient that if new methods and strategies for control are developed there will be plenty of opportunity for investment.  A key question for interventions for this set of threats is whether there is a way to make the investment profitable for a private corporation or whether there will have to be government investment or specific incentives to create the opportunity for private profit.  In this case, the opportunity for innovation comes from the obsolescence of the ways in which we deal with infection and the rapidity with which we learn about new disease.

Third, the population is aging. The ratio of the number of individuals who are at what has traditionally been thought of as “working age” relative to the number of individuals who are at what has traditionally been thought of as “retirement age” continues to shrink in the United States and around the world.  The ratios are moving to levels previously unseen. The changes create numerous opportunities for investment in innovation. 

Innovations could increase productive and healthy life years for older individuals.  This could be associated with consuming more in traditional post-retirement age.  It could also be associated with keeping individuals in the work force for longer periods of time.  The market implications of keeping individuals in the workforce longer may have an important impact on the health and economic outcomes of the labor market for the rest of society.  This makes the value of investment in innovation in this area challenging to calculate. 

There are also opportunities to maintain current length and quality of life in more efficient and less costly ways that can be cost-effective and beneficial to society. The economics may be as favorable as extending life and health at a higher level of expense.  Controlling costs for current health outcomes would benefit society, particularly taxpayers, while also directly benefiting older adults and their families who would face lower out-of-pocket expenses and perhaps smaller opportunity costs of their time with better care management. 

Also related to aging is the opportunity for investment in innovation related to dementia care—or better yet prevention or cure.  The demands that are being placed on the United States economy as a result of dementia are huge.  The psychological and social costs are growing as quickly as the economic costs.  Anyone who can find a way to slow or prevent the process will have the potential to reap incredible returns on their investment. 

Each of the opportunities for innovation having to do with aging come from the obsolescence of an economic and cultural system in which a specific age was deemed to be the “right” age for retirement and our systems of caring for those who are frail are overly expensive with large burdens for the individuals, their families, and society.

A fourth opportunity for investment in innovation, this time more specifically in the United States, comes from employers and their employees finding a greater proportion of the total compensation for workers going to health insurance and health care even among the relatively healthy working age population.  So whether there are new treatments, new guidelines, new measures of quality, or new incentives to use the best care possible in as timely a manner as possible, the need for investment in innovation is clear.  The obsolescence here is in aspects of the ways we have financed insurance and provided care. 

A fifth opportunity for investment in innovation comes from the notable increase in the incidence of chronic disease that is related to many things including earlier identification, earlier treatment, an expectation of long-term savings (that do not always materialize), and earlier treatment triggers.  All of these call for innovation in how we manage conditions, how providers interact with patients, which providers interact with patients, and the tools and information we give patients to manage themselves.  The obsolescence here might be thought of as being a function of our understanding of how to prevent and manage chronic conditions and how to manage health versus the rest of our lives. 

I have provided a list of five opportunities for investment in innovation related to health care and to promote individual and population health.  Each of these deals with the obsolescence of something in our health, economic, or social systems.  The opportunities could result in new treatments, new ways of managing care, new behaviors, new facilities (designed with the patient and health management in mind in ways that we have never seen before), new communications, or new social norms. These are just a subset of the opportunities for bright minds who focus on design, or on looking for sources of funding, or on the flow of funds from taxpayers to government to educators and providers, or on the flow of funds from individuals to insurers to providers, to think creatively about how to improve the organization and financing of the health care system.

Where will we find the bright minds working?  Healthcare innovations have come from both the private and the public sectors.  Just because we are sitting in a business school does not mean we completely eliminate the idea that government has something to contribute to innovation.  Rather, we recognize that there is a role for government in supporting those who cannot pay on their own as there is a common good in a healthy population. The key question is how to best balance the public and private sector opportunities to provide funds for innovation.  That balance will come through the public sector focus on research, or building infrastructure, and on educating medical care providers.  And the private sector focus on bringing products to market including pharmaceuticals and medical devices, emphasizing design principles in new products and facilities, new ways of organizing care and new ways of managing care.  To encourage these investments, the government has a role in structuring the assessment of and incentives for potential investments while the private sector determines how to structure investments to maximize the probability of producing a positive outcome. 

The lessons in innovation and investment and not only for present and future health care leaders.  These are important for all industry leaders. Of course, there are some businesses that are designed around keeping individuals or the population as a whole healthy and preventing the need for health care.  There are other businesses that are designed specifically to provide health care to unhealthy individuals.  Both are concerned about health—whether the goal is just to slow the decline in health or the goal is to stabilize health or the goal is to return the person to near perfect health as quickly as possible for as long as possible.

An additional reason for all businesses to be concerned about health is the school’s mission to teach business with humanity in mind.  As we think about the phrase, we recognize that healthy businesses are located in healthy communities.  Thus, all businesses should take an interest in the health of their workers, the health of their customers, and the health of the surrounding community. Productivity decreases with less healthy workers.  And unhealthy consumers have less discretionary income to spend on non-essential goods and services. 

This does not mean that all businesses should using their creative energies toward innovation in health and making investments in health care.  But the interest in health and health care among business leaders should be both broad and deep.

  

I anticipate we will find today’s discussion of investments that have been and can be made and innovations that have occurred and may occur inspiring no mater where our careers take us.  Whether we plan to be directly in health care, in a related industry or simply in an industry that relies on health.  We will hear from leaders who are in the private sector at present but who have had career experiences in both the public and private sector at the cutting edge of innovation and investment in the health care system and in public health. 

We will find the stories inspiring because we admire people who experiment.  We admire people who bring resources to bear on taking risks. And whether the innovations are truly game changers or incremental stepping stones on the path to the future, we admire those who have found ways to push us and our economy ahead.

We will find the stories inspiring whether we hear about successful results or the challenges of and the process of learning from failure.  Sometimes the best and most important lessons we learn in our careers and for our businesses come in the form of failures.  And I anticipate that the inspiration will be what may help to drive someone in this very room to bring on the next major innovation or choice to make an investment somewhere in their career that helps to move the US health care system toward a trajectory that is more sustainable and results in a healthier population over time.

So now it is closing time for my comments.  Let us move on to listening to stories of innovations that come from some other innovation’s obsolescence.