Brown versus Warren: A pre-Election Day view

Back in August, I offered a pre-Labor Day view of the Scott Brown-Elizabeth Warren race for US Senate here in Massachusetts.  I suggested that Warren was in trouble on the emotional front having "failed, so far, to convey in a visceral way who she is and why we should like her."

The polls now show a close race with Warren ahead by several points. I'm hearing otherwise in my unscientific research.  My non-random sample (in Middlesex county) has been college-education, employed men and women who view themselves as being on the liberal end of the political spectrum.  I first ask them how they handicap the race and, without provocation, most then tell me how they really feel.  These are the kind of sentiments I get from men:

He's a good guy who works in a bi-partisan manner.  We need people like that in a divided Congress.

From women:

I feel like she is lecturing at me, and I am tired of it.  I don't want to have to listen to that for the next six years.

From both:

Isn't it a good idea for Massachusetts to have some Republicans in the delegation?

These reactions are in spite of an acknowledgment that they might agree more with Warren's policy prescriptions.

Interestingly, the presence of young Joe Kennedy as the apparently anointed replacement for Congressman Barney Frank may have a spill-over effect into the Senate race.  People seem to take his election as a sure thing because of the family dynasty, but they are uncomfortable with that presumption, even if they plan to vote for him.  How odd if his being on the ballot actually causes cross-overs to Brown!

Speaking of cross-overs, let's consider the impact of the elimination of polling machines--where you just run you hand down a bunch of levers and vote for one party--to the use of paper ballots--where you can't.  I voted early this week because I will be away for election day.  You have to work hard to vote a party line.  The placement of the Democrat and Republican on the ballot is different in each race (President, Senator, Representative.)  While Obama will sweep the state (after all, we really know Romney!) I expect to see a lot of cross-overs this year in the other races in Massachusetts.

Ex-external defibrillator

Is this a trend?  I noticed this excised AED in a building at MIT.  My colleague there suggested that this and others had been removed because of the difficulty in ensuring that they would be properly maintained.

Have others seen this in other buildings where they work or places they frequent?  I wonder if these kind of devices will end up like those home exercise machines, abandoned after a short time.

So what do they do for us?

A recent blog post by Sarah Kliff on Ezra Klein's Workblog sets forth the strategy and plan of the nation's insurance companies to lobby Congress after the election. The purpose:

Moving into a potential debate over deficit reduction, health insurers want to carve out a different role in Washington. Namely, they don’t want to be the bad guys anymore. To that end, they’ll soon start arming their lobbyists with data that argues that other health care sectors are actually the ones to blame.

Check out the charts.  You will be pleased to know that the rate of growth in insurance premiums lovingly tracks the rate of growth in medical costs in the country.  In the 2010s, for example, medical costs rose 54.61% and premiums rose 56.09%.  What that is supposed to tell us, I don't know.

Is it meant to tell us that insurance costs as a percentage of overall health care costs have stayed roughly constant?  I guess so, as seen in this chart:

So, let's think this through.  As health care costs have soared over the decades, the insurance companies' share of the costs have stayed about the same.  That means that they have been unable to implement the kind of technological and operational efficiencies of other sectors in the financial services industries.  Such is certainly the case in Massachusetts, something I noted a couple of years ago:

Golly, we see an average annual increase in the administrative costs of Massachusetts insurers of 9.3%. How can this be the case? In other financial services industries, unit costs of transactions have gone down, not up. What is it about health care that suggests the opposite should be the case? 

But let's go further. The lobbyists plan to use a chart showing the overall growth in US health care expenditures.  Here it is:

I don't know the purpose of this.  I think it shows that those in the industry are tacitly admitting their failure to contain prices--if one accepts that is part of their function.  But is it?  Actually--as I have just noted--if their share of the health care budget has stayed constant, they have had an interest in watching the total number of dollars go up.

What's the next phase?  Well, if the Massachusetts experience is prologue, the insurance companies will next want to shift risk as much as possible from them to the providers, doctors and hospitals.  As I have noted about Blue Cross Blue Shield of MA:

Think of it.  The firm, in the face of little or no empirical proof, has persuaded an entire state to adopt a rate-making approach whose main value is to shift risk from it, the dominant insurance company.  Now, risk does not disappear.  Usually in society, we pay people to assume more risk.  Also, people from whom risk is shifted usually expect a lower return.  Here, the risk is shifted, but the insurance company gives up nothing.  Indeed, it is secure in pricing its product because it knows exactly how much money it will pay out in medical claims.  Meanwhile, the percent of premiums it collects to cover administrative costs remains remarkably constant, even as revenue grows.  The capital reserves that it has accumulated over the years to cover actuarial risk remain untouched, even though the degree of risk assigned to it has fallen.

There may be an odd result from this lobbying campaign:  Insurance companies will have destroyed every argument for them to exist.  They will have demonstrated that they have had no impact on overall health costs.  They will have demonstrated that they are a constant tax on the growing health care budget.  Meanwhile, they will no longer be insurers, having shifted risk away from them and on to other parts of the sector.

In short, they will have done everything possible to justify a single payer health system.

With undergrads at Northeastern University

It was back to Northeastern University today, this time to address Professor David Boyd's undergraduate leadership class.  You see him here with Caroline, one of the students who made a very good observation.  Pictures of two others are also included here.

Today's topic was the paradox of hospitals in America (and elsewhere).  Well-intentioned, intelligent, and well-trained doctors somehow participate in making hospitals extremely dangerous places to be.  (Listen to this story on Marketplace for more particulars on that topic.)

We spent a lot of time talking about the nature of medical errors. In particular we discussed the concept of normalization of deviance, explained nicely in this blog post by Steve Whitehead:

Each time a behavior or standard doesn’t lead to a catastrophic result, we are more tolerant of that standard.

It makes for an interesting contradiction. A history of success and positive outcomes does far more to erode our standards than a single negative outcome. The longer our success, the more normalization of deviance comes in to play.

Get away with doing something unsafe or substandard enough times and the unsafe and substandard become your standard.

Cognitive errors of this kind are rampant in organizations where work-arounds become the norm.  Each time some well intentioned, task-oriented person designs a work-around to overcome some obstacle in the workplace, it creates the potential for an unsafe or wasteful process.  Quality and safety in hospitals therefore requires a knowledge of cognitive errors and of the science of process improvement.  The leaders of such institutions need to create an environment in which mistakes and near-misses are cherished as opportunities to be "hard on the problem and soft on the person," rather than opportunities for blame and criticism.

With the Northeastern MBA's

I always enjoy giving guest lectures at Professor David Boyd's leadership classes at Northeastern University. Last night's session with his MBA students was no exception.  As is my custom, I include pictures of a few who made particularly insightful observations.  Names are included so you can hire them!

I started out by asking the students to set forth likely characteristics of the high performing anomalous company in a given business sector.  Mark, here, pretty quickly keyed in on the importance of empowering front-line staff.

But, what, I asked, did we hope those front-line staff would do?  Someone replied, "To suggest solutions to problems in the workplace."  We probed this a bit and concluded that--while suggested solutions were always welcome--the more important value brought by front-line staff is to point out problems in the workplace.  What conditions might lead to poor production quality, to a poor production process, to waste, or to an unsafe condition?  The responsibility then falls to the supervisor to be responsive to those concerns and to bring in people from throughout the company to explore the problem in real time, invent possible solutions, and experiment with those.

I had them recall the work of Steve Spear, who has diagnosed companies that do well.  Here's a summary from a previous post:

As Steve has written in his studies of Toyota and reviews of other high performance organizations, the common characteristic of these organizations is not in their ability to design perfect and complex production or service delivery systems. Rather, it is their ability to discover great systems. They do this by managing their work flow to encourage people at all levels to call out problems; to "swarm" together to solve those problems; to share this process of discovery with others in the organization so that the solutions are diffused widely; and to cultivate the skills of people throughout the organization to be involved in this kind of constant improvement.