I keep hearing that it costs more to put a person in jail for a year than it does to send them to college for a year.
What if when someone was arrested in your town, the town was taxed for putting the person in prison. They had to pay the actual cost of emprisonment, but could choose between a standard jail or a job training/re-habilitation jail.
Would these for-profit jails start competing on cost in ways that would drive better or worse bahavior?
Would the towns seek out crime reduction strategies to prevent putting people into jail?
I often hear cops complain that they are only encouraged to lock up criminals, not stop the crime before it happens. Would towns change how they reward cops?
...
Here's the real question: Can you construct a small, realistic, policy change that would create incentives towards reforming people rather than punishing people?
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[After writing this I realize that it is about 2x longer than it needs to be. “I didn't have time to write a short letter, so I wrote a long one instead.”]
The twitterverse is full of people saying "@SteveCase's op-ed on health care reform in WaPo was thoughtful. Did you read? http://ow.ly/RNwe #hcr". This is a reference to his editorial in WaPo: Health-care reform requires healthy living choices
Steve Case is fraught with a misunderstanding of how the universe works.
The article makes two good points an a bunch of terrible ones.
Good points:
- The healthcare bill is insurance reform, not healthcare reform
- In this country we're dealing with how we treat illness, not why people are getting sick in the first place
Now let's talk about the bad parts.
"As a nation we bypassed the diagnosis stage and quickly focused on addressing problems related to the insurance system." Bah! Steve Case, as a CEO why aren't you addressing the problem like a real CEO? Let me tell you what I've learned from most of the CEO's that I've worked for: F--- finding the real problem. The goal is to make sure that we look good in front of the press between now and the quarterly report. My father once said, "the first priority of a politician is to get elected; once elected the first priority is to get re-elected." That's in conflict with politicians finding a real solution. The real solution would have been a total rethinking of healthcare in this country: replacing health insurance with universal service administered by "results based" guidelines and a structure that puts the incentives on a healthier America, not more efficiently processed patients. This system would put pressure for the government to pressure companies to be more responsible. Instead of "we deregulated the FDA to help companies be more profitable" we would say "Obviously to help Americans be more healthy, which is in the common good, we are raising the FDA's standards". The incentive, however, for the politicians is to find the shortest route to 50%+1 at the next election: don't piss off too many people or industries so that you can be re-elected. Sure, people like yourself, Eric Schmidt, Steve Jobs, and other CEOs are successful for looking beyond the next quarter's results, but let me tell you about working for Henry Schacht and Richard McGinn (Lucent), Tom Bruggere (Mentor Graphics), Piyush Sodha (Cibernet), Bernard Ebbers (WorldCom/MCI): the attitude was always "let Mother Teresa fix the world, you've got an analyst meeting tomorrow at 10am" and that's on a good day. (Note: I never worked for Ebbers, but friends of mine did)
"The truth is, our country doesn't really have a health-care system. We have a sick-care system." Of course we do. And it's making a lot of people very wealthy. Asking those companies to make money off of healthy people intead would be every problem in "The Innovator's Dilemma" multiplied by "Crossing the Chasm". The new business model would be a big risk, potentially less profitable, and we wouldn't know for years... or multiple quarterly reports. What stockholder meeting would let a CEO survive if he announced his insurance company is going to adopt a new, untested, business model?
"Take a hard look at our real underlying disease: the lifestyle choices we make every day that lead to more sickness and thus more cost." You say "cost", I say "profit". Do you think Nabisco is sad that their TV commercials encourage young children to make bad lifestyle decisions? Fat people are more profitable than thin people. If that leads to bad health, that's just more profit for the sick-system. If the family is over burdened by taking care of the sick, more profit for the mental health industry and Prosac.
The number of people with diabetes is nearly 24 million. The National Bureau of Economic Research estimates that obesity rates will top 40 percent by 2020, and annual related medical costs have already reached $147 billion. Hey, I have friends with diabetes, you don't have to tell me what a tragedy it is. My dad had it. I'm at risk of it. You need to tell Wall Street to start popping the champaign bottles 'cause when you say growing to $147 billion in cost, they're hearing $147 billion in new profit potential.
You are a CEO so I don't have to tell you this but if a company is publicly traded they are required, BY LAW, to seek the most profits they can for their shareholders. When a CEO does a press conference after an accident and says, "Safety is our top priority" they are settings themselves at risk of being suied because either they are indicating a desire to break the law, or they are not telling the truth. Sure, profits will go down if an airline develops a reputation for being unsafe, but they will be more profitable if they are unsafe but make sure accidents are blamed on someone else: the mechanic, not the manager that over-worked him to the point of exhaustion, the director that cut the training budget, or the airline association that lobbied to reduce safety requirements.
Heavy metal band Megadeth has an album
Peace Sells... but Who's Buying?. I've never listened to it, but I love the title and wanted to work it into this article somehow. :-)
But seriously. Unhealthy living benefits the food industry, the diet/lifestyle industry, the media that lives off the advertising from all the above. Keeping people scared doesn't just make good headlines, it drives sales of useless products.
I don't think you can break the cycle. You can create a replacement that is more profitable (HMOs were an attempt in the 1970s, then they turned evil in the 1980s), or you can require the replacement by law (universal service).
I don't believe in conspiracies. I don't think that the food giants, the health service giants, and the media giants sit around inventing these things. It built up slowly and now has become institutionalized. Institutions protect their own existance.
Who is the vilian here? The company seeks to teach children that "eating the right food makes you popular" or this guy I know who we'll call "Tom".
In 2008 three things happened to "Tom". (1) he turned 40. (2) he realized that most of what he had been taught about food was myth, not fact. (3) he realized that he'd been rationalizing his lack of physical fitness as some kind of nerd chic.
Therefore in 2009 he got on Weight Watchers to re-teach himself about food. It was fact based, and helped him lose a lot of his food myths. Best of all, the technques used to lose weight were the habits needed to keep it off. Thus, when he lost 40 pounds (went from 204 to 164) he now had 9 months of practice on how to eat right (he could just eat a little more than before). He started walking a LOT more and working out at home. At first he couldn't walk a mile without stopping to catch is breath, or do 3 push-ups. Now he can walk 2 miles, do 10 pushups, and 30 "jack knife" exercizes; nothing exciting but more than he could do before.
However, let's look at why Tom is evil.
- No snacks. He no longer snacks all night. "Don't bring it into the house if you don't want it in your mouth" means less profits for Nabisco. If everyone did this, his home state of New Jersey would lose jobs at the local M&M factory.
- Execize for free. He refused to do exercises that have a recurring cost: no gym membership. Yes, he bought an AbRocket and a Wii Fit, but those are CapEx, not OpEx. It doesn't cost anything to go for a walk. His daily drive to the train station is now a walk: less profit for the gas station, the monthly parking company, and his auto insurance company makes less because they gave a discount for not driving to work.
Those are just some examples of how evil this person is. If everyone did both of those things today, the economy would be in terrible shape tomorrow.
That's why the insurance companies spent $5,000,000 every day of the healthcare debate. Our friend Tom spent $200 in donations to various pro-reform groups, and $300 of his own money helping his local MoveOn chapter produce 3 rallies (One got
TV coverage on WWOR, two got
newspaper coverage)
Five million per day verses the grass roots. Who is gonna win?
So, Steve Case, do you and your foundation really want to change things? Here's what you can do:
- Change Congress: Change how congress is funded, so the incentive is to do what's right for the people, not companies. Citizen-funded elections will do this.
- Change Wall Street. Unblock governance reform. Do things to encourage long-term thinking, and un-do the things that encourage short-term thinking. Permit instutional investors on boards of directors (currently banned, leaving boards to be filled with short-term profit-minded folks). Forbid the same person from being both CEO and President of the board (the president sets the CEO salary).
- Change the media. Permit them to buy their way out of being publicly held. The Newspaper Revitalization Act would allow newspapers to operate as non-profits.
Steve, you are right. People aren't unhealthy because insurance is one way or another, people are unhealthy because of the simple life choices people make. However, this is like the airline CEO blaming an individual mechanic when the real problem is that he's created a system where all mechanics are making mistakes because they are overworked and under-trained.
Steve, your article ends with good advice: "Eat less food and make smarter choices about what to consume. Move your body more. Don't smoke." Why don't you add another item to your list: "
Change the system"
Tom
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