It’s not about lower taxes…that completely misses the point again

Republicans have for a long time focused on the “lower taxes” mantra. While recent events suggest that this mantra was a farce, the idea of lowering taxes as a key objective is wrong and incredibly poor thinking–it’s not even good business thinking.

The real issues is to lower my overall costs, not just lowering one part of my cost burden while jacking up other costs-that’s just cost shifting which invariably is a zero-sum game.

A recent article in the Washington Post highlights this issue. The article describes how CA will demand that all new homes have solar power installed. The payback for doing so is over the life of the home, more or less, potentially sooner. This seems like an outrageous cost burden to impose. But let’s think of the alternatives.

If we believe that we can fully identify costs, including the costs of building new power plants and the cost of pollution or even the cost of servicing the national debt, then let’s focus on lowering “total” costs.

For the solar home law, they are shifting costs to the homeowner with the anticipation of lowering or zero-summing costs away from large utilities/higher taxes. That does not really help on a net basis–the costs may be the same. Of course, if solar homes lower overall costs over the calculation horizon, then its a win and a good model. We could also speculate that the law imposes regulations on homes with the trade-off of not imposing regulations on future power generation or other utilities. While you may think that all regulations are bad, a subject of another blog, this regulation is a cost-shifting regulation with a potential, we presume, of lowering overall costs.

It’s possible that cost shifting stimulates innovation in the area where the costs are borne. We have seen, however, that when costs are imposed on companies, many companies just lobby to have them removed and play tax schemes vs innovating around them. That’s not good and we should demand more from the companies we purchase from. If we imagine that there is widespread popular support for addressing global warming, etc. through solar power generation then shifting costs to the “people” may force the people to “demand” innovation in companies–a bit of an end-run around companies not being well managed, lacking morals and civil responsibility to begin with. By shifting  costs to the homeowners, the CA government may also be getting around various federal and state official lack of action on this particular topic.

We face the “lower taxes” hoax all the time. Lawmakers have shown that they are not really interested in lowering total costs–which should be the real focus. In fact, they do not seem to be interesting in lowering taxes either. Lowering taxes (or taxes in one category) while increasing costs elsewhere is disingenuous. I do not care whether I pay one person or another for a certain level of benefit, comfort or moral objective given the two are roughly equivalent. And in some cases, forcing costs onto one party or another is not morally or tactically helpful. Sometimes it could be, sometimes it is not.

Why I Like Fishing – It’s Not What You Think

Yesterday, my family went on a fishing trip.

We keep a twenty-one foot, center console fishing boat over on the Eastern Shore just off the Chester River. The Chester feeds the Chesapeake Bay. The mouth of the Chester is about 1 mile north of the Bay Bridge.

There were four of us, my wife and I and our two sons. I bought sandwiches and some chips at the nearby Safeway and we had each had our own water jugs. We brought 10 fishing poles. Four poles are heavy duty and are designed to catch larger fish deeper in the bay (around forty to fifty feet in the main channel). We had our planar boards with us to spread out the lines but we used them only once.

This was October–the stripers had just started running. The stripers (aka Rockfish) become larger by November, but we were out early to see what we could catch. Most of the time we did the following:

  • Jet out to the middle of the channel.
  • Look for bird flocks on the water.
  • Jet the boat to the seagull flock, along with several other fishing boats.
  • Fish with individual poles using a variety of lures. My youngest son is an expert fisherman so he knew which lures to use for each situation.
  • Try not to hit the other boats.
  • Catch fish.
  • Release those that were too small.
  • Catch seagulls, by accident.
  • Untangle the seagulls, unharmed.
  • When the seagulls picked up and moved, following the fish, jet to the new spot.
  • So we, along with alot of other fisherman, move from flock to flock, jetting around in the water, trying to catch legal sized fish.

That’s it! We did that for half the day.

Our “charter” started late because I was late from a Saturday meeting. We left around 1:30pm on the boat and came back right after sunset, around 6pm. As we returned to the Chester after sunset, we were not paying close attention to driving and almost hit a dock, but that’s another matter that my youngest son can explain one day to his kids when discussing boat safety.

It was wonderful weather, not too cold. Skies were overcast which kept it cooler–good for fishing of course. We had forgotten to fill the oil reservoir so the oil engine light kept coming on. We had plenty of oil, the reservoir was just low that’s all.

After the trip, we came back and had some delicious crab cakes at the house with my wife’s mom. The crabcakes were from the Bay Shore Steam Pot in Centerville. I think they are the best crab cakes on the Eastern Shore and the shop is very close to where we keep our boats.

It was our older son’s eighteenth birthday. He had wanted to go fishing. The night before, we went to a jazz concert with the Anderson twins (sax, clarinet and flute) and Alex Wintz (guitar), known as the Peter and Will Anderson Trio, in Baltimore at the fabulously cool An die Musik. Fabulous concert. All of the chairs were oversized and full of padding; relics from a regal hotel no doubt. Front row seats. The jazz seemed to infuse the next day’s boating trip.

It seemed to me that fishing was about getting things done and working together, like jazz, versus pop music or old style rock and roll both of which have a different type of energy.

Overall, we caught around forty fish but only a few were keepers. Stripers need to be twenty inches to keep, and our largest was seventeen. No matter.

While you can still catch a fish on a simple fishing pole off the dock, the larger fish need to be found. You need the right gear but it’s not excessive. You need to know some techniques to catch alot of fish to find the few keepers. You need to work as a team since steering, fishing and keeping your eyes open for the bird flock is hard for just a single person to do. My wife and I did less fishing than the kids but we helped as much as we could having been relegated to deck hands. My wife took alot of pictures and I sneaked in a few. We were fortunate to grab some pictures below the Bay Bridge with the bridge framing our fishing activities.

As we headed back to the dock for the night, I thought this was the nicest family weekend in a long time. We all worked well together on a small boat and got things done. Everything seemed to come together and it felt good. My youngest son captained the boat and it was my older son’s birthday. In a crazy, fast world, we spent a little slice of time trying to catch a few fish, together. Perhaps the fish were really not the point.

That’s why I like fishing.

 

 

Yeah! Big data to the rescue…wait a second…

I use google alerts to provide me a sense of flow around articles. One of the filters is around bigdata and healthcare. The flow around this topic has increased. I see many stories, $100m investment here, $20m investment there, and so on. That’s alot of dollars! Alot of it is government backed of course and put on hyperdrive with a recent McKinsey report on bigdata and potential healthcare savings.

Breathlessly, drawing on my own bigdata and scientific background, I then ask, “well when should see the effects of these bigdata exercises?” The answer is not so clear. Just as I explained in my last post, there has not been a dramatic lack of analytics applied to healthcare. However, I do think to do more analytics because clearly there are many ideas and insights to draw on.

But it will still take a few years before insight turns into action. And it will take longer for any significant savings and benefits to be realized. Why?

Unless we solve the payment and incentives issues (also blogged on before) what’s the incentive for large scale change?

Bryan Lawrence in today’s Washington Post’s opinion article “The fine-print warning on Medicare” put it well.

  • No real productivity growth in many areas of healthcare
  • Benefits of reimbursement will never be given up to the government (every year we see this with Medicare payments, every year Congress avoids implementing payment changes, literally). This is the age-old question of making investments, “who gets to cash the check?”
  • Lower prices usually leads to providers increasing volumes
  • Congress will keep changing the laws anyway, you’ll never catch up.

You could peg this as cynical thinking, but its this type of envelope thinking that calls out issues that are hard to ignore and overcome quickly.

So while bigdata could give us great insights, implementing and acting on those insights (the change management problem) is larger and more complex. Its like the Artificial Intelligence (AI) claims back in the 80’s and 90’s that said we can really use analytics to get better answers. After two decades, the crickets were chirping. The value realization is better now, and it is clear, at least to me,  that more people performing analytics can make a difference. But the real policy world is much more difficult to navigate.

There are no good answers to accelerate value capture from bigdata. Although everything from nationalization to forced integrated capitated models (like Kaiser) may be the only way to structurally change the system. It’s clear that competitive forces have been inhibited in the US and that there are externalities driving the dynamics of the healthcare system.

And the real change that’s needed is in you and I. We need to get healthier. And for that, we need increase both our personal commitment to better health as well instill changes in our government policies  to change arcane food and commerce laws that lead to bad diets.