Peter L. Berger's Blog, page 184

Massive Truck Bomb Attack in Kabul

At least 80 people have been killed and hundreds more injured in an enormous truck bomb attack in Kabul. As the New York Times reports:

The huge blast during the morning rush hour caused panic in much of central Kabul, shattering windows as far as a mile away. Nearly two hours after the explosion near Zanbaq Square, a crowded area in the capital that leads to the presidential palace as well as major foreign embassies, plumes of smoke were still rising from the scene.

While not quite as secure as the former Baghdad Green Zone, the diplomatic quarter of Kabul is deep within the city’s “Ring of Steel”— making it in theory one of the most secure areas of the capital. That has not stopped Taliban militants in the past. In 2015 the Taliban managed to storm parts of the Afghan parliament complex; suicide vest attacks near ministries and military installations are relatively common. Nonetheless, this latest attack appears to be unprecedentedly large. An ISIS attack last June at a Shia religious procession killed a similar number of people, but as shown by the size of the blast crater and other images of the aftermath, this latest latest bombing was truly enormous:

This photo of the crater caused by the massive blast in #Kabul can give you an idea about the magnitude of #KabulAttack. Photo @ArianaNews_ pic.twitter.com/tId1g9UFpL

— Habib Khan Totakhil (@HabibKhanT) May 31, 2017

Afghan intelligence has attributed the attack to the Haqqani network, a largely Pakistan-based Taliban affiliate closely linked to Al Qaeda that has been the frequent target of U.S. drone strikes.

The attack comes as the Pentagon is requesting up to 5,000 additional troops, a decision still being weighed by the Trump administration. Compared with President Obama’s 2009 surge, which eventually saw more than 100,000 U.S. troops deployed in Afghanistan, this mini-surge would bring the total coalition forces in Afghanistan to just under 20,000. The basic strategic problem posed by Afghanistan is a familiar one: Like the Soviets before us, we have invested enormous amounts of blood and treasure in a government that is unpopular, corrupt, ineffective—and under siege. The Taliban are gaining ground.

With U.S. casualties low and the public uninterested, 5,000 troops and a few extra billion dollars might be a low-cost way to win a decent interval for Kabul and the Ring Road cities. It seems too little, too late to do much else.

Zuma Puts Down Party Revolt

South Africa’s notoriously corrupt President Jacob Zuma has quelled a second revolt from his party’s leadership, cementing his hold over the ANC ahead of party leadership elections later this year. Financial Times: 

South Africa’s ruling African National Congress sought to close ranks around President Jacob Zuma on Monday, a day after he quashed an attempt by senior party members to remove him as head of state.

Mr Zuma’s allies easily rebuffed calls for him to step down at a meeting of the ANC’s National Executive Committee over the weekend. But it was the second time in six months that his scandal-prone leadership had been challenged, underlining the deepening fractures in the former liberation movement. […]

“It’s very clear that Zuma has reached the point of no return, and he will go all the way” in putting his survival over the interests of the party, said Prince Mashele, an analyst at the Centre for Politics and Research in Pretoria.

Predictably enough, the rand slumped soon after it became clear that Zuma would survive the leadership challenge. And that gloomy outlook is more than warranted: the steady decline of the ANC threatens both South Africa’s democracy and its prosperity. The spread of corruption and patronage politics will weaken investment and degrade the capacity of state institutions—and those hardest hit, as usual, will be the poor and the voiceless.

The ANC’s next major test comes at December’s party conference, when members will choose a new party leader. That contest will pit Zuma’s ex-wife and preferred successor, Nkosazana Dlamini-Zuma, against Cyril Ramaphosa, the deputy president who has lately become a vocal critic of his boss. Unfortunately, all the early signs suggest that the pro-Zuma factions will prevail—and that his legacy of cronyism and corruption will outlast his time in office.

The Path to Real Health Care Reform

Health care in America resembles a 19th-century cottage industry. It is fragmented, with doctors and hospitals scattered across communities and often working in silos. It is primarily paid for piecemeal, based on the number of services provided rather than on the excellence of clinical outcomes. It uses technology left over from the previous century, and it has minimal leadership at the delivery system level.

Health care consumes 18 percent of our nation’s gross domestic product today, a figure that is projected to increase to 30 percent over the next two decades. Nearly 40 percent of this country’s Federal tax revenue is spent on health care, and with the rising cost of care delivery, double-digit increases in pharmaceutical prices and 10,000 Baby Boomers becoming Medicare eligible every day, this figure could soon surpass 50 percent for as long as it takes that huge cohort to pass into history.

This is unsustainable, and if we don’t take the necessary steps to transform health care delivery, the health of America itself will be at stake. Indeed, it is not far-fetched to assert that a major health care crisis in the United States would constitute a national economic and security concern.

The Affordable Care Act (ACA), passed in 2009 and implemented in 2014, expanded insurance coverage but did very little to address the inefficiencies that are inherent in American medical practice. President Obama’s signature legislation nevertheless represents the most significant change to American health care since the implementation of Medicare and Medicaid more than fifty years ago. So we begin there.

The Dawn of the Affordable Care Act

In 1985, on the South Side of Chicago, the future President accepted a job as a community organizer. His assignment was to meet with the nearly 5,000 residents of Altgeld Gardens Homes and convince them to push city hall for improved living conditions inside their public-housing project.

Obama realized he needed to connect personally with the projects’ residents. Over several months, he met with many families and came face-to-face with their realities. He witnessed firsthand the deprivation that permeated some of Chicago’s roughest neighborhoods and saw how these conditions wreaked havoc on residents. He came to understand how the lack of food, education, and—most notably—medical care precipitated high rates of crime, violence, and death.

A little over a year into his first term in office, President Obama addressed the nation’s most powerful constituency of U.S. physicians, the American Medical Association (AMA). He spoke passionately about the economic stresses confronting the American people:

Make no mistake, the cost of our health care is a threat to our economy. It is an escalating burden on our families and businesses. It is a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America. It is unsustainable for Americans like Laura Klitzka, a young mother I met in Wisconsin last week, who has learned that the breast cancer she thought she’d beaten had spread to her bones; who is now being forced to spend time worrying about how to cover the $50,000 in medical debts she has already accumulated, when all she wants to do is spend time with her two children and focus on getting well. These are not worries a woman like Laura should have to face in a nation as wealthy as ours.

All the physicians at the AMA conference that day knew someone like Laura from their own practices. They had all taken care of patients who couldn’t afford treatment for diseases like cancer. They knew people with chronic illnesses who had to choose between their care and their family’s financial well-being.

Obama, surveying the massive hill he would need to climb, recognized that he would need to change the context of the conversation and shift the audience’s perception of health care reform. To do that, he started by putting a human face on the imperative of expanding health care coverage and reining in escalating costs. His ability to make doctors and patients see the problem in a personal way was the catalyst for radical change in America’s health care system.

President Obama entered the White House in 2009 with a veto-proof Congress, including 58 Democrats and two aligned Independents in the Senate. Despite the numbers, Obama recognized he wouldn’t have a single vote to spare. As a student of political history, having studied the failures of past Presidents to change the American health care system, Obama concluded that it wouldn’t be productive to send Congress an ambitious, well-baked, yet poorly backed plan. Instead, he took a hands-off approach in the early stages, asking lawmakers to sketch out a first draft. And rather than painting legacy players as villains or obstructionists, the President included them in the discussions, too. He began by inviting representatives from Big Pharma, community hospitals, and for-profit health plans to the White House for a “health summit” in March 2009.

In November 2009, the House approved its version of health care reform by a narrow margin, with several compromises and concessions. The following month, despite an attempted GOP filibuster, the Democratic majority pushed its version of the health care reform law through the Senate. Next, it would have gone to the Democrat-controlled joint conference committee, where bills of massive scope and complexity are sorted out. This is when the political calculus changed.

The untimely death of Senator Ted Kennedy from Massachusetts and the election of Senator Scott Brown, a Republican, to replace him altered the numbers. No longer did the Democrats have the 60 votes needed to overcome a filibuster. Obama accepted that a good law enacted was better than a perfect one killed by partisanship. So instead of modifying the bill further, Congress passed the Senate’s version unchanged. It then used reconciliation, a legislative process that requires only a simple majority but that limits modifications to those that are economic in nature, such as taxes and governmental spending, to finish the job. And that’s how the ACA, the good with the bad, became the law of the land. Many of these same political challenges and parliamentary maneuvers are making headlines today, as the Republicans work to “repeal, replace and repair” this legislation.

ACA Success: Covering the Forgotten and Excluded

Obama set his sights on the 18 million uninsured Americans who couldn’t afford health insurance and didn’t qualify for Medicaid. Although much of the funding for Medicaid is provided at the Federal level, the program itself is the responsibility of the states. Therefore, the President’s approach was to offer funding to states that agreed to expand Medicaid for individuals and families earning up to 138 percent of the Federal poverty level. Since the dollars offered to the states would cover 90 percent of the cost, he assumed all would say “yes.” This is where politics overcame expectations.

Some 22 states with Republican leadership declined the Federal subsidy, and, as a consequence, only about half of the targeted 18 million uninsured were enrolled in the program. This still represented a major expansion in coverage, and allowed almost ten million more people to have insurance, reducing the nation’s uninsured rate to the lowest in its history.

Having used Medicaid to expand coverage for those earning up to $33,000, the next challenge for Obama was providing insurance for those whose income was higher, but for whom health care prices still exceeded their budget.

The catch-22 of the old health insurance system was that the people who needed coverage the most—those with pre-existing conditions—had the hardest time getting it. Obama saw this practice as health care’s greatest absurdity. So the ACA implemented “guaranteed issue,” which meant that all insurance companies had to accept and cover any individual who applied. What’s more, insurers had to charge them a price comparable to what others in the system had paid.

This, of course, raised the “moral hazard” problem: If people could obtain coverage at will, they might delay buying insurance until they became sick. It would mean higher insurance premiums for everyone, and it would also mean that the uninsured would miss out on the kinds of preventive services that benefit patients the most. So Obama included the “individual mandate,” requiring nearly everyone to buy health insurance or pay a penalty, but he also included subsidies through the public health care exchanges to defray the cost of coverage. After surviving a challenge at the Supreme Court, the combination of the individual mandate and guaranteed issue created an expectation of health care coverage for all.

As a result of many more people experiencing the advantages of health insurance coverage, President Trump now faces political risk if Congress undoes these elements of the ACA. Two-thirds of those newly insured through this expansion live in states he won this past November. Were Trump to pull back funding for the Medicaid expansion or reduce subsidies to those who purchase coverage through the health care exchanges, he could harm not just his future electoral prospects but those of the Republicans in Congress as well.

But Obama didn’t just throw subsidies at the problem; he created a whole new way to compare, understand, and buy health insurance. Seeing how Amazon and Expedia had disrupted the retail and travel sectors, the President envisioned an online marketplace that could do the same for health insurance. These insurance exchanges would offer a broad array of plans with standardized benefits, creating the kind of information and cost transparency that encouraged enrollees to pick programs with the highest value to them. The President believed that, over time, consumers would gravitate to organizations that provided the highest quality and most convenient service at the lowest price.

Similarly, he shifted Medicare Advantage, the prepaid alternative to the traditional fee-for-service option, in the same direction. He taxed the programs that participated but offered them the opportunity to earn back even more dollars if they provided the highest quality care and patient satisfaction. His approach was a five-star rating system with substantially greater payments to those health plans with the highest performance. Once again, the expectation was that, over time, seniors would choose the five-star programs, expanding their use of preventive services and avoiding future costs through better disease management. Ultimately, the hope was that this model of different payments to insurance companies based on the value created would become the standard for all types of health insurance. But through the ACA this concept has attained only a small beginning.

Looking back, the President could have taken a different approach. He could have established a review board to structure the expansion in coverage, a selection process to determine which insurance companies could participate in the exchanges, and a predetermined price point for all. The result would have been a limited set of “government approved options.” Instead, he bet on broad competition with a common set of benefits, transparent prices, and freedom of choice. His hope was that people would select the programs of lowest cost and greatest value, and thereby limit the overall rate of heath care inflation in the future. And in the first few years, they did.

Other Implications of the ACA

But the President and his advisers had not foreseen the unintended consequences of the legislation. The rapid rise in prices on the exchanges just before the 2016 elections became a lightning rod for Donald Trump and those who had campaigned on repealing the ACA. In retrospect, President Obama may have put too much faith in competition, not fully realizing how un-free the markets for health care really are, and how comparing insurance plans, even ones with transparent pricing, can be too complex for most consumers to understand.

The need to digitize health care brought out a rare form of bipartisanship on Capitol Hill. Most politicians agreed that to improve patient care, doctors needed to have comprehensive, electronic access to patient information. The President wanted this information stored securely in a private medical record, available to all doctors for meaningful purposes. These systems would allow care providers to communicate with their colleagues and transmit prescription requests. And they would allow patients to schedule office visits and review their clinical information online.

Fortunately for the President, a law designed to enable all that had passed earlier in 2009. The Health Information Technology for Economic and Clinical Health (or HITECH) Act offered doctors $44,000 in subsidies to install computer systems in their offices, on one condition: They had to agree to use the systems in ways that improved patient care (“meaningful uses”) rather than just for billing. Unfortunately, almost a decade later, despite the vast amounts of money invested, net-dollar savings haven’t materialized. The reality is that without transforming care delivery computers add little economic value. In fact, rather than improving physician performance, electronic health record systems slow doctors down with mountains of electronic paperwork and add significantly to overall costs.

Other parts of the legislation have met major resistance, too. “We have the best medical schools, the most sophisticated labs, the most advanced training of any nation on the globe,” the President said in one of his final ACA sales pitches. “Yet we’re not doing a very good job harnessing our collective knowledge and experience on behalf of better medicine.” He knew that less than 1 percent of U.S. health care spending goes toward examining the most effective treatments, leaving too many doctors and patients to make life-altering decisions without good information.

To address this vacuum, the President placed one final bet: the Patient Centered Outcomes Research Institute (PCORI). Using public and private funding, this program selects, designs, and conducts clinical effectiveness research that compares drugs, devices, medical interventions, and delivery systems. The President expected PCORI to clarify which approaches achieve better health outcomes for patients at a lower cost. He hoped that all doctors would embrace the treatments shown to be most effective.

Once again, in retrospect, President Obama and his staff underestimated the power of legacy players to resist change. Today, when drug or device companies want to introduce a new (and often expensive) medication or technology, they must demonstrate that it is safe and effective. They are not required to prove that it is any better than products that already exist. And having obtained the authorization, they can then promote the products that generate the most profit, even when they add little or no value compared to lower-cost alternatives. As a consequence, real comparisons generated by objective clinical research are threatening, and they have fought against them. The new Congress and President have indicated that they may not fund this program. And despite broad agreement that drug prices are too high, it is unclear whether effective legislation will be passed to limit the egregious pricing practices of pharmaceutical companies, which today are rising many times more rapidly than overall inflation.

Integrating a Fragmented System

By opening the insurance exchanges to patients with preexisting conditions, Obama flipped on its head the old insurance practice of picking the healthiest enrollees. In doing so, he knew the exchanges would become a magnet for the nation’s sickest (and most expensive) patients. He hoped that through the individual mandate and subsidies the exchanges would retain a workable balance of sick and healthy, but he also knew that over the long haul there had to be a drive for delivery-system improvement. In retrospect, he overestimated the time he had to make change happen, once he had increased the cost of health care through the expansion of insurance coverage and inclusion of the sickest patients in the public health care exchanges.

More specifically, he underestimated the financial impact of the exchanges on large insurers. Over the initial two years of ACA implementation, most of the major health insurers struggled with the high costs associated with new enrollees. As a result, in 2017, insurers on the exchanges raised rates for state-based plans by an average of 25 percent, according to U.S. Department of Health and Human Services data.

Second, Obama underestimated how the insurance companies would respond to these economic challenges. In 2017 the nation’s largest insurer, United Healthcare, dropped out of most of the exchanges, and even more are threatening to leave in 2018. The risk is that in some regions patients will have only one insurer to go to, or even none at all.

In addition, a major part of his plan to overhaul the delivery system through a new approach called Accountable Care Organization (ACO) has had mixed success. An ACO pairs up independent primary- and specialty-care physicians with a hospital and aligns their financial incentives toward greater efficiency through a single “capitated payment.” The ACO receives this payment in advance, and the participants are expected to provide all the care that patients require in return. The structure theoretically creates incentives for more preventive care, greater collaboration, and fewer medical errors. The President hoped that these combined hospital-and-physician organizations would be able to raise quality, lower costs, and compete with traditional insurance companies on the heath care exchanges. Increasingly, this appears unlikely to happen. Creating an ACO is complex and risky. And some fear that many of these consolidated entities would use their new market dominance to raise prices instead.

So how do we move forward from the partial successes and residual problems following the implementation of the ACA? If health care costs continue to rise at current rates, neither individuals, nor businesses, nor governments will be able to afford them. Once that occurs, we will invariably slide into a two-tiered health care system—the rich who can afford to buy additional coverage, and everyone else. The best solution is to transform heath care delivery. And to do that we need to focus on how medical care is provided, reimbursed, technologically supported, and led. Here is a road map for doing that, built on four essential pillars.

Pillar 1: Physicians Working Together

Health care needs to be integrated, both horizontally within each medical and surgical specialty and vertically encompassing primary, specialty, and diagnostic care.

Today, health care delivery happens in one of three venues. There are community-based providers, mostly working in individual doctors’ offices and smaller hospitals. Then there are the traditional academic medical centers (university clinics and hospitals) with their associated research laboratories. Finally, there are relatively large, integrated delivery systems with multispecialty medical groups and associated hospitals.

The third group takes a unique path, focusing mainly on “operational excellence.” The structure of integrated delivery systems helps maximize collaboration and cooperation, thereby making the provision of care more effective and efficient. These delivery systems typically include physicians from different specialties who practice together in large, centralized medical buildings. Their combination of greater size and fewer locations succeeds in lowering costs, while higher patient volumes allow specialists to maximize their skills and improve outcomes.

In the future, greater integration, along with a significantly stronger focus on prevention, in medical practice will make the role of the primary care physician more important. Today, for every 100,000 U.S. patients, there are 66 specialists compared to 46 primary-care physicians. In the global health systems with the best outcomes, those numbers are reversed. If our country wants to improve health care performance and outcomes, a great place to start would to address this workforce imbalance.

The first step is to shift financial rewards. Today, physicians who perform complex procedures earn two to three times more than those in primary care who focus on preventing and managing chronic illnesses. The second step is to increase the connectivity between primary and specialty physicians through modern technology. With improved physician connectivity and communication, patients can receive better medical care, and receive it more quickly. And when patients have complex medical problems, primary care physicians can make certain these patients don’t “fall through the cracks.”

Next, we need to fix health care’s money problem.

Pillar 2: It’s Better and Cheaper Not to Get Sick in the First Place

Health care needs to be substantially prepaid, moving away from pay-for-volume toward paying for value and superior outcomes.

Americans appreciate a doctor who can rescue them from a catastrophic event. But all patients would prefer not to have a heart attack, develop cancer, or suffer a stroke in the first place. Unfortunately, that’s not what the current reimbursement system incentivizes.

The Pacific Business Group on Health (PBGH) is one of the nation’s leading nonprofit business coalitions, and it focuses on improving the quality and affordability of health care. When the group’s leaders recently looked at ways to increase quality and reduce costs, they honed in on the operations that replace worn-out hips and knees using prosthetic joints. They started by calculating the total expense, including the surgeon, anesthesia, the operating room, and the hospital’s costs. They were shocked to discover that prices for this “bundled service” varied from as low as $20,000 to upward of $120,000, depending on the hospital. Even more astounding was the realization that clinical outcomes at the most expensive facilities were no better than at the hospitals charging one-fifth as much.

So, what happened when PBGH announced it would only include in its network the hospitals charging no more than $30,000 per joint? Even locations that once charged as much as $100,000 lowered their costs to meet this single bundled payment requirement.

Limiting what hospitals and doctors earn has always been a contentious issue. But to improve American health care, we need to recognize that fee-for-service reimbursement skews the incentives and leads to more care, not better care. We desperately need to change how the existing insurance reimbursement system works so that it rewards best practices and values prevention and the avoidance of complications from chronic diseases like diabetes. The overall cost savings would be huge, since estimates indicate that as much as 75 cents out of every health care dollar are spent on preventable “lifestyle” diseases and avoidable medical problems.

Today some organizations accomplish both better care and lower costs than the rest. They manage hypertension with a 90 percent success rate, rather than the national average of 55 percent. They screen for colon cancer in 90 percent of at-risk patients, rather than 50 percent. And they lower the chances of patients dying from heart disease, according to the National Committee for Quality Assurance, by 30 percent compared to the rest of medicine.

Expanding the use of exchanges, both private and public, and improving the transparency of data on quality outcomes, would allow patients to choose those programs with better outcomes, as well as get greater convenience and lower prices. The result would be better health for Americans and reduced overall health care costs.

Pillar 3: What Your Doctor Doesn’t Know Can Hurt You

Health care needs to be technologically enabled, with comprehensive electronic health record systems, patient access to medical information, and the ability to obtain care using mobile and video technologies.

Any ATM can figure out who you are and how much money is in your account at whatever bank you use, regardless of the country or currency. It can spit out cash in a matter of seconds. To provide this convenience, the ATM communicates with servers that contain your bank balance and other pieces of information. This capability is called interoperability.

In health care, connecting doctors with patient data isn’t technically complicated; rather, it’s financially and politically complicated. To explain the underutilization of most electronic health records today, we need to differentiate between an “electronic health record” and a “comprehensive electronic medical record.” With the former, we’re talking about patient information that’s entered digitally into a computer in a typical doctor’s office. This is certainly better than paper records. But this record doesn’t include information from all physicians who care for the patient. Thus there is limited quality improvement and no cost reduction. Instead, we need comprehensive records, which include all of the patient information, regardless of how many different doctors the patient saw or whether the care was provided in an office or a hospital. In that way, all physicians can address gaps in prevention and ensure that the care they provide is compatible with the actions of their colleagues.

Electronic health records could be compatible. After all, other industries—from airlines to banks—have long since solved the interoperability and data-aggregation problems. Unfortunately, the companies that develop electronic health records systems don’t want doctors using comprehensive systems, unless, of course, those systems happen to be their own.

If health record vendors allowed third-party developers to access their application program interface, all your medical information could be combined into a single, comprehensive system—much like the one you access through an ATM. And they could make these next-generation systems accessible through tablets and phones, not just computers. This would be extremely beneficial for patients and physicians. But doing so would make it much easier for doctors and hospitals to switch from one company to another, and therefore the current vendors are likely to resist this requirement.

Different sorts of technological advances promise to make doctors and patients smarter together. This year, the physicians of Kaiser Permanente in Northern California are on pace to provide more than one million virtual visits each month through a combination of video, secure email, and telephone. By 2018, they are likely to provide patients with more virtual visits than in-person office visits.

Patients can always choose to have in-person office visits, but more and more people are deciding to access their care virtually. This not only means less work and school missed; patients also usually report higher satisfaction than with an in-person visit. People want convenience when it comes to their health care. The hardest part for most is finding it. A recent Nielsen study on behalf of the Council of Accountable Physician Practices revealed that just one in five patients has access to online appointment scheduling with their doctors. Only 15 percent of patients can use email to communicate with their providers, and a scant 2 percent have access to video visits.

There are many reasons for this lack of technologically enabled care, including regulatory and financial ones. Physicians are prohibited from providing telehealth services across state lines. It is legal for a doctor in San Diego to treat a patient in Eureka, California, more than 700 miles away, but not for a physician in Chicago to provide a video visit to a patient thirty miles away in Gary, Indiana. This is absurd.

Telehealth will gain momentum in the future. It could be embraced as a lower-cost alternative to in-person visits for people paying for health care costs out of pocket. Or it could be requested by the millions of people in this country who live in rural areas and can’t easily access specialists.

But the group most attracted to this alternative may well be high-end consumers, the busiest of professionals and corporate executives who don’t want to take time away from work to drive to a doctor’s office. Knowing they could access medical care from their office would be a game-changer. And as soon as they realize this form of high-quality, convenient medical care costs less, they will want it for their employees, too.

The combination of integration, prepayment, and new delivery technology will prove synergistic in practice. Each can make the other more effective. But without the final pillar, none of this will work for the patient.

Pillar 4: Whom to Trust?

Health care needs to be physician-led, which will require doctors to gain greater leadership expertise. The good news is that physician leadership can be taught, honed, and developed.

More than a decade ago, our medical group established one of the largest leadership training programs in the nation. Already 2,000 of our 9,000 physicians in Northern California have participated in the program. Creating an elaborate infrastructure is expensive and takes a long time to reap benefits. It also requires role models who are willing to give future physician leaders more than textbooks and presentations from which to learn and grow.

Effective physician leaders engage three organs in the doctors they lead. First they engage the heart. Most physicians are smart and talented. But medical practice is inherently intimate and emotional. Being a doctor means being a part of life’s most personal experiences, from birth to death. The heart combines mission and purpose. It is why doctors dedicate their careers and lives to safeguarding the health of others. To engage a physician’s heart, leaders must create a vision that is both aspirational and achievable.

The next step is engaging the brain. Presented with a vision for the future, many physicians worry about being asked to do the impossible. Leaders address this fear by explaining the specific changes in behavior needed, the context for the change, and how success will be measured.

Behaviors are specific and observable actions. Examples include washing your hands every time you walk in and out of a patient’s room or ordering a mammogram every time you see a woman over the age of forty who hasn’t had one in the past two years. Once physicians understand exactly what they are being asked to do, they will realize that the magnitude of change required is less than they originally feared.

Physicians also want to understand the reasons and context for change. They won’t move forward until they comprehend the “why.” Distributing information on physician performance, when used, has a powerful impact. Successful leaders use data to show variations in results and what the highest performing physicians can accomplish. Often, the first step in the process of change is helping everyone recognize that what seems impossible isn’t. Someone, somewhere is already doing it.

Finally leaders must earn the trust of others. Trust is described as a “gut feeling” even if the label is physiologically incorrect. To earn that trust, they can’t just send memos, but they must engage with physicians individually, and in small groups, look them in the eye, tell them the truth and listen to their perspectives.

What Happens If Physicians and Hospitals Refuse to Change?

Ask him what he does, and Dr. Devi Shetty will tell you that he sets the price of a human life.

Today, he and his team perform complex heart surgeries at $1,800 a case in India, a fraction of what such a procedure costs in the United States, and with results equal to those of the best American hospitals. Dr. Shetty knows that if he can get that price down to $1,500, many more children will be able to have surgery and live. He therefore will have raised the value of a human life. His goal is to lower the cost of heart surgery to under $1,000 by 2020.

Some of his successes depend on lower labor expenses in India. Many more have come from maximizing volume, improving operational systems, and creating technological advancements. Dr. Shetty has implemented one of the world’s most sophisticated information technology systems. By noon each day, all managers in his hospitals know the profit/loss from the day before. This allows them to immediately address waste and correct inefficiencies. It also helps them figure out how many free surgeries they can provide.

To maximize quality, every morning, he reviews the time it took physicians the night before to respond to a major deterioration in the clinical status of a patient. His average delay is under ten minutes, less than one-third of a typical U.S. hospital today.

Dr. Shetty’s vision doesn’t end within his hospital walls. He developed an insurance program for more than a million poor farmers. With it, they pay less than $1 a month to obtain coverage for whatever surgical procedure they may need. The program affords access to a variety of procedures for patients who would otherwise be denied his services. Even sophisticated procedures such as implantation of mechanical heart pumps are included.

Three years ago, Dr. Shetty opened a hospital in the Grand Cayman Islands, less than one hour by plane from Miami. His hospital, which boasts superb clinical outcomes, can’t yet offer heart surgery for $1,800 a case, but the facility can do it for less than half of what the procedure costs in the United States. Although the current hospital is modestly sized and serves mainly patients from the Caribbean, Dr. Shetty has received approval to build a 2,000-bed hospital on this island of 50,000 citizens. If the American health care system doesn’t change, at some point in the future, most of those beds will be filled by American patients tired of paying too much for outcomes that have fallen behind the best hospitals in the world.

For American doctors and hospitals, Dr. Shetty’s success should serve as a call to action. Almost every industry has experienced disruption with devastating consequences for those who refuse to change until it is too late—just ask Kodak, Borders Books, and the American steel industry. Health care won’t remain the exception forever.

While it won’t be easy, we can transform and improve the American health care system.

The government will need to be sure that all individuals have access to coverage, including both preventive and other essential services. It will also need to address the egregious drug pricing practices that exist today. Finally, it will need to ensure there is a level playing field for all insurance products so that health plans and delivery systems compete based on quality, personalized service, and price, not on the ability to attract the healthy rather than the sick. In the process, some insurers will not be able to succeed, some hospitals may be forced to close, and some doctors won’t be able to match the performance of others. There will be shakeouts; there have to be. But the beneficiaries of this change will be patients and their families.

The Affordable Care Act tried to address some of these shortcomings and may, over time, prove to be part of the solution. But we have a long way still to go. If Congress simply rolls back some of the ACA provisions without creating incentives for the greater transformation we need, our nation and its people will suffer, both from an economic and a health perspective. These four pillars define a path that can save lives, improve health, and make American health care the best in the world. Nothing of real significance will change until we begin to walk down that road.

Will Trump Be Remembered as the Champion of US Solar?

The United States is considering the implementation of emergency tariffs on solar cell imports in an attempt to protect the American solar industry from “dumping” of cheap products manufactured in India, the European Union, and most importantly China. As Reuters reports, the U.S. just filed a warning with the World Trade Organization (WTO) that it’s weighing its options:

The move raises the stakes in a global battle to dominate the solar power industry, which has grown explosively in the past five years. As production has increased, prices have tumbled, favoring producers who can take advantage of economies of scale.

The United States, China and India are vying to be the market leader, and are looking out for any perceived breach of the international trade rules by their rivals.

This is just the latest flare-up in a long war between countries (and an economic bloc) that are jostling for space in a rapidly expanding market. Each player has in turn accused every other player of some sort of trade malfeasance at some point in this race to the bottom, but this latest American filing with the WTO is important because it suggests that the Trump administration is ready to go to bat for this renewable energy source.

We’ve made the point in the past that the green jobs mantra in terms of the production of solar cells in the U.S. was spurious—this product, green though it may be, is of course subject to the same pressures that have created the manufacturing trade deficit overall. This week we’re seeing clear evidence that this is happening.

Price-wise, these market interventions won’t make solar any cheaper, and to the extent that each national solar industry is capable of stymying imports from competitors, we can expect the cost of solar to rise (or at least fall more slowly). The question then becomes: Would you rather lose American jobs due to Chinese mercantilism, or accept higher prices for solar?

It seems like the obvious step for Trump would be to push the trade issue hard—he would be defending “green jobs” in the U.S., appealing to his “America first” base, while also potentially wooing some of the more jobs-focused environmentalists who, to this point, have found very little in this Administration to admire. Trump won’t care much if the rate of conversion to solar slows if this trade protectionism results in higher prices—this is a win-win for him, and an easy one at that.

Will Trump be remembered as the champion of the American solar industry? We’ll be watching.

Will Macron’s Movement Win an Absolute Parliamentary Majority?

Emmanuel Macron’s stunning victory in the recent French Presidential elections last month could be rewarded with an absolute parliamentary majority next month, according to the Financial Times:

[P]olls suggest his cross-party movement, La République En Marche, will attract about 30 per cent of the vote in the first round of the election on June 11 — a 10-point gain in a month and putting the party within reach of winning an absolute majority in the run-off round on June 18.

Such an outcome would defy those sceptical of Mr Macron’s ability to turn his unlikely presidential win into a long-lasting overhaul of French politics. At stake is his room for political manoeuvre as he tries to overhaul the dysfunctional jobs market and revive the eurozone’s second-largest economy.

If La République En Marche pulls it off, expect Macron to move as quickly as possible to pass painful reforms. Macron’s advantage is that, unlike his predecessors, he ran a campaign openly promising he would do just that—and won convincingly. An absolute parliamentary majority would represent a solid mandate, and the only constituency he will feel beholden to is the one clamoring for big changes in France.

If he succeeds, he will be able to approach whoever ends up winning in Germany this fall with a credible argument for undertaking far-reaching reforms of the EU. The Germans, after all, have used France’s unwillingness to make the kinds of labor market adjustments Germany forced upon itself in the early 2000s as an excuse to punt on bigger questions.

There are still many “ifs” and unknowns ahead; it’s all still a long shot. But everyone who wishes the West well should be pulling for Macron. If he fails, France may not get another chance to regain its élan and play its indispensable role in European and world politics.

Why Higher Education Is Stagnating

The Chronicle of Higher Education has a good explainer on the expanding layers of bureaucracy that are making American higher education cost more and more without measurably improving the quality of thinking or breadth of knowledge among graduates:

When students arrive on a campus, they’re looking for services and amenities, many of which colleges have not traditionally offered. Student services — such as help applying for a scholarship, aid in landing a job, mental-health counseling, top-notch residence halls, wellness centers, study-abroad opportunities, and orientation programs that include adventure trips — are all a given on many campuses these days. And each new service or amenity comes with the professional staff to run it. […]

Growing organizations grapple with problems that bureaucrats tend to think can be solved by creating more bureaucracy. For example, an institution that wants to become more sustainable would probably name a chief sustainability officer and then build a staff for that person to oversee.

One reason this problem is hard to tackle is that the Left and Right disagree on the ultimate cause of the bloat. Many progressives see it as a product of the free market: If students and parents select colleges based on the quality of student spas and diversity centers and other amenities, then of course colleges will tailor their offerings to meet that demand. The real question is how to make access to college even more universal. Conservatives, meanwhile, are more likely to point to overweening government, including unnecessary regulations, which require more staff to implement, and to federal student loan programs, which pay the salaries of well-organized bureaucrats and end up funding superfluous services that colleges might otherwise forego.

There is some truth to both of these analyses, but neither side is offering a realistic program for how to address the underlying problem. “Free college” programs, now popular among Democrats, will simply make the underlying cost even higher, even if they shift it to taxpayers rather than consumers. And GOP slash-and-burn efforts at state universities often extract theatrical budget cuts without actually excising the source of the rot. Student tuitions go up and faculty salaries are frozen, but the bureaucratic bloat isn’t actually rolled back.

Perhaps the best hope for reducing bloat is the entrance of new types of educational institutions into the market—ones that don’t have state-of-the-art gyms and legions of guidance counselors, but that offer a high-quality education at a significantly lower price. There have been germs of efforts along these lines at the elite level. Whether they can get a big enough foothold in the higher education market to make a difference remains to be seen.

U.S. and South Korea Split Over Missile Defense

The Korean nuclear crisis continues to heat up this week, with Pyongyang launching a precision-guided ballistic missile and ominously threatening to send a “bigger gift package” to the United States. Even as such a grave threat looms, though, the political and defense establishments in South Korea and the U.S. seem unable to get on the same page.  Reuters: 

South Korean President Moon Jae-in has ordered a probe after the Defence Ministry failed to inform him that four more launchers for the controversial U.S. THAAD anti-missile system had been brought into the country, his spokesman said on Tuesday. […]

“President Moon said it was very shocking” to hear the four additional launchers had been installed without being reported to the new government or to the public, presidential spokesman Yoon Young-chan told a media briefing.

Was Moon being kept in the dark on the THAAD deployment? The Pentagon is  that is not the case, saying it has been fully transparent about the timetable for installing the controversial system. Still, Moon’s comments are likely to reinforce a narrative that was already getting some play in South Korea: that the U.S. is excluding Seoul from the decision-making process on North Korea, rushing THAAD into place over the public’s vociferous objections. And that impression of discord between allies will hardly help create a united front against the North’s saber-rattling.

Meanwhile, as Moon questions the THAAD system in South Korea, the U.S. is touting a successful test of its own missile defense systems at home. :

The U.S. military said on Tuesday it had staged a successful, first-ever missile defense test involving a simulated attack by an intercontinental ballistic missile, as concerns mount over North Korea’s advancing missile and nuclear program.

“The intercept of a complex, threat-representative ICBM target is an incredible accomplishment … a critical milestone for this program,” Vice Admiral Jim Syring, the director of the Missile Defense Agency, said in a statement.

The successful U.S. test is indeed good news, but the larger context should not be overlooked. According to a March scoop by the New York Times, the ground-based interceptor system just tested is one that the Obama administration had previously deemed a failure, since such systems registered a 56% fail rate under ideal conditions. Perhaps the military has worked out the kinks to make such systems more effective, but one successful test cannot erase the lingering doubts about the program’s viability. And the fact that the Pentagon is trying to defend against North Korean ICBMs is a reminder of how dire the situation has become.

Ultimately, any resolution of the North Korean crisis will depend less on missile defense breakthroughs than on the ability of Seoul and Washington to establish an effective working relationship. But so far, their early track record leaves much to be desired.

The Back Channel Delusion

In 1991, when I was Ambassador to Jordan, King Hussein became convinced that the deterioration in his relations with the United States was the fault of an unsympathetic Department of State. It was certainly true that the store of sympathy at Foggy Bottom for the PLK—“Plucky Little King”—as he was affectionately known, had run dry. This was a function of what was seen, with some accuracy, as his duplicity in the run up to the first Gulf War. The King had downplayed Saddam’s preparations for the invasion of Kuwait, and had tried to stay neutral in the aftermath to negotiate a settlement between Washington and Saddam. Although Jordan voted in the United Nations for sanctions on Iraq, Jordan’s borders remained disturbingly porous—to the point that only the intervention of Secretary of State Jim Baker himself blunted an effort by State and Pentagon officials to impose the Iraqi sanctions regime on the Hashemite Kingdom as well.

The King’s motivation was clear enough: He had deceived himself that this was his moment in history, his chance to broker peace. That meant balancing precariously on some imagined middle ground between the adversaries. It was a miscalculation; there was no middle ground. The King’s peace overtures were treated with hostility in Washington and contempt in Baghdad.

He then took to placating his pro-Saddam public with polemical speeches about the United States, the double standard in Washington’s treatment of the Arabs, and the supposed exploitation of Arab resources by the rapacious West. This did not endear him to the White House and still less to the State Department, whose officials were particularly sensitive to charges of clientism where Jordan was concerned. A sub-zero chill descended on relations between Washington and Amman.

I still had access to the King. But my role was to be a nag and a scold, delivering messages always full of complaint: about sanctions enforcement, the King’s anti-Western public statements, and his repeated and abortive efforts to craft some deal giving in to at least some of Saddam’s demands as cover for an Iraqi withdrawal from Kuwait.

There was, however, a more sympathetic ear in Washington. Hussein’s relationship to the CIA had always been close. The yearly subsidies Washington had once paid to the King’s private account had ceased some years before, but they were commemorated in yearly “birthday gifts” from the Agency. And the King preferred to deal with intelligence operatives, man to man. They didn’t bother him about human rights or sanctions enforcement. They wanted certain things from him, and were willing to provide certain things in return. By custom, my station chief had independent access to Nadwa Palace. Sometimes I was briefed on what was said, accurately or not; sometimes I was not briefed at all.

In one of their meetings, when relations were particularly frosty, the King asked my CIA Station Chief to facilitate an independent channel between him and White House, bypassing me, the State Department, the Pentagon, and the remainder of the national security apparatus. He thought that if he could only plead his case directly to his old friend, George H.W. Bush, all would be well. The Station Chief was willing.

The State Department bureaucracy could be ignored. But the message could not bypass CIA Director Bob Gates, and—king or no king—Gates knew better than to try an end run around Jim Baker at State.

So it came to pass that my secure phone rang with a call from Ed Djerijian, then Assistant Secretary of State for Near Eastern Affairs. He began by saying that if I tried to fire my Station Chief, the Department of State would not support me—this before he told me why I might want to fire my station chief. Ambassadors have this authority in principle; only the foolhardy test it in practice.

It had never occurred to me that State would support me in a showdown with the CIA, or in any other controversy for that matter. As every experienced Ambassador knows (and as our new President in now discovering), there is considerable institutional loyalty within the intelligence community. At State, by contrast, they keep the trap door well greased. So Ed could have saved himself the phone call.

In the aftermath I had a talk with my Station Chief; he looked suitably abashed. The King’s hope for a secret back channel to Bush came to nothing and the 1991 Gulf War eventually was launched and won.

What’s the moral of the story for Jared Kushner, Donald Trump, and the whole of the third-rate vaudeville show now playing at the White House? It is this: There are no secret back channels. It’s a myth.

Yes, it’s true, back channels have been set up and, from time to time, been used temporarily to some sound purpose. Henry Kissinger knows a good deal about such matters, and their use back in the day with respect to both China and the Soviet Union. But this is not tactic for the naive—the sort of people who don’t understand, for example, that sending a known message through the other side’s system of encryption is an excellent way to break their codes. Russian Ambassador Kisylak knows this, which is why he was reportedly bemused when the suggestion of using Russian communications was made.

The fact is that, however confidential a back channel is supposed to be, a number of people will always know what was said, what offers were made, what intelligence was passed, or what indiscretions were committed. That sort of knowledge is power.

In the case of a mooted Kushner back channel, those people “in the know” would have included not just Vladimir Putin but a good part of the Russian intelligence community. Perhaps they would have leaked it. Perhaps they would have turned it into disinformation and launched it publicly when it pleased them through one of their many surrogates. Perhaps they would have held it in reserve to use later if that served their interests, reminding Trump and company in the midst of some crisis that they possessed an embarrassing secret: that Kushner had lied, such that the President’s son-in-law was potentially compromised

One thing is certain: They would have used the information in that back channel in all ways feasible to damage the interests of our country, and promote the interests of their country. Were U.S. intelligence operatives approached by a well-connected simpleton from the inner circle of the Kremlin leadership, we would do the same. That’s how it works.

It’s really a fundamental principle: You don’t confide in your adversaries (assuming, of course, you’re not completely clueless as to who they are). If you do, you give away your power to those who do not mean us well. Professionals know this. It’s time for the amateurs to learn.

Everywhere You Look, Carbon Markets Are a Bust

Pricing carbon is a more difficult task than many green policymakers initially envisioned, it seems. Only 15 percent of global greenhouse gases are covered by carbon markets, but according to a group of leading economists, the more pressing problem has to do with the price of carbon: around the world, costs for emitters are too low to change behavior. Reuters reports:

The cost of emitting carbon dioxide must rise to $50-$100 per tonne by 2030, much higher than the current price in Europe of less than $6, if countries are to meet climate pledges made under the Paris Agreement, economists said on Monday.

It follows a call this month by a group of more than 200 businesses and governments, including oil majors Shell and BP, for a worldwide carbon pricing system to prevent dangerous levels of global warming.

This confirms something we’ve known for a long time: the current patchwork system of regional carbon markets is failing to find that goldilocks carbon price, high enough to incentivize companies to change but not so high that it drives those heavy emitters right out of the region (a process called carbon leakage).

That latter scenario is the biggest fear in any of these regional markets, and as a result policymakers err on the side of caution and set the price of carbon so low as to make the schemes meaningless. In Europe, the price of carbon would need to septuple before it ascended into the range wherein economists believe it might start helping solve the climate problem. In California, carbon market planners can’t get companies to purchase more than the bare minimum of permits offered on auction.

It seems that wherever in the world you look, businesses aren’t buying in to carbon markets—literally.

China Accelerates A.I. Ambitions

Could China overtake the United States in shaping the future of artificial intelligence? The New York Times sees a very real possibility:

The balance of power in technology is shifting. China, which for years watched enviously as the West invented the software and the chips powering today’s digital age, has become a major player in artificial intelligence, what some think may be the most important technology of the future. Experts widely believe China is only a step behind the United States. […]

Beijing is backing its artificial intelligence push with vast sums of money. Having already spent billions on research programs, China is readying a new multibillion-dollar initiative to fund moonshot projects, start-ups and academic research, all with the aim of growing China’s A.I. capabilities, according to two professors who consulted with the government on the plan.

China’s private companies are pushing deeply into the field as well, though the line between government and private in China sometimes blurs. Baidu — often called the Google of China and a pioneer in artificial-intelligence-related fields, like speech recognition — this year opened a joint company-government laboratory partly run by academics who once worked on research into Chinese military robots.

It has long been an article of faith that China’s top-down, heavily regulated system is a barrier to the kind of technical innovation that can flourish in a place like Silicon Valley. But the NYT article makes it clear that China’s A.I. push is not just about throwing money at over-regulated, micromanaged boondoggles. China has also been recruiting (and generously funding) top-level Western talent to open labs in China, investing money into promising U.S. startups to gain a foothold in the American A.I. sector, and relaxing rules that have hobbled research in the past.

The Times is not the only one taking notice: The Atlantic noted in February that China has made rapid advances in A.I. research over the past three or four years. And the Pentagon recently sounded the alarm in a report warning about Chinese inroads into the U.S. tech sector, which could allow Beijing to gain access to critical A.I. technologies with military applications—or allow China to better track citizens and impose censorship at home.

Unfortunately, China’s A.I. push comes at a time when the U.S. is preparing to reduce its investments: the proposed Trump budget would reduce the National Science Foundation’s spending for such research by 10%, even as China prepares to spend billions of dollars on the issue. Spending alone is no guarantee of supremacy, of course, but it does seem that Beijing is thinking more strategically about how to develop the technology of the future—and that America’s long-held advantage in A.I. could be slipping.