Two weeks ago I committed to a series where I discussed the economics of the healthcare industry, so in performing some research I caught up this week with a character from a past Update, The Player.
The Player is an old friend of 30 years. A good looking, quite smooth chap, you can probably work out the origins of his nom de guerre. Unfairly intellectually gifted as well as aesthetically, The Player now finds himself a surgeon.
Using last week’s theories on luck and randomness I would say The Player has been genetically lucky.
Before I continue I need to be clear that none of the theories I am currently using as bases are mine. I am careful not to plagiarise, and attempt to make clear references as often as possible. Luck is something that many authors and researchers have written about lately. I have mentioned some of these authors previously and will do so again here…now.
Nate Silver is an expert in predictive analytics and luck, while Daniel Kahnemann and Amos Tversky are experts in the field experimental psychology, judgement and decision making and I base a lot of my thoughts on their work.
Nassim Taleb is an ex finance industry professional who has written books on luck and probability with his most well-known being The Black Swan, or Fooled by Randomness.
I won’t go into detail regarding their ideas, but again, I see a lot of value and applicability in what they write.
Check ‘em out….or don’t.
Back to The Player. I thought we were going to discuss costs and benefits, subsidies and fees, but instead we ended up talking about data, risk and luck. Strange…
Here is an idea I am not sure is spoken about enough, but am pretty sure most people have thought about. We are currently awash in data. Mountains of it. Here are definitions of information and data:
Information: “Knowledge derived from study, experience or instruction”
Data: “Factual information, especially information organized for analysis or used to reason or make decisions”
It was only a few years ago, 2011 I think, that it was acknowledged that over 90% of the information generated by humans had been created in the previous 3 years. Blogs, info sites and other media were flooding the world with information. Not new information, or even true and accurate information; just information. But, given the above definitions can we really even call what was out there in such quantity as “information”? Probably not…
Now we are living in the age of IBM’s Big Data, where capturing, analysing and interpreting data is regarded as the Holy Grail, with the most notable use being the tracking of users’ clicks and what that means for shopping habits.
Fairly stinging indictment of our priorities that we have the capability to capture this amazing record of human preferences and the current highest and best use we come up with is; ”What are people most likely to buy?”
Every employee of a medium to large enterprise I speak to confirms they have access to a “dashboard” that tells them the benchmark performance levels for their role, and their actual performance levels.
The Player is a privately employed surgeon, but still does work for the WA Dep’t of Health where his performance is tracked using a dashboard. Number of consultations are obviously tracked, as is surgery time, average recovery time, error rate and a whole host of data we didn’t get into.
And this makes perfect sense to me, because when you boil it down, the only two things an individual really has in life are time and their health, so the effectiveness and efficiency of our health professionals should be one of the first things we measure.
But The Player then confirmed my suspicion that almost every area of life has been hijacked by the High Priests of Finance by saying the primary reason for the Dep’t of Health gathering this data was to monitor costs and management of a budget.
Not to ensure high level medical care was being provided.
Not to protect the most valuable commodity any of us possess.
And given that most citizens still philosophically view their health, and provision of world class healthcare, as a publicly provided service, not to protect the reputation of the government.
Just to make sure it happens fast, at the lowest possible cost and with as few mistakes as are publicly acceptable.
And what’s an acceptable error rate in medicine? Is it 1 in a 100, or 1 in a 1000, and is it different for a GP than for a surgeon who has you under general anaesthetic?
It changes depending on your circumstances, doesn’t it? If you are visiting the GP for some antibiotics you are probably willing to accept a higher error rate than if you are under the knife, which is why GPs see people every 10 minutes and surgeons may only have 2 to 3 surgeries per day.
So, different types of medical issues have different levels of uncertainty. A quick definition of uncertainty:
In statistics, uncertainty is: “The amount or percentage by which an observed or calculated value may differ from the true value.”
Now we come back to the concept of risk, with risk just being the price attached to the uncertainty regarding a future event’s outcome. Once again, a definition:
Risk: “The possibility of suffering harm or loss.”
Putting these two definitions together you can see uncertainty is a part of risk. Uncertainty is the degree to which an actual outcome can differ from the forecast or predicted result, and risk is the chance this variation may result in loss or harm. But what about the chance that variation could result in benefit?
What about if you replaced “suffering harm or loss” in risk’s definition with “benefitting from a positive outcome”? Risk could potentially be used to describe the possibility of positive outcome as well.
On the topic of uncertainty and risk, the Player told me a story about a patient he helped while on call for Accident and Emergency (A & E) over a weekend not too long ago.
A 40 year old bloke (apparently with a biological age closer to 60) with a blood alcohol reading of about 0.2% drove his car into a tree at 3am on a Sunday, injuring his passenger and fracturing his femur and wrist. He was also bleeding into his stomach.
The police arrived on the scene and the driver gave a false name. Smart moves so far. I don’t see a lot of luck involved in the outcome as it all seems engineered on purpose to be as bad as possible.
Our driver ended up at A & E where the trauma surgeons stopped the gut bleed, which is when The Player stepped in, repairing the driver’s femur before moving onto his wrist.
The Player was finished and closing when the driver had a massive heart attack on the table. Once again, trauma specialists stepped in and resuscitated the driver, operated and found a large blockage in one of his heart’s arteries. This was removed and a stent inserted and the driver’s life was saved.
The Player found himself chatting with our driver in recovery the next day.
What began as a series of poor decisions by the driver leading to an almost unavoidable conclusion, resulted in the driver being in the right place, at the right time in order for his life to be saved.
The uncertainty would initially have been about whether a patient with the initially identified injuries could be saved and healed. Intuitively I suspect most patients in that condition would be OK, so the risk could have been reasonably low.
BUT, when the identified injuries had almost been completely addressed another element of uncertainty appeared. But our driver happened to be right where he needed to be in order for the risk of death to be minimised.
Briefly back to an acceptable error rate and what amount of uncertainty is acceptable.
So, if your GP got it wrong by 100% and said there was nothing wrong with your son, when in fact he had an ear infection, the price might be a few nights bad sleep for you, and a nasty fever and lack of appetite for your son.
But if your oncologist got it 100% wrong and declared you free of cancer when in fact you were not, the price might be your life.
And that’s when The Player and I started talking about the dollar price of risk. For him, it’s his professional indemnity insurance, and for his patients, it’s the price of their private health insurance.
I don’t have an exact number, but the Player told me his premiums are extremely high. Is that fair? Considering the training he has undergone, the level of monitoring and scrutiny that every procedure is exposed to and the way we view our health as a public good?
Sometimes I don’t think so.
Particularly when you consider that finance advisers, stock brokers and others who regularly blow up people’s life savings either pay no professional indemnity insurance, or if they do, pay premiums that are quite low.
The Player’s advice is, rely on the public health system in times of crisis but make sure you have top shelf private health insurance for that rainy day.
Because there is no real way of knowing or predicting what health risks one might face in the future. We try, but with minimal success.
And that’s what the insurance industry does. It is a transference of risk from the poor to the rich, where uncertainty is deemed unacceptable to the point where you are prepared to pay substantial amounts to have the risk of loss met.
About $2,000 a year for the risk your house might get robbed, or burned down, and about $2,000 a year for the risk of serious illness suffered by any member of your family.
A brief aside here. That’s really what the banking/lending industry is all about as well. We pay interest on money we have borrowed to enjoy the fruits of tomorrow, today. There is uncertainty around what we might earn and save in the future, so we mortgage our future earnings to remove that risk and enjoy that lifestyle today.
What about bad luck?
The extraordinary bad luck experienced by the late Phil Hughes in getting struck on the rear of the head in just the right place to break a bone that then severed a cranial artery was shocking to all who saw the footage.
A talented, skilled and experienced sportsman playing in what was his second tier competition. On 63 n.o. he had passed the jittery stage so these factors should have led to a reduction in the probability of a mishit, a miss timed shot…but it still occurred.
Further evidence supporting his extraordinary bad luck are two events; one of which is fairly well known and almost part of Australian sporting/political folklore.
TV footage of our erstwhile PM, Bob Hawke, at the crease in his whites, and taking a shoulder-high swipe at a delivery, only to be struck in the face. The footage showed his glasses smashing and the remnants spraying around the popping crease.
Then last summer, following some disparaging comments, the UK ex-newspaperman and now US-based talking head and ultra-tool Piers Morgan was dared by Brett Lee to face three deliveries.
Morgan took up the challenge and on national television, during a lunch break in one of the Tests, Lee lined up Morgan with three bullets, pinging him on the back with one.
Now, neither Hawkey nor Morgan was even hospitalised as a result of their injuries…but a professional athlete passed away.
That’s bad luck…
So, the final point on health and luck I want to make came from a conversation with another friend whom we will call The Scientist. A qualified medical scientist who spends her time consulting with medical specialists, mainly haematologists and oncologists.
We were having another episode of an endless debate about genetics versus environment and health when The Scientist blew me away by telling me about the “Rule of Three” regarding incidences of cancer.
When quizzed about what this meant, The Scientist replied that development of cancer can be attributed, on average, to one third genetics, one third environment and one third luck.
That’s right, whether you develop cancer, the health scourge of the western world, is 33% attributable to a purposeless, unpredictable and uncontrollable force…
In a world where we pay the rich to take away our risk, and we constantly strive to remove uncertainty that’s food for thought…