Paying for outcomes in healthcare, gravitational waves, and on Indian economy
I write this piece from London, where thankfully physical book stores are still in abundance. Waterstones in Piccadilly may very well be my favourite book shop in the world. I don’t remember a trip to London where I have not spent a couple of hours browsing books across its five floors. Moreover, the aimless browsing makes you stumble across random books, and for once you are not guided by well curated newspaper reviews to add to your reading list.
Here are some books that I bought in this trip. The one I am most excited about is Ultralearning, which promises to teach the principles of learning anything deeply and quickly. Let’s see if the promise holds – I will write a summary of it when done.
Otherwise, some worthy long-form pieces appeared this week across wide-ranging, but relevant, topics. Here are some that I found most interesting:
If you are remotely interested in gravitational astronomy, then the past month was a noteworthy one. So, what happened? A neutron star merged with a black hole some 900 million lightyears away. And why is that important? Because we ended up detecting gravitational waves borne from that event. Gravitational waves were predicted by Einstein in his Theory of Relativity in 1916, and the detection of these waves confirm his findings. Or rather, reconfirmed his findings for it was not the first time that ripples of gravitational waves (that could be as small as ‘a thousand of the width of a proton’) were measured on Earth. They have been recorded nine times in the past, but always between two black holes or between two neutron stars. This time though, the fusion between the black hole and the neutron star holds the promise to open the secret of the insides of the neutron star – dubbed uninspiringly as ‘nuclear pasta’, for the tubes and sheet-like structures that it’s is speculated to be. If it exists, it could very well be the strongest material ever discovered (‘10bn times stronger than steel’). This long-form article came out last week describing not only the findings from the event but also recapturing some of the underlying principles, including how a LIGO observatory that detected these waves works. It is one of the better pieces of science writing, and I highly recommend it.
Healthcare is being radically transformed. And it’s starting with one state at a time. North Carolina in the US is adapting a ‘pay-per-outcome’ model instead of a ‘fee-for-service’. Simply out, hospitals are paid for the treatments they provide to the sick. However, under the pay-per-outcome model, they will be rewarded for keeping people out of hospitals! So, how will it work? Hospitals and other care units will be paid for delivering outcomes such as keeping blood glucose or cholesterol under control. These markers are often leading indicators for more serious disorders that follow (say, a heart attack), and a proactive approach to managing them will reduce more expensive treatment costs later. This is revolutionary, for healthcare happens to be one of the most conventional industries, and resistant to change. However, two trends are bringing about this change. First is the spiralling cost of healthcare. To control that, the new payment model nudges primary care providers to do more screening (for example, diagnosing depression earlier), and even set up home visits to deeply understand and eliminate challenges the patients face (for example, poor ventilation triggering asthma). This story summaries the North Carolina experiment. The second factor bringing about healthcare 2.0 is the emergence of data driven decision-making. By tracking health data on individual patients, providers and insurers can better predict the disease onset and take proactive action. This is a sensitive issue, for we are talking about personal health data. However, data science will soon than later transform healthcare, and we are already seeing big technology players entering this space. One such is Verily, an offshoot of Google, that aims to use data to ‘create new digital, personalised ways to tackle disease. Data will enable ‘personalised medicine’, which in its simplest form is taking the right amount of drug at the right time. Here is a story that came out on Verily. When I was working at Novo Nordisk, we were seeing both these trends emerging (pay-per-outcome and data-driven medicine), and now the first few concrete use cases have started to appear.
If you are searching for a primer on the current state of the Indian economy, then listen to this podcast with Raghuram Rajan. Rajan, former chief of Reserve Bank of India, takes a balanced view on the Modi government, that’s not coloured with political undertones found in so many other economic commentaries on India. In brief, the Modi government, once patronised by corporate India is gradually losing favour with it. The economy is slowing down, marked by flat consumer spending and a 6% YoY growth, the worst since 2013. The government is sending mixed signals by increasing spend and lowering the interest rates, but at the same time, imposing higher taxes on foreign investors. If you find Rajan’s take reasonable, then you’ll most likely enjoy his book on the 2008 economic crisis, Fault Lines.
A quote I came across last week:
In the long run (and often in the short-run), your willpower will never beat your environment.
- James Clear (I wrote about his game-changing book on habits here)