PESTLE

American Politics, 5 year forecast

Well, for those readers who have been slightly numbed by the technology focus of recent posts, this may be a welcome change. It's time to look at American politics over the next 5 years.

The key political change has been Democratic control of the levers set in motion by the 2010 Census. The passing of state legislatures into Democratic hands, the ability of Congress to move towards inference instead of enumeration in some instances will tend to make Democratic districts stronger and some fence-sitting districts lean leftwards. Spoils of victory and all that. The effect will be that Democrats will be able to continue to control much of the machinery of government despite what I predict will be a 10% loss of 'countable' popularity--countable meaning various outputs including, but not limited to, voting.

The Democrats would be crazy not to factor in this 10% loss in popularity--there is no magic wand to fix the economic mess America's in, and they are the party in power during a downward slope in the economy. But the Democrats are not crazy--the Democratic leadership is experienced, savvy and saw Republicans play the same game twice during their careers. They will maintain working control with the grudging assent of a thin majority.

At the top, President Obama seems sure to be re-elected, mostly due to the lack of a qualified candidate on the Republican side. There does not seem to be one Republican or even independent candidate who could move the polls significantly, and the most likely nominee, Romney, will not exactly unite the Grand Old Party.

There are 16 senators over the age of 74, so nature will change the composition of the Senate more than will the next two elections. Those 16 are split evenly between Democrats and Republicans, so no predictions here. The oldest members of the Supreme Court are liberals or moderates and will probably allow President Obama to name their replacements during his term. But they will be hoping its his second term.

The 2010 elections are a threat to Democrats, as the only event that they can use as leverage is the state of the economy. I do believe the economy will be recovering by election day, but perhaps not enough to help Democratic incumbents--especially if conservatives find effective talking points, and voices to utter them. Democrats will be happy if Rush Limbaugh and Anne Coulter continue to be the mouthpieces for conservative doctrine--but they are unlikely to be so lucky. Fortunately for Democrats, 8 Republicans have already decided to retire by 2010, compared to only 4 Democrats (so far--both numbers are likely to grow).

The external factors most likely to influence the political situation in America are narco-war in Mexico, the disintegration of Pakistan and/or Afghanistan, and the follow-on effects of severe problems in China. I would suspect the third as being the most likely cause of political problems in the U.S.

Alternatives to alternative energy (1)

(If like me you're a geezer, you'll be seeing the fine hand and inspiration of a certain Jerry Pournelle in all of this--what hat tip could be big enough?)

Five years from now we will be spending prodigious sums of money on alternative ways of generating power. Today, most people think that means building more windmills and installing more solar panels--and that may end up being the case. 

But if that is all it means, it will also mean we have missed the bus. If we don't look seriously at systems that produce serious amounts of energy, then this will have been an exercise in ego-stroking and vanity, the equivalent of using a butterfly fan to cool ourselves as we reach for a cocktail on a summer afternoon. Neither windmills nor solar panels will get us to where we need to be. We are apparently too stubborn to license expansion of nuclear power. So what's left on the table?

There are two robust systems that don't get talked about enough: One is OTEC (which when I heard about it was OTS, but times change). OTEC stands for Ocean Thermal Energy Conversion, and it exploits the temperature differential between the surface of the ocean and the much colder water x number of feet below. (The bigger x is, the greater the differential and the more power is delivered). You could put thousands of them unobtrusively all over the world. 

They've been in existence since, oh, 1930, and there was a pilot plant near Hawaii that produced 50,000 watts during a trial. 

Someone will have to explain to me why we are not jumping all over this. It also provides free air conditioning, fish love it and it produces desalinated water. Join the org and see what's up.

The second source is solar power satellites that collect energy and beam it to Earth as microwaves at about 85% efficiency. Now it has an acronym, too SBSP or SSP, for Space Solar Power. Japan's looking at it, the Pentagon says they want to use it, and (finally) a company has been formed to provide it commercially. Again, this has been talked about since 1968, and although numerous engineering problems would need to be solved, nothing new would have to be invented to make this work. Where is the government contract for energy that would kick-start this thing?

If we are going to be serious about alternative energy, let's focus on schemes that will provide an adequate bang for our buck and do not require the invention of new ways of converting and storing energy. Just sayin'.

Green technology and hype

Well, many of you may have been surprised to learn that the number of new patents in medical technology has been declining for years. I was. But now we learn, thanks to WIPO, that the same is true for environmental technology. Every year the decline has been 1.1%. If we actually do need to save the world, you'd think it would be growing. In the sexiest areas of technology, new patents can grow by 5% per year or even more.

So, with all the hype about how alternative technology is needed to replace fossil fuels, which country is actually doing the most work about making alternative technology a reality? For solar, it's Japan, head and shoulders above the crowd--between 2001 and 2005, Japanese companies filed over 9,000 patents for solar energy technology. Second place, with only 2000 patents, went to South Korea.

Japan's lead is even greater in fuel cell technology patents--over 12,000 patents in the same time frame. The U.S. was second--with 2,900 patents.

For wind power, the leader is... Germany! in the 5-year span, they generated 1,383 patents, narrowly edging out--Japan, with 1,336.

So who is serious about alternative energy technologies?

Five year forecast healthcare technology

Although a lot will happen in the next five years regarding technology used in healthcare, to some it will seem like small beer. An annual 2% decline in patents in medical technology makes it less likely that some stunning breakthrough will arrive soon. Although patent activity is more promising in biotechnology and pharmaceuticals, business and politics conspire against us all in these fields. Hope I'm wrong...

Both the EU and the US will be focussing on interoperable healthcare records and more efficient data interchange. Expect breakthroughs in areas like greater use of software to detect potentential drug interactions and improvements in automated diagnostic tools. This is important and will save lives, as will improved communications between health care stakeholders.

Many improvements will feed through into healthcare after being invented and piloted outside of healthcare environments. This will include the routinely miraculous improvements in ICT efficiencies overall, but pay special attention to work being done in voice recognition software and automated translation tools, which will further improve communications.

Assisted living should get easier on a steady curve, with more intelligent devices to summon care and take care of household logistics, mostly via the internet. And stay tuned for surprises from the world of robotics--there may be domestic robots used in healthcare, both off hospital grounds and in the wards themselves.

Nanotechnology will play its part, mostly in terms of coating materials for stents, implants and devices, but to a certain extent in drug deliveries--but the major breakthroughs in that seem further out than five years.

Genetics and biotechnology will continue their tortuous mating dance with pharmaceuticals, but the courtship will be painful and the adjustment period long. Individual advances will continue to go unexploited and we will all continue to hold our breaths waiting for the big one. Maybe 10 years out. Maybe 20.

Overall good news, solid improvements--but everyone in the developed world is waiting for the big one. Not this time around.

Choices, technology and healthcare (4)

The great ICT explosion of the past 25 years did not happen because of one invention or innovation. It was literally thousands of incremental improvements in circuit design, chip fabrication, software, batteries, fans, mobile technology, etc., etc., that have created this new world.

The same will be true in healthcare technology--if we let it. At the Kaiser Family Foundation website, we find this:How Changes in Medical Technology Affect Health Care Costs

"Heart disease and its consequence, heart attack, is the leading cause of death in the U.S. and a good example of how new technology has changed the treatment and prevention of a disease over time.  In the 1970s, cardiac care units were introduced, lidocaine was used to manage irregular heartbeat, beta-blockers were used to lower blood pressure in the first 3 hours after a heart attack, “clot buster” drugs began to be widely used, and coronary artery bypass surgery became more prevalent.  In the 1980s, blood-thinning agents were used after a heart attack to prevent reoccurrences, beta-blocker therapy evolved from short-term therapy immediately after a heart attack to maintenance therapy, and angioplasty (minimally invasive surgery) was used after heart attack patients were stable.  In the 1990s, more effective drugs were introduced to inhibit clot formation, angioplasty was used for treatment and revascularization along with stents to keep blood vessels open, cardiac rehabilitation programs were implemented sooner, and implantable cardiac defibrillators were used in certain patients with irregular heartbeats.  In the 2000s, better tests became available to diagnose heart attack, drug-eluting stents were used, and new drug strategies were developed (aspirin, ACE inhibitors, beta-blockers, statins) for long-term management of heart attack and potential heart attack patients.  From 1980-2000, the overall mortality rate from heart attack fell by almost half, from 345.2 to 186.0 per 100,000 persons." It wasn't any one thing that made the dramatic change--it was everything.

If you followed the ICT revolution, you would normally feel very optimistic about a similar path to revolution in healthcare. There is a robust community of suppliers and inventors, there are ample rewards for the winners, there are pathways to success being charted out--we should expect to see a power-law logarythmic curve to technology making us immortal, or something like this (from Ray Kurzweil, of course):

And yet. Somehow, as governments get more involved with healthcare (usually at the express request of their citizens), something seems to get lost. The overall number of medical technology patents declined by 2% annually between 2001 and 2005--the same period that saw a 5% annual increase in patents for optics, of all things. What incentives are being changed?

And yet. Countries tend to specialise in specific areas. It shouldn't surprise anyone to discover that Singapore, Japan and South Korea specialise in semi-conductors, for example. But consider France, a respectable generator of patents and overall research. They do good things there. But they punch above their weight in patents for telecommunications, and punch under their weight for medical technology, pharmaceuticals and biotechnology. What's up with that? The United States punches above its weight in all three, while countries with very active government involvement in healthcare are not really leading in healthcare innovation. 

If we provide direction and incentives to cut administrative costs and reduce paperwork, that's where companies will focus their efforts. Intel has a medical division that is working on a large variety of hugely useful products and services, but their big headline winner to date is a joint venture with MCA to produce a tablet PC that helps doctors and nurses... communicate better, reduce information friction and lower the administrative burden of hospitals. It's... worthy. It's valuable. But Intel was born to change the world, not improve on the tablet PC, dammit.

So when I do my five year forecast on this sector, I will be more cautious than hopeful. And that's a mortal pity--I think I'm going to need a few medical inventions to get to my 100th birthday.

Healthcare and technology choices (3)

There is a major split between technologies used in healthcare. On one side are technologies used to increase efficiency and lower costs. On the other side are technologies used to improve care and extend life. The first side will tend to make it easier to increase access and level the playing field. The second side will actually increase costs and probably inequality of access.

President Obama's proposed initiatives for healthcare are all aimed at the first side, at streamlining communications and reducing information friction. This is a good and valid use of government funds and I, at least, support it whole-heartedly.

But we stand on the threshold of a new world--not a Brave New World, but a chance to overcome the hurdles at the end of our days and turn our alloted three score and ten into five score and four. It'd be a shame to delay that new world by ignoring what technology can do. 

So the question that may well control how long you and I live is, will Obama at least provide moral support for the part of technology that makes life difficult for hospital administrators and insurers--new treatments and drugs that extend life at a relatively high cost? It'd be a shame if the answer was no.

Healthcare, Technology and Choices (2)

Why is President Obama trying to convince the world that making the right choices about technology in healthcare can make such a difference in the recovery of the American economy? Well, because he's right, at least from my point of view.

Before I examine evidence and give links, let me state my prior assumptions: First, that the changing demographic composition of the U.S. makes this the most appropriate time to make a major technology upgrade to healthcare. The retiring Baby Boomers (perhaps too aware of surface healthcare issues and perhaps a bit too worried about them) desperately need remote healthcare to avoid clogging up the physical plant of the healthcare system. The desire for assisted living by the Greatest Generation can better be met by remote monitoring and consultations. Meeting both of these 'patient' preferences head on could reduce inpatient and even outpatient admissions. Reducing admissions brings many, many big benefits--huge reduction in costs, blessed reduction in number of errors, lower need for capital expansion, and (importantly, but probably not something that is measured), lower external costs to families.

This is all before examing the potential effects of technology in record-keeping, staff communications, improved performance of wards and rooms, better prescribing practices and avoidance of both over-medicating and conflictual medicating, facilities maintenance, etc. And it is also before examining the potential for technology to help detect, delay and treat medical conditions.

You can see it's a big subject. In 2007, the U.S. spent $2.26 trillion on health care, or $7,439 per person. That's two thirds of the entire GDP of China. It's big enough that small improvements are worth pursuing, and large improvements amount to a holy grail. Currently, a large part of this comes from American companies, a tax on employment that makes them a) less likely to hire new workers and b) less competitive in the world-wide market place. There's a reason car companies have plants in Canada--the Canadian government pays the healthcare insurance costs, not the car companies.

Companies that can provide technology to make these improvements will not just save money for consumers, governments and insurance companies. They will also succeed themselves, and will become additional engines for economic growth--much of it by selling their solutions to the rest of the world.

Armed with these prejudices, let's survey the field. Okay, in the next few posts. It is Saturday morning...

Stress Testing the Third Sector

Before I continue with healthcare technology, let's take a minute to talk about the third sector, the charities, not for profits and non governmental organisations that have assumed such a large role in society over the past decades.

These organisations receive their money from a variety of sources, but all of these sources are facing tough choices--which they will naturally pass on to the third sector when they can. Smart government (definitely not smart governance) would be cutting funding to third sector organisations and letting them decide which of their constituencies must suffer, and there is some evidence that that is happening. Smart management in the third sector (not something the third sector is famous for, but one can hope) would be to get firm commitments for five years at whatever level they can and to publicly readjust their missions accordingly.

How can third sector organisations prepare for the future? They are subject to the vagaries of elected officials, capricious donors and other third sector organisations, not to mention transnational bodies. What would be a good list of practices to have on hand?

1. Have a 5-year business plan for normal operations

2. Have a contingency plan for times of stress that will insure completion of core mission for 1 year

3. Cultivate a group of contingency investors/donors/funders for times of emergency

4. Create contingency agreements with landlords, car companies, food suppliers, telecoms providers, etc.

5. Have something to barter with

Come on, folks--help me out here. Those five points look pretty thin.

Technology, healthcare and choices

Let's look at lung cancer. It is decreasing by 1.8% per year among men and increasing 0.5% per year among women, tracking cessation and adoption rates of 30 years ago quite closely. The overall cost of treating lung cancer was $9.6 billion in 2004, and you can bet it hasn't gotten cheaper since then. Again in 2004, 13.3% of all spending on cancer treatment was on lung cancer.

As 85% of lung cancers occur in smokers (and, sadly for me, in ex-smokers), lung cancer is the poster child for the theory that up to 70% of all cancers are behaviour-related--it is what we eat, drink and smoke that gives us more cancer than anything else.

Hence the healthcare dilemma: New technology will without doubt provide new treatments for lung cancer. But, these new treatments will be expensive. The most cost-effective way of eliminating lung cancer is by persuading people to not start smoking. The second most effective method is by persuading current smokers to quit smoking.

President Obama's healthcare plan intends to use technology to improve communications and reduce errors. But there will also be support for new research. Some of that research will be regarding cancer. So, the $64 billion question is, should research be focussed on changing behaviour or on finding new treatments for cancers? Obviously it will be both, but what should the proportions be?

Organised medicine wants the bulk of money to be spent on changing behaviour. The patient community and some technology providers want the bulk spent on improving treatment. There will probably not be enough to fully fund both. Is there a Solomon in the house?

5 year prediction for American economy

There is obviously some uncertainty about the near term future, but it seems clear that a series of major stimuli will eventually overcome the series of major shocks to the economy and America will begin to recover. So what will the American economy look like in 5 years time?

Assuming that major legislation is passed and a new healthcare regime is installed, and assuming that major legislation is passed and a new energy regime is installed, and assuming that no major changes are made to Social Security,

1. Employment will recover quickly--the number of Baby Boomers heading into the sunset will create large numbers of vacant positions. The unemployment rate will return to 5%. However, the underemployment rate will be surprisingly high, depending on how it is counted.

2. The American economy will get even more lopsided--Obama's plan for healthcare and energy will create opportunities for some very succesful high tech companies. I will tell you who I think the real winners will be after I rebalance my investment portfolio next week.

3. Many elderly would-be retirees will take low-level jobs to supplement their incomes. This will create competition with certain immigrant classes. The American elderly will win this competition.

4. The re-elected President Obama will be struggling as mightily to control inflation as he currently is struggling against recession. It will be close to 10%. (I've explained why in previous posts).

5. The U.S. GDP in 2014 will be roughly $15.5 trillion, and finally gathering steam.

6. The U.S. government deficit will show no signs of being tamed. Total U.S. government debt will be about 88% of GDP.

That's what the crystal ball shows on a Saturday morning.