Tuesday, July 12, 2016

Uncertain Health in an Insecure World – 87


In early 19th century England, bands of workers called Luddites destroyed textile factory machinery that threatened their job security. Followers of mythical Leicestershire-man Ned Ludd (below), the Luddites were accused of criminal activity by the British government, and labeled “small minded” by business magnates for their violent resistance to technological progress.

The Industrial Revolution validated the Luddites’ fears about job losses and working conditions.

In early 21st century America, Dr. James Madara, CEO of the American Medical Association (AMA, above), the world’s largest physician advocacy group, referred to digital health technology as “snake oil.” His position was provocative by design, suggesting that the AMA would save the profession from this looming threat.

The first snake oil formulation dates from the 7th century B.C., when it was used to treat arthritis. To this day, medicinal uses of snake venom for blood clots, cancer, etc. are under active study.

On hearing Jim Madera’s snake oil quip, digital health technology mavens were up in arms, and critical of the AMA for taking a regressive analog worldview. Paul Sonnier (below), leader of a 47,249 member DIGITAL HEALTH LinkedIn group, was one strongly outspoken critic, noting that the AMA’s new president “has admitted that he doesn’t even use an EHR in his own practice.”

But like snake venom, digital health technology is complicated… and all science-y.

And to be fair and accurate, Madara criticized marginal digital products, saying “From ineffective electronic health records, to an explosion of direct-to-consumer digital products, to apps of mixed quality… This is the digital snake oil of the 21st century… It’s like trying to squeeze a 10-gallon product idea into a 2-gallon health care knowledge base… digital tools that make the provision of care less, not more, efficient.

Most digital health-tech companies are trying to deliver real tools, not toys.

Regulators at the U.S. Federal Trade Commission (FTC) have singled out a few bad actors. FTC’s Bureau of Consumer Protection Director Jessica Rich stated, “Truth in advertising laws apply in the mobile marketplace.” But FTC fines for MelApps and Mole Detective ($17,963 and $3,930, respectively) for false claims on skin cancer detection seem more symbolic than material.

Modern healthcare reimbursement has forced a digital culture change on medical practice.

Healthcare insurers require that doctors and health professionals use EHR’s if they wanted to be paid. Meaningful EHR use has now been linked to the “value” movement, that is as much about conforming to new cost curve-bending reimbursement policies as it is about healthcare quality. Having trained on and used three different EHR’s in two countries in the past five years, I can personally attest to their pros and cons. Early adopters and champions are keys to digital health technology approaches becoming reality. But even these advocates would have to admit that the lack of EHR interoperability and endless system upgrades negatively define this digital medical marketplace.

At the June 2016 Digital Life Design (DLD) Conference, Seimans AG President Joe Kaeser (below) predicted that the value chain in healthcare will be cut in half in the next ten years by digital technology. “Speed is the favorite of strategy consultants”, said Kaeser. “But speed just gets you to disaster earlier.” And when considering how big incumbent companies survive, “Size doesn’t matter… Adaptability is the answer.”

“Managers who grew up in hierarchical system, getting it into their brains is the challenge.”

Kaeser sees digital factories transforming industry from experience-based to knowledge-based platforms. For example, optimization of the power grid has moved big power plants at the center of distribution grids (supply-based) towards distributed energy sensing (demand-based) and real-time utilization (conservation-oriented) models.

Paradigm shifts are occurring in digital machine technology.

Kaeser predicts the growth of stress-less autonomous vehicles, and an end to car ownership. But a Model S Tesla driver was killed in May in Florida watching a Harry Potter movie while using the Autopilot™ function. A Tesla spokesperson attributed the crash to a sensor failure (below) in detecting an 18-wheel truck against a bright sky, noting that there were 130,000,000 miles of Autopilot™ use before one tragic death.

This first reported autonomous car driving death will not be the last.

What does the future of corporate innovation look like?

What Kaeser called “Interesting Seimans,” a disruptive new subsidiary named next47 (€1B investment to begin in Oct. 2016) is replacing “Boring Seimans.” Seimans AG has 350,000 world-wide employees; next47 will have offices in Berkeley, Shanghai and Munich. next47 presents the technology giant (founded as a telegraph startup in 1847) with an internal culture clash that previews eventual corporate culture change. At “Boring Seimans”, inventions were held close and patents tightly protected; still, it spun off >180 high-tech startups. next47 data must be shared and ideas opened up, in the free spirit of startups.

Digitalization requires a change in mentality, to be both socially accepted and adopted by people.

But post-Brexit Europe and post-Bernie Sanders America have a problem, and presents a challenge…  Society has lost its enthusiasm. The very fact that a self-declared socialist was a U.S. Presidential finalist reflects the transformation from the American dream of widespread wealth into a nightmare of economic exclusion.

In this prickly environment, political and corporate leadership must clearly explain what digitalization is all about… for individuals and for society. Does digital efficiency simply mean broad job losses? Do AI, blockchain and autonomous machines portend the end of the middle class?  Does digitalization elevate one person into wealth, while nine fall by the financial wayside? Will there be any personal resources left to buy the benefits of digitalization on Amazon?

Failure to manage the digital message will create… no, has already created societal unrest.

When President Kaeser welcomed President Barack Obama to the Seimans AG plant in April 2016, he only had a few minutes to relate the relevance of global digital engineering to the leader of the free world. Kaeser saw two options: 1) tour Obama through the company’s physical plant to highlight its many impressive technologies, or 2) tell a story of “digitalization at work.” He chose that latter.

With Chancellor Angela Merkel cringing nearby, Kaeser described how Seimans software was helping Callaway Golf (Carlsbad, California) to simulate new golf club performance before production. He explained how his digital company offers a simulation tool that measures the human interface with the club, to individualize the club for use by one golfer… And all for almost the same price as factory stock production.

The message to one amateur golfer was as simple as placing a “Yes We Can” 2008 Obama election logo on the club… Digital technology makes “Me”, the average President, into a better golfer.

So, when it comes to digital technologies… there will likely be more losers than winners.

What’s in it for the favored few may not benefit the masses.

Going digital may positively impact the cost of doing business, without enhancing humankind.

In the Square, we are not technology Luddites – we understand and accept such inevitable digital world trade-offs. But when the 100th autonomous car driving death is recorded, we hope that watchdogs call upon society to reflect on such digital “progress”. 

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