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Report from Last Week’s World Economic Forum

Thursday, November 13th, 2008

Last week, I had the pleasure of participating in what the World Economic Forum founder, Klaus Schwab, described as the planet’s largest brainstorming session. Approximately 700 leading thinkers (and me, too) converged upon Dubai to discuss the greatest economic challenges facing the world, from the current economic crisis to future crises. People from 6 continents came together, people from government, academia and business, to discuss these events. And yet one man dominated the event, a man who wasn’t even there.

That man was Barack Obama.

Obama did not address the convention. And while several prominent Obama advisers were in attendance, most were not (being busy working on the transition) and no one there attended in any official Obamoid capacity.

Yet, Obama was omnipresent, mentioned explicitly in almost every official conference presentation. When the leader of Dubai addressed the convention, his first words were directed to Obama. Obama was explicitly discussed in thousands of casual conversations. Indeed, every non-American I spoke with wanted to talk about Obama, often congratulating me for his recent election victory.

But it was Obama’s implicit presence that I found most remarkable. On the final day of the meeting, you see, all of us met in a general session and listened to seven people who had been asked to summarize the ideas generated over the previous two days. These summaries were often distressing. We conference participants had been charged, after all, with outlining the biggest problems facing the world, and we had no problem finding some major problems to discuss.

Foremost on many people’s minds, of course, was the current economic crisis, which most agreed could be the worst crisis in decades. But as serious as this crisis is, it was viewed by most attendees as a temporary problem, overshadowed in the long run by some much more serious and potentially permanent threats — threats of water shortages, soil destruction, food deprivation, global warming, over population…all of these problems causing serious political unrest. Pretty distressing stuff.

To make matters worse, we all recognized that the solutions to our current economic crisis are the very kinds of things that will exacerbate our long-term problems. Most efforts to overcome the financial crisis are focused on getting the global economy growing again. When economies grow, so too do CO2 emissions and deforestation efforts and water usage.

While most of us at the World Economic Forum agreed that governments need to take strong measures to avert a global economic crash, we also felt that the world is in trouble if economic success continues to depend on unsustainable growth.

That is why Obama loomed so large over the meeting. Because the challenges facing the world need a leader prepared to tackle such vast problems. And over the last decade, the world hasn’t had such a leader. I don’t mean to denigrate the great leadership from people we’ve seen like Al Gore, in bringing attention to global warming, or even more recently to Gordon Brown, for designing some sensible first steps in responding to the economic crisis.

But let’s face it, the world still looks to the president of the United States for global leadership. And based on what I saw in Dubai, the world now awaits for Barack Obama to take office and lead the way. The economic crisis has provided further evidence of just how small our planet is, how interconnected we all are. We live in a time where neither the economy nor the environment are local, where the US can’t afford to put “Country First” without regard to global challenges.

When it meets in Davos, the World Economic Forum is famous for its celebrities, with Bono and Sharon Stone and Angelina Jolie, among others, putting their fame to work on behalf of important world causes. The recent World Economic Forum in Dubai, however, was devoid of such celebrities. It was attended, instead, primarily by academics like me. Ironic then, that a man mocked by John McCain for being a celebrity dominated the event anyway, without even having to leave his Chicago home.

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Insane Soccer Dads and Vitriolic Presidential Campaigns

Wednesday, October 22nd, 2008

Here in the final stretch of the presidential campaign, things are getting even uglier, with the other side lobbing misleading verbal attacks while our side tries to remain above the fray. With this kind of negativity and distortion, it is hard to imagine the winning candidate being able to pull the country back together.

But perhaps my experience last weekend at my eight year old’s soccer game illustrates a way for all of us to put the campaign back into perspective.

My boy plays on a travel team stacked with fast and aggressive players who usually win, racing past the other team to any open balls. Ahead 4-1, they were still scrambling after the ball, trying to out-muscle the other team.

The ball trickled toward the sideline, and one of our players leaned into an opponent to get the ball. Parents of the other team waited for the referee to call a foul, but she let them play on. Outraged at this injustice, the parents began complaining among themselves about how rough our team was, how they were pushing all the time, and how the referee never seem to call fouls on our kids. They quickly decided that we were benefiting from home field advantage.

Armed with this “knowledge,” they found themselves in a competitive lather. Each time two boys fought for the ball, they were convinced that it was our kids who initiated the contact, and our referee who was allowing such inappropriate aggression. Caught up in the emotions of the moment, they began verbally abusing the referee, screaming that she was blind, biased, and didn’t belong on the field. When that didn’t work, a couple of the dads began yelling to their kids, instructing them to push our kids down.

When they called upon one of their kids to push my kid, I must admit to feeling a strong urge to beat the crap out of the two most egregious fathers. But the urge was only fleeting, mainly because I had two pieces of information that helped me to see the situation that day more clearly than the other parents.

First, I’d managed to strike up a conversation with the referee at halftime, and learned that she was a high school freshman from the same town as our opponents. She wasn’t a hired gun, favoring our team. She was a 14-year-old, struggling to figure out where to draw the line in a game between two groups of intense eight year old boys.

Which brings me to my second piece of information — having studied human behavior for the better part of my professional life, I knew that these parents were making an honest mistake. They were unconsciously viewing the game through distorted lenses. Studies have consistently shown that people have a very difficult time observing partisan contests with objective eyes. That’s why in a game between the Eagles and the Cowboys, Eagles fans will invariably believe, passionately, that the officials are biased in favor of Dallas, even pointing to specific plays that demonstrate clear evidence of such bias. Cowboy fans, of course, will believe that the officials are biased in favor of the Eagles.

I actually reflected on this phenomenon as two of the players leaned into each other that day, neither player initiating the contact, and neither player getting the better of the exchange. The opposing parents erupted in a flurry of catcalls and accusations upon witnessing this battle. They were honestly enraged, but the source of their rage, the circumstances that prompted their anger, were entering their consciousness only after being distorted by this powerful psychological lens.

It was easy at that moment to see this strange crowd as emblematic of the current presidential election. My son’s team is centered in Ann Arbor, a reliably Democratic community. Our parents were sitting calmly on the sidelines, muttering under their breath about the insane parents standing 20 feet to our right. The opposing team is from a solidly Republican city just south of Ann Arbor. And they sounded to us like the kind of angry crowds we’ve heard about who scream epithets at McCain/Palin rallies.

But how would we Ann Arbor parents have reacted of our team was behind 4-1 in a physical game like this? I’d like to think we would remain calm, like the presidential candidate favored in our community. However, there is lots of reason to believe we would have seen the game differently, viewing the aggression as more one-sided than it was.

The McCain campaign is trailing badly in the polls. Is it any surprise that McCain supporters are calling foul so aggressively at rallies? Is it any surprise that they believe that it is Obama who was the first one to go negative in the campaign? Is it any wonder that they are convinced that it is Obama who is putting his campaign ahead of the country’s best interests?

We citizens are currently standing on the sidelines observing two presidential campaigns caught up in an aggressive battle. We are all convinced that the media is biased against our candidate, just like those parents were convinced that the 14-year-old referee was taking sides.

When our psychological biases cause us to scream at our eight-year-old boys to maim other people’s eight-year-old boys, it can not come as a surprise that we exchange nasty words with each other when caught up in an intense and important political campaign.

But the campaign will soon be over, and the elbow throwing will cease. Maybe then we will all realize that this campaign wasn’t a game, and that we are all, as Americans, rooting for the same team.

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Why Health Care Never Wins Elections

Tuesday, October 14th, 2008

Despite Barack Obama’s recent surge in the polls, much could change between now and election day. While it looks like this election will be decided by the economy, unexpected events could dramatically change the campaign narrative. Terrorists could conduct an attack inside the US. Obama, despite his two years of steady poise, could say something really stupid between now and November, that would cause independent voters to flee.

But one thing is certain: this presidential campaign, like all recent campaigns, will not be decided by the candidates’ health care proposals.

The US health care system is a bigger threat to the American population than terrorism ever was. As horrific and evil as were the attacks on 9/11, and as much as we needed to mobilize our troops to depose the Taliban from Afghanistan, the more than 3000 people who died on 9/11 are dwarfed in numbers by the tens of thousands of people who die, needlessly, because they have no health insurance.

Ask people what they are worried about, and health care usually sits near the top of their list. Almost 50 million people in the US have no health insurance, people who have to decide whether that gash really requires stitches, or whether that heartburn is a mere stomach problem or sign, instead, of a potentially fatal heart attack. A similarly vast number of people have too little health insurance to cover the basic health needs. Consequently, they hover in economic peril, one serious illness away from bankruptcy.

To make matters worse, persistently rising health care costs threaten our global competitiveness, handcuffing US industries with huge expenses. This health care inflation also adds to state and federal budget problems.

Yet despite this dire situation, health care doesn’t win elections, because health care problems never feel as immediate as other threats. When the Dow Jones plummets 800 points, people understandably worry. They can see their life’s savings dwindling, and their hopes of early retirement evaporating. When a student conducts a school massacre, everyone is caught up in the terrible drama, with their view of gun control quickly rising up their list of concerns: gun control advocates will feel even more passionately than before the massacre that we need to restrict gun ownership, while gun control opponents will become even more convinced that the whole situation could have been averted if more of the teachers were packing.

There is no aspect of the health care crisis that has the immediacy of a bank foreclosure, a terrorist attack, or even a verbal gaffe from one of the candidates. Our health care crisis fails to win elections in part because it doesn’t feel like a crisis to enough people. It also fails because it is hard for candidates to come up with a simple solution to such a complicated mess, and therefore any solution a candidate puts forth is easily caricaturized and criticized.

Both candidates have proposed ways they think will improve our health care system. I feel strongly that Obama’s approach, even in its preliminary form, is far superior to McCain’s. But that probably won’t matter on election day. Ultimately this campaign will be won over other issues.

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Presidential Debates Round Two and Three: Show Us That You Care

Tuesday, October 7th, 2008

Barack Obama would like the next two debates to be about the economy. John McCain would like them to be about anything but the economy, preferably with plenty of discussion of 60′s radicals and crazy preachers.

McCain won’t get his way, of course. We will hear discussions of the bailout, taxes, health care and the like, with Obama eloquently explaining the failed Bush-McCain approach to these issues, while McCain tries to paint Obama as an out-of-touch, tax-and-spend liberal.

But what will it take for Obama to win the debates? The best answer I’ve heard to this question comes from a man who has been an irritant to Obama supporters for many months now, a man whose advice I approach with great caution, out of fear that he is setting a trap for the candidate. The man is Bill Clinton, and the advice is this: to win the presidency, it is less important to make people like you than to convince people that you like them.

The man who “feels our pain,” famously biting his lower lip, knows how to project empathy. Obama did not display this talent in the first debate. He did an excellent job of portraying competence and knowledge, and of appearing calm and presidential in the middle of a financial crisis, a strong contrast to McCain’s erratic behavior during the same period.

But the campaign is getting dirty now. Sarah Palin is accusing Obama of pallin’ around with terrorists. We can expect some unofficial interest group to start cranking out ads with you-know-who God d@#$ing America. McCain and company will try to scare people away from Obama.

To dampen these fears, Obama needs to show people that he cares for them. How best to do that? He needs to reveal his heart without coming off as a phony. If he starts biting his lower lip, we are in trouble. If he pulls out one of those tired old campaign stories and expects us to feel his empathy — “why just the other day in Toledo, I spoke with Betsy Wilkerson, a single mother blah blah,” — well, been there, slept through that.

Obama needs to tell us about people who he truly loves deeply, and about how he wants to help the same people. When he talks about his love of America, and therefore his love of the American people, he should talk about how our great country helps people very close to him achieve their own version of the American dream. Does anyone who he loves rely on Medicare? Let’s hear how that person would be affected by McCain’s policies.

Most undecided voters won’t be voting with their heads; they won’t be calculating tax rates, health-care deductibles, and federal budget deficits and seeing which candidate comes out on top. Instead, they will be voting with their guts. And if they can’t trust a candidate, they won’t vote for him.

The image of Barack Obama palling around with terrorists won’t stick in people’s minds if they see his caring side on display Tuesday night, and if they see how his head for policy details works together with his heartfelt desire to help the many people he loves.

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Why (Your Candidate’s Name Here) Will Win the Debate

Friday, September 26th, 2008

This Friday, John McCain and Barack Obama will presumably (John McCain willing) square off in the first presidential debate of the season. For people like you, interested enough in politics to be reading this post, the outcome of the debate is already largely determined — your favorite candidate will not only win the debate, but your support of the candidate will be even stronger than before, and your view of his opponent — well, frankly, you will wonder why anyone could consider voting for him.

Debates are polarizing not simply because of their ridiculous formats, with red lights blinking when the time is up, and with embarrassing questions from the moderators followed by non-answers from the candidates. Instead, they are polarizing in large part because of the way people evaluate information on topics that they feel strongly about.

In a classic 1979 study, three Stanford psychologists recruited students who held strong opinions about the death penalty, and exposed them to hypothetical research results that either confirmed or challenged their established opinions.

Suppose you are one of the students and you begin the study already strongly opposed to the death penalty, because you don’t think it deters criminals. Imagine that the researchers now present you with a brief description of a new study that demonstrates a deterrence effect. How will you respond?

As it turns out, you’ll begin to waver… “Hmm, maybe I was making a hasty judgment,” you’ll wonder.

But now the researchers give you a longer description of the study. The study includes data from 10 states over a decade, analyzing homicide rates. Your brow begins to furrow: Only 10 states? And what about historical trends leading up to this time period? Why only one decade? And why didn’t they study more common violent crimes, like armed robbery? With this more elaborate information, you confidently conclude that the study is so seriously flawed that it does nothing to challenge your preconceived notion of the death penalty.

Meanwhile, another student reads the same study. This student, unlike you, has come in to the exercise favorably inclined toward the death penalty, and is very impressed with the study design: 10 whole states! For 10 whole years!

Kind of reminiscent of the Annie Hall scene, where Diane Keaton’s character is asked by her psychologist how often she and Woody’s character have sex, and she replies that they have sex practically all the time, too often in fact, something like three times a week. Meanwhile, Woody’s character is asked the same question by his psychologist, and provides a starkly different opinion — reporting that they almost never have sex, barely more than three times a week.

Like the characters in Annie Hall, the students and the Stanford came to very different conclusions even though they were exposed to the same facts. Indeed, those who favored the death penalty were quite critical of studies that denied a deterrence effect, while opponents of the death penalty thought the studies were quite excellent.

The findings from the Stanford study are even more distressing than I’ve described so far. You see, all the students were given examples of conflicting studies — one that proved deterrence and one that seemingly refuted it. All saw critiques of each study, as well as responses to the critiques. And the order of the studies was randomized by the researchers — pro or con — across students. Even the study designs were flipped around randomly: sometimes the pro-study took place in 10 states, and sometimes the con-study did.

The result? The more information students saw, the more polarized their opinions became. Pro-death penalty students became even more in favor of the death penalty, and those who were previously opposed to the death penalty became even more opposed to it.

We humans can’t help but perceive evidence through the lens of our existing beliefs. McCain will really prove to his detractors what a terrible president he will be, as will Obama to his detractors.

So when you wonder how your mother-in-law can watch the same debate you watched, and completely overlook the obvious flaws in her preferred candidate, remember that she is probably wondering the same thing about you.

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Bankers’ Brains, Market Behavior

Wednesday, September 24th, 2008

This week’s version of John McCain — the populist version — is blaming our current, um, situation on greed. (With such strong fundamentals in our economy, we couldn’t call it a crisis.)

Last week’s John McCain, and the one from the week before that, and the week before that, and the one who has served in the Senate for two decades, would not have been so negative about greed. As a fan of free markets, this long-standing version of McCain believed that greed pushed markets forward, causing people to take the kind of risks that propel economic innovation. The new McCain pretends that he believes markets are flawed because they encourage greed. The old McCain would have seen today’s banking debacle as a rational market correction to a decade of generous monetary policy from the Federal Reserve.

The old McCain was wrong to have such unfettered faith in markets. People are not nearly as rational as the market evangelists in the Republican Party would have us think.

But the new McCain, the one who insincerely blames our banking crisis on greed, is equally wrong. Rationally directed greed would never have led us to this crisis. Greed alone is not the cause of recent business failures. Trust me, the former directors of Fannie Mae and Freddie Mac are not jovially counting their earnings and laughing at us taxpayers for providing them with generous severance packages. The leaders of AIG and Lehman Brothers are not congratulating themselves for raking in the dough while running their companies into the ground. (That said, I think any solution to this problem should involve large paybacks from these extremely wealthy people.)

Both the old McCain and the new one don’t realize much more fundamental limitations of human nature that, when combined with unfettered markets, are a recipe for disaster. Let me illustrate one of these limits, a strange kind of herd mentality that infects our species, by asking you to imagine a situation that most of you will never be in.

You are a medical student, spending a month on your OB/GYN rotation, learning how to deliver babies and how to take care of female reproductive health. You’re spending the morning in the operating room, and the head surgeon has just finished prepping a patient. The patient is now anesthetized and the surgeon looks your way and says: “Hey student, come over here and feel this pelvic mass.” The surgeon is asking you to perform a pelvic examination on this woman, so you will be better at recognizing abnormal masses when you examine future patients. But you are concerned — you’ve never met this woman before, and you realize that you would be probing her most private parts without her permission, offering her no benefit at all. You would simply be practicing on her anesthetized body. What would you do?

When non-physicians are asked to consider the scenario, they say they wouldn’t feel right about examining this woman without her permission. Indeed, people entering medical school feel strongly that it is important to ask for such permission. But in my research, I have discovered that graduating medical students frequently feel that such permission is not necessary. In fact, they experience a significant shift in their opinions shortly after completing their OB/GYN rotations.

Why do students’ views change so much? Because they learn through example. They come to respect the surgeons conducting their training, and learn that the surgeons are generally good people — motivated to help patients and to teach students. So when respected surgeons invite them to conduct these pelvic examinations, their moral concerns clash with their opinion of the surgeons. Ultimately, many students reconcile this clash by becoming less concerned about the morality of examining women without their consent.

What do pelvic exams have in common with our banking crisis?

I expect that in the last few years, many financiers looked around and saw their peers taking on increasingly risky mortgages. Their rational sides worried that such practices were unacceptably risky. But honestly, who can calculate the exact risks of such practices? They knew that their peers were very smart. They recognized that the institutions their peers were working at were historically cautious. So they followed suit. Meanwhile, their peers glanced back in their direction, and came to the same conclusion.

People are often prey to social norms and peer pressure. We often judge our own behavior by comparing it to the people around us. Sometimes our rational instincts compete with these herd instincts, and in such cases the herd instincts often win.

What neither the old McCain nor the new McCain recognize is that free markets, for all their wonders, can be disastrous when left unfettered to compete with the irrational side of human nature.

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A Moose Killing, Oil Drilling Hockey Mom…Just Like Me?

Thursday, September 11th, 2008

With the nomination of Sarah Palin as vice presidential candidate, the McCain campaign seems to hope that the election will hinge upon personality rather than policy, on candidates’ life narratives rather than their 15 point energy plans. Recognizing that they cannot win based on whose policies benefit the largest number of people — Republican health plans and tax cuts not being friendly to the middle class — the grand old party instead appears to be betting that the combination of an academically challenged military man and a moose killing hockey mom will resonate so much with voters that the electorate will ignore their policy proposals.

But it is dangerous to dismiss the Republican ticket as one of personality over policy, because for many voters, policy is inseparable from personality. You see, 15 point plans are inscrutable to most of the general public. For such people, the only way to evaluate such plans is through the lens of a candidate’ s life narrative, by sensing whether the candidate has come to the same conclusion about a topic that the voter would have come to if the voter had had the time to think things through.

Most people don’t have the inclination to become informed about complicated political issues. How should we handle Iran’s nuclear efforts or Russia’s aggression against Georgia? What should our country do about global warming, Medicare costs and the mortgage crisis? With most of our citizens still unable to find Iraq on a map, we can’t expect people to vote for presidential candidates based on the candidate’s vision for how to promote clean coal.

In a complicated world, many voters fall behind the candidate who they believe shares their values, and who comes culturally speaking from a place closest to their own. This explains part of the power of the three G.’s for the Republican Party: God, guns and gays. Ask people to list the most important issues facing the country, and the three G.’s won’t usually come out on top. But even though most voters care more about the economy than about whether to ban assault rifles, many of these same voters don’t have a clue about what the government should do to help the economy. So when two candidates spar over the economy, and one candidate “looks like me” — likes to hunt, say, or goes to a church like mine — whose economic plan am I going to trust?

In trying to identify which candidate thinks most like they think, many people also pay close attention to whether a candidate comes from their preferred party. In this respect, voters are a lot like sports fans. If, for example, the personnel of the Los Angeles Lakers were traded, whole cloth, for that of the Boston Celtics, Celtics fans would quickly embrace Kobe Bryant and his teammates while rooting against Paul Pierce and company. Sports fans are amazingly flexible in their attachment to specific personalities. I’m sure the Dallas fans hated Terrell Owens when he was on the Eagles, put off by his grand standing and poor sportsmanship. But now of course, with their Super Bowl hopes riding on his broad shoulders, most cowboy fans love him. Ultimately sports fans don’t seem to root for athletes as much as they support whoever is wearing the right color jersey. In much the same way, the general public supports the policies of the people in their parties. If George Bush had brought out a tax cut seven years ago that was geared largely towards the middle class, it would have been embraced by most members of his party. But once he settled on the current form of his tax cuts, most of the party faithful were quickly convinced that Bush had chosen the best possible way to cut taxes.

I don’t mean to take this point too far. Boston Celtics fans would still hold nostalgic feelings towards Paul Pierce if he was traded away, and would probably root for him to beat anyone but the Celtics. And voters who identify with the Republican Party will not go along with any policy that a Republican president puts forward. A Republican president who decided to ignore Roe V. Wade when nominating Supreme Court judge would quickly be vilified in the party. But for the hundreds of policies in which people don’t have strong preformed opinions — how to handle Fannie Mae, what to do about the globalization of the economy — the best way to figure out the right policy is for the voter to figure out which candidate is “most like me”.

Thus, we can expect the Republican base to rally behind McCain and the policies he proposes between now and November. And now, with Sarah Palin resonating with the Republican culture of small-town, gun toting individualists, the dismal policies that McCain is proposing could play an even smaller role in influencing people’s voting choices.

To win elections, it is not necessarily enough to favor policies that align with the interests of the middle class, because people in the middle-class won’t necessarily grasp the details of those policies. In saying this, I mean nothing but respect for most voters. It is simply impossible for most people, including myself, to become well-informed about more than a few important political issues.

Obama is right to point out the benefits of his tax cuts for the middle class, especially compared to McCain’s embrace of the Bush tax cuts. His campaign needs to push hard on the issues, showing people that the candidate has real substance behind his otherwise vague hopes. But if people think Obama is an elitist, his policies won’t resonate with them. That’s why Obama has to keep returning to his biography, and must do so in a way that not only sheds the elitist label the Republicans are trying to pin on him, but also emphasizes the commonness of his experiences. They must show that Obama, despite being such an extraordinary person — with an absent father from a foreign country, a long struggle for racial identity, and the brains and hard work to make law review at Harvard — is also like them.

The Obama team appears to be trying to address this issue. That is why we know more about Joe Biden’s train riding habits — knowing the name of each conductor — than about his efforts to promote the partitioning of Iraq a couple years ago. And that’s why those of us who are passionate about policy, and even informed about some policies, can expect to be disappointed by the way both campaigns are run over the next two months. Because both campaigns are likely to turn up the volume on personality and culture. We will see the Republicans work hard to make Obama look like he’s foreign, to make people suspicious about his policies. We can hope Obama counters these attacks with an effort to make himself look more normal, while highlighting the many ways in which the two Republican candidates are far from normal people.

For Obama to win, he needs to convince people that he shares their basic values, and that they can trust him to approach the many challenges of the Oval Office the same way they would approach them if they were forced to engage in the issues of our day.

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Simple Economics, Complicated Medicine

Monday, September 8th, 2008

Seven days into the patient’s hospital stay, his doctors realized they had fought a losing battle. The patient, an overweight smoker with a touch of diabetes, had come to the emergency department with shortness of breath. After a series of tests in the emergency room, he was given a dose of antibiotics for possible pneumonia and admitted to the hospital. His condition deteriorated quickly and now, on a ventilator in intensive care, he was unconscious and a chest x-ray showed that his lungs had completely filled up with fluid. Over the next couple of days, after long discussions with his family, the doctors and nurses withdrew his ventilator and the patient passed away.

Should the hospital be paid for taking care of this patient? Traditionally, hospitals in the U.S. are paid for services rendered, regardless of whether the patient benefits from the services. Intensive care stays cost money, and many patients in such units die despite the care they receive. Hospitals can’t afford to be paid only for those patients who survive such ordeals.

More recently, however, healthcare reformers have questioned this payment mechanism, asking why healthcare providers aren’t paid more often according to the quality of their care, rather than the intensity of this care. Common business practice holds that when you buy a faulty product, you get your money back. The same doesn’t seem to hold for hospital care.

Economics has taught us a number of simple but profound truths about how markets behave. For instance, as the supply of a good increases, the price of that good should drop. When looking at the economic mess we Americans call a “health system,” then, it seems only reasonable to turn toward these simple truths when considering how to reform health care.

Hence the power of the pay-for-performance movement in medicine. The idea is simple — human beings, as economists have taught us, respond to incentives. If we reward doctors for providing high quality care, or punish them financially for providing less than optimal care, then doctors will do better at their jobs.

Unfortunately, as shown in an article in July’s issue of the prestigious Annals of Internal Medicine, simple truths often don’t work in healthcare. The authors of this study focus on the problem of pneumonia, the illness that killed the patient whose story opened up this essay.

Pneumonia is an infection of the lungs, often caused by bacteria. Pneumonia is often deadly. Therefore, if patients are going to survive this disease, they need rapid treatment with antibiotics. Indeed, when a group of pneumonia experts reviewed the medical records of several thousand pneumonia patients, they discovered that those who had received antibiotics within four hours of arriving at the emergency department were significantly more likely to survive than those who did not receive them so quickly.

It wasn’t hard for reformers to look at this evidence and conclude that those doctors who give pneumonia patients antibiotics within four hours should be paid more than those who do not. Pay for performance, not for poor performance.

Only one problem with this plan however — it creates a hoard of problems.

Pneumonia, you see, is often difficult to diagnose. When a patient comes to an emergency department with shortness of breath, doctors like me are going to wonder whether it’s from pneumonia, asthma, or congestive heart failure. We’ll also consider more urgent problems, like a potentially-fatal blood clot in the patient’s lungs, or a blockage of one of his coronary arteries, leading to a heart attack.

What should we doctors do in these situations? Well of course, we should move quickly to make the diagnosis. If the patient looks relatively stable, we should hold off on any preliminary treatment for a short time, while obtaining the kinds of tests that will point them toward the right diagnosis.

Unfortunately, the right diagnosis doesn’t necessarily announce itself in the emergency department. A good chunk of people with pneumonia come to the emergency department without fevers. They are often so dehydrated from their illness, that their pneumonia doesn’t show up on chest x-rays. It’s pretty common, in fact, for emergency department doctors to treat patients for multiple problems at the same time, because they aren’t sure of the diagnosis. I’ve taken care of many patients in the hospital who, even after a few days of treatment, leave me befuddled as to whether they were short of breath because of congestive heart failure or pneumonia.

Why this brief introduction to the difficult diagnostic life we physicians face in the hospital? To reveal the pitfalls of simple economic schemes (pay for performance, dude!) on the practice of medicine. You see, when insurance companies began rewarding doctors for administering antibiotics to pneumonia patients within four hours of arriving at the emergency department, many physicians raised a proper and justified stink. They pointed out the strange behaviors that would follow from this incentive scheme — doctors would give too many patients antibiotics, even stable ones who could have waited another hour for test results. Overuse of antibiotics leads not only to antibiotic resistance, but also creates potentially life-threatening side effects. And this payment scheme, by making doctors so concerned about treating pneumonia quickly, diverts their attention away from other possible diagnoses. In other words, the already complicated job of diagnosing sick patients gets even more complicated, thanks to these simplistic reforms.

Beware of business people and politicians who promise that a little common sense — pay for performance — will improve our healthcare system. The same kind of quality improvement processes that make companies more efficient at producing widgets, and the same kind of financial incentives that maximize the performance of door-to-door salesmen, won’t improve the way doctors like me treat patients who come to us struggling for air.

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Equal Play for Equal Pay in Women’s Tennis

Tuesday, August 26th, 2008

This year, for the first time, the Wimbledon Championship offered equal prize money to men and women, joining the U.S. Open more than 30 years after that tournament recognized the importance of equality between the sexes. Unfortunately, neither tournament has joined the idea of equal pay between sexes with the notion of equal play. Women’s championship matches persist as best-of-3 sets, while the men battle away for as many as 5 sets. This inequality bothers me, not only as a feminist, but also as a tennis fan, for it leaves me with no hope of witnessing an epic women’s final.

Consider the Men’s Wimbledon’s final from last July, a glorious 5-setter between Rafael Nadal and Roger Federer. If that had been a best-of-3 match, Nadal would have cruised to a quick 2-0 victory, and the final, rather than being a battle-for-the-ages, would have merely been lopsided evidence of Nadal’s new dominance. However, because the men played best-of-5 sets, Federer was able to show his resilience and demonstrate to the world he can still play inspired tennis. We tennis fans were rewarded with a gargantuan match, with stirring play across both sides of the net, the winner in doubt for well more than three hours.

Contrast that with the all-Williams Women’s Final. The final did not lack for excellent tennis play. Unlike previous matches between these sisters, both of them brought their A-game to this final, and the match was a joy to watch. But after a mere two sets, barely half way through my breakfast at Wimbledon omelet, the match was over. Great tennis, no doubt. But unfulfilling.

If only these women had played a best-of-5 match like the men. Would Serena have made a comeback to win the third and fourth sets? Would Venus have then regained momentum to win the fifth set? Or would Serena have continued in her remarkable comeback?

We will never know.

In the old days, people mistakenly believed that women were too frail to play 5-set matches. This mindset allowed us to go for decades without a women’s Olympic marathon. This mindset still causes us to have a men’s decathlon versus a women’s heptathlon. And worst of all this week, as the US Open begins once again, it has left us tennis fans with no realistic chance of watching an epic women’s final.

Time to fight for equal playing rights for women.

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Electoral Logic

Thursday, August 14th, 2008

We are in the midst of what will certainly be the most expensive presidential campaign in history. The political powers are already inundating us with negative ads. The candidates are flying around the country in a frenzy, holding events and rallies with their partisan flocks. And the parties are putting finishing touches on their made-for-TV conventions, each of which will cost millions of dollars only to give the respective candidates a temporary boost in the polls.

Am I the only person who finds this process horribly inefficient? Why so much money, energy and time just to leave us with another election that will be determined by anti-Castro Cubans in Florida and exurban evangelicals in Ohio?

Fortunately, there is a better way, a truly American way to maximize the efficiency of the campaign. No, I’m not talking about settling the race with a hot dog eating contest. (My money would be on McCain.) Instead, I’m referring to a Scalia-like return to the Constitution, to the spirit of our founding fathers. I’m talking about taking the Electoral College to its logical conclusion, and awarding Electoral College votes not state-by-state, but county-by-county. My bold plan will give Americans what they want — the Constitutional right to remain blissfully ignorant about presidential politics. At the same time, it will allow a small cadre of voters to become energized by politics, because their concerns will actually matter to the candidates.

Let me briefly illustrate this plan.

I live in Michigan, a swing state that will be overrun by the campaigns well before November. As a Michigander (or, as some prefer, a Michiganian — unless you are from the Upper Pennisula, then you are a Yooper and everyone else is a Troll — because they live “under the bridge,” but I digress), I’ll be forced to unplug my phone and turn off my radios and TVs, to avoid the robo-calls and incessant advertisements that will inundate my unfortunate state come November. A county-based Electoral College plan would relieve me of this burden. My home is in Ann Arbor, you see, which is solidly Democratic; thus, under a county-based electoral plan, my neighbors and I will be robo-call free. My friends in Saline, a heavily Republican area, will also be spared. Detroit, Traverse City, East Lansing, and a few other Democratic strongholds — off the hook. Rural Michigan, a consistent Republican bastion — virtually ignored by the campaigns.

By my estimate, there would be only a couple counties in the entire state of Michigan up for grabs, with a total population of around 1500 voters. Assuming other states are like Michigan, and recognizing that Michigan has a larger population than most states, I roughly calculate that the county-based electoral College will leave the choice of our next president of the hands of 63,171 people (plus or minus 73 people, given the current rate of foreclosures).

Think about how efficient our campaigns would be if the candidates spent their time courting only these 63,000 people. The campaigns would quickly abandon television and radio ads, recognize that most of the advertisement revenue would be wasted on voters like me, who live in uncontested counties. Rallies in sports stadiums, town hall meetings in elks clubs — these, too, would be abandoned in favor of campaign events that targeted the “Swingin’ 63K.”

Even the political conventions would be more efficient with this plan, as each campaign would abandon its delegates in favor of flying the 63,171 “people who matter” into Colorado and Minnesota respectively, to court them up close.

Some people will no doubt complain that this county-based system abandons the idea of one person one vote. That it disenfranchises too many Americans. But it is the current system that disenfranchises voters. In our current system, Californians and Texans, New Yorkers and Louisianans, Montananites (you know, the people who wear those cool hats) and Mississippians, … all would be irrelevant to presidential politics, and thus their specific needs are ignored. A county-based Electoral College system would force campaigns to address issues in each of the 50 states (except North Dakota, according to my most recent analyses, where only one county is up for grabs with a total of seven voters; no system is perfect, alas).

What’s more, the new system, by focusing on such a small number of voters, would inevitably raise the quality of political debates. Like Iowans before the presidential primary, these voters would become extremely knowledgeable about politics. Heck, a good portion of them would have time for one-on-one meetings with the candidates, looking them in the eye to ask them unvetted questions (a chance to find someone to replace George Stephanopoulos on Sunday mornings), maybe even bowling with them (although the Obama campaign may try to interest them in a friendly game of H-O-R-S-E instead).

Disenfranchised? If that means being able to avoid negative campaign ads and dinner-thwarting robo-calls, then please disenfranchise me! Thanks to the Electoral College, the majority of Americans who go to the polls in November will cast meaningless votes, for candidates who have ignored their states in favor of a handful of swing states. Clearly the founding fathers, in creating the Electoral College, had a desire to make presidential campaigning more efficient. We owe it to these great men, then, to take their initial inspiration to its logical conclusion, and make the process even more efficient. It is time to make almost everyone’s votes meaningless, so the Swingin’ 63K can do the important work of educating themselves about the candidates, and choosing our next president.

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Peter Ubel
paubel@med.umich.edu
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Center for Behavioral and Decision Sciences in Medicine
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