Increasing patient empathy: what manufacturers can do

As discussed in a previous post, the key to getting manufacturers to have a vested interest in building empathy with them is to insert patients into the customer experience supply chain. Here is one thing hatmanufacturers can do to support this.

Manufacturers can open up their data to third parties: For devices that record and track data, the status quo works great for manufacturers and doctors. Doctors have access to the data and use it, and in so doing have feedback for the manufacturer. The manufacturer considers that feedback and may even ensure that the data provided to the doctor is usable and useful. It's a very closed loop system where there's a solid link between the inputs and the outputs. For many devices, this is the customer experience supply chain.

The problem, however, is that the patient is left out of the loop. Doctors may want to keep data from patients for a variety of reasons (e.g. they assume patients won't understand it, they assume patients don't want it, etc.) and manufacturers may have their own reasons. In the end, neither the doctor nor the manufacturer feels that much pushback from patients because--as non-decision makers--patients have little leverage. So patients stay on the fringes of the customer experience supply chain.

The problem with this arrangement is that for a lot of devices there is information that patients would find useful, if for no other reason than (as elicited in a previous post) than to gain a better appreciation for the capabilities of the device. Moreover, the very fact that patients want data but can't get access to it is itself emblematic of a lack of empathy for patients. But given the entrenched nature of the customer experience supply chain discussed above and the manufacturer's desire to preserve the status quo ("if it ain't broke, don't fix it"), how can patients get access to the data?

One way would be for the manufacturer to let other systems access the data in its devices, essentially paving the way for some other company to establish an entirely different system with its own customer experience supply chain. Except for in this new customer experience supply chain, the patient would be the focus. While this solution is far from ideal, it gives both the patient and the doctor a prominent role in each of their respective customer experience supply chains. Once this is the case, the incentives are aligned to foster an increase in patient empathy.

Image from here.

Increasing patient empathy: what patients can do

In a previous post, I explained how the unique economic structure of the healthcare market presents an inherent challenge for the cultivation of empathy between medical device manufacturers and patients. The gist of the problem is that manufacturers often sell their devices to doctors or hospital administrators, who then [usually] decide for patients which brand of device the patient is going to get. Since patients are not the decision-making consumer, there is little financial incentive for manufacturers to concern themselves with the patient experience and understand (at an empathic level) what it's like to be a patient. Contrast this with an industry like consumer electronics, in which end users are decision-making consumers, and you can see why the consumer electronics world ends up with products like the iPhone and the medical device world ends up with products like the Monicard Home System pictured above.

Right now patients are sort of an ancillary component to what Robert Brunner and Stewart Emery refer to as the "customer experience supply chain" in their book Do You Matter?. In other words, patients do not have a significant impact on what manufacturers perceive to be the important parts of the customer experience. The key to building empathy with patients, then, is to get patients to become a legitimate component of the customer experience supply chain.

It will likely be a long time before the healthcare system is truly consumer-driven and patients are eagerly pre-ordering the latest stent from Amazon.com. So in the meantime, here are some practical ideas for how medical device patients can become part of the customer experience supply chain right away.

Patients can become effective communicators with their doctor(s): Effective communication means asking good questions (do research online before going to the doctor!) and being honest about any feedback or concerns one might have with their device, as well as being assertive and demanding that the doctor not shrug off what she considers to be a trivial issue. Doctors don't remember everything a patient tells them (they're human, after all), but the more feedback they hear from patients the more likely they are to pass that feedback onto the manufacturers.

Patients can communicate with each other: In a lot of industries, word-of-mouth is considered the best form of advertising. Indeed, there's likely a lot of word-of-mouth "advertising" that goes on between doctors. Encouragingly, patients have begun using the Internet to swap stories and share their device experiences with each other. As long as patients maintain effective communication with their doctor (see above), information shared between patients will eventually make its way to doctors.

Again, the key is for patients to influence the decision-makers, and by talking with doctors about what they've read on the Internet (even if patients bring up a bunch of rumors), doctors are more likely to pass that feedback on to a manufacturer. In the case of errant rumors, for example, a manufacturer might use such feedback to improve whatever aspect of their system was causing the rumors to be propagated in the first place. And voila, empathy for the patient.

Patients can demand their device's data: Just as one might expect a diagnostics report or explanation from a mechanic prior to having work done on a car, patients should expect the same level of transparency (at least!) from their doctor. I suppose the mantra would be, "Trust, but verify." If a patient has a device that spits out data, then that patient should feel entitled to not only getting a copy of the data but also to getting an explanation of the data that they can understand. By familiarizing herself with the data, a patient is more likely to learn about how their respective device works. Patients can be lectured all day about how device X measures parameter Y and delivers therapy Z, but until they can actually connect the dots between their health and the data tracked by the device, they're less likely to fully appreciate the capabilities of the device.

When patients appreciate the capabilities of the device, they can become more involved patients. Not only does this translate to more effective communication with their doctor (see above), it also positions the patient to take on a more consumer-type role when they need their device replaced or need to add an accessory to the device. As such, the next time their doctor prescribes a device, the patient will be able to offer an informed opinion to their doctor, something which would have a significant influence on the doctor as purchasing decisions are being made.

Next up: what manufacturers can do to increase patient empathy.

Image from here.

Why patient empathy is challenging for manufacturers of medical devices

A hot topic in the design world recently has been the importance of building empathy between businesses and their customers, a concept well documented in the book Wired to Care, by Dev Patnaik and Peter Mortensen. The basic case for empathy is actually pretty intuitive-by spending time with customers a business can better understand their needs and therefore deliver better products and services that more effectively meet the needs of customers. Formal efforts to build empathy with customers have been underway for quite some time with consumer electronics products (a classic example might be Jan Chipchase's globetrotting research conducted for Nokia), but one area where there remain structural challenges to building and capitalizing on empathy is between medical device manufacturers and the patients who use their products.

A fundamental dynamic of the medical device industry is the disjointed relationship between the patient, doctor, healthcare administrator, and the medical device manufacturer. This relationship is especially complex in the case of sophisticated devices that are not sold directly to patients and which are instead sold first to doctors or hospital administrators and then resold (via a prescription) to patients. The following diagrams illustrate (in a simplified manner) how the sales channels are structured for a typical sophisticated medical device versus a typical consumer electronic product.


While there are some similarities between the two models (for example both have "middlemen," the Doctor and the Retailer), there are two important differences between the two models: (1) the medical device model contains an "Administrator" component, and (2) the sales flow to the patient in the medical device model is a PUSH flow, whereas in the consumer electronics model it is a PULL flow. While the presence of the Administrator component is indeed an important part of the medical device sales model, this analysis is concerned with the effect that PUSH vs. PULL relationships have on how much weight is given to empathy for the end user at the manufacturer during product development.

In the above models, a PUSH flow represents a decision made by the giver/seller, whereas a PULL flow represents a decision made by the receiver/buyer. For consumer electronics, the sales flow model is straightforward. Consumers own the purchasing decision, and—simplifying greatly—if they value a product, they buy it. if they don't value a product, they don't buy it. Whether from a Retailer or directly from the Manufacturer, the flow is always PULL in nature. As such, the Manufacturer has a natural incentive to build empathy with Consumers. After all, by better understanding their Consumers, Manufacturers can better meet their needs and ultimately sell more products.

For sophisticated medical devices, however, there is a structural challenge that puts Patients one step removed from Manufacturers. For medical devices, the flow starts with Doctors and/or Administrators choosing (via a PULL flow) which devices to stock, a decision which Patients-who can only get a device through a Doctor's prescription-are essentially stuck with regardless of their individual preferences. In other words, Doctors/Administrators (I'll refer to them simply as "Doctors" for the remainder of this post) PULL devices from the Manufacturer and then PUSH those devices onto patients.

As a result, for medical devices Doctors emerge as the primary customers and Patients become secondary customers. As decision holders, Doctors hold a tremendous amount of very concentrated power. Naturally, this results in Doctors having a rather strong voice with the Manufacturer, who from a first-order economic incentive standpoint has every reason to bend over backwards to please the Doctors. So employees at the Manufacturer spend time with Doctors at conferences, training sessions, or advisory boards collecting quantitative and qualitative information and all-the-while forming empathic bonds with Doctors. Patients, however, end up getting short shrift, something that's easy to justify when Patients account for approximately zero direct revenues. As marketing personnel tally their annual market research budgets, it's easy to conclude that the benefits associated with building empathy with Patients do not outweigh the costs, which makes the decision easy. After all, why spend time learning about and building empathy with Patients when they never buy anything?

So does this mean that Patients are forever destined to miss out on the benefits that arise from building empathy? In my next post, I will discuss some possible solutions for helping empathy become a vital part of the medical device development process.


Image from here.

Disclaimer: I work for a large medical device manufacturer (not the one that made the device pictured above.)

Android vs. iPhone: Which is more open?

Guest-writing at Megan McArdle's blog, Timothy B. Lee riffs on the growing frustration that developers have with the closed nature of the iPhone platform versus the relative freedom offered by the open Android platform. I agree with Tim that this is a big weakness of the iPhone and that--if Android ever gets its act together--this could be the Achilles' heel of the iPhone. In thinking-out-loud about how Android could get its act together, I realized that there is one area in which the iPhone is more open than Android: the user interaction paradigm.

One of the main differences between the iPhone and Android respective user interaction paradigms is that Android has two off-screen buttons--one for moving Back within or between applications and one for accessing a Menu of actions available within each application. The iPhone puts this functionality in the screen, which whether by design or by chance ultimately leaves the decision of how to implement this functionality to the designer of each application. The net result is more user interface (UI) freedom on the iPhone. This may seem trivial at first glance, but upon further inspection I think that there's actually something significant there.

Granted, app developers still have to concern themselves with Apple's Human Interface Guidelines (and straying too far from these could--based on Apple's ambiguous approval rules--result in an app getting rejected), but in practice there is actually considerable diversity between iPhone apps. The downside to such freedom is a lack of consistency, but the upside is that market forces within the iPhone App Store can function to separate the apps with bad UIs from the apps with good UIs.

In contrast, Android's interaction paradigm (with the two off-screen buttons) is somewhat constraining from a UI perspective. Granted, there is probably a lot of diversity between Android apps, but they all suffer from the usability handicap created by being forced to use off-screen buttons. This handicap makes it all the more difficult for Android apps to truly break away from the pack in terms of user experience. A mobile platform is only as good as its apps, and one of the main things that makes an app good is a good user experience.

So I would argue that neither the iPhone platform nor the Android platform is as free and open as a mobile platform could be. The best solution would be a platform that has no constraints on how applications are coded (like Android) and gives UI designers maximum latitude for creating compelling interactions (like the iPhone).

Image from here.

Android Gingerbread should get rid of the dedicated "back" and "menu" buttons

According to this TechCrunch post, Google is going to be improving the user experience of its Android mobile operating system. This is great news, and I'm sure their improvements will go further than simply making the graphics "prettier." In my experience using Android on the HTC Hero and the Google Nexus One, the thing that hurt the user experience more than anything else was Android's poor usability, particularly with respect to navigation. The two big usability flaws were: (1) the use of a dedicated hardware Back button for navigating within and/or between applications and (2) the chameleon-like Menu button that, when pressed, opens a popup menu of actions the user can take within the specific application being used.

First, the Back button, which is the leftmost bottom below the screen on the Nexus One, pictured to the right. My main beef with the way it's used is that it's really easy to get cognitively lost, especially when you start shuffling between applications. My recommendation for the Android user experience (aside from hiring me!) would be to scrap the whole idea of stacking. For in-application navigation, put the "Back" button on the screen, since that's where the user's attention is, anyway. It's how the iPhone does it and it works great. And for between-application navigation (i.e. multitasking), adopt the "deck of cards" metaphor employed by Palm's WebOS. TweetDeck's iPhone client also uses the deck of cards metaphor and it's not only easy-to-grasp, but also sort of fun to use.

Now, the Menu button, which is the second-to-left button below the screen on the Nexus One. From my experience this was even worst than the Back button. The reason the dedicated Menu button is so frustrating is that it's highly unpredictable. I'm actually pretty surprised that Android ever even went with such a confusing feature, as it violates one of Jakob Nielsen's heuristics--Consistency. (Nielsen's heuristics are fundamental to the field of usability.) Since each application will almost certainly have its own set of commonly used actions, access to those actions should not be forced into one single button. The iPhone handles this quite well by letting each application define for itself how to give users access to common actions; usually applications put four or five buttons along the bottom of the screen, each representing common actions. And then maybe the last of those buttons is a "More" option, which brings up a little popup menu.

For both the Back and Menu buttons, from my perspective the key to improving usability is to move functionality away from dedicated off-screen buttons and onto the screen (where the user's attention is). These changes would put Android approximately on par with the iPhone for usability.

iPad Use Case Idea - Car Sales

Here's another idea for how an iPad could be used: selling cars. Imagine a salesperson approaching a prospective customer on the lot and showing them a short and interesting video (probably not a commercial) and allowing the customer to explore some of the car's specs on the iPad. Each manufacturer could have their own app designed to answer (in an honest way) the most common customer questions. Maybe each app could have a custom racing game that would allow customers to drive through famed stretches of roadway (the Autobahn, Tokyo, Los Angeles freeways, etc.) in the car they're interested in.

I think one big appeal of this idea is that iPad could ease the awkwardness between the salesperson and the customer. Instead of interacting with each other directly, the salesperson and the customer can now use the iPad as a means of interaction, or if nothing else as a conversation starter. Instead of the salesperson being the sole conduit for information (which the customer understandably views as a biased source), now the iPad can serve as a neutral source of information. Perhaps more importantly, whereas in a conventional exchange the customer may feel like they're being given a hard sell from an aggressive salesperson, when interacting with an iPad the customer might feel that they're in control of the experience. The net result is that the iPad puts the customer at ease.

Additionally, at least in the short term, the iPad is a novelty that signals to customers that a given car company is design-minded and "gets it." I'm thinking of companies like Volkswagen or BMW. An iPad-based sales interaction could be a real experience differentiator. Why buy a car the old fashioned way from Toyota when you can buy a car the smart way from Volkswagen?

Images for above mockup from here, here, here, and here.

iPad Use Case Idea - Healthcare

UPDATE: iMedicalApps demonstrates that an iPad can be used in a sterile field here.

Easy-to-use tablet devices (such as the iPad, which I'll use here to generally refer to any easy-to-use tablet device) give us (humanity) the chance to fundamentally improve everyday experiences. One area where a lot of experience improvement is needed is healthcare. Human errors (many due to poor usability) are a major problem, not to mention the fact that many medical devices deliver pretty poor user experiences. This is not all that surprising, given the heavy burden of clinical, regulatory, and compliance hurdles that medical devices must pass. As a result, products take longer to get to market and once on the market are more costly to change than the typical consumer product, so anything that's viewed as "non-essential" is often the first to go. And rightly or wrongly, user experience is often deemed as non-essential or dismissed as something that can be addressed in training. Combine this with the complexity of the healthcare market, in which it's common for one person to make the purchasing decision, a different person to prescribe the use of the device, and yet another person to actually use the device, and it's not hard to see why poor user experiences prevail.

Enter the iPad, a relatively cheap piece of powerful hardware that is portable, can be mounted anywhere, and requires no accessories to interact with. As the FDA has indicated with healthcare apps running on the iPhone, while medical software may be considered a medical device, the iPad itself (i.e. the hardware operating system) may not end up being considered a medical device. Taken to its logical conclusion, this would mean that the iPad could effectively become THE display and control panel for pretty much any medical device.

The image at the top of the screen shows just one possible use case for the iPad in healthcare. In this case, a clinician in a cath lab (in real life they'd probably be in scrubs but the illustration is just a quick mockup) can use the iPad to review, manipulate, and add annotations to the same images projected on the lab's monitors. And at the end of the procedure, all the results could easily be exported into the clinic's EMR. Such functionality surely exists in today's cath labs, but the iPad allows all the interaction to happen in a context that is more immediate and direct than with today's systems. Perhaps more importantly, cath lab team members will be able to communicate amongst each other more effectively, as the iPad's portability allows for team members to communicate visually ("here doctor, look at this") instead of relying solely on the verbal channel ("note the bifurcation in the right pulmonary artery at approximately 1-inch distal to termination of the pulmonary trunk").

Needless to say, it will be interesting and exciting to see how the healthcare industry responds to the iPad.

Image on monitors and iPad from here.

Freedom of business model

Critics of libertarians often conflate capitalism with a handful of specific business models (like fee-for-service or ad-supported). This leads many of those critics to falsely conclude that anytime a libertarian supports an enterprise that strays from the bounds of these business models, that libertarian is engaging in behavior that is incompatible with "capitalism" and is therefore being hypocritical.

In reality, such a charge reflects the ignorance of the accuser. Libertarians support capitalism not because of how awesome money is, but rather because it is consistent with the general notion that individuals ought to be free to engage in consensual transactions with other individuals, regardless of whether such transactions are profitable or even involve money at all.

Link via Hit & Run.

Norman Borlaug

This weekend was a proud, yet humbling time to be a graduate of the University of Minnesota. Not because of the new on-campus Gophers football stadium, but because the world is remembering the life of Norman Borlaug (left, above), an alumnus of the University of Minnesota and a hero to mankind who passed away on September 12, 2009:

Dr. Borlaug’s advances in plant breeding led to spectacular success in increasing food production in Latin America and Asia and brought him international acclaim. In 1970, he was awarded the Nobel Peace Prize.

...

Yet his work had a far-reaching impact on the lives of millions of people in developing countries. His breeding of high-yielding crop varieties helped to avert mass famines that were widely predicted in the 1960s, altering the course of history.

David Boaz suggests he be called "Borlaug the Great," a label that from what I've read the humble Dr. Borlaug would most likely be uncomfortable with. Boaz goes on to make an excellent point about how human society remembers its past:

Just think of the people who have gone down in history as “the Great“: Alexander the Great, Catherine the Great, Charles the Great (Charlemagne), Frederick the Great, Peter the Great — despots and warmongers. Just once it would be nice to see the actual benefactors of humanity designated as “the Great”: Galileo the Great, Gutenberg the Great, Samuel Morse the Great, Alan Turing the Great.

Saving the lives of hundreds of millions of people...I think that qualifies one to be "great."

Image from here.

For a large country, the US does alright

Via Infosthetics, the above graph (culled from the Flash visualization here):

...maps the base pay of the world's parliamentarians, ranked by country and expressed as a multiple of per capita GDP, versus a "Good Governance Index", which itself is a combination of the Democracy Index, the UN's Human Development Index and the Perception of Corruption Index.

In short, the further away the country dot is removed from the yellow cross, the more their MPs are being paid. The larger the (counter-clockwise) angle from the yellow line, the worse their corresponding governance.

Some commenters on the Infosthetics post have decried the visualization as unnecessarily flashy, but I think it's actually pretty useful, at least for relative comparisons. The best cluster of countries in this analysis are all countries with small, fairly homogenous populations such as Switzerland, Iceland, Luxembourg, etc. Not all such countries are in the same cluster (notably Austria and Belgium), but the biggest country (population wise) in the best cluster is Canada, with about 33 million people.

The second-best cluster of countries includes much larger countries, including the US, the UK, France, Germany, Spain, and Japan (Japan is the line that extends to the right out of the image). In general, these countries are more also more diverse (namely the US, the UK, and France).

So, in general, the trend seems to be that smaller, more ethnically homogenous countries get more for their money than large, ethnically diverse countries. This isn't all that surprising. But what was a little surprising for me was how relatively well the US does, considering that it is both the largest country in the upper-right quadrant and also the most diverse. Of course, it should be reiterated that the US' position on the graph is likely heavily influenced by the fact that the base pay is normalized per GDP, and the US' GDP is quite a bit higher than some of the countries in its cluster.

So that's what an A/B test is...

The other day I was reviewing this great Alertbox article on user experience methods, and I came across a method with which I was unfamiliar--A/B testing. Well, sure enough, just like when you learn a new word and then it suddenly seems that you hear it used a couple times within the same day, this 37 Signals post points to a real world example of A/B testing. In this case, Less Everything simply measured the number of "conversions" (I guess the number of people who tried the application for free?) when a button was placed on the left side of the screen versus when it was placed on the right side and found that putting the button on the right led to a conversion rate of 13.8% versus a conversion rate of 12.3% for when the button was on the left.

The study seems to follow the guidelines for A/B testing in that the sample size is large ("thousands of users") and it was performed on an essentially finished design where it was easy to change only one part of the design and observe the effect of that change in isolation.

Target Price Tags Lead to Shopper Confusion

While browsing through the food aisles at the SuperTarget in St. Louis Park, I observed two separate incidents of shoppers not understanding Target's price tags. Since I didn't observe that many total incidents of shoppers interacting with the price tags, this seems like an abnormally high error rate.

In the first instance, two women were chit-chatting while casually picking up food. As they passed by the barbecue sauce section, one of them remarked to the other that Sweet Baby Ray's (a brand of barbecue sauce that's fairly popular in Minnesota and Wisconsin) was on sale. As a fan of Sweet Baby Ray's myself, the comment piqued my interest (I'm always looking to stock up on something I like when it's on sale) so I looked over to the rack to inspect the price. To my dismay, Sweet Baby Ray's was in fact not on sale. But, the item directly above it (some sort of marinade) was on sale, and the large 'on-sale' ticket was hung directly above the various bottles of Sweet Baby Ray's. As far as I can tell, the shoppers mistakenly associated the 'on-sale' ticket with the Sweet Baby Ray's and used it to justify its purchase, which one admitted to the other was an "impulse purchase."



In the second instance, two teenage boys were shopping with a limited budget (this sounds like some made-up persona, but it's true!) and I passed them in the snacks aisle. One of them saw a bag of Munchies and mentioned to his friend that he loved Munchies and that they sooo good. But he ended up not buying the product because, as he explained to his friend, "Seven dollars is too much for Munchies." Not a fan of Munchies myself but nonetheless an occasional purchase of bagged chips, I thought to myself that seven dollars IS too much for Munchies...something must be wrong. So, I checked the price (since the item was not on sale, the price tag was a standard tag like the one pictured above) and found that the price for the object adjacent to the Munchies (some sort of package of several "lunch size" packs of chips) was $6.99 (i.e. "seven dollars"). However, the Munchies, whose price tag was a bit to the left of the bag and therefore easy-to-miss, were $3.99, a far more reasonable price (I think it was a super-size bag). So in this case, the shoppers' confusion led to a lost sale for Target.

In both cases, the shoppers were confused about which price tag applied to which item, which to me calls into question the effectiveness of the price tags' designs. I'm guessing they were not designed for maximum usability, as they are similar to the tags one would find at any big-box store and are probably merely the default style that the tag manufacturer provides. But, this being Target, I'm surprised that the company hasn't unleashed its army of designers on this problem, something that could be costing the company lost sales and, if solved, could possibly result in greater revenue and most-likely in greater brand equity.

One idea I had was to, at least on the larger 'on-sale' tickets, put a picture of the sale item on the tag. Manufacturers already spend a lot of effort on distinguishing their packaging from their competitors, so why not leverage that effort and simply show a picture of the item next to the price? If this isn't possible, then perhaps the price tag could at least feature an easy-to-read, non-technical, non-abbreviated description of the product. "Munchies, $3.99" would probably be sufficient.

Images from here and here.

An Idea for Reducing Energy Usage and Subsidies

I had a thought while driving home after softball today and listening to an NPR report about the complex issues involved in developing a multilateral coordinated response to the problem of climate change, something that will be addressed head-on at climate change talks in December of 2009 in Copenhagen.

Here's my idea. Once Google PowerMeter and/or similar services becomes ubiquitous, each homeowner's energy use could be compared to all the other homeowners in the same city or county. Utilities would include a homeowner's energy usage percentile rank (lower is better) on each month's bill (or paperless statement, if the homeowner so chooses) so they could see how/whether their changes in behavior are affecting their rating and private companies (such as DIY KYOTO) could provide devices that deliver feedback on energy usage in real time.

So, nothing too revolutionary with the above paragraph (see pages 195-196 of Nudge). But to really incentivize people to strive for the best ranking possible, what if receipt of the home ownership subsidy (more commonly known as the mortgage interest tax deduction) were subject to a homeowner attaining a ranking below the median homeowner. That is, as long as a homeowner's energy usage is in the lower 50th percentile of their peers (across a given municipality), they receive the full subsidy (just like they already do today). But homeowners with energy usage in the upper 50th percentile receive no subsidy.

The program could be phased in over time, so that in Year 1 no subsidies are withheld from homeowners but those who are in the upper 50% would be notified that next year, they will not receive the full subsidy. In each subsequent year, the subsidy offered to energy-intensive households would decrease (e.g. 75% in Year 2, 50% in Year 3, etc.) such that eventually only homeowners with energy usage in the lower 50th percentile would receive the full home ownership subsidy. And maybe over time the 50th percentile threshold could change or become multiple thresholds, so that homeowners not near the 50th percentile mark will still have an incentive to save energy (after all, if you're already in the 90th percentile, it may be unrealistic to think that you'll ever be below the 50th percentile, so you might just give up). The gist of the idea is to tie receipt of the home ownership subsidy to some level of energy conservation.

Not only does this chip away at the market-distorting home ownership subsidy, it also offers a progressive (as opposed to regressive) nudge to homeowners, since wealthier homeowners are more likely to use more energy. As discussed in the book Nudge, often people (Humans, not Econs, in the terminology of authors Richard Thaler and Cass Sunstein) will respond more readily to incentives with high salience than those with low salience, even if the value of the behavior changed by the incentive isn't directly proportional to the value of the incentive. The threat of losing a generous subsidy for not reducing energy usage may in fact be a more salient incentive than a utility bill that is $10 higher in a given month.

One final point: it's important to reframe the concept of the home mortgage interest deduction as a home ownership subsidy, since (1) that's what it is and (2) a tax "deduction" sounds like something to which you're entitled but a "subsidy" sounds like something that has been granted onto you and is subject to removal.

Einstein Expanded on Newton, but Newton is Still Relevant

A great exchange from the two bloggers at Defective Equilibrium, the New Zealand version of Marginal Revolution:

Udayan Mukherjee:

This doesn't mean we have to argue that markets are always and everywhere a non-starter. It is merely an acknowledgment that the model proferred by neo-classical economics is not the final draft of economic explanation, but that it is akin to the Newtonian Physics awaiting its Einsteinian upheaval. For me this is tremendously exciting, as it opens up the study of economics and allows its foundations to be put under the experimental zoom lens. If people are predictably irrational, then it is something we need to be aware of as empirical scientists and integrate into our models of market behaviour.

Tom Mathews:

Uday used a useful analogy of Newtonian vs. Eisteinian physics. Newtonian physics gave us a good approximation of how the world worked for hundreds of years - but as Einstein showed, it turned out to be fundamentally misconceived. Einstein's insights gave us a deeper, more accurate understanding of how things actually work.

But have we since abandoned Newtonian physics? Of course not. In the vast majority of observable situations (that is, except for research physicists) Newton's laws still appear to hold. Engineers need not worry that people moving around in their buildings will increase in mass as they move and thus crash through the floor, for example.

While earning a master's degree in mechanical engineering, I don't think I ever learned about Einstein's theories beyond the cursory mention that Newton's stuff is really just an approximation for how things really work, but it's so accurate for most real world applications that it's all we're going to teach you. Ten years from now, perhaps this is how neoclassical economics will be thought of.

Image from here.

Inspiration

There's something incredibly inspirational about seeing Danny MacAskill attempt something extremely difficult and then finally master it. That's what happens in the first 1:30 of this video. The rest is just awesome.



Via Kottke, who aptly describes the above feat as "parkour on a bicycle." Although I think the actual term is "bike trials."

Are stoplights really necessary?

Via Tom Vanderbilt, the London borough of Ealing is about to conduct an experiment in which they observe whether traffic flows better at some intersections without stoplights:

Ealing found evidence to support its theory when the lights failed one day at a busy junction and traffic flowed better than before. Councillors have approved a report which recommended that they “experimentally remove signals since experience of signal failure showed that junction worked well.”

I observed a similar phenomenon sometime around March of 2009 at an intersection near where I work.  For about a week, the intersection shown below, which is usually regulated by stoplights (including a left turn arrow), was regulated solely with stop signs as a 4-way stop. My personal observation was that traffic flowed no worse than usual, and if anything may have been better. Ultimately, I think the best solution for the intersection shown below is multi-lane roundabout.



View Intersection where stoplight was out of service in a larger map

Fostering Increased User Participation in Healthcare

IDEO's Tim Brown thinks that "participation is key to the next big wave of innovation in business and society." In a post specifically about healthcare, he envisions EMRs (Electronic Medical Records) and HSAs (Health Savings Accounts) as two ways to enable greater participation in healthcare.

Fundamental to this collaboration is the creation of platforms that encourage participation. By this I don’t mean goading people into eating healthier food or taking more exercise. These may be beneficial outcomes of other more systemic innovations, but they are not, on their own, going to create the major shifts that we need.

Two platforms that are already under discussion and, in my opinion, offer huge potential for improved collaboration and participation, are e-medical records and health savings accounts (HSAs). With the risk of sounding like a health-care reform lobbyist, here is why I think they are important, but also why I think current ideas about these platforms run the risk of limiting their impact.

The Obama administration has already embraced EMRs, but HSAs have typically been championed by libertarians and conservatives. I agree with Tim Brown that HSAs help people become more engaged with their healthcare decisions, but I'm skeptical that HSAs will gain much traction in the foreseeable future.

Image from here.

Dynamic Haptic Displays: The Next Big Thing?

Dynamic haptic displays like the one shown above (from Chris Harrison) seem to really be gathering momentum and I wouldn't be surprised if they become the next big thing in interaction design. The feedback channels of sight and sounds are already maxed out, but the sense of touch is currently underutilized (we can do better than just a vibrating phone). Another cool dynamic haptic display technology comes from Artificial Muscle:

Corporate Nationality As a Branding Tool

Matt Yglesias on corporate nationality:

Beyond CEOs, Nestle has 15 directors. Of them one is Indian, one is Swiss/American, seven are Swiss, and the rest are from other European countries. But there’s nothing especially “European”—and certainly nothing Swiss—about the company’s actual operations. They earn a lot of money in Europe, but the majority of their revenue is from outside of Europe, and there’s production all over the world. It’s also totally normal for large multinational firms to be disproportionately owned by shareholders located in their “home country” and home continent.

Corporate nationality, in other words, doesn’t matter. But it seems as if it actually does. And for somewhat mysterious reasons.

One reason I can think of is that corporate nationality can and is used as a branding tool. There's probably some serious brand equity in Nestle being thought of as a Swiss company because Switzerland is know for its luxury brands and chocolate. And American companies practically flaunt their American-ness (at least here in America).

Image from here.

Customer Experience In Healthcare

Jay Parkinson:

I’ve started collecting photos I take of medical clinics vs. veterinary clinics in the same neighborhoods. If anyone has some good examples, send them my way…but here’s the first. Just goes to show that when people pay their own hard earned money for healthcare, providers start competing on price and quality and appearance…essentially, the consumer experience.