Search

Editor's Note: This is the third post in a three-part article series. In case you missed it, you can read the first post here and the second post here. 

America is desperate for affordable health care. We spend more on health care than any other developed country. But we are not seeing the results. Our health ranks last among industrial nations.

The first of this three-part article series focused on the two reasons why we are spending so much more with so little results. The second article outlined three steps for changing the drug and insurance industry business model to achieve lower prices.

Now, we'll take a look at five American behaviors that must be changed if we are to realize lower healthcare costs.

Five American behaviors making health care unaffordable

Our healthcare costs are soaring because:

1. Our weight is killing us. Half of Americans are overweight or obese. Our weight is the driving force behind our national diabetes and heart disease epidemic.


2. Drug abuse. Opioid abuse is now a leading cause of death.


3. Vehicle accidents. They are rising again, killing and injuring millions annually.


4. Gun violence. It now compares to vehicle accidents as a leading cause of death and injury.


5. Infant mortality and children health. America’s infant mortality is comparable to Serbia’s and three times higher than Japan’s

Healthcare costs will not decline until America, and Americans, address these behaviors.

1. Our national weight crisis

Americans cannot afford our weight. The cost to medicate our weight is bankrupting our country. The baby boomer generation is accelerating us over this cliff. Seventy-five percent of boomer women and 80 percent of boomer men are overweight or obese. Their weight-related illness threatens to bankrupt Medicare.

It is past time for Americans to recognize that our consumption of sugar, fats, salt and food additives is as dangerous to our health as using tobacco. The solution is to adopt public policy that treats unhealthy foods and beverages just like we treat tobacco products. We really won’t like doing this. But we also can’t afford to pay the healthcare costs of being overweight and obese.

2. Drug abuse epidemic

The war on drugs has failed. Two radical steps are required to curtail our drug epidemic.

First, we must recognize individual drug abuse as a disease, not a criminal act. Such a system would stop throwing drug abusers in jail and making them criminals. It would instead treat their addiction.

Secondly, we must hold drug companies and doctors accountable for medicating pain in a manner that promotes addiction.

Implementing these two solutions will curtail the drug epidemic, reduce law enforcement and incarceration costs, and grow our economy by enabling employment of individuals with a drug addiction disease.

3. Vehicle accidents

America is again facing a vehicle accident crisis. This comes after years of success in reducing death and injury through government mandates of increased vehicle safety features. Human distraction from using digital devices is one of the root causes for rising vehicle accident rates. The other is impairment from drug/alcohol use.

Technology is on the cusp of coming to our rescue. Mass adoption of autonomous vehicles will not only lower driving costs, but its will also reduce vehicle accidents.

4. Gun violence

Is there a more contentious issue than guns? It is a Second Amendment right to own a gun. And Americans own more guns than any other country.

The byproduct of gun ownership is gun violence. The two leading causes of gun deaths are suicide and murder. Half of all suicides are executed with guns. America must invest in mental health care to reduce gun violence, drug abuse and homelessness.

Another telling data point is that African American males are the largest demographic group murdered by guns. Linked to this trend is the fact that African American males in Midwest and Mid-Atlantic cities confront 45 percent unemployment rates.

Gun violence can be reduced. But doing so requires public consensus, and policy, to reduce the underlying causes of gun violence.

5. America’s shame of high infant and children mortality

How America cares for its newborns and kids is a major reason why health insurance costs are higher. Unhealthy kids end up becoming unhealthy adults. Both drive up healthcare costs.

Poverty is a key reason why we have a high infant mortality rate and unhealthy kids. Over 20 percent of our children live in poverty.

Today, Medicaid provides 16 million children with health care. Another 7 million children are uninsured. Public policy that cuts Medicaid will only generate millions of future unhealthy adults with diminished potential. The solution is to provide expecting mothers and children with health care that will improve their health, diminish their need for health care and enable their fullest potential.

America’s healthcare crossroad

We are at a crossroad on health care. Spending one out of every five dollars on health care is limiting our economic growth. Plus, for all the money we are spending, we are not getting healthier.

The ultimate solution is for Americans to behave in a healthier manner. Specifically, we must:

1. Strive to lose weight and live healthier lives


2. Reduce our gun violence by investing in mental health and creating job opportunities for African American men, most especially in Midwestern and Mid-Atlantic cities


3. Adopt autonomous vehicles to slash vehicle deaths/injuries


4. Treat drug addiction as a disease focused on restoring individual health and productivity


5. Provide universal prenatal treatment and children healthcare.

America's healthcare bottom-line question is: Do we invest in solutions, or cut benefits in the belief it will also cut costs?

Where we go next will determine the future of our health and healthcare costs.

The team at Futuro Construction wondered why clients were choosing to build high-performance homes. Did homeowners want to protect the environment by saving energy and using nontoxic products? Did they want durable homes that require little maintenance and have low energy bills, saving money over time? Were they seeking healthier homes with cleaner indoor air?

We sat down with Matt Silva, Futuro Construction’s general manager, to discuss his findings.

What began as market research for Silva led him to discover one of the most important (but rarely discussed) items on customers’ minds: “More than 70 percent of the people surveyed indicated health concerns as their top priority, long-term costs as the second, followed by environmental concerns,” Silva told us.

“Clients aren’t necessarily raising concerns about healthy home air when they approach a builder. People come to expect indoor air quality, so I don’t think they ask for it much. People just come to expect it. If I bought a car, I just expect it to have a steering wheel.”

Futuro Construction is no stranger to giving clients healthy indoor air through several methods: “We build homes that are so tight that we have to use no-VOC paints,” Silva said, referring to eco-friendly paints free of volatile organic compounds. “Our cabinets are made locally and are formaldehyde free. More and more, we see that clients feel an increased sensitivity to these compounds in their daily lives, and we work to address it from the beginning.”

Tightly constructed homes exchange less air between the interior and exterior through gaps and cracks. While tightly constructed homes are great for reducing energy costs for the homeowner, they require the builder to ensure proper ventilation for healthy indoor air.

“An average home with a family of four can add 18 or more gallons of water vapor a week to the air through showering, cooking, doing laundry and other daily activities,” Silva explained. This water vapor increases indoor humidity levels and can cause mold issues in the home if it isn’t properly ventilated.

Futuro Construction installs Zehnder HRVs and ERVs to promote healthy air exchange. These systems run around the clock, maintaining ideal humidity levels and promoting indoor air quality. The HRV also adds a component of energy efficiency: Its heat exchanger transfers heat from the exhaust air to the intake air, transferring up to 95 percent of the heat.

“The beauty of a Zehnder system is that it does that job better than most without the concern of it being an energy hog,” Silva told us. “If you have something that is going to continuously operate, you want it to use as little energy as possible, like the Zehnder systems.”

Silva's survey results are consistent with research by UL Environment, which asked 1,000 consumers about their top motivations for green purchasing decisions.

The findings were published in the report Under the Lens: Claiming Green a few years ago. Forty-three percent of the participants reported being concerned about indoor air quality and 54 percent indicated being concerned about chemicals that come directly in contact with the skin, such as lotions and carpeting. Although waste reduction and natural resource conservation are priorities to many green shoppers, health and safety ranked No. 1 on the list of decision influencers for the building/home improvements category.

Image Credit: Futuro Construction

By Luna Atamian

Corporations have made significant progress on the sustainability front, but the work done to date mainly focused on making sure companies do less harm, protecting reputation and managing risk. In other words, the work focuses on ‘minding the gap’ between society and corporations.

However, given the disconnect and fragility of the relationship between society, business and institutions, minding the gap is simply not enough. Business needs to tread carefully and thoughtfully as it works out how to start mending the gaps and reconnecting with society more effectively.

On March 9, Salterbaxter decided to bring great minds together during the U.S. Sustainable Business Forum to discuss the changing role of business in society, the need for business to radically reconnect with stakeholders, and how to do this. If you missed the discussion with speakers including McKinsey, BNY Mellon, DSM and Novozymes, we’ve compiled some of the highlights for your reference.

Adopt the “connected leadership” model

Lack of trust in the business community is not a new trend. In fact, it extends back over 2,000 years. However, there is no doubt that anti-business feeling has increased since the global financial crisis of 2008. Corporate social responsibility (CSR) has failed both companies and society because the initiatives are almost always detached from the core commercial activities.

Breaking this anti-business sentiment is possible, but it requires reconnecting corporate social responsibility with real commercial activities and rethinking what leadership means. The ability to effectively connect with society -- and its real needs -- and to integrate societal and environmental issues deeply into the business model is crucial and can boost profitability and competitiveness for corporations.

Robin Nuttall, partner at McKinsey & Co. and co-author of “Connect”, said the shares of companies that connect outperform those of competitors by 2 percent every year, amounting to a performance boost of 20 percent over a decade. The book also identifies four tenets of “connected leadership” that companies – and leadership -- can adopt to improve profitability and relationship with society.

1. Map your world: Start by quantifying the economic impact of external issues on your company and stakeholders as businesses perform better when they have a good understanding of the world around them.


2. Define your contribution: Ask yourself the following questions: what do I want my contribution to the world to be as a corporation? What’s my long-term purpose?


3. Apply world-class management: Integrate these considerations into your business strategy.


4. Engage radically: Proactively and regularly engage and communicate, regardless of immediate need and interest.

CSR reporting and partnerships can effectively involve your stakeholders

That’s right. Engaging and reconnecting with your stakeholders is key to business success. But what are effective ways to do so? Partnership building and CSR reporting are powerful options to explore.

Let’s start with partnerships. BNY Mellon, for instance, just released a new study in partnership with the U.N. Foundation, one of its stakeholders, entitled Return on Equality. “This is a great story of stakeholder engagement and partnership at its best," said Heidi DuBois, global head of CSR and social investing at BNY Mellon. "We have had a partnership with the UN Foundation for several years now and together, we decided to focus on Goal 5, which focuses on achieving gender equality and empower all women and girls.”

Another interesting example is Novozymes. Claus Stig Pedersen, head of corporate sustainability for Novozymes, spoke about how partnerships and the U.N. Sustainable Development Goals (SDGs) have guided the company's long-term targets for fulfilling the company’s stated purpose of finding biological answers for better lives in a growing world. The SDGs helped companies prioritize their activities and attract the right partners. Similarly, working with the right partners helped Novozymes develop better, more sustainable products.

Finally, we all know that CSR reporting is important for transparency and communications purposes but it’s also a great way to engage with stakeholders. It can be both the culmination and kickoff of a year-long engagement process with experts, managers and employees, and external stakeholders with different stages that bring the company and its different stakeholders together, from the materiality analysis through to engagement around the results.

Set sustainability goals – and incorporate them into compensation structures

If corporations have serious sustainability ambitions, then they must incorporate sustainability goals (whether environmental or social) into their senior executive compensation structure, otherwise, these targets will never be prioritized.

Indeed, linking executive bonuses exclusively to short-term financial targets will incentivize executives to deliver short-term results – results that are not sustainable.

Hugh Welsh, president of DSM North America, spoke about the company started to link all managers’ compensation to sustainability in 2010, with targets related to greenhouse gas emissions, energy and water usage, eco-friendly product development, and employee engagement, besides traditional revenue targets. The result was real, measurable progress.

Gain greater understanding of consumers to change behaviors

Sometimes even sustainability-driven businesses aren’t successful at providing consumers with the right environments in which to meet their sustainability aspirations. Sille Krukow, founder and chief behavioral designer at Krukow, thinks behavioral economics is one of the answers.

Behavioral economics analyzes how choices are presented to consumers and the environments in which choices are made. Supermarkets, for instance, are usually focused on incentivizing consumer decisions that will maximize revenue.  In other words, products that bring the greatest profits are those that are in the “hotspots," where purchases are most likely to occur.

With behavioral economics, stores and supermarkets have the power to influence consumer choice architecture to focus on sustainability. By placing sustainable products in these “hotspots” or incorporating specific labels to recognize these products, supermarkets can make it easier for consumers to select and buy sustainable products. Thus, by better understanding consumer behaviors, we can incentivize the sale of sustainable products.

Whether it’s a connected leadership model, effective partnership with stakeholders or better understanding incentives and behaviors, one thing remains certain: the business community needs to Step Up and reconnect with society. And there are some great examples of companies out there who are taking the lead and doing just that.

Image credit: Pexels

Luna Atamian is a consultant at Salterbaxter. She advises leading global companies and brands on sustainability and corporate social responsibility strategy and communications.

Salterbaxter helps companies and brands step up to the challenge of the changing relationship between business and society. We combine smart strategy, savvy insights and sharp creativity to help businesses do different things, not just say different things. We work with our clients across the whole spectrum of strategy and communications – from strategy insight and development to stakeholder engagement, influencer campaigns, and reporting programs.  Everything we do helps businesses make a more positive impact on the world.

Please contact Salterbaxter to attend our next event on April 27^th on the subject of materiality or core issues assessment. The event is free and will take place in NYC. Our guest speaker will be Ken Gustavsen, Executive Director, Corporate Responsibility, Merck & Co., Inc.

 

By Anna Johansson

The fastest way to see a community thrive is by organizing local food systems that can produce and distribute healthy, organic food to the people.

The average American spends $151 per week on food, according to Gallup.

Most grocery store food is imported which means produce is picked before it ripens, and it’s difficult to enjoy. Because imported food is cheaper, local farmers can have a tough time setting competitive prices for their food.

But in a perfect world, if everyone bought locally, they could drop their prices and that $151 per person would go a lot further. Not to mention, it would keep the farmers in business and improve the local economy.

The chain reaction of local food systems

Ultimate sustainability within a local community does more than just maintain the replenishment of environmental resources. When local food systems are in place, sustainability extends to encompass the replenishment the community’s local economy, keeping food sales local, which significantly impacts the wellbeing of the community.

Local food systems, when embraced by entire communities, provide some great benefits:

Local food decreases food costs to the consumer: Food is a necessity for all of us, and many people spend the majority of their paychecks on food.

It’s cheaper to buy avocados imported from Mexico than it is to buy local avocados, even when you’re surrounded by them. Buying locally will almost always be more expensive when the whole town isn’t doing it. Furthermore, it’s not because the farmers want to make more money. They have to charge more just to stay in business.

It’s just an unfortunate fact that it’s cheaper for the large food corporations to produce and deliver in bulk across the world. Local farmers just don’t have that luxury.

The tables turn, however, when an entire community consistently supports local farmers. Supporting and contributing to a local food system helps to increase and maintain the demand that farmers need to be able to drop their prices.

Many people have the mindset that they’ll buy local as soon as it’s cheaper, but that doesn’t work. They’ll be waiting forever. If everyone bought local, starting today, the community would see a significant price drop in a short amount of time.

Local food allows you to know where your food comes from: Some aspects of agriculture standards are important to consumers but aren’t covered by the certified organic program run by the USDA, such as soil management, pesticide use, water conservation, greenhouse gases, and farmworker welfare, just to name several. For more conscious consumers, this means there’s no way to know how their organic produce was really grown.

In order to fill in this gap of information, Whole Foods Market is rolling out a new program called Responsibly Grown where produce and floral suppliers are rated on a handful of sustainability practices. Based on their practices, the suppliers are given a rating of Good, Better, or Best in an effort to maintain supply chain transparency for the consumers.

Although this program isn’t widespread (yet), it has the potential to change the way people select their food.

Local food generates relationships: It’s almost impossible to go to a local farmer’s market and not find yourself involved in an interesting conversation with one of the vendors. Whether it’s the guy who sells the beautiful fractal vegetable called Romanesco or the lady who sells the Asian pears, if you dare to connect, you’re going to learn more about fruits and vegetables than you ever dreamed possible.

When you buy local food, you don’t just know where your food comes from regionally because you peeled a sticker off a piece of fruit. You know where your food comes from because you’ve met some of the people involved in its production. You’re a part of the community and so are they. And the connection you create with the people who grow local food will make you feel good about where your money is going and who you are choosing to support.

Communities thrive on a relationship-based economy: At the end of the day, sourcing food locally is the best way to create sustainability. By supporting your local farmers, you’re keeping them in business, and ensuring there is a demand for what they produce. This demand allows them to keep a supply of food readily available for the community at a reasonable price.

There’s more to a community’s economy than just an exchange of dollars, goods, and services. A staple in any economy is the relationships that are created within the systems – a stable economy comes from the trust and camaraderie of the people inside the community. And there’s no better way to create that experience in a community than through food.

Image credit: Pexels

Anna is a freelance writer, researcher, and business consultant. A columnist for Entrepreneur.com, HuffingtonPost.com and more, Anna specializes in entrepreneurship, technology, and social media trends. Follow her on Twitter and LinkedIn.

An audacious corporate goal is one a company doesn't yet know how to reach. A goal without a plan means a potential failure, after all, and no company wants a failure. But H&M correctly understands that the stakes are high enough, when it comes to the global threat of climate change, that it needs to try.

Today, the apparel company released its 2016 sustainability report outlining several new goals including a commitment to use 100 percent recycled or other sustainably-sourced materials by 2030 and to become climate positive throughout its entire value chain by 2040.

The "entire value chain" bit is key. You'll see a lot of corporations make promises that sound quite bold -- 100 percent renewables or 100 percent carbon neutral by such-and-such time. We never hesitate to applaud because we need the small steps too, but the value chain commitments are the most meaningful because they speak to a company's total impact. In the case of H&M, the directly owned facilities are mostly stores and office buildings, while the value chain includes the growing of cotton, manufacturing of polyester, sewing and shipping of garments and even what happens to them in customers homes and at the end of their lives.

Today I'm on the ground in Stockholm to help the apparel retailer's team figure out what "climate resilience" means for them and how H&M can most effectively serve as a "climate sink" in the years to come. If those are new terms for you, you're not alone. You'll be seeing more and more of them in the months to come as we all come to terms with the fact that we've missed the lifeboat for avoiding the worst impacts of climate change.

Now, we need to figure out how to adapt, which is a little bit scary since plans must be made for responding to unknown risks -- storms of increasing strength, dangerous temperature swings and sea level rises. Climate resilience is a system's ability to adapt to these great risks and unknowns.

For H&M and other apparel retailers, resilience means planning for likely shipping delays to stores worldwide; spiking costs for raw materials (the price of water-intensive cotton will rise as the costs for key inputs rises and the price to manufacture polyester, made from petroleum, could rise as well); and even manufacturing concerns as garment workers down the supply chain live in some of the areas that will be greatly impacted by sea level rise and high-velocity storms. H&M is starting today in Stockholm at the Change Makers lab, where I'm facilitating a session on Achieving Climate Positive Fashion with many leading experts on climate resilience, systems thinking and design.

Climate positive, of course, is a system that has a positive impact vis a vis the risk of global warming. Renewable energy producers are climate positive, as are methane capture projects, refrigerant recovery businesses, sustainable forestry projects and the like. A carbon sink is a project that captures carbon or other global warming pollutants from the atmosphere or avoids it's release, with the explicit purpose of mitigating climate change. These projects include wetland protection or restoration, sustainable forestry projects, biochar and healthy soil. Innovative projects include cement, and, in the case of the fashion industry, projects like smog jewelry that clean the air as they adorn wearers.

Regular readers will have already connected the dots and will understand that climate resilience makes business sense for *any* carbon-intensive company. That includes H&M with its global logistics, and a commitment to customers that they'll find new fashions in the store every week.

H&M's core value proposition is at risk in a world with sea level rise and intense storms. But H&M's commitment to climate positivity and investing in carbon sinks inside and outside their supply chain make the company global leaders; activists, really, because they will be operating in fits and starts along the way.

The path to carbon positivity remains uncertain. But it will more than likely include H&M's leading commitment to close the loop on fashion and figure out how to turn old, worn-out clothes into new ones without resorting to virgin fibers. This will substantially reduce the climate impact of production.

Of course, H&M and other retailers will need to account for the remaining impact and shipping that will always be present for a manufacturer. This will take place via investing in worthy projects outside the company's direct scope (like the forestry projects mentioned above) and, one hopes, sharing research and best practices with other retailers. For it is only through collaboration and innovation that climate "woke" retailers can hope to truly address the real elephant in the room: consumerism.

Stay tuned for an exclusive report on the climate resilience conversation at today's change maker event.

Image credit: Flickr/Mike Mozart

As U.S. President Donald Trump seeks to dismantle the energy and environmental policies implemented by his predecessor, one NGO is reminding the White House and Congress that the extension of federal renewable energy tax credits is an economic multiplier.

In a report issued this week, the Natural Resources Defense Council (NRDC) suggested that those credits will result in more than 220,000 jobs and contribute $23 billion to the U.S. economy this year alone. The outcome is not only an improvement in air quality across the country, but also lower utility bills and less risk that consumers will be exposed to volatile energy prices, the NGO concluded.

As it stands now, 2015 legislation passed by Congress will provide tax credits for onshore wind projects until 2019. For solar power, residential tax credits will be eliminated after 2021; utility- and commercial-scale projects will be capped at 10 percent of investment costs after that same year.

Many clean-energy advocates, including staff at the Union for Concerned Scientists, have argued that these long-term programs help boost U.S. manufacturing capacity, create certainty in the markets and reduce emissions. In previous years, the annual renewal of federal tax credits for wind and solar power often lapsed or were reinstated during last-minute budget talks, hampering the sector’s growth.

NRDC’s analysis pointed to the gains in states where, at a first glance, renewables would not have much of a presence.

Wind and solar tax credits will help create 9,700 jobs this year and 10,000 jobs next year in Ohio, increasing the state’s GDP will increase another $1 billion, the NRDC concluded. The Buckeye State’s neighbor, Pennsylvania, will see a similar benefit in both additional jobs and a boost in state GDP.

But economic benefits are not solely limited to a state's energy sector: NRDC’s research suggests that Iowa’s growing wind power industry will result in more construction jobs, Michigan could see an increase in manufacturing jobs due to new wind installations.

“Good tax policies to boost wind and solar projects are creating new jobs, growing our economy, and providing climate and public health benefits,” Kevin Steinberger, an NRDC policy analyst, said in a statement. “This analysis makes a clear and compelling case to build on this progress to achieve even stronger, more persistent job gains and economic growth.”

The NRDC report incorporates data from multiple studies that project solar and wind power capacity in the U.S. to double by 2021 from 2015 levels.

In comparing future renewables growth in a scenario that included tax credits versus one with none, NRDC concluded that the difference would be an additional 29,000 megawatts of clean power. That 23 percent boost in capacity could be enough to electrify almost 8 million homes.

Critics of the clean-energy sector often say its growth is only possible because of generous tax credits and subsidies – even though improvements in efficiencies have resulted in the costs of these technologies to drop precipitously in recent years.

It's true. The federal government does spend money on clean power subsidies and incentives -- a total of $11.3 billion In 2013, according to the U.S. Energy Information Agency. But the research organization Oil Change International estimates that the federal government spent $37.5 billion annually on price supports for the fossil fuel industry in 2014, including $21 billion on exploration and production subsidies.

And in fact, those numbers increased during the Barack Obama administration, due to Obama’s oft-maligned “All of the Above” energy strategy that irritated critics on both the left and right.

Image credit: Pexels

Editor's Note: This is the first post in a three-part article series. In case you missed it, you can read the first post here.

Increasingly, Americans cannot afford our healthcare system. One out of five dollars spent in our economy is on health care. Spending this much money on health care is a major reason why we are stuck in a low-growth economy.

The first of this three-part series examined our country’s healthcare crossroads. One road leads to continued high prices with diminished heath benefits. The other road addresses the contentious issues of our health insurance structure and lifestyle choices. If we solve them, Americans will be healthier and healthcare will be more affordable.

This second article focuses on solutions to an insurance and drug industry business model that keeps raising prices without improving our national health.

Why insurance and drug prices are so high

Insurance companies and drug companies can raise prices because they have the power to do so. Competition is limited, at best. Regulation is limited, at best. Here are four examples:

1. Drug companies set their own prices. Drug companies can raise prices unfettered by government price regulation because they have won protected monopolies granted by the U.S government.


2. Use of complex pricing to gain pricing power. Consumers are too often buying services "blind" because they cannot understand health insurance prices and complex contract terms and conditions. The classic example is our national malaise of thinking we are getting a fully paid for health service under our healthcare plan, only to have the insurance company use the complexity of the plan to deny payment on part or all of the cost.


3. Price discrimination. Insurance companies maximize revenues through price discrimination based on whether someone works for a big company, small company, is self employed or is unemployed. For example, a healthy person working for a major corporation pays a lower price than a healthy person working at a small company. This maximizes revenues since the majority of Americans do not work for large companies.


4. Insurance and drug company lobbying. Lobbying has paid huge financial dividends for insurance and drug companies at the consumer’s expense. Medicare is a classic example. The government healthcare system purchases $112 billion of drugs annually. Industry lobbying has successfully won Medicare rules that reward doctors for using more expensive drugs.

Three steps to lower insurance and drug prices

How we buy car insurance provides an alternative model for acquiring health insurance. The key economics that enable competitively-priced, affordable car insurance are:

1. Universal coverage. Insurance is a pooling of risk to achieve a lower average cost. The larger the pool, the lower the risks and costs. This is the economic driver behind mandating car insurance to gain a drivers license.


2. Intense competition. Intense competition provides consumers with coverage choices that are price- and service-competitive. Marketing competition drives consumer-friendly price designs that can be easily advertised.


3. Price regulation. State regulation of the car insurance industry limits unfair pricing, like price discrimination between like-risk consumers.

The three steps that will create this type of competitive system for health insurance are:

1. Requiring all Americans to have health insurance. Yes, that means if you are healthy as a horse then you are buying health insurance you might not want. But the fact that you will someday demand health insurance is why everyone has to be in the pool. Doing so will make health insurance more affordable for all.


2. Selling health insurance as a national service. Selling health insurance on a national scale will create real competition. This will drive down prices and expand service. Just like in car insurance, individual states can regulate the insurance and drug companies’ prices to promote price transparency and pricing fairness. They can also provide arbitration to address claim denials.


3. Legal enforcement against monopoly and oligopoly pricing power. As a national healthcare system, insurance companies would be held accountable to the Sherman Anti-Trust Act. This legislation empowers our government to sue companies that use their size to overwhelm consumers with higher prices.

Two key challenges to insurance industry reform

You may remember Sen. Bernie Sanders (D-Vt.) advocating for a single-payer system during his presidential campaign. A single-payer system is how we buy car insurance, as well as life and home insurance. But a single-payer system confronts two very real challenges.

1. Resistance from workers at larger companies. If you work for a large company that pays for all or part of your health insurance, you are already getting a great deal. This is a tax-free benefit. Who wants to lose that? That self-interest blocks political consensus for a single-payer system. One potential solution is to legislate company paid health benefits as tax-free to employees and a tax deduction for companies.


2. Claims of socialism. I am on Medicare. So are 55 million other Americans. It works great. Monthly premiums are affordable, and the service is excellent. One form of a single-payer system would be to put everyone on Medicare. There is research that calculates $375 billion in annual savings if Medicare was available to all. Those who oppose this idea think it is socializes medicine by replacing consumer choice with government choice. In fact, Medicare empowers individual choice in doctors and hospitals.

A larger concern is that applying Medicare subsidies to all of us could bankrupt our government. A solution is to provide those under 66 years of age with unsubsidized Medicare. Even unsubsidized, Medicare would probably cost less than our current insurance.

A third complicating factor is that a lot of doctors do not like the lower prices paid through Medicare, and they are opting out of providing service through the system. They can do this as long as they can rely on insurance and drug oligopolies to pay them higher prices. Many doctors will resist this idea based on their own economics.

What it will really take to make healthcare affordable

Adopting a single-payer, competitive business model is proven to deliver lower prices and improved service. Adopting this business model for health insurance is likely to produce similar result.

But doing just this is not enough. The ultimate solution is for Americans to act in ways that promote their health.

The third article in this series identifies the five lifestyle behaviors that Americans must address if they are to gain affordable and universal healthcare.

Image credit: Pexels

YouTube is a favorite time suck for many of us, and for countless good reasons. Uploading videos is seamless and fast, and watching content -- from cute kitties to math classes at Khan Academy -- makes it an easy service to use. Whether you seek self-improvement or just want to waste time, YouTube has become the site and app of choice. Various statistics suggest that 300 to 400 hours of content are uploaded on YouTube every minute, and 5 billion videos are enjoyed daily.

But all of that content has triggered headaches for many advertisers, and now YouTube and its parent, Alphabet (the parent company of Google), have taken a financial hit.

The risk that a brand’s advertisements can run alongside a sexist outburst or an Islamic State rant on YouTube has caused many online marketers to yank their content from the popular video sharing site. JPMorgan Chase, for example, joined companies such as Johnson & Johnson, Coca-Cola and Walmart in halting their ad campaigns due to growing consumer backlash.

Google said this problem only amounts to “very, very, very small numbers” of ads running on YouTube. But for a major global brand, the risk of consumer outrage if an ad is placed before or during a racist or hate-filled diatribe on YouTube is very, very, very big.

To that end, Google said it will roll out a new system that permits third-party companies to evaluate quality standards on YouTube. But considering the vast amount of content that is added to the site, human eyeballs may not be enough.

Bloomberg’s Mark Bergen is among many analysts who inferred that Google did not move quickly enough to quell what has now become a crisis. So, could artificial intelligence help repair and resuscitate YouTube’s reputation and revenues?

Machine learning techniques could be the ticket to weeding out those dodgy videos. Google says it has already been researching and investing in the technology over the past five years. In layperson’s terms, this technology is going far beyond the zeroes and ones that have been the foundation of computer science for decades. As artificial intelligence pioneer Arthur Samuel described machine learning almost 60 years ago, this sub-field of computer technology “gives computers the ability to learn without being explicitly programmed.”

As New York Times technology writer Daisuke Wakabayashi reported this week, Google has already applied this technology to monitoring some of YouTube’s content – mostly to root out easily identifiable copyrighted content or pornography. But the next frontier for machine learning is granting the systems an ability to understand context. After all, teenagers filming themselves acting out a parody of "The Bourne Identity" series, or septuagenarians pretending to be James Bond, are not quite the same as an online diary of some right-wing militia urging an uprising against anyone non-white. The same goes for a DIY video on how to cook meth compared to a media geek’s review of an episode of "Breaking Bad."

For now, the artificial intelligence used at Google cannot differentiate such nuances – but that could soon change.

Google told the Times it is accelerating the application of machine-learning techniques to YouTube’s service, complemented by researchers who are developing an automated system that can determine a video’s appropriateness for public viewing.

With 3 million advertising-supported channels on YouTube, it could take years for such a process to approach anything near perfection. But for Google and its deep-pocketed advertisers, there is really no other option if YouTube will remain both popular and profitable.

Image credit: Steve Rhodes/Flickr

According to the Department of Health and Human Services, 78 people die each day from an opioid drug-related overdose. The rate of these overdose deaths has almost quadrupled since 1999, and no wonder: With at least 650,000 opioid prescriptions dispersed daily, the risks of citizens developing an addiction are high. Plenty of blame can go around: Doctors who struggled with the separation of pain relief from addictive behavior; lax enforcement as the crisis worsened in recent years; and a disengaged working class that feels ignored and on the margins.

The results are disturbing: The United States, which is home to about 5 percent of the world’s population, consumes about 80 percent of its opioid supply, according to reports in news outlets such as CNBC.

Pharmaceutical companies must also shoulder some of this responsibility, though their financial prowess has allowed them to evade legal responsibility.

Purdue Pharma, for example, aggressively marketed OxyContin since the 1990s – and when doctors complained that the recommended 12-hour dose of the drug was not working, the company’s sales reps simply urged them to prescribe stronger doses. Purdue agreed to pay $600 million in fines last year, and has since agreed to work closely with law enforcement and healthcare professionals to raise awareness about the risks of opioid addiction.

Pfizer also found itself in legal trouble last year when Chicago sued the company for contributing to the city’s surge in drug overdoses.

Now another company has skirted any punitive action from the federal government despite evidence suggesting it had a large role in exacerbating the opioid epidemic.

A recent Washington Post investigation suggested Mallinckrodt Pharmaceuticals was negligent about monitoring its opioid drug sales and shipments, which led to a $35 million settlement with federal regulators. Four investigations across five states found that the company may have committed as many as 44,000 federal violations that could have totaled $2.3 billion in fines.

The relatively measly settlement has been described by a government official as “chump change” for a company that generated almost $3.4 billion in revenues and $489 million in profits last year.

But murky legal precedent, combined with Mallinckrodt’s relentless band of attorneys, eventually convinced the federal government to drop its case and seek a settlement. The company will not have to admit to any wrongdoing, and Mallinckrodt insisted in a recent press release that federal investigators’ reports were full of inaccuracies.

Federal prosecutors described Mallinckrodt’s dodging of liability as "egregious." Drug Enforcement Agency (DEA) investigators, for example, concluded that 500 million of the company’s generic oxycodone pills ended up in Florida due to suspicious orders between 2008 and 2016. That amount was two-thirds of all the oxycodone pills sold in the Sunshine State during that time. At least 24,000 of those pills ended up at one Delray Beach medical practice during one year alone. That doctor was eventually convicted when crimes related to his “pill mill” were exposed after one of his patients accidentally overdosed, and he is now serving a 25-year prison sentence.

Nevertheless, while federal law requires drug companies to monitor their sales and report any suspicious activity, Mallinckrodt insisted that once a drug was sold to a distributor, the company was no longer responsible for tracking where those pills end up. And in any event, despite advances in information technology (all of these pills were issued with lot numbers), the company claimed it did not have the capacity to monitor the tens of thousands of retail outlets at which its drugs are sold.

As it disclosed in a recent Securities and Exchange Commission (SEC) filing, Mallinckrodt does not expect the settlement to have any “material adverse effect” on its financial performance. Investors, however, cannot be pleased with this recent news, as other investigations have contributed to the company’s stock trading at less than half of last summer's $85 share price.

The United Kingdom-based pharmaceutical giant has also been taken to task for the tactics it employed to market other drugs, including H.P. Acthar, a drug that is not often prescribed but is used to treat several conditions and diseases, from infantile spasms to multiple sclerosis. As Linette Lopez of Business Insider reported last month, the company came under scrutiny for a generously-paying speakers program that benefits doctors who are the top prescribers of H.P. Acthar.

Mallinckrodt says it will do its part to prevent the abuse of opioids, including an aggressive distribution of drug deactivation pouches in regions such as northern Kentucky that were hit hard by the epidemic. The company says it will also boost its support of prescription drug monitoring programs across the U.S. while including anti-theft tracking devices in more of its drug shipments.

But considering the surge in opioid-related deaths since the early 2000s, and the price paid by families and communities, Mallinckrodt has overall emerged unscathed from its role in this crisis, and its efforts can best be described as taking a slingshot into an AK-47 fight.

Image credit: Daniel Foster/Flickr