Saturday, March 11, 2017

The economics of health

The economics of health has been complex. Diverse stakeholders - patients, providers, manufacturers and payors - who all seem to have a partial picture of the whole problem, have made it more difficult to solve. To top it all off, policy makers, with little understanding of this complex picture, seem to trade in photo ops and healthcare acts.

The value accruing to society is an important and possibly the only consideration of policy. The evaluation of policy choices will require an understanding of the value of the foundational units - the individuals, themselves. Unfortunately (or fortunately), the value of an individual is not the discounted stream of utility to society and thus healthcare systems around the world, making decisions on a fixed value of a human, are misguided. Since the individual is perfectly capable of changing the future stream of utility, she can only be considered to be a basket of interacting options. Thus, any policy that forces the individual to prematurely exercise such options is unambiguously suboptimal.  Additionally, policies that reduce the flexibility afforded to the individual to pursue new ideas will devalue the options held by the individual. This automatically reduces the value of the individual, both to herself and to society.

For example, any policy that can be shown to reduce the incentive of an individual to move from one job to a more attractive one, will have a deleterious effect on aggregate utility. Any policy that does not allow an individual to climb out of a low value position, either due to a capital constraint or due to failing health, will reduce aggregate utility. Any policy that does not provide incentives to prevent health problems for individuals will automatically increase the expected future costs in the system. Any policy that does not allow market forces to move the complex system to an optimal position by sharing the economics among the various participants will have a negative value to society.

Politicians are likely the worst people to create and implement healthcare policies. It has been known for ever that "healthcare is this complex." It will take a bit more than theatrics and politics.

Sunday, March 5, 2017

Natural Intelligence

Recent news that researchers could now encode 215 petabytes of data in a single gram of human DNA (1) and possibly all the information created from human inception in a container of DNA that weighs couple of pickup trucks, is a constant reminder that Nature works in a dimension, possibly incomprehensible to humans. Recently, humans have been worrying about the growth of noise at an accelerating clip with over a zettabyte a year. Although some call this data and even information, an apt description of it is noise, as much of it is useless to advance knowledge.

More importantly, the capacity of data storage revealed by the DNA structure tells us that the status-quo technologies that some believe will propel us to the proverbial singularity are mere toys of insignificance. The only possible answer to the Fermi paradox is that extra-terrestrials find our level of development too premature to make contact. Evolution has been slow and biological systems seem to have taken almost 4 billion years to cobble together something that could start to think about knowledge replication and perpetuation. But the technology afforded to humans is too crude and likely in the wrong direction to make a significant leap toward harnessing high dimensional energy and tunneling through spacetime.

Those who are actively seeking "artificial intelligence" in Silicon may be well advised to return to studying natural storage and processing that appear to be fully integrated and freely exhibiting quantum states.


Wednesday, March 1, 2017

Pipe-climbing bacteria

Recent news (1) that bacteria can climb up a pipe at an astonishing speed of 2.5 cm/day is a constant reminder that the first inhabitants of the Earth is highly capable of eradicating those who appeared late. As they happily climb out of every hospital sink across the world, infecting their distant cousins, it appears inevitable that advanced biological entities will eventually succumb to potent simplicity. The information slope in the first cell has been so astronomically high that it seems obvious that incremental additions since then, have been trivial. Meanwhile, humans have been chasing extra-terrestrials and artificial intelligence as if they have conquered everything else.

Ignorance has been a constant companion for humans from inception. Their observations of the heavens always resulted in wrong hypotheses. First they saw the Sun going around the Earth and now they see dark energy and dark matter. In medicine, first they saw inexplicable spirits affecting the human body to create diseases and now they see pathogens and the body attacking itself. Alchemists have given way to modern chemists, manufacturing concoctions they don't understand to solve both biological and engineering puzzles. And in economics, they have created theories that seem to work only in regimes and those diving head first into the financial abyss have turned into TV personalities. But complexity does not advance knowledge - it just adds to ignorance.

As the ignorance in chief leads the world to the brink of disaster, it may be worthwhile to keep an eye out for the little things, that creep up the pipes.