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Disease management + short takes on Kahneman, Podcasts, Merck, Design Thinking, Consumer Health

12 Oct

Disease management article I’d like to believe:

An adoring piece in the November issue of The Atlanticsuggests that someone has finally figured out how to make disease management profitable.  For years, the idea was that investing money in prevention upfront, especially in chronic conditions such as diabetes and heart failure, could result in both health improvements and cost savings down the road.  While a number of pilot programs demonstrated health improvements, the inconvenient truth was that durable cost savings, at the level of P and L, proved remarkably elusive.   As a consequence, programs would often invoke concepts like absenteeism, and failing that, presenteeism to make their case.

Yet according to The Atlantic article, at least one company, CareMore, has now figured out how to make this model work, and achieve both health improvements and sufficient cost savings to turn a profit (though I found myself wishing I could look carefully under the hood).  The secret of their success?  Embedding what might be termed the classical disease management model (e.g. telephone reminders, more frequent monitoring) within a vertically-integrated provider/Medicare Advantage plan offering coordinated care, aligned physician incentives, and a narrow primary care network (points all highlighted in this characteristically insightful analysis from the Recon Strategy group).

A relevant 2009 academic paper by Milstein and Gilbertson also includes CareMore as one of four examples of “Medical Home Runs” – primary care practices that demonstrate significantly reduced costs while maintaining quality.  According to the authors, the key success factors are:

–          Exceptional individualized caring for chronic illness

–          Efficient service provision (often achieved by focus on specific patient group – e.g. older patients with chronic conditions – as well as standardization of care processes and replacement of MDs with less expensive care providers where possible [an approach also highlighted in Clay Christensen’s “The Innovator’s Prescription”])

–          Careful selection of specialists

CareMore was acquired this summer by the large insurer WellPoint, who now plans to replicate the model more broadly.  I truly hope this effort to scale the program is successful, yet the financial challenges experienced by so many previous efforts in this area suggest a need for continued vigilance.  Moreover, we need to be especially mindful of the “stone soup” problem, and be sure that the features we might like to believe are critical, and which are touted as critical (i.e., providing care kindly and proactively) are driving success, rather than merely providing an appealing face (a cynic might say “necessary distraction”) for an aggressive underlying business strategy associated with more constraints and choice limitations than many patients may initially appreciate or recognize.

New book I can’t wait to read:

“Thinking, fast and slow,” by Daniel Kahneman, is due out later this month.  Kahneman (along w/the late Amos Tversky, to whom the new book is dedicated) founded the discipline of behavioral economics, an achievement that won Kahneman the Nobel Prize in 2002.  Most of Kahneman’s previous writing (other than his Nobel address, here ) have been highly technical and not easily accessible – a market vacuum that has been filled by a remarkable number of authors who have channeled, adapted, been inspired by, and in some cases, even extended, his original concepts.  TalebThalerSunstein, andGladwell have all been directly influenced by Kahneman (and in some cases have also collaborated with him).  Now, it seems we finally have the chance to read his story directly, without an intermediary — an experience perhaps akin to reading the Torah for the first time after years studying the Talmud.  At least it’s the right time of year for thoughtful reflection.

Two podcast series:

– The Stanford Entrepreneurial Thought Leader Series has started up again, with a fantastic kickoff lecture by David Friedberg, who was an astrophysicist at Berkeley, then spent time in I-banking, private equity, and Google before deciding to found his own company (Climate.com, née WeatherBill.com) selling what is essentially weather insurance.  Fascinating story that’s inspiring (mostly) and sobering (just a little), highlighting the potential of entrepreneurship (a term he seems to disavow) while discussing the many risks, challenges, and obstacles encountered along the way.

– Freakonomics – first there was the book – a collaboration between NYT writer Stephen Dubner and wunkerkind economist Steven Levitt – then there were the NYT-associated blog and podcasts, and then earlier this year, they went rogue (sort of), leaving the NYT cocoon behind to become an indie venture (whichthey evidently hope will evolve into a “media juggernaut”).  Not clear that juggernaut status has been achieved, but the podcasts are consistently appealing – sort of “Planet Money” meets “This American Life.”  Their recent show about the folly of prediction is especially recommended.

Two Merck stories:

– First, as this recent article in Xconomy suggests, Merck is clearly placing a big bet on biosimilars, therapeutics inspired by (but appreciably more complex than) traditional small molecule generics.  The general idea is that in an increasingly cost-conscious world, as the song says, it’s better to be the hammer than the nail, and having suffered for so long at the hands of generic small-molecule competitors, the idea of developing what are essentially generic biologics, and delivering a value-priced (relatively-speaking) product, must seem especially appealing.  Of course, Merck doesn’t exactly of a history making biologics, so they are clearly hoping they can acquire and seamlessly integrate both the expertise and the facilities; success will also require a viable regulatory path – details of which are due to be released shortly (as discussedhere).

– Second, the FDA has recently approved a new Merck combination product that brings together a generic cholesterol-lowing medication (simvastatin [Zocor]) and a proprietary diabetes drug (sitagliptin [Januvia]) together; the combo, reportedly, will sell for the same price as Januvia alone.  The key commercial question here is whether this line-extension play will fare better than Pfizer’s high-profile effort in this arena, Caduet (combining a different statin, atorvastatin [Lipitor], with a hypertension drug, amlodipine [Norvasc]), a product that generated disappointing returns.

(Disclosure: Merck is a previous employer; I have no prior involvement with these programs.)

 Two new commentaries:

Finally, at TheAtlantic.com this week, I discuss:

  1. Design thinking can improve healthcare, but can it deliver new cures?
  2. Will consumer-oriented health companies make physicians obsolete?

Enjoy.

The Great Disruption Or The Big Shift?

12 Oct

Tom Friedman has an interesting column in the New York Times about what’s going on in the world today. He writes:

“When you see spontaneous social protests erupting from Tunisia to Tel Aviv to Wall Street, it’s clear that something is happening globally that needs defining. There are two unified theories out there that intrigue me. One says this is the start of “The Great Disruption.” The other says that this is all part of “The Big Shift.” You decide.”

What are the two theories?

The Great Disruption

One is by Paul Gilding, the Australian environmentalist and author of the book The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World.

He argues that these demonstrations are a sign that the current growth-obsessed capitalist system is reaching its financial and ecological limits. The system is broken… What we now have is that “the rich are getting richer and the corporations are making profits — with their executives richly rewarded. But, meanwhile, the people are getting worse off — drowning in housing debt and/or tuition debt — many who worked hard are unemployed; many who studied hard are unable to get good work; the environment is getting more and more damaged; and people are realizing their kids will be even worse off than they are.” Gilding is actually an optimist at heart…. He believes that while the Great Disruption is inevitable, humanity is best in a crisis, and, once it all hits, we will rise to the occasion and produce transformational economic and social change (using tools that are now available to us.

The Big Shift

The second theory is put forward by John Hagel, John Seely Brown and Lang Davison in , “The Power of Pull. They suggest that we’re in the early stages of a “Big Shift,” precipitated by the merging of globalization and the Information Technology Revolution.

In the early stages, we experience this Big Shift as mounting pressure, deteriorating performance and growing stress because we continue to operate with institutions and practices that are increasingly dysfunctional — so the eruption of protest movements is no surprise. Yet, the Big Shift also unleashes a huge global flow of ideas, innovations, new collaborative possibilities and new market opportunities. This flow is constantly getting richer and faster. Today, they argue, tapping the global flow becomes the key to productivity, growth and prosperity. But to tap this flow effectively, every country, company and individual needs to be constantly growing their talents.

What’s the decision?

Friedman writes: “You decide.” But in fact we don’t have to decide between these two theories. The Great Disruption and The Big Shift are essentially the same narrative. The Great Disruption is merely the first part of The Big Shift.

The real questions are (1) how quickly are we going to move on cleaning up the mess caused by the Big Disruption? (as I explained in my article earlier this week, From The Great Recession To the Great Stagnation) and (2) how energetically and nimbly are we going to get on implementing the radical management needed to prosper in The Big Shift, as I explained here?

Some once-prosperous organizations, like Wal-Mart [WMT], Cisco [CSCO] orGE [GE], have yet to even grasp the nature of the Big Shift, let alone adjust their management to prosper in it. As a result they struggle, just to stay in place.

Some such as Apple [AAPL], Amazon [AMZN], Salesforce [CRM] and Li and Fung have grasped it and mastered the elements of radical management and are sailing happily into the future, with exponential growth.

Why is it taking so long for the others to learn?

_______________

To learn more about radical management, join my webinartomorrow Thursday October 13 at noon ET. This webinar is part of the Jossey-Bass online conference series. To register here and use discount code JBMSD.

Steve Denning’s most recent book is: The Leader’s Guide to Radical Management (Jossey-Bass, 2010).

Follow Steve Denning on Twitter @stevedenning

RIM: Amid Outages, Prospects For Finding Buyer Seem Dim

12 Oct

Research In Motion shares are trading lower Wednesday amid growing doubts that the BlackBerry device maker will attract takeover interest. Adding to the pressure are a third straight day of service outages in some markets.

RBC Capital analyst Mike Abramsky notes this morning that service outages that first cropped up in Europe have spread to India and parts of South America; he writes that North American service also appears to have been disrupted this morning for about an hour. The outage outside North America may have hit up to 30-40 million BlackBerry subscribers, he estimates. “These outages create another highly visible PR challenge, coming in markets where the company is still growing,” he writes.

Meanwhile, Jefferies analyst Peter Misek  this morning repeated his Underperform rating on the stock, asserting that any potential bidders for the company will likely wait until the company completes the shift of its handsets to the QNX operating system from the current BlackBerry OS – otherwise, he says, “they will not know what they are buying.” He also thinks buyers will want to wait to see if Microsoft’s Windows 8 becomes the third major mobile ecosystem, “as its success or failure will dramatically alter the strategic situation and RIM’s valuation.” He adds that he thinks it will be “difficult to extract value from RIM in a break up or a management change scenario.”

Misek also thinks it will be hard to find a credible new CEO for the company.

“While investors are very frustrated with Jim Balsillie and Mike Lazaridis, we cannot think of anyone who could take over as a transformational CEO who has significant software expertise and clout with both developers and carriers,” he writes.  “No one at Apple is likely poachable as they all have too many shares, options, and non-compete agreements. Extracting them would likely be prohibitively expensive. We believe MMI’s Sanjay Jha would be the best fit, but based on our checks he is highly regarded within Google and more importantly his ties to QCOM make a move there far more likely. Andy Rubin, the head of Android, would encounter the same issues as Apple executives. That leaves someone from Microsoft and searching through current and past ranks does not lead to a conclusive answer. Robbie Bach may be interested but we have not heard whether he is interested in working again. We would also like to remind investors that current shareholders gave the existing management team and board a 90%+ reelection just a couple of months ago.”

Likewise, he has trouble coming up with a logical suitor.

  • PC makers? Carriers? “HP struggled in mobile with WebOS. Dell would bring few synergies. Other PC OEMs are too small. A purchase by any carrier while bold would likely destroy RIM’s neutral status and severely limit the addressable market as other carriers pull away.
  • Asian manufacturers? “Samsung and HTC are likely too preoccupied with patent litigation to contemplate such a large purchase in the near term. Chinese companies are unlikely buyers as RIM has millions of U.S. government employees as subscribers and national security concerns would be voiced.
  • Internet players? “Amazon and Facebook make a fair bit of sense to us, but we believe the firms are seriously evaluating WebOS as an acquisition or partnership. A move prior to QNX makes no sense as all of Facebook’s apps are becoming optimized on top of iOS and Android code bases and Amazon’s existing tablets (based on Android) would be alienated.”

In a research note earlier this week, Canaccord analyst T. Michael Walkley reached a similar conclusion. “Given our belief QNX has a low probability of emerging as a viable long-term smartphone ecosystem versus iOS, Android or even Windows, combined with our belief RIM will struggle to grow its subscriber base longer term, we do not believe RIM can sell the company at a large premium to the current valuation,” he wrote.

RIMM is down 29 cents, or 1.2%, to $24.12.

With iCloud Launch, Apple Demotes The Personal Computer

12 Oct

The promise of the personal computer was simple: all the computing power you need, all on your desktop. Apple co-founder Steve Jobsdelivered on that promise first with the Apple II. He delivered on it better with the Macintosh. And for the last decade Jobs has worked to expand that franchise, turning the Macintosh into a ‘digital hub’ that linked cameras, printers, and music players into a personal digital ecosystem.

No longer. On Wednesday Eddy Cue, Apple’s senior vice president of software and services will lead the public launch of iCloud, a suite of online services that will demote the computer on your desktop from essential to nearly inconsequential. Digital books, documents, applications, photos, and music will all be stored on Apple’s servers, for free. Not to mention email, contacts, and calendaring information.

Where do you get this product? If you use any of Apple’s products, even just iTunes, you’ll soon be soaking in it. Support for iCloud has been built into updated software for Apple’s desktop computers, mobile devices, and even the iTunes digital media management software used by tens of millions of Windows users. iCloud, of course, hasn’t been baked into Windows as it has all of Apple’s software, but if you buy a piece of music or a TV show on your Windows PC, you can download that media to other devices running Apple’s software with just a tap.

The most dramatic change: Apple is cutting the cord — literally — between the Mac and the iPhone, iPod, and iPad. The latest version of Apple’s mobile software, iOS 5, available as a free download Wednesday, will allow users to synch directly with Apple’s cloud services. Photos, for example, will be scooped up into Apple’s server and pushed out to all of a user’s devices. No more need to synch these devices to a personal computer for software updates or to get copies of a user’s movies and music. No more need for a personal computer at all.

Google, of course, is taking steps in the same direction. The laptops built around Google’s Chrome operating system boot quickly and are built around the web browser, and push all their data to the cloud. Apple’s approach is much more radical. Rather than stripping everything but the web away from the personal computer, as Google has done, Apple is pushing the Internet into every nook and cranny of what its devices do.

While Google becomes more of a competitor, Dell is becoming less of one. Both Apple and Dell compete in the personal computer market, but both are finding growth in very different slices of the cloud. Apple is building a polished, consumer-class cloud-based service, while Dell wants offers the high-margin building blocks businesses need to assemble their own. For Dell, rack-mounted servers are just a start. Apple, by contrast, quietly ended its rack-mounted server business last year.

The only question now: how well will Apple’s plan work in the real world. Apple has no doubt tested its new services thoroughly. But the size and scale of its user base is enormous: there are now more than 60 million Mac users and more than 250 million iPhones, iPads, and iPod’s running Apple’s iOS operating system. It took a while for Apple to get its far less ambitious MobileMe suite of services right. Even if iCloud doesn’t work as planned, or work at all, someone — maybe Microsoft, maybe Amazon — is going to get this right. And that means the personal computer is going to get left behind.

National Instruments Is Leading a Quiet Technological RevolutionNational Instruments Is Leading a Quiet Technological Revolution

12 Oct

Thirty-five years ago, Dr. James Truchard, fresh from getting his PhD, realized that if he wanted to get a job he liked, he’d have to make it himself. From that idea, National Instruments was born in a Texas garage with a small business loan. When I spoke to him recently, he told me that he “liked the idea of working with cool applications and challenges.”

“Dr. T.” as he’s known by his colleagues, started with a focus on testing and instrumentation. This led to the development of LabVIEW in 1986. LabVIEW is a system design software which was designed to improve the testing and measurement of systems for engineers. Pretty soon, though, it was clear that LabVIEW could do more than that.

Doing More Tests With Smaller Teams In Less Time

What LabVIEW has meant for testing is increased productivity – the ability to do more in less time with fewer people, while still achieving the same results.

In building the James Webb Space Telescope, for example. NASA anticipated that they would need about 600 programmers and several years to design and test due to the 50,000+ actuated mirrors on the telescope. Using LabVIEW, however, they were able to complete the project with only 2 programmers over the course of a few months. That’s an impressive achievement.

“It’s a return to the age of Edison,” Dr. Truchard tells me. “LabVIEW enables small teams can get amazing results, in a short period of time.”

The PC of Embedded Systems?

Embedded systems, which is a computer and hardware dedicated to a few or even one task, don’t garner the same headlines as “sexier” general computing products like tablets or ultrathin laptops. But in the industrial world, they’re often much more important.

Because of LabVIEW’s capabilities, National Instruments has been applying it to improving embedded systems in a big way, and their goals are equally big.

“We want to be to embedded systems what the PC was to computing,” Dr. Truchard says. “One standardized platform for maximizing productivity.”

To that end, National Instruments has been applying their software to a number of big challenges. They’ve worked with CERN on the Large Hadron Collider, SpaceX on their projects, and are actively involved in green energy.

“We were all over fuel cells in mid-2000’s, then suddenly that wasn’t so hot,” said Dr. Truchard. “So now we’re focusing on Smart Grids for wind and solar power.”

Revolutionizing Robotics

Of particular interest to me, though, are the possibilities that LabVIEW holds for robotics. I spoke with Dr. Dave Barrett, a former VP at iRobot who now teaches robotics at Olin College and is currently visiting at MIT. I asked him what makes LabVIEW a good platform for robotics, and his answer was straightforward: “It may be the best currently available robotics development system.”

He even gave me a long writeup that includes the “10 Reasons LabVIEW Rocks for Robotics.” The first of which is simple – it doesn’t take long to learn. About two weeks to get up and running, and only eight weeks to programming complex robots. This first impressed him at the DARPA Urban Challenge “when Virginia Tech’s LabVIEW powered car beat our MIT race vehicle.”

Virginia Tech had a team of five undergrads using LabVIEW. MIT’s team had 20 post-docs.

“It wasn’t a question of more brainpower,” explains Brian Powell, who is National Instrument’s Technical Evangelist. “It was just a question of having better tools.”

The advantage that LabVIEW has over traditional robotics programming, Powell explains, is that it’s a “top to bottom system.” Since it had large uses in embedded systems, it’s already there to act in a manner that Dr. Barrett describes as “Sense – Think – Act.” The focus of the programming is on interacting with the world, with the processing going on in between.

What’s more, explains Powell, is that the fundamentals are so basic that it can be applied across the board for autonomous systems applications. “Kids can use it to program Lego robots, while physicists can use it to program the Large Hadron Collider.”

Dr. Barrett appreciates that when it comes to teaching his own robotics students. “Students from all backgrounds can pick up the graphical programming much easier that the traditional text based languages.” As a result, his students have done some amazing projects, from unmanned vehicles to robot fish to medical robots.

Unleashing Creativity

For my own part, from talking with Dr. Barrett, Dr. Truchard, and Brian Powell, I’m more than a little impressed at what LabVIEW is capable of doing. It co-exists comfortably in the technological paradigm that I’ve evangelized here before: using technology to free creative scientific and engineering minds from the “grunt work” so they can focus on innovation, creative thinking, and design. And I think that LabVIEW will be a great tool to launch that paradigm into the present.

I can’t wait to see what challenges Dr. T and his team take on next.

Samsung Avoids Dutch Sales Ban By Upgrading Galaxy Phones

12 Oct

Touché. Europe may be where some of the fiercest court battles are taking place between Apple and Samsung over patents, but it’s also where consumers will soon get their hands on three versions of Samsung’s Galaxy smartphones that have been specially upgraded to, in one way, stick it to Apple.

Samsung says the upgrades will allow it to circumvent a court ban on sales of earlier versions of the products in the Netherlands, which were ruled to have violated Apple’s patent.

Last August a Dutch court banned sales of the Galaxy S, S II and Ace in the Netherlands, after it decided that Samsung had breached one of Apple’s technology patents. Apple had claimed Samsung was engaged in “slavish style copying.”

The sales ban also included a “grace period” until Oct. 14 – this  Friday – to deal with the infringement. A spokesman for Samsung told Reuters that the company had now “fixed the technological problem and upgraded products to address the issue. They will be shortly available for sale.”

He added that Samsung might try a similar approach in other European markets where Apple has successfully called for a sales ban on its products, though but he did not give an exact launch date or give details on how exactly they would be considered upgrades.

Samsung and Apple are now engaged in 20 different patent disputes in 10 countries, according to Reuters, as the South Korean electronics giant fights tooth and nail to beat Apple as the world’s No. 1 smartphone maker.

Samsung recently rented a pop-up shop just a few meters down the road from Apple’s main store in Sydney, Australia in an apparent attempt to pre-empt the release of the iPhone 4S by offering consumers the Galaxy S II for $2, for a limited period. The move has led to long queues in front of Samsung’s temporary store, since only the first 10 people in line are let in on the deal, according to The Next Web.

Analysts at Nomura also cited Samsung in a note this morning as among their preferred stocks in the smartphone and handset market. They say that Samsung will benefit from falling component costs, which will in turn drive the prices of phones that run on Google’s Android operating system close to the $100 mark over the coming 12 months.

Why’d You Go and Break My Heart, Google Plus?

12 Oct

I’m not supposed to take sides, I know. I can’t help it. I was pulling for  you, Google Plus.

I was pulling for you and you let me down.

It’s looking more and more like you’re never going to be a viable alternative to Facebook.Whether or not your traffic is actually down, it’s certainly not growing like it could be. Even worse than the numbers is the lived experience. The knock on Google Plus (or Google+, if you prefer) is it’s an echo chamber frequented only by tech geeks and social media groupies, and even they’re losing interest. “I don’t know anyone who uses it regularly, and since I’m in a hyper connected social media world, that doesn’t lead me to have very positive feelings about their long term viability,” says Buddy Media CEO Mike Lazerow.

That matches my observations. When I logged into Google Plus this morning, eight of the 10 newest posts in my stream were from Robert Scoble. I’ll be honest: I’m not even really sure who Robert Scoble is. Probably I should know, but that’s kind of the point: I’m not one-dimensional, but the Google Plus projection of my life is.

Listen, Facebook, it’s nothing personal. I like you a lot. I use you all the time, as I guess you know. I just created a new album of vacation pics the other day, and I’m loving Spotify on Facebook Platform. It rules. I want all that stuff. I just want it on Google.

The thing is, I’m lazy. I want all the good stuff a great social network gives you in the same place I have my email, my chat, my calendar, my documents, and so on. Is this giving one company too much power over my information? I don’t care. I’ll take it in exchange for the convenience. Facebook messaging is a pain in the ass, and don’t even get me started on people who think sending a DM on Twitter is an acceptable way for adults to communicate.

Also, I kind of prefer the Google aesthetic. Or maybe it’s an anti-aesthetic. Facebook is like a guy from “Queer Eye” who keeps loudly telling you howfabulous your life is going to be once you start taking all his advice. Google’s more like a quiet, thoughtful roommate who follows around after you, putting away your clutter exactly where you’d look for it and imperceptibly upgrading the decor and appliances. Don’t mind me, he says, I’m just making it so we never have to pay for long distance again.

I know Facebook had a big, big head start in social. But, Google, you were the one company that was supposed to be able to rival the network effect of 800 million users. Everyone I know is already on Google. Most of them are even on Google Plus now, too. They’re just not sharing anything. Just Robert Scoble.

I don’t even know what to tell you at this point. I guess you could do a bunch of Twitter-style outreach to celebrities and other “influencers” in the hopes that if they start using Google Plus, the masses will get on to see what they’re up to. But, frankly, I found it a little annoying when Twitter did it, and I still find it creepy and sad that otherwise normal people follow Lady Gaga or Ashton Kutcher. I suppose you could bug me and all my friends with a million prompts to share every time we try to check email or search something, but, again, that’s not your style.

Maybe that’s the point. Maybe, all other things being equal, the hectoring “Queer Eye” dude is always going to throw a bigger, noisier party than the quiet roommate. Then again, maybe I’m just not giving you enough time, and there’s still a chance you’ll pull it off.

I sure hope that’s it. Somehow I doubt it.