System PPPPreferences (Four P's #174)
Public systems, Professional systems, Personal systems and Practical systems.
I'm obsessed with systems.
Systems of all kinds. Big systems. Closed systems. Complex systems.
Systems can be connected networks that work together in different ways… they can be processes we implement to enhance, prevent, manage, or control, experiences… and they can be anywhere and everywhere.
Indoor plumbing is a system: Clean water comes in, disperses to different touchpoints (sinks, showers, toilets, washing machine, etc.), and dirty water (and more) goes out. Pretty neat.
The assembly line is a system: Each worker in the factory has her and his specialized role, inserts the part or checks the product, and on to the next one!
The airport baggage process is a system: You check your bags at the gate, they go down into a holding area where they are sorted, distributed, loaded, transported, unloaded, collected, and redistributed. I mean... CRAZY!
Some systems are more complicated, and likely require other systems to fix and/or support them. Let's explore a few this week:
SOMETHING PRACTICAL: The Broken Healthcare System
I finally got my first COVID test last weekend before a quick trip to Canada, and if you're thinking how amazing it is that I went 21 months without needing a test, well, you'd be right. I am amazing.
It was also amazing to catch a tiny glimpse into what an ideal healthcare system could look like if we really made the effort. In America. I arrived early at a local hospital ER to get my test, and was rewarded with an empty waiting room. There was also a nurse/PA standing by at the COVID testing station ready and waiting for me. No insurance information needed. In and out in 15 minutes. With test results online a few hours later.
This is how our healthcare system could work... how it should work. It takes emergencies of different kinds to both test our systems, and force improvements on our systems. We can only hope that the COVID-19 pandemic will be the catalyst that drives some change.
But the American healthcare system is more about business than it is public health. Patients are routinely forced to pay exorbitant fees on everything from hospital visits and services to medications and devices. And this is a new phenomenon. The earliest U.S. insurance companies were actually nonprofits that aimed to help hospitals get paid while also helping patients save money. American hospitals also began as charitable institutions set up by religious groups.
Then in the 1950s, things began to change. The number of Americans buying health insurance increased by 60%, and for-profit companies started taking over. In the '70's, hospitals began manipulating their bills, raising prices in an effort to optimize profits, and act more like major corporations than philanthropic foundations. These changes resulted in more costs for the patient. Between 1997 and 2012, overall hospital service fees increased by 149%. By comparison, the average cost of a hospital stay in the U.S. is 10x more than a stay in a Spanish hospital. Prices are also being driven up by the rise of medical conglomerates. Northwell here on Long Island is one such conglomerate. Sutter Health in California is another, comprised of nearly 30 hospitals, 40 outpatient surgical centers, nine cancer centers, and thousands of affiliated private practices. In some areas of California, a patient has no alternative but to deal with the overpriced service of a Sutter Health facility. They are run by corporate executives, not healthcare professionals, and they can raise prices as they see fit.
Oh what about Big Pharma? Drugs and health remedies were not always as expensive and manipulated as they are today. But as the science has improved, the prices have risen. Legislation designed to protect the consumer ALSO protects pharmaceutical companies, who lobby lawmakers in exchange for protection and also find new ways to manipulate patent law. And they only fund research when there is a high potential for commercial profit.
The business of health care would rather sell treatment over an entire lifetime than sell a single cure. Not a great system, is it? So how do we fix it?
National fee schedule for drugs, procedures and devices: This is how countries like Germany, Japan and Belgium operate. The prices are negotiated by doctors, academics and government personnel, and once they’re set they can’t be suddenly raised overnight.
Single-payer system: Similar to the ones in places like Canada, Australia and Taiwan, the government covers most of the money being paid to healthcare providers, thereby cutting out the private insurers from most of the basic services.
Patient education: Speak up, ask questions, be informed. Are there cheaper alternatives and why tests are being done? Is that test really necessary? Does this doctor take my insurance? The many doctors I know are on our side and just as angry about this, so treat them as allies.
Choose your insurance wisely: Most employers provide employees with access to provider coverage, and while the options are limited and not all costs are covered. Carefully consider all options, read the details, make comparisons, leverage the healthcare advocacy program created by the Affordable Care Act to help us make sense of all of this.
Negotiate: This was something I didn't think about until my wife started challenging many of the charges we'd receive as a family. Almost all of them are waived and reduced once you start asking questions.
Buy medicine overseas: They're cheaper and it's hard to track. (Yes, it's illegal, but so is speeding.)
Consider a nonprofit insurance plan: Yes, they do still exist. They are rare, but the biggest benefit of nonprofit insurers is that they have no shareholders.
SOMETHING POLITICAL: Social Support Systems
The “American system” of government and finance has been dissected, analyzed and written about perhaps more than any other in history. Yet the great experiment in democracy has evolved into such a complex system, that attempting to fix any one part is nearly an impossible task. What's worse is that despite all of the consideration and explication, our systems remain widely misunderstood. Words and phrases have been hijacked. Processes have been propagandized. Truths and fiction turned on their heads. So the question is: When systems break down, is it the result of faulty structure? Or faulty agency?
For the United States to build a stronger, better, and happier society, we must rethink the way our taxation and spending systems work. When everyone pays his and her fair share, we can invest in the things that everyone needs and help all Americans AND others around the world realize their full potential.
Let's start with basic welfare. Success in America is not attainable if you’re poor. With poverty, society bears the costs no matter what. So most people think of welfare as government handouts to retirees, the poor, and unemployed. But REAL welfare is investment in education, infrastructure and public goods – things that are essential to the functioning of any society. Welfare is designed to give everyone an equal chance at happiness. For example, government insurances like Medicare, Medicaid and social security not only protect citizens, but actually give us the opportunity to start a new business or go back to school.
Welfare is essential to the pursuit of happiness. Unfortunately, we are failing the middle and lower classes. After adjusting for inflation, the median income of an American man in 2010 was lower than what his father’s would have been 37 years earlier! An increasing number of people are living below the relative poverty line, which means society is not as "equal" as it used to be.
Little known fact: extreme inequality is a recent phenomenon, and has increased rapidly since the 1970s. If you compare 1979 to 2007, you’ll see that everyone in society except for the top 1% came to hold a smaller share of the country’s total income. And we continue to move in the wrong direction. Despite what some politicians on the right will claim, increased inequality has poor economic results. But if inequality truly does drives economic growth, why aren't we seeing stellar growth these days on a regular basis? The United States has the highest rate of inequality with respect to disposable income, which refers to the amount of money people have left to spend after they pay taxes and social security.
Government investments boost the economy, and there are countless of examples from the Hoover Dam to the aforementioned Affordable Care Act. Despite what conservatives say, many government programs cover their own costs. For example, ObamaCare is actually deficit neutral. The CBO has shown a deficit decrease as a result of the ACA, which has revenue-increasing measures built into it. In fact, the federal deficit dropped from 10% of GDP in 2009 to 2% of GDP in 2015. (Thanks, Obama!) These programs get people working, which leads to lower unemployment. Government investments also bring in higher tax revenue while stimulating increased household spending, effectively killing multiple birds with one stone.
So how do we pay for these programs? Taxes, obviously. And that's not a bad thing. Over the last decade, the proportion of all taxes, including national, state and regional taxes, to GDP is lower in the United States than in any other OECD country. The government also loses revenue to tax rebates, which can come in the form of subsidies for oil companies, renewable electricity, mortgage interest deductions and many other examples. Tax rebates go straight into the pockets of the country’s wealthiest people rather than staying in government coffers. With lower total taxation, therefore, we have lower revenue. We can raise revenue without harming the economy and investing it back into society.
Investing in education, infrastructure, and insurance systems enables Americans to realize their full potential as individuals. And when everyone in a society reaches their full potential, we can ALL contribute to the growth of its economy. An investment in our systems is an investment in ourselves.
SOMETHING PROFESSIONAL: The “GAFA” Systems
The quadropoly of Google, Amazon, Facebook, and Apple have made up a significant core of our digital ecosystem for the past 10-15 years. In so many important ways, they have expanded the network of partner technologies, creators, marketers, and companies that leverage these platforms to provide richer, more meaningful experiences. This system gives rise to new innovators and entrepreneurs, while also making GAFA's shareholders stronger and richer.
When we trace back over the evolution of Web 1.0 and Web 2.0 (which I have done quite a bit of in this space over the past few months), it's clear that the companies who were "first" were not always best. Most didn't stick around, even if their innovations became foundational building blocks for many others who ARE still around. Strategy, creative, technology, media, and community companies sprung up to support Web 1.0. Some evolved to support Web 2.0 while others stayed with who they already were.
In the late 2000s, I took on a leadership role building out the social media practice at a digital / Web 2.0 agency (360i) built off the strengths of a Web 1.0 search and media agency. We worked as an intermediary between brands, publishers, and platforms to enhance the marketing technology and content models to create new systems. We didn't always get it right, but we collectively transformed how brands and marketers connect with consumers across myriad channels.
The same patters are happening again. As blockchains and other emerging platforms create new opportunities with Web3 and the metaverse, those same needs are quickly emerging for agencies, creators, strategists, technology developers. We must collaborate, to partner, to share data, to challenge each other, while ultimately leading brands and marketers into this new world of DAOs, NFTs, shared ownership, fandom, commerce, and decentralization-to-recentralization (more on this next time). A new system is being built as we speak, some of it leveraging existing frameworks and built on the old, some of it never before seen. How Google, Apple, Facebook, and Amazon lead, react, or (attempt to) block these developments will also help determined just how the new system plays out.
SOMETHING PERSONAL: Individual Development Systems
We all have personal systems in our lives that both guide and limit the way we think, operate, and react. Many of my systems have been developed and refined over time to solely to avoid “big mistakes.” In life, big mistakes are usually result of many small mistakes that string together in a network all their own. While some small mistakes are obviously okay, and even expected, they are often the result of human beings systematically overestimating their abilities.
Most of us tend to view ourselves through rose-tinted glasses. 84% of French men consider themselves to be above-average lovers. 93% of American students ranked themselves as “above-average” drivers. 68% of University of Nebraska faculty ranked their own teaching abilities in the top quartile. We also mistakenly attribute successes to our own abilities and failures to external factors.
To prevent this, our systems should be optimized to enhance self awareness and situation awareness. Some of those systems might include:
Ask for feedback: Ask a co-worker you trust to give you feedback. Invite an honest friend out to coffee and ask for their candid opinion on your strengths and weaknesses.
Obliterate the illusion of control: When we believe that we can exert some kind of control over our situation, then we can better endure life’s many sufferings. But there are far more things outside of our control. I've built in daily reminders to focus my energy on a few things of importance that I truly can influence, and not let the other things ruin my day.
Safety in numbers: While it's occasionally better to stand out from the crowd, it's also okay to follow what a group does. In moments of uncertainty and high risk, conforming prevents ourselves from being excluded. Social proof makes us feel like our behavior is correct when it matches other people’s.
Limit confirmation biases: Knowing that we are unconsciously influenced by our confirmation bias, we should instead set out to find contrary opinions and evidence in order to form more balanced convictions.
Understand context: The contrast-effect is the reason why you appear far less attractive than you truly are when standing next to your ultra-attractive friend. Or shorter compared to a tall friend. Luckily, we can circumvent these comparison biases by assessing something’s value based solely on its costs and benefits. By doing so, you’ll make much better choices.
Avoid multitasking: Our attention is very selective and narrow, and we miss everything that occurs outside it.
Reduce options: Ever hear of analysis paralysis? Sometimes too much choice can be a bad thing, and we often just give up instead. Research has shown that decision-making can also be exhausting, resulting in decision fatigue. There is rarely a “perfect decision,” so instead learn to love a “good” choice, rather than striving for the “best” choice.
Separate rationality from feelings (but harness both): Feelings guide our decisions more than we think as most people have neither the time nor the energy to make meticulously rational assessments. We are not ultra-rational in our decision-making, which is okay! But having a check or mental evaluation moment in place to understand when our decisions are guided by emotion/feeling and when they are guided by fact is perhaps the most important system we can have as human beings.
Thanks for reading this far. I’m so glad you are in my system… and I’m in yours.