Despite the fact of two transformative revolutions taking place—the globalization of the world’s economies and societies, and the information and technology revolution sweeping the planet—the United States’ healthcare system faces some unique challenges that defy market and technological changes. That assessment came towards the end of a probing, insightful look at how the world’s economy and society are changing dramatically right now, as conveyed by Fareed Zakaria, the renowned Indian-born U.S. journalist, author, commentator and program host, on Friday, Oct. 16, at the CHIME Fall Forum, being held at the JW Marriott Grande Lake Resort in Orlando, Florida.
Zakaria outlined for his audience of healthcare IT leaders at the CHIME Fall Forum (sponsored by the Ann Arbor, Mich.-based College of Healthcare Information Management Executives) some of the very broadest trends reshaping global society, among them the dovetailing of the planet’s economies into more or less a single global economy, and the enormous information technology and other-technology revolution transforming social interactions, politics, culture, and communications. And yet, at the end, when drilling down to issues facing the U.S. healthcare system, he cautioned that information technology alone will not change the fundamental dynamics of that system.
Fareed Zakaria addresses the CHIME15 audience on Friday
Speaking of the globalization of the world economy, Zakaria noted that “A global central banking system emerged in the early 1990s,” with strong effects through the present,” including stabilizing ones. “In 1979,” he noted, 35 countries had hyperinflation (15 percent compounded); today, it’s zero. The last country to have that was Zimbabwe, before it dollarized its economy. So you’ve had this globalization evolution that was brought countries from all over the world into basically the same capital market system, and that has allowed for this great wave of globalization, which has been outsourcing. In the 16th and 17th centuries, via tall ships, you began to move goods around the world. In the 18th and 19th centuries, you began to be able to move capital around the world; and now, you can send capital and jobs around the world through outsourcing. There are 3 billion people still not participating in the global economy, but they soon will be. Meanwhile,” he said, “there are still a billion people in India, a billion in Africa, who don’t have access to the Internet.” But the economic outsourcing that began three decades ago is now in fact maturing. “You’re already seeing people outsourcing, in China, to lower-labor-cost countries like India; and from India to Bangladesh.” The plus has been economic growth. “In 1979, the number of countries growing at 3 percent or more a year was about 32. In 2007, before the financial crisis, that number was 124. And it’s still 85 today.”
Meanwhile, Zakaria told his audience, “The second great train coursing through global society is a technological revolution. In 1990, you were in a world without anything you use now: you had no smartphones, no laptops, no tablets, no World Wide Web, and not one website.” The political and societal implications of the change have been earth-shattering, he noted. “Governments that once had a monopoly over information, have lost that monopoly. Here’s an interesting fact: when Saddam Hussein invaded Kuwait in 1990, the government of Saudi Arabia was able to keep that fact a secret for a week while they tried to figure out how to respond. That would simply be impossible today.”
What’s more, he noted, “In the 1940s, whenever there was a coup in any country, the coup plotters would go to the presidential palace and radio station and take those over. In the 1950s, it was the presidential palace and the TV station. Today, you would still take over the presidential palace. But what would be the point of taking over a radio station or TV station, since very handheld device has the power to transmit information? That’s the reality of today’s disaggregated information system. Countries and governments have lost all control over information. Think of Edward Snowden, or dozens of other examples—a shift in power where they no longer have the control over information. That process is only in its infancy. I believe we have created a networked system, and that networking process took place in the early 2000s, with the laying of fiber-optic cable around the world. Those companies went bankrupt, but it benefited consumers.” And the fact of the globalization and instantaneous nature of information-sharing and communications, he said, is one that is transforming all societies, and disaggregating power away from governments and towards individuals.
“The point,” he said, “is that you’re watching Moore’s law continuing to apply; computers are beginning to double in power every two years, but are starting at an extraordinary level.” And he pointed out that “The smartphones you have are 100 times more powerful than the computers NASA used to get a man on the moon. That’s an iPhone 5. And now, we’re getting to a computer power on steroids. So you’re beginning to see possibilities that simply did not exist before. The first one is an extraordinary transformation of data. The ability to scan and access data is creating computing power and function of a kind that people didn’t think was possible for a while.”
Zakaria noted something fascinating around language, to give an example of the power of computing. “It was always a holy grail among computer scientists,” he said, “that you could get computers to understand language. It turns out that that is extraordinarily hard. That’s never worked. And yet you now see a lot of these great translation programs. Why? Because Google said, forget trying to get computers to understand how to speak German. Just give the computer a thousand documents translated from German to English, so that the next time the computer scans, it will choose that. That is essentially what Google Translate and all those programs do—it is a massive correspondence between phrases in languages. And the language best translated in Google Translate? It’s French, because they scanned the proceedings of the Canadian Parliament going back to the 19th century.” Meanwhile, he notes that “When Blue plays chess with a human player, the computer plays out a thousand chess matches, figures out which move might win, and does it. It’s a sort of inefficient mechanism. Every time the computer moves in a chess match, it’s literally playing out a thousand chess matches, but that doesn’t matter, because it computes fast enough.” The implications of such speed of computing are breathtaking to consider going forward, he emphasized.
Still, despite everything that has happened in terms of economics and information and other technology, based on his research into healthcare systems, Zakaria told his audience, the U.S. healthcare system remains stubbornly resistant to fundamental change, and is likely to be untransformed by IT alone. Why? Because, as Zakaria said, the problems are fundamentally policy-based and political, and the U.S. healthcare system has a disconnect between consumers and providers of care (the buyers and sellers in any other market system) that simply does not lend itself to ready change, because of the intercession of health insurers, both public and private, in all transactions.
“The hope in the United States has always been that we find a technological solution that magically gets around all these problems,” he said. But the reality is that any broad solution to the ills of the U.S. healthcare system will be a policy and political one, he said, because the economic dynamics of U.S. healthcare defy easy change. “More likely, we’re going to have to do the hard work of unraveling the system to some extent, and force people make hard decisions, such as, when you’re 85 years old, do you need a double hip replacement? The revolution needed here is not an information revolution, but a political revolution.”
When asked by an audience member during the question-and-answer period at the end of his presentation, whether technology diffusion could help U.S. healthcare, Zakaria said that “I think technology will have a great deal of effect. The mistake, I think, is that because of that, you will be able to lower costs when the structure of the healthcare system has not been changed, because technology also produces new wants. Technology will provide lots of options you didn’t have before, but technology can’t change the fact that you have a certain structure in place, with certain insurance elements in place, and certain elements like the fear of (medical malpractice) litigation, or the fact that hospitals can operate in smaller markets as effective monopolies. One of the reasons you see costs go down in the area of technology is that it is a largely unregulated consumer product, right. iPads can drop in cost all the time, because you have supply constantly meeting demand.”
Zakaria said that, after having studied a number of healthcare systems at a broad level, he sees the Swiss healthcare system as being close enough to the U.S. system that some of its innovations could be adapted by U.S. healthcare leaders. But he noted that doing so would require comparative effectiveness standards to be applied, though he did not use the term, when he referenced the fact that in the Swiss healthcare system, an 85-year-old patient will not be getting a double hip replacement.