Peter Huber with a long and typically brilliant article explaining why the new medicine makes socialized health care impossible. Excerpt:
Insurance makes sense for risks that people can’t control. Or to put it more bluntly, socialized medicine was a smart idea back when medicine was too stupid to halt infectious epidemics, discourage suicidal lifestyles, or discern the perils in killer genes.....
But we’re now past the days when infectious diseases were the dominant killers, and heart attacks and lung cancer seemed to strike as randomly as germs. And insurance looks altogether different when your neighbor’s problem is a persistent failure to take care of himself. Many people willing to share the burden of bad luck eventually tire of sharing the cost of bad behavior.
The new medicine certainly hasn’t banished luck completely—molecules don’t predict car accidents and can’t yet cure Huntington’s disease, cystic fibrosis, or many rare cancers. A widely shared sense of common decency also impels protection of children and the elderly. In between, however, the unifying interest in health insurance is surely the sense that anyone can be struck out of the blue by a ruinously expensive health catastrophe. And step by relentless step, molecular medicine is taking luck out of the picture.
Now consider what that does to insurance economics. Most critics of the status quo focus on the more manageable of the two core problems that health insurers now face: runaway cost. But the real problem is that for many people, health care is getting cheaper. This is what makes actuaries wake up screaming in the night: disease is coming out of the closet, and the new medicine splits health-care economics in two. For the health conscious, skipping the Cherry Garcia may be difficult, but it’s cheap, and Lipitor at almost any price is much cheaper than a heart attack. The health careless skip only the pill, not the ice cream, and end up in desperate need of what helps the least and costs the most. Doctors, hospitals, and scalpels summoned late in the day cost far more, and accomplish far less, than chemistry tuned to the point where there’s never plaque to cut.
No one-size, one-price insurance scheme can keep people happy forever on both sides of this ever-widening divide. Aetna can’t offer uniform coverage to individuals who face radically different risks, and who know it, too. Governments can’t, either.
Watch our colleague George Gilder discussing technology and the Net on two panels at last week's Always On conference at Stanford:
(1) In Out of the Lab and into the Market , George moderates a discussion among IBM, SAP, and HP executives about innovation at large companies.
(2) Next, in The Democratization of Media: Good or Bad?, George responds to Andrew Keen, author of Cult of the Amateur, which argues that the open Net, social networks, and Web 2.0 are negative cultural forces.
Policy makers should recognize information technology as the centerpiece of economic policy and develop their plans accordingly, concludes the Digital Prosperity study published this week by the Information Technology and Innovation Foundation.
“In the new global economy information and communications technology (IT) is the major driver, not just of improved quality of life, but also of economic growth,” writes Foundation president, Dr. Robert D. Atkinson, author of the study.
Atkinson is a widely respected economist who formerly served as project director of the Congressional Office of Technology Assessment, and is the former director of the Progressive Policy Institute’s Technology and New Economy Project of the centrist Democratic Leadership Council.
Based on reviews of other studies, and Atkinson’s own research, the report maintains, “IT was responsible for two-thirds of total factor growth in productivity between 1995 and 2002 and virtually all of the growth in labor productivity” in the United States.
Continue reading "Digital Prosperity Report Concludes IT Investment Critical" »
The following is a transcribed excerpt of Peter Huber’s Gilder/Forbes Telecosm 2006 keynote, delivered earlier this month in Lake Tahoe:
When a deliberate nuclear release occurs in the United States, as I think it inevitably will, we will almost certainly find that the material originated somewhere mundane—a hospital, a factory, an industrial setting. There is a whole lot of nuclear material out there all over the place. It has many useful applications. People who want it will find it.
The London subway bombers used Triaceatone Triperoxide (TATP). They brewed it in the bathtub using acetone, drain cleaner, and bleach. The Japanese subway attackers home-brewed their Sarin gas. The Oklahoma City bombers mixed liquid fertilizer and diesel fuel.
Continue reading "Can Technology Defeat Terrorism?" »
 Another thought from our Telecosm conference last week: We had a couple very good presentations on health care from Andy Kessler and Art Robinson. Kessler's new book, The End of Medicine, focuses on advances in digital imaging, as we go from single "slice" CT scans to 4 to 16 to 64, 256, 1024, down the line. The scanners are getting faster, higher resolution, and can now create 3D images. These things put out enormous amounts of data. The new ones yield around 2 gigabytes (GB), or about as much as a full-length DVD movie. Read just a bit about these marvelous new technologies, and one thing radiologists say over and over is that the data storage and bandwidth problems associated with all this output are significant. We're going to need huge new telecom and datacom capacity if we are going to handle and fully exploit these new technologies that have the real possibility of making us all much healthier.
-Bret Swanson
We often forget about the secondary and tertiary effects of massive capital infrastructure investments. Two panel discussions at George Gilder's 10th annual Telecosm, just concluded in Squaw Creek, California, indirectly reminded me of these virtuous side-effects.
On the first night of the conference, Terry Turpin of communications equipment vender and hyper-tech defense contractor Essex Corp., was listing some of the pluses and minuses of the telecom boom (bubble?). Essex makes optical processors capable of the most demanding computational tasks ever known, from breaking codes to looking through the walls of caves in Afghanistan. Can you do 5 petaflops on just 10 watts? Didn't think so.
Anyway, Turpin mentioned that some of the machines he's built in the last half-decade would never have been possible without the late-90s optical network buildout boom. Waves of new optical components -- and old components at rock-bottom prices -- flooded the market. Lenses, prisms, coatings, gratings, free-space interferometers, and assortments of lasers with more power and better precision. Pieces that Turpin had previously hand-made at prohibitive cost and pieces that previously did not exist were now available in bulk at reasonable prices. The super-secret machines Turpin has turned out, one by one, for decades could now be supercharged with the volumes of high-end technology churning out of the telecom industry.
The next morning of the conference, Gilder had engaged Google, Equinix, Mozy, and others in a discussion about data centers and the massively parallel computing architectures that deliver your Gmail, YouTube clips, and most other web services. Bottlenecks abound in these giant, bandwidth hogging, power sucking, behemoth hardwarehouses. But one key bottleneck that emerged from the discussion was the dearth of cheap 10 Gigabit Ethernet components needed to connect the tens or hundreds of thousands of processors and disks.
In the past, the motherboard bus and other computer system communications links had been faster than the network to which they would one day connect. Today network bandwidth is beginning to outstrip PC-level communications. But 10 GigE links are not yet made in the volumes needed to make economical the connection of these server farms with wires 10 or 100 times faster than the 100 base T Ethernet or 1 Gig E connections used today.
The fiber optic metro and access networks being built by the telcos today, however, are making abundant use of 10 GigE and 1 GigE links. Should government regulators in Washington and the states allow these gigantic fiber optic buildouts to go forward, a new wave of optical and electronic components will flood the market, trickling down into the storewidth data centers and across the network. One part of the ecosystem feeds the others.
Telecom investment is thus not important only for our entertainment and communications capabilities today, not just for our productivity next year, but for the long-term health of a range of military, security, high-tech, high-growth industries as well.
-Bret Swanson
Mobile phones, yet again, are shown to be brain-safe...
-Bret Swanson
George Gilder and Bill Joy just finished their panel on "Is Technology Making Us Safer?" at the Always-On conference at Stanford University. Joy, once a co-founder of Sun Microsystems and now a new partner at Kleiner Perkins ventures, seems to have somewhat moderated his views on the "relinquishment" of technology -- for example, saying biologists should have a sort of Hippocratic oath to help prevent the spread of dangerous bio-information rather than a bureaucratic government response as he previously suggested -- but he is still just as worried about global warming as ever. He asked George, "Don't you read Nature magazine?" as if the climatologists published there are dispositive. Joy said there is a consensus about global warming, and asked why would George fight it. George countered that science isn't about consensus -- in fact, science is the antithesis of consensus based knowledge -- science is about truth. Joy's dabbling in politics and economics is actually bad for the problems of mankind he cares so much about. By distracting himself with things he knows little about, he takes himself away from the realm where he really can contribute to human wellbeing -- technology. I guess it's good, therefore, that Joy is now back in technology as a partner with KPC&B, and not writing socialist or anti-technology tomes. Even at KPC&B, however, he envisions his primary goal not simply to make great investments but to compensate for today's dangerous (as he sees it) political environment.
-Bret Swanson
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