Saturday, November 14, 2009

Black Swan Health Policy: What's in a Domain?

What's in a domain (name)?

Hopefully, a bit of Black Swan health policy.

Of course, I know it's a dream; a dream to make the unseen seen.

But I do own a domain (thanks to Navanit Arakeri) -- AncestralFitness.com -- that I'd like to build out iteratively, without any deadlines or rigidity, in order to operationalize Physiological Economics in some capacity.

So I am thinkering of ways to use it most effectively.

In some shape or form, I want it to involve elements of Black Swan health policy--such as an anti-health insurance co-op, as one potential possibility--because that seems like the logical next step to me. The Ancestral Fitness Epistemocracy (AFE) is coalescing on the periphery quite nicely, and I have been listening intently to this online collaborative communication melody, and I suspect that it would be a semi-travesty if we did not, at some point, attempt to organize this genuine positive energy in a creative manner to somehow influence health policy constructively. However this spirit of influence manifests is fine with me--after all, it's a bottom-up, spontaneous-order epistemocracy, and I am open to everyone's valuable and distinct my-thologies.

And there are many perceptive leaders--like Art DeVany--who entered this vibrant health and fitness space well before me, so I want to respect everyone's territory, autonomy, and unique approaches to mythologizing and tinkering. But for those who are interested in joining me, send me your thoughts and ideas on how best to cultivate this emerging epistemocracy so that we can bubble up as many positive Black Swan hits as possible from the envelope of serendipity.

To start this process rolling, here are a few of the basic 'choice architecture' social scaffolding nodes that I envision currently:
  • A sign-up form/petition section where folks can sign their names and leave comments as a way of expressing interest in joining the AFE Anti-Health Insurance Co-Op should this dream ever become a reality.
  • An information page that explains this Co-Op concept, like MediShare does.
  • A page that captures all the active Bloggers in the AFE in one place.
  • A Wiki-type platform that is an open Web-book: that is, anyone can write this book. It would be the ultimate user/community-authored book. People could share their self-experimentation experiences--that could be one chapter--share foods and drinks and fitness links--another chapter--etc.
In the interest of avoiding information toxicity, this project must be deployed and implemented strategically--the last thing we need is an echoing chamber that lacks novelty. We must aim for novelty. Thankfully, Jeff Erno and a few other comrades have already agreed to assist me.

In addition to blogging sporadically, I already co-own and co-operate--with a few close friends--a company called Academic Impact (Ai) and a non-profit program called Game Plan Academy (GPA), so working via Nassim Taleb's dentist-writing-novels-on-the-weekend model seems apt, reasonable, and sustainable to me: there's a novel out there that needs to be written, so you starting writing, with no completion date or timeline in sight, because you enjoy writing--you feel compelled to write. For example, years ago, as early as middle school, I expressed passion and interest in child development as part of my future 'career' (life) goals, never imagining, at that point, that I would end up mentoring youth in the wonderful, fulfilling roles that I currently do. Life tends to work out that way, interestingly.

So, here are some thoughts--some of it is 'old hat', of course--to accompany this dream (warm thanks to Aaron Blaisdell and to Dave Lull for offering feedback on this working-draft essay piece):


Black Swan Health Policy: Healthcare Financing & Nonlinearities

Healthcare dynamics in the United States reflect some troublesome nonlinearities that health policy efforts must address creatively. To frame this problem, consider an alternative universe, a world devoid of chronic illness. The metabolic syndrome is foreign there. People rarely get sick, luckily, but when they do, they suffer from acute bouts of illness that modern medicine responds to quite rapidly. Occasionally, poor health conditions linger longitudinally, but for the most part, chronic conditions do not exist because people fuel and expend energy ancestrally by self-experimenting with ancestral mimicry.

Now consider our contemporary world, where linearity in disease courses continues to increase in prevalence exponentially: preventable chronic illness consumes an ever-increasing majority of our healthcare expenditures--that's a troublesome nonlinearity. In this context, it's imperative that we implement healthcare policy foundations and frameworks that support, facilitate, and drive the re-evolution of medical diseases back to acute, rare, catastrophic health events. Chronic disease medical care plagues--overwhelms--our current healthcare delivery and finance system immensely, and (largely) preventable conditions like diabetes, various heart maladies, hypertension, obesity, stroke, and others, which act on patients each and every day in repetitive, constant, linear ways, consume most (>80%) of our healthcare resources and are stressing our medical services bandwidth extensively: currently, our bodies, collectively, are 'too-far-broken' for our medical practitioners to 'fix' effectively. The real fix is to reduce the prevalence of chronic, linear and repetitive illness in society and return disease events back to their rightful status as rare negative Black Swan strikes.

In his splendid book, The Black Swan: The Impact of the Highly Improbable, Nassim Taleb examines the nonlinear, power-law nature of high-impact events. If we model illness--such as trauma or other highly-improbable, unexpected medical events--as negative Black Swan hits, an approach to health policy and administration emerges with far-reaching implications: health insurance must be re-designed as real insurance (a product/financial instrument that we are incentivized and compelled to avoid using); that is, it must protect us financially against catastrophe and bankruptcy from unexpected, unfortunate health risks, but it must not pay for regular, chronic, and linear day-to-day medical care. Right now, our healthcare system does the inverse: we pay first-dollar coverage for linear, non-insurable health events, where paying out of pocket and acting as a 'consumer' are appropriate, but we fail to prevent bankruptcy and cover catastrophic, nonlinear health strikes fully, when and where 'shopping' and worrying excessively about the prices of health services are not appropriate or socially desirable (we surrender some agency to our entrusted medical professionals in these cases).

We must invert this approach to financing medical care; we need the opposite nonlinearities. High-deductible health insurance plans, scaled according to wealth/income/ability-to-pay could help accomplish this task. By requiring patients to pay out-of-pocket or through savings from health savings accounts for their linear, routine medical care, patients would respond to this appropriate personal responsibility feedback landscape by searching actively for ways to prevent and heal their chronic illnesses like obesity and diabetes (perhaps, they would examine their lifestyles more closely and would reflect on how they fuel their physiologies and expend energy regularly). Then, as linear, chronic illness declines in prevalence as a result of healthier (ancestral) lifestyle choices, diseases would look more and more like nonlinear, unexpected, and unfortunate (and some unavoidable) negative Black Swan hits--events that we could roughly anticipate, on a larger scale, like car accidents, and turn into Grey Swans that we could insure against sustainably. In this evolution process, we would 'kill two birds with one stone': the robustness of our collective health states would increase exponentially--we would traverse the medical system much more cautiously, attempting to prevent illness in the first place--and our ability to pay properly for medical care would be restored, allowing us to avert a healthcare system collapse like our financial system recently experienced.

When it comes to financing medical care, insurance can't pay for everything: medical services should be distributed nonlinearly, but in an inverted power-law manner than they are currently, with most (about 80-90%) of medical events representing small, routine preventive types of services (including things like ancestral nutrition) that patients could and should pay for as market-price conscious shoppers/consumers, while providing bankruptcy-protection against the few (~10-20%) medical events that are catastrophic, high-impact, acute, and high-cost--this is where modern Western medicine thrives and helps us survive. No more donut holes or gaps in coverage; we need clean breaks. Scaled high-deductible, catastrophic insurance approaches support this healthier, more financially and operationally stable distribution of national healthcare expenditures. It's an application of nonlinear dynamics to health policy, and it's the power-law prescription for a flourishing healthcare system in the 21st century.

Sometimes alternative universe dynamics do come true.

So, then, what's in a domain?

Well, I hope there's more than just a name.

But if not, that's alright.

The name Ancestral Fitness Epistemocracy is now part of my m=1 my-thology.

It's existence makes no difference, ultimately, for me, because I will continue with my n=1 self-experimenting bricolage for the rest of eternity.

I will continue with ancestral mimicry.

That's simply how I enjoy living.



To good health,

Brent

17 comments:

  1. Brent,

    This is a great post....with NO comments. Well here is mine, and I think this could actually be done.

    First, forget health policy, except to work to make sure Obama's plan does not pass as it will prohibit the sort of arrangement I am proposing.

    My Emergency Medicine group belongs to a low-risk malpractice company (actually a co-op) that we are shareholders in. The way it works is that the best emergency medicine groups in the country pooled their resources to become self-insured. Criteria were developed to determine who were the lowest risk pool of emergency physicians. Only groups that were all board-certified, had democratic financial structures, and highly functional risk management/patient safety systems in place were eligible.

    Once an initial cadre of groups was organized, premiums were determined. Because initial premiums are not enough of a "war-chest" to cover against a potential black swan (big payout malpractice case), you have to find a third-party administrator to underwrite your risk in exchange for premiums until you have enough covered entities (ie premium income) to establish your own "war chest" of funds. This typically takes a few years.

    The thing is, if you can show that you are covering very low risk entities, very high quality "A-rated" companies are willing to underwrite you. In our case there was no problem getting Lloyd's of London to serve that role. Once your war chest is built up, you can be self-funded with very low premiums.

    My thought is to form a similar EF risk pool. Those in the pool would set up a Medical Savings Account (MSA). The EF Insurance Cooperative would function as a high-deductable catostrophic plan. The money that is in the MSA could simply be the amount needed to cover the deductable. There would be little need to consume the MSA funds since EFers know that "check ups" and "screening exams" are useless. The "war chest" funds are used to cover medical/hospitalization costs in the event of a true medical "black swan".

    The criteria for getting into the cooperative would be participation in an EF diet and exercise lifestyle. Objective measures of being allowed into this low risk pool could be measurement of body comp and some indicators or meaningful health markers. I think measurement of an arachodonic acid/EPA ratio (a measure of omega 6:omega 3 ratio) and serum 25-OH Vitamin D3 would be all the lab markers needed. This could be rechecked every 12-24 months as a requirement for staying in the low-risk pool.

    Not only is there the benefit of being able to charge incredibly low premiums, but there is the tax benefit and investment benefit of the MSA. Most importantly, all participants are owners/shareholders in the insurance company that thrives because it has the lowest possible exposure to black swans, and doesn't need to worry about or pay for the white swans.

    What do you think? Let's circulate this around. IF there is serious interest, I can see what is involved to take the next step.

    Doug McGuff

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  2. Brent, great post.

    Doug, great response.

    I would happily jump into the EF risk pool.

    Lifestyle-based co-ops have enormous potential to capture the energy and dynamism of groups with a shared mythology.

    The EF community is bubbling with energy, as seen by the groundswell of blogs, primal recipes, and videos pinging around.

    This seems the most logical, practical way to channel this energy; low premium, investment leverage, and a healthy lifestyle, all supported by the archetypal mythology of being 'alive!'.

    I've noticed a sincere interest among my family and peers re: Ancestral Fitness, and I am only on the periphery of the movement, working on the ground level.

    So...I'm in!

    Ironically, my family has operated a swimming pool company in Sacramento since 1922, so I am familiar with this 'pool' idea. This one just won't have any chlorine.

    Best,

    Brian

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  3. @Doug,

    Great comment. The ER group's model sounds like a fine one to start with. Sign me up for sure!

    I had another thought on this as well but I will leave it for a follow on comment.

    jeff

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  4. @All,

    I had one other thought on this but I am not sure it will work. Rather than measuring whether people follow a particular regimen, why not have very limited insurance.

    Insurance companies do this somewhat now by covering some things but not others. For example, gastric bypass is covered, but varicose veins are not. The logic is somewhat based on what is cosmetic but the specific logic really doesn't matter. They cover some things but not others for various reasons. What I am proposing would be to cover any and all acute injuries but have no coverage whatsoever for illnesses related to diet and lifestyle.

    Some things would be debateable and make it interesting. One near and dear to the BBS crowd might be wear and tear injuries. Do we cover that? It is a lifestyle choice to engage in ballistic and/or high impact acivities. Do we measure that up front and cover it or do you simply state it isn't covered and it is your choice to do those things.

    This method might be simplier to implement and easier to calculate for doing an "insurance" plan. Just sum up all the costs and throw out the ones that are not included and there you go.

    This idea whouldn't have worked for the ER group. You just wouldn't have had an option to go bankrupt based on a law suit. With this the only thing that happens is that you get stuck with the bill since the insurance won't cover the ailment that is ill gotten(diabetes, most forms of cancer, you get the idea).

    Does this make any sense?

    jeff

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  5. Excellent concept, Brent, and great comments everyone else. I like the model that Doug describes. I'm wondering if there would be an incentive for people who have coverage through their employer to switch to this approach. As a University of California employee, I have relatively inexpensive insurance (with Kaiser Permanente) for my family when I consider my monthly costs as well as the low co-pays (usually 15 dollars) per visit (which are relatively rare).

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  6. Thanks, Dr. McGuff and all.

    The Emergency Medicine Group Model Co-Op approach/spirit is an excellent startup bridge for establishing sustainable capital and infrastructure while weaning away from a third-party administrator to underwrite the negative Black Swan risks, however long that takes.

    Right now, we face the state-by-state mandates and regulations hurdles in determining the size of the deductible and how barebones we can make plans in terms of only covering certain acute events.

    For instance, in California, right now, I pay $65 per month for a clean $4,000 deductible catastrophic plan (it was only $52 last year but Blue Shield hiked rates again!). I pay everything out-of-pocket up to $4k; then, after that, it's a clean break: I am covered completely for all catastrophe costs after $4k (up to a maximum lifetime benefit of $6 M). As long as I have $4k in savings each year, I am protected against bankruptcy from a negative Black Swan strike, but I do bear the risk of that first 4k in coverage individually, which is appropriate, and this further compels me to make wise lifestyle choices daily. Also, with the lower premiums, I can use the money I save to spend on my gym membership, ancestral foods, books, etc. that keep me well: prevention is incentivized financially for me.

    However, this type of plan is illegal, as constructed in the State of New York where the least expensive option for a 'high-deductible' option runs in the $225 - $350 per month premium cost zone! This is partly because NY has so many mandates and so much red tape.

    Ironically, Blue Shield offers me one free 'check-up' / physical per year as part of my barebones policy. I will never use it--it's useless to me, and potentially dangerous too: they just want to gather information from me (elevated cholesterol, perhaps?) that they could use manipulatively to justify raising my premiums. It's not a preventive screening at all; not to me.

    I live ancestrally.

    That takes care of the White Swans for me.

    I spent 2+ years and some decent coin (despite receiving a 50% tuition scholarship for merit) on a Master of Health Administration degree at USC, and this idea represents my most practical approach to turning our healthcare tide in right direction.

    I am more than happy and ready to help lead the charge.

    Cheers,

    Brent

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  7. Great post and comments. Count me in to assist in any way possible to make this a reality.

    In response to Jeff's comments, I would note that limiting the covered services could be useful in discouraging unhealthy enrollees. However, I think standards for nutrition and exercise offer a huge opportunity. Nutrition is, for the most part, poorly understood and I would argue it is the largest determinant of health. If the EF insurance plan were able to enroll a large group of people who followed an EF lifestyle, it would have the ideal pool of enrollees. This group of enrollees would be the envy of every other insurance plan and some of the healthiest people in society. This is the reverse risk pool. Adverse selection is turned upside down to benefit the insurance plan and all of the enrollees.

    My dream is that the plan would be a non-profit and it would use the “profits” to increase the health of its members. Imagine if your health insurance plan provided a free membership to your local crossfit gym or subsidized the cost for grass fed butter and meat or... The possibilities are truly amazing.

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  8. Thanks, Joe.

    Good additions.

    AncestralFitness.org is available.

    Should I purchase it?

    A non-profit subsidizing ancestral fitness and diet lifestyle components is great.

    Best,

    Brent

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  9. @Aaron: Thanks. Unfortunately, because our current tax-code heavily favors employer-based benefits over paying higher wages (and employees subsequently purchasing health insurance individually or as families, as I do now), some folks have no incentive to leave their plans their employers provide because part of their paycheck is siphoned off into those benefits--it's 'use-it-or-lose-it' compensation, which is exactly the opposite of how health insurance should be structured and incentivized. That's one of the biggest underlying problems of our current healthcare financing malaise.

    I can't think of anything yet that would attract these folks into the EF risk pool, but I am sure we could be creative and find ways.

    Cheers,

    Brent

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  10. @Aaron,

    You indeed have a fairly cheap plan. I had Kaiser when I was in SoCal and I know how good it is.

    Unfortunately the rest of us are not so lucky. Many companies, including mine, are drastically raising the rates and decreasing what is covered. I can't speak to the state issues but it seems Brent has that covered.

    My company(to remain nameless) has 3 levels. The high end one is the funniest to me. It is high premimums but doesn't pay anything for a quite a large sum. My first impression was "why bother with the premium". We, as a family, pay far below the deductable so it would make no sense for us. Many have already been discussing catastrophic style insurance since the low end option is still pricey and doesn't cover much.

    For those lucky ones, while they still have it, they will not be interested. Once their private insurers get more and more strapped with the high costs then things will change I think.

    jeff

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  11. I love the ER risk pool idea, though I'm afraid the doctor is correct when he says the health plan (as passed by the House, at least) would preclude such an innovative concept.

    Although I am curious, how would such a plan absorb the sheer costs of monitoring the participants on an annual or bi-annual basis? It would seem to me - a health non-expert to be sure - that these costs could become prohibitive in the long run.

    Nevertheless, I love the idea. Great post.

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  12. I need to collect my thoughts on this insurance issue, but here's my first go. Really fascinating stuff, I remember reading about this from McGuff I believe earlier but with Brent's comments and McGuff's together it is much clearer now. My wife has worked in the field of bariatric psychology, something that I encouraged her toward after I started doing EF. This is a big story that deals with both the pros and cons of bariatrics, what's insured & what's not, and how most effectively a bariatric medical group of doctors, psychologists, trainers and nutritionists work together. There are some aspects of this approach that may be utilized as regards this EF insurance idea.

    Namely, I think along with the vitamin D, Omega 3/Omega 6 and body composition/fat indicators (assuming these tests are administered by doctor/health professional), I think that advocates/testers could also come from the realm of nutritionists and psychologists. From Art's site I read about a psychologist who was incorporating fish oil, time spent outside (could argue for vitamin D, as well as for fresh air), good sleep, spending time with groups, exercise and practicing to not ruminate on negative thoughts as a way to fight depression.

    I'm not sure how to articulate this on the first go round, but I think the means by which you get to those ends of the good indicators that Dr. McGuff mentions may need to be considered from different fields. This has been an ongoing brainstorming in my household, and something that I look forward to sharing when I can add to this discussion and/or it becomes clearer in our own minds on our related thinking on these issues.

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  13. Thanks, Zach and Ryan, for chiming in.

    The administrative approach would need to be hashed out; a process that I envision the community doing collectively as a self-organizing entity. Some of it would be trial-and-error internal policy experimenting on the precise values for different health indicators, etc. For instance, what would we do with people who now adhere to ancestral diets and lifeways but are still in the process of losing weight and regaining their EvoFit health? When would they qualify for the co-op?

    MediShare (medi-share.org) is organized as a 501(c)(3), so they side-step all the red tape associated with mainstream 'insurance' classifications. They refer to themselves as an 'insurance alternative'. They are truly a voluntary co-op where people with similar lifestyles and spirits pool their resources to help pay for each other's medical events and at the same time help each other avoid the White Swans entirely. MediShare has a pool of about 50,000 people right now and is quite successful based on my research.

    One approach to monitoring enrollees at a lower cost would be to permit self-testing and reporting using some of the tools that Dr. William Davis at Track Your Plaque uses, for instance. That's one possibility.

    Thanks to all for carrying on such a thoughtful conversation here.

    Keep the input flowing.

    Grazie,

    Brent

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  14. I’m really enjoying this conversation. Brent, I like your “social scaffolding nodes.” To echo Dr. McGuff and Ray, the final health-care bill will probably disallow secular co-ops, but your central idea – using an insurance-like system to protect EFers from Black Swans, spread knowledge about the EF lifestyle, and lower costs – is still compelling.

    BTW, here in Massachusetts, individuals in religious health co-ops like Medi-Share are exempt from the individual coverage mandate. The Senate Finance bill would make religious co-ops exempt too. Apparently if we had an Ancestral Fitness church, it’d work.

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  15. @all,

    Great comments and ideas. The inter-state regulatory issues and the tax issues are indeed a major roadblock. Bigger problem is that the commander in theif's plan will make anything like this illegal.

    It is interesting that a co-op is allowed if you have a mystical foundation for doing so, but if you have a rational basis for doing so (based on millions of years of evolution)...then "no way Jose".

    We need to keep this discussion going, as more people contribute a means for it actually working will "evolve" and percolate to the surface.

    Doug McGuff

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  16. Thanks Nate and Dr. McGuff,

    Essentially and unfortunately, this is a microcosm of the larger problem that we face in healthcare: there is no wiggle room to innovate. You cannot hunt for positive Black Swan treasures in healthcare, currently, because red tape and barriers to entry drown out all curiosity, creativity, and entrepreneurial activity--the status quo, mainstream players are so deeply entrenched in the governance and regulatory 'power-tower' that small things cannot bubble up and turn into big things that transform healthcare finance and delivery in revolutionary ways.

    That does not mean that we won't stop writing.

    There is an evolutionary health revolution out there waiting in the wings--it's still unseen--but the more we percolate our ideas and visions, as Dr. McGuff suggests, the more likely we will make the unseen seen; we will make the Ancestral Fitness Epistemocracy (AFE) a real-world healthcare financing community.

    For the time being, we will build out AncestralFitness.com as a placeholder for this dream, as a place for this conversation to continue evolving for the world to see.

    Thanks for contributing to this conversation melody.

    Cheers,

    Brent

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  17. PS.

    Parkour!


    *see: http://epistemocrat.blogspot.com/2009/09/office-parkour-sans-vibrams.html

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