Toto, we're not in Kansas anymore

I'm on a business trip in Arkansas. At first, I didn't notice much of a change. The airport seemed relatively new and modern. It only had a handful of gates, so I wasn't surprised when I had to get a key from the counter for the rental car. It was only once I pulled away from the airport exit that I began to notice the changes.

The car radio was tuned to classic rock. I usually prefer to listen to news. As I scrolled through the FM dial, I noticed that there were no less than six gospel stations either preaching or playing Christian rock. I even caught this snippet of conversation:

Host 1:  Who is the person you should love the most?
Host 2:  Your spouse?
Host 1:  No, it's God!
Host 2:  Trick question!

As I rolled through the countryside, I passed a number of RV parks. I was also looking for a gas station so that I could refill the rental car upon my return. Sadly, a number of them were closed or for sale. One of them still had signs with prices over $3 per gallon, so it must have been vacant for a while. Then I saw this:

I guess the price of oil has fallen a bit....

Some sense of size

Original post:  Dec 29, 2015

The Hubble Space Telescope has given us some of the clearest pictures yet of the wider universe. Earlier this year, NASA released an enormously detailed photo of the galaxy Andromeda. To give you some idea of just how large the photo is, NASA points out that it would take 600 HD TVs to display the image at full resolution!

The YouTube video below will help give you some small appreciation for the incredible size of our universe. An excerpt from a Vox article puts it into perspective:

As the video zooms deeper and deeper, remember that every single pinprick of light is a star — in most cases, scientists believe, a star orbited by its own planet (or planets).

Think of it this way: our Solar System is so big that we still haven't sent any spacecraftbeyond its borders. But it's replicated over and over, literally billions of times, in the Andromeda Galaxy. And Andromeda is just a single galaxy, relatively close to our Milky Way — both are part of a larger supercluster of galaxies called Laniakea.

Science can certainly be a mind-blowing experience.
Here is the link to the source article:  It's impossible to appreciate how vast the universe is. But this video will help. - Vox http://www.vox.com/2015/1/26/7915359/andromeda-galaxy-video

Healthcare isn't immune to supply and demand

Original post:  Dec 16, 2015

For years, hospitals have claimed that the wide variation in costs could be attributed to factors such as quality or patient mix. A recent analysis of the underlying billing data revealed that is not the case.

Here is an excerpt from Becker's that explains what happened:

Researchers analyzed the real prices hospitals negotiate with private insurers and found places that spend less on Medicare do not necessarily spend less on healthcare overall.

The new "Big Data" project from researchers at Carnegie Mellon University, Yale University, University of Pennsylvania and the London School of Economics shows that the prices hospitals negotiate with private health insurers vary significantly within and across geographic regions in the U.S.

For the study, the researchers analyzed 92 billion health insurance claims from 88 million people covered by three of the nation's largest health insurance companies: Aetna, Humana and UnitedHealthcare. The data was provided by the Health Care Cost Institute and represents spending and utilization for about 30 percent of individuals in the U.S. with employer-sponsored health coverage.

The study shows spending patterns for the privately insured aren't the same as those for Medicare, which may cause policy makers to reexamine some of the markets that have been lauded for their healthcare models.

Time Magazine went on to add further analysis:

Shopping for health care services is incredibly difficult. Prices for the same service can vary widely, for little discernible reason. A MRI might cost you $511, or it might cost $2,815, depending on where you go.

A new study sheds some light on why some people see much higher prices than others. For the first time, researchers analyzed some 2.92 billion actual insurance claims for 88.7 million people across the country. They found that a person on one end of the country “routinely” might have to pay eight times more than they would somewhere else in the country — for the same procedure. Within the same city, hospitals would routinely charge three times more than other hospitals nearby.

Market power inevitably led to higher prices. This is exactly what economic theory says should happen in a rational market.

One of the most important factors influencing the crazy differences in price? The number of hospitals in any given region. The researchers found that even after controlling for other factors, areas with just one hospital had prices that were 15.3% higher than areas with four or more hospitals. Areas with two hospitals had prices that were 6.4% higher, and areas with three hospitals had prices that were 4.8% higher.

“We have this large body of evidence covering many, many years that consistently shows if you happen to live in an area with only one hospital you are going to pay a lot more,” study co-author Martin Gaynor told Marketplace.

Intuitively, this makes sense. When you have health insurance, you pay monthly premiums to get access to the health care providers in your insurer’s network. Your insurer negotiates with local hospitals to get lower prices for its pool of customers. In areas where there’s more than one hospital, the hospitals may be more inclined to compete for each insurers’ customers — and therefore more inclined to cut better deals with insurers. But in areas where there’s just one hospital, that hospital has little incentive to lower prices: If you get sick, you’re going there no matter what.

With the trend leaning towards increasing consolidation in the healthcare market, this trend bears watching.

One of the most important counterweights to this type of market power is exactly the analysis conducted. By sharing their actual billing data, major payers can compare rates and help to negotiate more competitive pricing for their members.

Here are the links to the articles:
Becker's:  New data shows experts were wrong about where healthcare costs less
Time:     Health Care Costs More in Cities with Fewer Hospitals 

Truth hurts

Original post:  Dec 14, 2015

During the period between Thanksgiving and Christmas, it's traditional for the houses on my block to light their houses with elaborate displays. Some have simple candles in each window. Others have strings white lights wrapped around poles or lining the sides of the houses. Still others have multiple colors in their trees and bushes and all kinds of other attractions.

We've been quite busy the past few weekends, so our house had not yet been decorated. As I was in the yard, our neighbor from across the street came rolling by. The four-year-old pedaled her Big Wheel up to me and said, "My mommy said your house looks sad."

I could only laugh because I had to agree with her!

Children do say the darndest things.

The equation keeps changing

Original post:  Dec 3, 2015

In Paris, the COP21 climate conference is currently underway. Heads of state from 150 countries around the globe are meeting to discuss what the world can do to help mitigate the potentially dangerous consequences of climate change.

This is not the first attempt, but it may be the first one to achieve lasting commitments. Worldwide, there seems to be a growing awareness of the issue and a growing consensus that some changes need to take place. What makes these talks very different from previous conferences is the sudden growth of alternative energy as an actual substitute for fossil fuels.

In this chart based on official information from the Department of Energy, you can see the electricity produced by land-based wind is actually less expensive than new coal power plants!

How did solar and wind energy costs drop so quickly? Here are some explanations.

Let’s start with wind. Two main forces have driven the price of wind in the past five years, MacDonald said. First, she said, it’s cheaper to produce wind turbines than ever before. Second, wind turbines are much more efficient than they used to be.

....

But the falling cost of turbines is not the only factor driving down the price of wind. Manufacturers have also gotten better at making individual turbines produce more energy. Wind turbines can now be mounted higher, so they reach more powerful breezes; and their rotors can be bigger, so they capture more air. Utilities have also gotten better at deciding where to place turbines, and they’re more reliable, so they don’t break down as often.

Back to that car-market comparison. MacDonald seemed to understand these many improvements to turbines as amounting to an almost fundamentally different machine. Today’s car market, she said, “is not just about producing a 1920s car more cheaply. When you think about a 1920s car versus a car today, the performance has improved dramatically.”

Solar had a slightly different path:

Solar is a different story. “It’s pretty simple—it’s all about the experience curve. The more of something we do, the better we get at it,” said Jenny Chase, the head of solar at Bloomberg New Energy Finance, in an email.

“Loads of solar got installed in Europe from 2004 to 2008 in response to German and Spanish incentives, meaning it was finally worth building big specialized solar module factories (mostly in China),” she said. “The manufacturers pushed down cost by making the wafers thinner, by optimizing the structure of the cells to get more efficiency (i.e. more energy output for the same area), by reducing the use of silver paste and other expensive components, and all the other ways scale can be reduced.”

....

As with wind, smaller improvements have also brought down the price of solar. In particular, Chase highlighted the falling cost of inverters, which convert the direct current produced by photovoltaic cells into the alternating current used by the electrical grid. She also told me that contractors have gotten much more efficient at installing solar panels: “Installers have trained their roofers to build residential photovoltaic systems in one hour, not one day, and got better at sending out teams with everything they need so they don't have to waste any time.”

If the world can sustain investment into continuous improvement in solar and wind while also addressing some of the storage issues, suddenly there are ways to address climate change that may not bankrupt us.

It will be fascinating to watch for the outcome of the summit. Perhaps we can look back and see that this was the real start of a new energy revolution.

Here is the link to the full article:  How Solar and Wind Got So Cheap, So Fast - The Atlantic

Marketing nostalgia

Original post:  Dec 2, 2015

Several years ago, I remember my reluctance at giving up my BlackBerry. What I missed most about it was my ability to thumb type. Over the years that I had the device, I was able to knock out quite a few lengthy e-mails with only two fingers. It took me some time to gain proficiency with the virtual keyboard on the iPhone. To this day, I don't think I can type as fast on a phone as I was able to on a BlackBerry. That said, the overall experience in most other areas is so much superior that I don't think I could ever go back.

BlackBerry is struggling as a company. They were too slow to realize the threat until their moment had passed entirely. They are now left with one desperate strategy:  nostalgia.

Having tried (and failed) at competing with copycat models, they are now marketing a smartphone with a keyboard.

Nostalgia is a powerful force. It evokes memories of how we used to be. For some of us of a certain vintage, it can remind us of less complicated times from younger days. If it's used well, it can make the retrograde version seem "cool" again. Think of all of the recent revivals of kitchen gadgets or fashion accessories that slide back into popularity with increasing regularity. It is rapidly making its way into technology. From an article on the Verge, here is a scientific explanation:

This nostalgic reaction to an old technology feature that most people no longer use is real. And so is the emotion driving it. "People have nostalgia for lots of things, including their gizmos," says Dr. David Linden, a professor of neuroscience at the Johns Hopkins University School of Medicine and author of Touch: The Science of Hand, Heart, and Mind.

Linden says that some memories are written more strongly into the brain’s circuitry, like memories tied to emotions and memories for things that we hold every day for years — including gadgets. "Talk to orchestra musicians and they’ll give emotional descriptions of the cello they wrap their arms around, or the flute that they put to their lips," he says.

It might be BlackBerry last, best chance:

Contrast Apple’s subtle nod to its history with the BlackBerry Priv’s physical keyboard: the Finder isn’t driving Mac sales, while BlackBerry’s physical keyboard could be the single reason a person buys the new Priv. Apple can wink at users who are old enough to remember the original Finder, but BlackBerry may need this throwback feature to stay in the game. The Priv’s keyboard works as you might expect a tactile keyboard to work, but it also functions like a mini trackpad, letting you glide your fingers over its keys to control a cursor, making more precise on-screen selections. "We look to the past to modernize elements that created emotion before," says Scott Wenger, BlackBerry’s global head of design.

Here is the link to the full article:  Why BlackBerry is still betting on the keyboard | The Verge

Even mighty Amazon

Original post:  Dec 1, 2015

Last night, I tried to purchase some presents for my son's upcoming birthday. My timing could have been better. Yesterday was the online event commonly known as "Cyber Monday." The items I needed were available on Amazon. I went through the prompts but noticed that it wasn't allowing me the standard two-day shipping. I was unable to place the order. Perhaps it was due to the massive volume of others all trying to place orders at the same time.

Since I wasn't in a mad rush for the item (his birthday is this weekend), I decided to wait until this morning to place the order. Sure enough, it flew through.

I think it goes to show you that even mighty Amazon sometimes runs into issues with its technology!

Bonus fun fact:  while it may seem that Cyber Monday has always been around, it actually was invented a mere ten years ago by the National Retail Federation. Fast Company has an article discussing the origins:  How Cyber Monday Was Born

Here is an excerpt from that article:

A decade ago, during the happy years before the recession, retailers noticed a spike in online sales the Monday after Thanksgiving. In a stroke of marketing genius, theNational Retail Federation decided to make the it an official shopping day. In a small room in the NRF's Washington, D.C. office, Ellen Davis, then a mid-twenties executive on the PR team, coined the term "Cyber Monday." "It's a random bit of cocktail party conversation I like to bring up sometimes," Davis says. "It's surreal to think that I'm associated with a term that has taken off like this."

And taken off, it has: Americans are increasingly spending more money on Cyber Monday than during Thanksgiving or Black Friday. Over the last two years, in fact, they've spent more on Cyber Monday than on Thanksgiving and Black Friday combined. Today is expected to be the biggest shopping day of all time, with predicted sales of over $3 billion.

....

Davis and her team were tasked with come up with a term to easily describe this shift in behavior. There were other phrases that didn't make the cut. They considered calling it Black Monday, in keeping with the Black Friday theme. "But that was also what we call the greatest stock market crash of all time," Davis points out. Also in the running: Blue Monday, after the color of hyperlinks, or Green Monday, because, well, money is green. "I liked the idea of Cyber Monday because it clearly described what was going on," she says. "Also, if you did a search for the term 'Cyber Monday' in 2005, you got zero results."

The name stuck. The New York Times, Wall Street Journal, and the rest of the media picked up the term. "We spoke the word into existence and we really haven't been able to escape it since," Davis says. "It took off so fast that I don't really feel a sense of ownership over the term. The media, the retail industry, and consumers have really embraced it."