The stories reminded me that, for the last 21 years of my Pitney Bowes career, I dealt continuously with the encroachment of state capitalism in the postal sector.  In the late 1980’s and throughout the 1990’s, we successfully fought a series of battles with the U.S. Postal Service to keep it from becoming another entity with all the powers and privileges of the federal government, but with none of the regulatory constraints associated with federal government agencies.  Several senior postal officials aspired to create a power base similar to many government-owned entities, such as the Tennessee Valley Authority (which Marvin Runyon, the Postmaster General from 1992 to 1998, had led) or the New York-New Jersey Port Authority.

Fortunately, we defeated efforts by the Postal Service to regulate the mailing industry and compete unfairly with it at the same time.  The Postal Service leadership teams succeeding Runyon and members of his senior team generally tried to operate within the boundaries set by Congress. We had a very collaborative, and mutually respectful, relationship with the Postal Service during most of my tenure as CEO.

The story was very different outside the United States.  While we had similarly respectful and collaborative relationships with the postal officials in the UK, Canada, Spain, Denmark, and Norway, we had a variety of challenges with postal authorities in many other countries.

We saw three distinct challenges:

• Some postal operators, which had appeared to become privatized, acted in very anti-competitive ways in their own nations, and also secured rights and privileges from their national governments that stacked the deck against partners and competitors.  The most extreme example was Germany, during the leadership of Deutsche Post by Klaus Zumwinkel, who resigned in early 2008 for reasons unrelated to his work-related performance.  Throughout Zumwinkel’s 18-year tenure as CEO, Deutsche Post acquired companies all over the world, including a disastrous acquisition of Airborne, a major package shipper, and the worldwide operations of DHL.

In Germany, where Deutsche Post realized most of its profits, postal rates were exceptionally high (well above $.60 per piece), service was not exceptional, but competition was ruthlessly suppressed.  At the end of 2007, a few weeks before Germany had committed to open its market to full competition from within the EU, Zumwinkel successfully prevailed on German legislators to pass a law that created a minimum wage for postal sector employees only, a wage pegged at Deutsche Post’s minimum pay grade.  The immediate result was to destroy its two largest mailing competitors, since neither could secure labor cost advantages over Deutsche Post.

In Italy, Poste Italiane took advantage of complex and onerous labor laws to fend off competition, since these laws made part-time and temporary workers prohibitively expensive.

• In many countries, postal operators expanded into businesses in which the marketplace was amply served by the private sector, but in which the postal operators would immediately have a competitive advantage, because of the implicit protection from national governments.  Australia, Belgium, Ireland, China and New Zealand all started retail banks.  Japan had always had a sizable postal banking system which paid almost no interest to depositors, but which became a huge source of loans to projects favored by politicians.  Prime Minister Koizumi staked his political career on an initiative to privatize the Japan Post, not because there was ferocious opposition to privatizing the mail or package business, but because the heavy governmental control of the flow of bank loans would be jeopardized. He barely avoided receiving a vote of no confidence because his initiative upset the way government favors had been delivered for generations.

Postal operators have played heavily in the money transfer business (competing with Western Union), in retail government services, in the sale of greeting cards and stationery, and in the sale of gift items often transmitted through the mail.  Postal operators like Australia, China, Finland, and Sweden moved seamlessly into mail services businesses. In countries with a strong tradition of state capitalism, these postal operators were able to operate freely in more businesses in which they competed unfairly with the private sector.

• The postal operators often carried mandates and missions inconsistent with a business focused on cost-effective customer service.  France and Canada were prime examples of this problem, as were Japan, Spain, and Portugal. In these countries, postal operators were saddled with explicit and implicit requirements that they keep a minimum number of people employed, even if the demands of the business would not justify such employment.  For Pitney Bowes, the government employment mandates made many of our productivity enhancement tools unusable by these postal operators.  They could not improve their productivity, even if they wanted to, because they were fulfilling social mandates.  Postal ratepayers paid more, in the form of a disguised tax, to create a welfare system for workers who probably could not have secured employment at comparable wage and salary rates.

I was able to experience the ugly underside of state capitalism for over two decades.  It made me realize that the United States should think long and hard about migrating down the path these other countries have followed.  It also is a cautionary tale for large multinational corporations that aspire to compete fairly in major markets in which one or more of the competitors are state-owned or state-controlled enterprises, or in which the state considers a particular industry strategically important.

Each of the experiences I have described above has shaped my thinking, but each has done so in a different way.

The data center visit

I visited a large data center, in which the operators are using state-of-the-art monitoring systems for electrical power, climate control, and the performance of its computer and server systems.  A company on whose board I sit, Eaton Corporation, is a leader in providing comprehensive power management solutions for data centers. What is remarkable about the large data centers is the degree to which these centers no longer need human beings to monitor many system components.  The central control hardware devices and software programs provide data on thousands of points within the system.  There are less than 10 employees for a huge data center.

What insight does this have for health care?  To the degree that we are designing a system that enables remote and comprehensive monitoring of the state of health of a patient population, we can do so with relatively few healthcare professionals.  Although we talk about a serious labor shortage, the labor shortage assumes an indefinite continuation of the face-to-face diagnosis and treatment systems we now have, as opposed to the remote monitoring systems toward which we are heading.

The term the data center people when describing a center monitored predominantly by sophisticated hardware and software technology is a “lights out” system.  We must evolve to a “lights out” healthcare system on the same model.

The medical school advisory board meeting

As we think about healthcare professionals being trained in modern medicine, it becomes clearer than ever that healthcare professionals not only need to learn traditional human biology and body chemistry, but to be steeped in the field of bioinformatics.  Bioinformatics is a relatively young field of knowledge and skill in which diagnoses and treatments are developed through both onsite and remote data collection and the computer-generated analyses that use the data.

There will never be a complete loss of human judgment by trained health care professionals, but their efforts can be focused on those cases in which human judgment can make the biggest difference.  Getting good data on biometric indicators, health and healthcare history, and the foods, beverages, prescription drugs, over-the-counter drugs, and other items ingested by an individual is critical to enabling the human judgment factor to work best.

Medical schools are beginning to understand the importance of bioinformatics, and to incorporate course material on this field.

The visits with biometric device producers and health plan administrators

The Dossia Health Manager now is able to aggregate not only the comprehensive clinical history on an individual, but biometric and daily activity data that enables the healthcare professional to get a much more complete picture of the individual’s state of health.

Even better, there is an increasing effort to integrate biometric data tracking and management into health plan designs.  Employers and health plans have been providing services and incentives to get individuals to participate in health risk assessments, but these have been one-time exercises, as opposed to a program of capturing and tracking health data all the time.

There was a 2010 Kaiser Permanente study which supported the view that someone who regularly tracks blood pressure is 50% or more likely to control blood pressure.  This is consistent with a broad principle, often articulated about business objectives, that what gets measured gets managed.  The ability to capture blood pressure data with wearable devices is better than ever, and should be stimulated with incentives and rewards.

Shopping at the local pharmacy

Perhaps the most interesting learning I have done over the past month has come from wandering through several pharmacies while I was shopping for a few items.  Near the pharmacy counter at every counter is an increasing variety of home health test kits which are getting close to laboratory accuracy.

One which particularly caught my eye was a kit costing about $30, marketed by Bayer, which enables a user to draw a drop of blood and get a quick reading on his or her Hemoglobin A1c level.  Hemoglobin A1c is a leading indicator of Type II diabetes.  In the past, someone like me, who monitors this biometric indicator as closely as possible because of a family history of Type II diabetes, a genetic predisposition to the disease, and a slightly elevated level of blood sugar, would have had to get a physician to write an order for a laboratory test.  I would have had to schedule an appointment to get blood drawn, and would have had to wait at least one day, and possibly longer, to get my A1C reading.

Today, I can buy my own kit, draw my own blood, and get a same-day reading of my A1C level.  While I would not rely on a home test kit for a definitive diagnosis, I can track general trend information and can do so far more frequently than would be the case if I relied on a physician’s order and on having to schedule an appointment at a lab.

The next step in the evolution of these biometric devices is to make them able to communicate automatically with either a smart phone or a laptop or desktop computer, so that the data can be communicated directly back to a personal health record controlled by the patient.  Once that happens, the productivity of healthcare professionals will increase dramatically.

Instead of having nurses reside at a physician’s office or visit each patient at home, the nurse can work from either a home-based desktop computer or a mobile laptop or I-Pad device to track the health status of a much larger patient population than ever before.  Physicians would write orders to that nurse relative to what biometric indicators are most relevant for a particular patient.

Final comment

The biggest obstacle to adoption of this “lights out” healthcare system is the resistance of those who have built strong capability and income from face-to-face diagnosis and treatment systems.  If I operate a large medical practice based on the assumption that I must see every patient I treat, it will be very difficult to put into place systems and processes that operate as if I am not there.  The biggest challenge in diminishing this resistance is not technological or educational; it is the fear of losing income, jobs, or status.

“High consumption of care is driven by the crowd of academic medical centers, specialists, and equipment needed to perform tests. The Bay State has one doctor for every 267 citizens — versus one doctor for every 425 people in the nation as a whole. Supply drives demand. “

Supply-driven demand happens for two reasons, often overlapping:

• Healthcare providers believe in a particular treatment or therapy, and try to maximize the number of people who access it.  This is often reduced to the saying that “If you have a hammer, every problem is a nail.”  Supply-driven demand occurs when people who should not be customers for a particular service become customers because the provider of that service force it beyond its natural market.
• Healthcare providers have excess capacity, and try to get that capacity in use.  This happens with expensive diagnostic imaging equipment, hospitals, and outpatient centers.  It is even arguable that physicians react to reduced usage of their services by patients who become healthier by increasing the frequency with which they see other patients.

The other reason hospital capacity drives demand is that, even when it makes sense to close or shrink a hospital, there is a strong reluctance to shrink or close a facility that appears to be a strong job preservation engine in a community.  However, we must confront the issues associated with repurposing healthcare facility and provider assets, because our current healthcare architecture is unsustainable.  Too many Americans, probably now in excess of 15 million, are employed in healthcare, and too much of our GDP, now around 17%, is devoted to healthcare spending.  We need to redeploy a significant percentage of healthcare assets toward alternative uses.

Closing a hospital can be done in the situation in which there are other hospitals that can absorb the patient population the closed hospital used to serve.  In Stamford, Connecticut, St. Joseph’s Hospital was closed and most of its patient population migrated to the Stamford Hospital in the late 1990’s.  The Stamford Health System, which owns the Stamford Hospital, created a new wellness, outpatient diagnostic, and outpatient surgery center on the old St. Joseph’s Hospital site.

However, there are less drastic alternatives to closing a hospital, especially when there is one hospital in a community and closing it completely is not a viable option for the served population.  Repurposing big chunks of hospital campuses is an option that healthcare policy makers have to consider, and for which they need to develop an expertise. Although the examples I have found around North America all relate to redeploying complete hospital sites, as opposed to partial redeployment, they are instructive on what could be done with separable parts of hospitals.

In Vancouver, British Columbia, the unused hospital space became an Arts Center.  In Rogers, Arkansas, the closed St. Mary’s Hospital became a Center for Nonprofits.  At Virginia Commonwealth University, a former hospital was converted to student housing.  At the Tufts Medical Campus, unused hospital space became a café and fitness center.

The repurposing of hospital space that is no longer needed for patient care can also take into account the needs of medical residents, who could live in the space, which, in some cases, has been converted to residential and retail space.  Given the exorbitant cost of medical school and medical residency programs, subsidized housing could be a great alternative to more hospital beds.

I could also envision an innovation incubator, in which there are small offices for entrepreneurs of start-up businesses.  In downtown Stamford, Connecticut, there is an attempt to use an old government building as an incubation center.

While hospitals will lose revenue potential by shrinking, the overall healthcare system needs to look at what benefits society as a whole, as opposed to what will maximize an individual hospital’s revenue and jobs.

What happens to those no longer working at the hospital?

• Those working as healthcare professionals, doctors, nurse-practitioners, nurses, physician’s assistants and nurse’s aides can be redeployed to the remote or the onsite care of patients in their homes.
• Those working in clerical and administrative jobs could also be redeployed in organizations that provide care, but in a less capital intensive organization.
• Those who provide facilities related services can provide those services to whatever uses are substituted on the site.  There are some facilities services, such as hazardous medical waste management, that will go away completely, but food service, maintenance and repair, and delivery services will survive.

Who loses when a hospital is repurposed?

• Providers of expensive diagnostic technology will see a significant volume drop.  Eventually, Medicare and other payers will create payment systems that reduce payments to a level at which unconstrained use of diagnostic imaging tests will not be able to be reimbursed.
• Doctors who rely on scheduled surgeries will lose opportunity because the hospital will do fewer surgeries.  However, one alternative to a portion of a hospital is an outpatient surgical center, which can absorb a portion of the supply.
• Providers of ambulance and emergency medical technician services will see a volume drop only if there is not alternative hospital to which to take patients, so emergency departments will not be automatically reduced to handle real emergencies.  However, there are emergency department transactions for non—urgent care that can be taken out of the hospital altogether, and can be managed through remote care.
• Labor unions which represent certain groups of employees that will be scattered when redeployed among a number of employees will lose, to the degree that their collective bargaining agreement is narrowly targeted at a specific employer.

The bigger challenge in closing or repurposing a hospital is political.  Elected officials intervene on behalf of any group, which believes it will be disadvantaged.  This is especially the case if the apparently disadvantaged group is organized to effect powerful political advocacy, such as a labor union, or if there is a high proportion of people of color in the groups affected by the decision.

The biggest skill set required in repurposing healthcare assets is the ability to envision a future that is better for the community, better for the community patient population, and not unduly disruptive to the various stakeholders, which benefit from having the hospital remain intact.

Having leaders who can think through and implement a game plan to transition elected officials and the communities they represent toward an alternative future that reduces the footprint of the healthcare system is our biggest challenge.

Sometimes, the influence of bad human decision making on the scope of a disaster is obvious: Hurricane Katrina would not have been anything more than just another bad Gulf Coast hurricane, had the levees protecting big portions of New Orleans not failed to protect the city against water damage.  The levees were not built to protect against Category 4 or 5 hurricanes, so a disaster of the type that happened was inevitable and experts were not surprised when it happened.  Experts warned of this kind of problem, but were ignored year after year. Nevertheless, most of the time, we forget the degree to which we can anticipate disasters and minimize their impact.

In 1991, after Hurricane Bob, which hit Long Island, the Eastern Connecticut coast, and Cape Cod very hard, the homeowners association of which I was a board member could not initially secure a renewal of our property and casualty insurance policy from any carrier.  National media carried stories about horrific beach erosion in the 4-mile stretch of beach, beginning half a mile west of us.  The beach and the houses on it had been completely washed away by both the hurricane and a nor’easter that followed it a few weeks later.  The media story was that nature was getting more ferocious over time, and people had to stop building homes on the beach.

While it may be good public policy to provide better beach access for all residents of a beachfront community and for visitors, and to reduce the building of private homes on the beach, the story was wrong.  The beach erosion was not a result of nature’s fury, but of a misguided decision by the Suffolk County New York Supervisor some years before to refuse to pay the County’s share of a project to extend protective beach barriers for the last 4 miles of the barrier island.  The 4-mile stretch bore all the force of the ocean tides, instead of having it spread over the entire island.  Ferocious winds and tides destroyed the beach, but it was vulnerable to destruction, because of human error, a decision to leave the beach unprotected.

Similarly, power outages and flooding are usually a result of a number of human decisions.  In many communities, utilities are not permitted by homeowners to trim branches from trees on an appropriate schedule, with the result that those branches break off during storm, hit overhead power lines, and cut the lines.  Street flooding is usually a result of poor drainage from inadequately built or maintained roads.  Basement flooding is often the result of building codes that do not require adequate soil fill under the foundation of a house or other kind of building.  We discovered this when our basement flooded many times in the last decade, because our builder cut corners in having only four inches of soil fill, when best practice indicated that 12 inches of fill was the minimum desirable.  Trees are often uprooted and destroy or damage whatever they fall on because poor soil drainage erodes the soil that holds roots in place.

In the storm’s aftermath, we are seeing the consequences of decades of underinvestment in our commuter rail systems.  The commuter railroads were not  able to resume service as rapidly as the New York subways because they have suffered far more preventable damage.

Wind damage results from structures that are not built to withstand winds above a certain level of intensity, and items inadequately secured to the ground or not stored properly in anticipation of a storm become projectiles that destroy everything in their path. In the spring of 1979, Chicago experienced a freak 70-mile per hour windstorm one afternoon, with the result that a thick wooden restaurant sign hanging by two chains to the restaurant’s patio came loose and killed a pedestrian.

The 1906 San Francisco earthquake caused most of its fatalities because the fire department had not properly secured its water lines, so it was unable to get water out to extinguish some of the fires.  Similarly, communities often fail to think through how they will get rescue vehicles to stranded residents, which created many issues in the Gulf Coast areas after Hurricane Katrina.

We are better at responding to disasters today because of the intense focus on what went wrong with Hurricane Katrina, but the problems with our infrastructure and the underinvestment in rebuilding, maintaining, and renovating roads, bridges, tunnels, and buildings will continue to make the impact of natural disasters far worse than they need to be.

We need better ways to hold elected officials accountable for decisions they make that put us at risk, not immediately, but over time.  Since we do not know when “natural disasters” will hit, it is tempting to defer maintenance, repair, and renovation that will secure our facilities from damage, but insurance companies, bond rating agencies, and watchdogs acting on behalf of voters should do a better job warning us.  As citizens, we need to send strong messages to elected officials that using their office to redistribute wealth and income from taxpaying citizens to favored constituents, instead of using taxes to maintain and strengthen the assets for which they are responsible is wrong.

I have now been the President and CEO of Dossia for almost four months.  As I look at the personal health record landscape, I think that those who care about this space need to rethink some fundamental directional assumptions about health information technology.

We are “consumers,” not just “patients”

The term “patient,” as applied to health information, has two flaws: first, we need health-related information at all times, not just when we are in a doctor’s office.  Health management is a 24×7 activity, not an activity confined to our clinical encounters, which are a tiny fraction of everyone’s life.  Second, “patient” is a passive term.  We should be controlling the management of our health, not being a passive recipient of clinical care.

We need all clinical information, not just medical information.

Our health care system encounters are with doctors, hospitals, outpatient centers, pharmacies, labs, imaging centers, dentists, alternative medicine providers, nutritionists, fitness trainers, health counselors, and retail outlets at which we receive immunizations and screenings.  We need all information, not just what our preferred doctor, hospital, or insurance company wants us to see.

The “medical home” and “accountable care organization” concepts contained in the recent health reform legislation are somewhat flawed because they assume we will concentrate our health care in one system.  That will never happen because we will want choices, even if we stay in the same geography. However, a sizable part of our population will change residences, which will force changes in health care providers, employer plan sponsors, and insurance plans.  We need a comprehensive and portable health information system.

We need all health-related information, not just clinical information.

Much of what matters to our health relates to non-clinical activity: what we eat, how active we are, how much sleep we get, how much stress we feel, what vitamins, herbs, and over-the-counter drugs we take, what infections are exposed to us, our genetic make-up and expression, what environmental hazards present themselves to us, and what injuries and cumulative physical stresses we risk.  We need all of that information presented accurately, automatically and comprehensively into a health record, not just what we can remember when asked by a doctor.

We need help navigating through health care payment sources.

The days when most Americans could anticipate having all their health care costs covered by a health plan are long gone.  Today, we navigate payment through four sources: the health plan, a tax-deductible vehicle like a Flexible Spending Account, a Health Savings Account, or a Health Reimbursement Account, an employer or other incentive program, or self-payment.  We need help navigating through these different payment streams.

We need help making health care decisions.

Health care decision making is increasingly complex.  It is influenced by cost, quality of care, relative effectiveness of treatments, and what health plans and other payment sources will cover.  Consumers increasingly need more decision support, because choices are imperfect.

We need to recognize that health-related decisions are often made by someone other than the patient.

The health care system and policies related to it, such as privacy policies, assume that most health-related decisions are made by the patient.  However, we know that this is not the case for many parts of our population.  Parents make health decisions for children, but a parent also drives health decisions for a spouse, for elderly parents, and even for elderly in-laws. People living together outside of traditional marriages are also making health-related decisions for domestic partners. Additionally, more elderly people are giving others health care proxies to make decisions for them under certain circumstances.  Our health care system needs to recognize this reality and accommodate in access to health information.

We need to recognize that people need help with decisions relating to health management.

The personal, consumer-controlled health management system assumes that, for many medical decisions, the decisions are not simple and the choices are both imperfect and inherently based on incomplete information.  Health management tools have to be available to make the health record more valuable in bringing to bear on health care decisions.

Privacy preferences are not simple and they will change, based on changing life circumstances.

Many privacy advocates, who are highly suspicious of the security and privacy of any health information system, and who may have experienced or been made aware of bad health outcomes because of misuse of health information, assume that everyone wants health information kept private. The real world is more complex.

Some people freely share their health status on public web sites, and on semi-public sites like Facebook, knowing that the information is no longer secret as a result.  For some, they do not care who knows.  For others battling a debilitating disease, they want to share information to get the best possible sources of help.

Others are willing to share information based on their need to find out better sources of help on allergies, back pain, or injury rehabilitation, but do not wants others to know that they have heart disease, because of job-related concerns.  Anyone who expects to apply for a health insurance policy wants to keep health information secret to the degree that it affects their ability to get insurance or to get the lowest possible rates.

Privacy consent management has to allow patients or caregivers to express precisely patient preferences and to have those preferences honored.

Moreover, people who express a preference at one time may change that preference, based on changed life circumstances.  Someone who is newly diagnosed with a condition may have more desire for privacy, or, in the alternative, may want information communicated more broadly.

Any privacy system has to make it easy for individuals to change preference profiles.

Conclusion

The state-of-the-art personal health management system needs to take all these factors into account.  Too much of what passes for personal health record systems today are based on flawed assumptions about how health, health care, and health benefits actually work. Dossia strives to help people function in the world as it is, not as we believe it once was.

Our government not only subsidizes home ownership through the home mortgage interest deduction, but it has created a variety of tools to enable lenders to make home mortgage loans to more people.  Lawmakers have always believed that broad-based home ownership is an inherent societal benefit, because they believe it creates a greater stake in the well being of the community.  Independent of whether owning a home is a good investment, American lawmakers want as many Americans as possible to own, rather than rent, their residences.

However, is this a good idea?  For someone who has a limited amount of discretionary income or asset base, using most of one’s discretionary assets to acquire a home may be a very bad idea.  If a person invests all of his or her savings in a home, the decision violates many principles of good financial management.

Don’t put all your eggs in one basket.

Buying a home with your savings is truly putting all your eggs in a single basket.  It is worse than that.  It is putting those savings in a highly illiquid asset that can only be bought or sold in its entirety.  One risk management tool any of us can use with stocks and bonds is to cash in a portion of our investment to protect the rest of the investment.  That option is not available for the purchase or sale of a home: it is an “all-or-nothing” proposition.

Don’t invest in an asset in which there are many independent factors that could significantly depress its value.

When we buy the stock of a public company, the Securities and Exchange Commission makes publicly traded companies describe a wide variety of risk factors.  The most common thread among these risk factors is the existence of single points of failure.  Companies have to disclose risks such as the dependence on a single product’s revenues, a single large customer, a single regulation, or a single patent or trademark.  In cases in which companies disclose these risks, they are considered “single points of failure.”

Airplanes have redundancy built into every critical system because airlines and regulators demand systems that cannot fail because of a single defect.  There are back-up engines, power systems, and controls.

Yet there are many single items that can cause the value of a home to drop significantly.  My wife and I experienced this with the first home we bought 32 years ago.  The federal government forced the state of Connecticut to allow trucks exceeding 80,000 pounds to use I-95, which was not far away from the home we had bought a few months before.  The increased noise and vibrations from the larger trucks significantly depressed our home’s resale value. We lost every bit of our equity.

We invested in a cooperative conversion project in New York City a few years ago.  We lost every penny of that investment because of tax law changes, and because New York City required every newly renovated or build housing unit to be 100% accessible to people with disabilities.

While we had successful real estate investments along the way, we learned the hard way that a single change in the law or some other factor outside our control can wipe out an investment in a home.

Don’t invest in something in which the other party has inside information and you do not.

The U.S. government, as well as every state, protects everyone who buys or sells a publicly traded security from the disadvantage caused by a party on the other side of the transaction who gains unfair advantage by having material inside information. However, there is no such protection in residential real estate transactions.

Buyers have the ability to get a home inspected and to do their own investigation about a home’s market value and the factors which affect it.  However, if a seller knows that someone is considering an action that will affect the home’s value and the buyer does not, the buyer is out of luck.  Similarly, if a buyer knows that a business is considering building on a piece of land and will pay premium prices and the seller does not, the buyer has a huge edge.

Don’t invest in something in which you have open-ended liability.

Homes are money pits (there was even a film by that name starring Tom Hanks some years ago), especially older homes that are often the ones available to first-time home buyers. My wife and I have had basement flooding, a leaky roof from the ice accumulation this past winter, and an underground oil line leak from a poorly insulated oil line.  Although we had sufficient resources to correct all these problems, they resulted in huge, unbudgeted expenses, even after insurance claims were paid.

When my wife and I were about to sign the contract on building our current home in 1993, our attorney Tom Skidd, from Cummings & Lockwood, told us that, before we signed our contract to get the home built, he would bring over something we had to review.  I expected to get a legal memorandum, or some educational materials on the legal risks of buying and owning a home, or an instructional videotape.  Instead, he gave us a videotape of the old Cary Grant-Myrna Loy film Mr. Blandings Builds His Dream House, a wonderful movie that depicted not only the financial and technical problems of building and owning a home, but the relationship tensions a home buying or building process creates. He was and is a very wise person, and we avoided many pitfalls because of him.

The National Urban League and many of its affiliates, and Operation HOPE, a financial counseling firm, have done great work counseling first-time home buyers, and I am proud at what the Urban League has particularly accomplished under Marc Morial’s leadership in the last few years, since he reacted to the housing crisis with a far more expanded set of offerings than had been the case before that.

Final observations

The biggest single lesson from all this is that we need to rethink some long-held assumptions about the benefits of home ownership.  Having a stable and engaged civil society and people committed to the betterment of their communities is critical to the effective functioning of representative democracy.  Whether home ownership is the right way to achieve this goal needs to be re-examined.

However, I also believe that we could reduce the stress on our transportation systems with three non-transportation initiatives, all of which are far less expensive to implement than building a lot of new transportation infrastructure.

Reduce work-related travel

Since I left Pitney Bowes two years ago, I have not commuted daily to an outside office.  As a result, I have not contributed to the clogging of our highways during peak commuting hours.  The reason is that the Internet and mobile technology available makes face-to-face meetings less necessary.  Partial telecommuting is an easy solution to creating more transportation capacity with what we have.

In my last few years at Pitney Bowes, we moved more call center workers back into their homes, which reduced our real estate footprint, improved morale, and increased productivity, since individuals were never late for work when they did not have to travel.  We never eliminated the commute to work completely, because we found that individuals who came to the office once every two weeks maintained a connection to their co-workers, but they did not have to be in the office every day.  Many more jobs can be restructured to reduce daily commuting, especially jobs that do not require retail contact with customers.

Increase deliveries in place of face-to-face pick-ups

I am pleased to see that, even in our suburban area, more restaurants are making delivery services available.  It used to be the case that only pizza stores delivered, but today Chinese, Japanese, and other restaurants deliver.  One delivery truck substitutes for 5-10 cars coming to the restaurant.

In our town, the dry cleaner services deliver.  The independent pharmacy delivers to senior citizens.  Many people get grocery deliveries because they work long hours.  The delivery of items to multiple people saves on trips during the busiest parts of the workday.

Ride matching for trips to fixed destinations

One of the underused sources of reduced driving is ride matching.  Ride-sharing and van pooling trips to work do not work as well as they used to because people work variable hours, have the need to leave the workplace during the day, and do not want to be dependent on others to get them to and from work.

However, I have often thought that going to and from airports is a great opportunity for ride matching.  I drive alone to New York airports if I have a short trip and am returning to the same airport from which I am departing.  However, I would be happy to drive someone else from my town going to the same airport if we were catching a flight at the same time.

The same thing is true with a trip to the train station for either a commute into New York, or an Amtrak trip to Washington or Boston.  I could easily save one or more individuals the need to drive their own cars to the train station.  They could share the parking fees with me.

Another opportunity is a ride matching system for sporting events like football and professional baseball games, films, plays, concerts, and other events where many people are going to the event at the same time and will be returning home at the same time.

Unfortunately, the state of Connecticut Department of Transportation has not provided enough incentives for ride matching agencies to do their job in getting people together for these fixed-destination, fixed time trips.  The limousine companies certainly will not tell anyone that someone else is going to the airport at the same time, because they lose revenue.

Surprisingly, large companies which have many people going to the airport at the same time also do not encourage ride matching because everyone going to the airport calls the limousine service separately.

Back in the 1980’s, I commuted between New York and Connecticut.  There was no shuttle service between the Stamford train station and the office in those days.  I would start walking, and people from the company would pick me up.  I made many friends from the company, and ended up with great learning in the process.

If we can have match.com or eharmony.com, we should be able to get people together who are going to the same place to share a ride.

One of the reasons ride matching systems have not worked is that they have been marketed as being good for the environment, not that they save wear and tear on cars, gas, tolls, and parking fees.  The other thing they save for trips to the airport is even larger bus or limousine service fees.  Frankly, I am surprised that firms like Travelocity.com have not found a way to match people from the same geography who are flying from a particular airport at the same time, and to collect a fee from each of them for saving them the higher individual commuting fees they would have paid.  In a place like New York City, they might very well be in the same building or next door to each other.

Summary comments

These ideas will not solve the transportation crisis, but they will reduce the strain on our system, and they will change commuting and travel patterns sufficiently that they may end up changing the planning for the network of the future.

Fortunately, Dossia is not only in compliance with all applicable laws and regulations, but, having had to market our personal health record system through large employers, we have had to meet much more challenging security and privacy standards than our competitors, who market directly to consumers.  I am very familiar with exacting security and privacy standards from working inside a company that had to manage sensitive financial information for postal services and their customers because of our postage meter business.

In the last decade, my immersion in security and privacy issues increased exponentially for a variety of reasons:

• Pitney Bowes Management Services took on more large financial services and health services customers, and managed major functions like print and mail, which caused us to be exposed to a considerable amount of personally identifiable information.  Not surprisingly, our customers demanded security and privacy protection far in excess of what the law required.
• Pitney Bowes Management Services also became a major provider of mail and print services to more government agencies like the FBI, the U.S. House of Representatives, and the Justice Department, which had their own security standards.  After the 9/11 and anthrax bioterrorism events, these security standards became even more exacting.
• As Pitney Bowes expanded its reach into the consumer and small business customer space this past decade, we began accepting credit cards, which meant that we had to withstand the audits and scrutiny of the major credit card auditors for American Express, Mastercard, and Visa.

I learned a great deal about security and privacy.  Some of the most important insights that I take with me into my new assignment are the following:

• A system dependent on privacy and security is only as strong as its weakest link. Therefore, every system needs to be stress-tested at multiple points at all times, to make sure that there is not even a single point of weakness. Moreover, a system that is large, expensive, and highly secure in many places, but has more potential points of failure than a less expensive system in which there are fewer points of failure can actually be less safe. There is an optimal level of spending on security at any given time.
• The most frequent and, often, most serious security breaches do not occur because of technological flaws in a system, but because of human failures.  A private investigator and security Kevin Mitnick wrote a very insightful book some years ago called The Art of Deception, in which he made the point that he could find the most sensitive information about anyone from even the most secure system. For example, when he was retained by a party to a divorce proceeding to learn about the other party’s salary and benefits from an employer, he would pretend to represent the employer’s CEO and would demand payroll information on an individual from someone who should not have surrendered it.  He would play upon an employee’s fear of upsetting the CEO and that employee’s desire to be helpful and would get access to information that should not have been available to him.
• Closely related to the previous point, security and privacy systems have to be compatible with how individuals function within various processes.  If the process is made too cumbersome because of security protections, people who need to function more efficiently will find a way to work around or even disable security and privacy systems.  The ultimate goal is to maximize security and privacy, based on how people will use a system, not to achieve a theoretical maximum level that will not get achieved because people compromise a system.
• Maximizing security and privacy is not a one-time effort.  Those seeking to compromise systems keep improving their skills, so those protecting the systems have to keep improving their vigilance and the effectiveness of their efforts.
• Among members of the public, there are differences among people in their attitudes toward privacy.  There are also differences for a single individual in terms of privacy concerns relative to different categories of information.  A privacy policy and system needs to recognize that individuals will care differently about whether information is disclosed, to whom it is disclosed, when it is disclosed, and how the disclosure will take place.  To the degree that we secure informed consent from individuals, we also need to understand that individuals have diverse ways of locking in on the data that is relevant to them giving informed consent. We also need to be as upfront with people every time there is potential for their data to be shared, and to have a dialogue with them that gives them a reasonable opportunity to give an informed consent.  They should be aware of the risks of disclosure, but also the benefits to them, and should make a knowledgeable decision.
• There are cultural norms that privacy policies and procedures have to respect.  One example of this was the absurdly legalistic view that individuals could not be identified by their last name in a doctor’s office waiting room because of HIPPA privacy rules.  The theory was that other people would know who they were, and that having strangers hear their last name violated their privacy.  One day, I listened to a receptionist adhere to this rule by calling a black adult patient by his first name.  Many adult black people from an older generation feel that being called by their first name is insulting and disrespectful.  To many adults, including me, having a stranger address me by my first name is disrespectful and condescending.  Requiring doctor’s office employees to deal with strangers on a first name basis without getting their prior permission is stupid.
• No security system is ever invulnerable to breach as long as human beings have something to do with it.  The goal is to strive to have zero breaches, to minimize their seriousness, and to learn from them when they happen, so that they never happen again.

The Dossia team has done a superb job building an exceptionally secure personal health records platform.  I plan to improve it continuously.

The telephone and Internet service were so bad for the eight days we were away that we were effectively cut off from communicating with others except for very brief periods when we could find a signal at a handful of locations.  Moreover, when there were power outages because of weather and horrific heat, we also were unable to use the landline phones in the rented house or the wired Internet service the owners had provided us.

My purpose for telling this story is not to complain about Internet or cell phone service, but to point out the vulnerability we face in our modern, high-tech society.  People make the faulty assumption that paper-based communications, TV and radio communications, and face-to-face communications are less necessary and can even be allowed to deteriorate because we have electronic communications available.  The cover story in the July 3-9 issues of The Economist, entitled “Cyberwar: the threat from the Internet” highlights only one of the many risks associated with our increasing dependence on the Internet, the vulnerability of the Internet infrastructure to cyber-warfare tactics.

After the events on September 2001, cell phone service, as well as landline telephone communication became useless because the demand quickly overtook the supply.  ATT has created a similar ongoing problem by its success in marketing Iphones: it has insufficient capacity to address the huge increase in system demand for data downloads.  The GAO issued a report in October, 2009, which found that, in the event of a pandemic, and a quarantining of  a significant part of the working and school-age population, the Internet would break down, especially in residential areas, largely because school children staying at home would overload the system downloading YouTube videos and accessing Facebook pages.

There are four critical actions the federal government needs to take:

• It needs the power to shut down recreational uses of the Internet in times of national emergency, especially recreational uses that consume a huge amount of bandwidth.  Amtrak already precludes the use of YouTube when it provides Wi-Fi services on its Acela trains.  This is a simple example of what needs to happen everywhere during emergencies.
• If we are to become much more dependent on wireless Internet services for uses like having electronic health records on cell phones, we need to make it far easier and less expensive for common carriers like ATT, Sprint, Verizon, and T-Mobile to build cell towers.  Too many communities have a “not in my backyard” mindset that significantly reduces cell phone coverage.  This is actually what was a major part of the problem in Cape Cod: there are very few cell towers relative to the demand across Cape Cod and Martha’s Vineyard.  There are many advocacy groups who think that cell towers cause cancer in surrounding populations or simply depress property values.  There is no credible evidence to support the cancer fears, and the property values argument goes out the window if cells are essentially located in every community. Today, cells can be built in such a way that they are not visible to anyone who does not already know they are in place.
• Carriers have to be persuaded to charge for data usage.  The notion that a person who accesses billions of gigabytes of data by playing YouTube videos on a cell phone should pay the same fee as someone who uses the cell phone solely for low-bandwidth-consuming voice conversations is crazy.  In fact, if we believe that having real-time universal access to wireless communications is critical for national security, public health emergencies, and effective interstate commerce, the government may have to require the carriers, by law, to eliminate pricing systems that invite overload, and prevent wireless systems from being broadly used. We have a difficult time changing to usage-based pricing when something has been priced at either a fixed amount or given away, but our collective wellbeing depends on having the Internet shared in a thoughtful way.
• The public needs to be educated to the fact that the Internet does not contain unlimited capacity everywhere.  This is a myth propagated by advocates of electronic communication.  Ironically, when former Vice President Gore referred to the “information superhighway” in the 1990’s, he was being more accurate than he realized.  Superhighways are almost always overloaded, because they invite more people to drive than the available capacity can allow.  Bandwidth, especially wireless bandwidth that depends on the building of cells in residential areas, cannot stay apace with bandwidth-hungry uses of the Internet that result from downloading or viewing of color and sound intensive videos.  The Internet is like the proverbial commons in the center of a rural town: the more cows that graze on the commons, the more quickly the grass that provides nutrition for the cows gets used up.

People sometimes forget that the concept of the Internet was invented by the Defense Department in the 1960’s to protect us from the consequences of having our traditional landline phone systems incapacitated in the event of a war.  We have to get back to basics and protect both our wireless communications and wired Internet systems for everyone’s benefit.

The usual solutions are to put supermarkets in the inner city, or to have farmers markets in the inner city or urban gardens in abandoned lots.  While all of these solutions are excellent long-term answers, all have problems or limitations.

Supermarket chains are increasingly reluctant to begin an effort to put a supermarket in an underserved low-income, inner city area.  There is an old saying that “No good deed goes unpunished” and that certainly applies to supermarket chains that try to do the right thing.  Almost always, labor unions and community coalitions try to force the chain to make various kinds of concessions as a condition of withdrawing objections, and small businesses who perceive they are threatened by the supermarket fight to the death to keep it out.  Last September 29, The New York Times published a story about a supermarket chain that tried to open a store in the Bronx, and was stalled by several different special interest groups.

The farmers markets and urban gardens are good solutions for growing foods during the growing season, but they do not provide a complete solution for population food needs during colder weather.

What works all year around is a delivery service that regularly trucks food that is ordered online from the supermarket to convenient locations in the inner city that only need storage space and security from break-ins and thefts.  Churches, schools, community centers, and industrial warehouses located in inner cities all can serve this purpose. The Baltimore City Health Department is actually pioneering this idea in a program it calls the “Virtual Supermarket Project.”

When I have spoken with people who have attempted to solve the food desert problem with delivery services, they always say that the “economics of the proposed service do not work for the delivery service.”  That strikes me as a phony argument.  Certainly, if a delivery service tries to copy a door-to-door service it provides in a wealthier area, the economic argument would make sense.  However, delivery to a location that clusters or groups multiple orders, but is convenient for local residents makes a whole lot more sense.

This whole discussion reminds me of the economics of mail delivery, which, by the way, is a way of delivering fresh fruit over long distance from gourmet services like Harry and David.  Postal services that have more freedom to change their delivery model, such as the Emirates Post, deliver to clusters, and charge extra for door-to-door delivery.  When I was at Pitney Bowes, the major corporate customers we served through our mail delivery services increasingly wanted delivery to clustered mailboxes rather than to individual desktops or mail cubicles.

In some European countries in which postal unions are large and powerful, the delivery obligations are far greater than what we have here in the United States.  For example, in the UK, on some routes, letter carriers have to walk up several flights in apartment buildings and deliver mail through slots on the doors of individual apartments.  This preserves postal jobs, but it makes delivery service extremely expensive.

The reason I prefer delivery services as a near-term or even a medium-term solution is that the construction of a supermarket, even when the supermarket owner can run through the gauntlet of community special interest groups, locks residents into the choices that supermarket offers.  Delivery services give the residents an ability to buy from any grocery store or supermarket within a reasonable radius of the community, which creates more competition.  When a supermarket comes into a community, it adds a single competitor, often one that displaces some or all of the small food stores already in place.  A delivery service keeps local competitors in place, and adds competition from the outside.  Moreover, over time, it can even incorporate long-distance online purchases of non-perishable items to put even more competitive pressure on the local bodegas or convenience stores that fail to offer adequately healthy food.  Having access to delivery services makes everyone more willing to be competitive in their pricing and their services for poorer communities.