Friday 30 August 2013

The Future Health Care Oligopoly in America














Oligopoly (noun): a state of limited competition, in which a market is
shared by a small number of producers or sellers.





Research by Booz & Company shows that the
hospital business in the United States is changing at a rate that has not been
seen for years.  In 2012 alone, there were 105 merger and acquisition
deals in the hospital and health systems sector, double the number seen in
2009.  Here is a graphic showing a history of the number of announced U.S.
hospital transactions between 1994 and 2011 and the key government actions that
accompanied the activity:










The authors suggest that the forces
behind this trend are related to:





1.) Federal healthcare reform (i.e.
the Affordable Care Act and changes to Medicare and Medicaid reimbursement).





2.) Deep budget cuts at the state
level.





3.) Insurance companies are holding
the line on costs.





4.) Difficulty in using credit to
raise the capital necessary to fund new infrastructure.





5.) Declining admission rates.





All of these factors are creating an
environment where hospitals and health systems have to think outside the box to
survive and remain profitable.  The most vulnerable targets are
stand-alone hospitals which on average, in 2011, saw their operating margins in
negative territory as shown here:










While these deals will be publicly touted as
creating economies of scale that result in greater efficiencies and reduced costs to hospitals, the Booz study
shows that this is not the case.  Out of a sampling of 201 hospital and
health care system deals between 1998 and 2008, only 41 percent of acquired
hospitals outperformed their peer group.  In addition, 18 percent of
acquired hospitals went from having positive margins before being acquired to
having negative margins after acquisition.  One would think that having
more beds would result in greater efficiencies, unfortunately, of the deals
that ended up with more beds, only 39 percent outperformed the broader market
and of the deals that resulted in the same number or fewer beds, 42 percent
outperformed the broader market.  Basically, the idea that a merger or acquisition
in the hospital or health sector would improve the bottom line is worse than a
coin toss.





Let's go back to my opening
definition of oligopoly.  Booz & Company predicts that out of the 5000
hospitals in America, roughly 1000 will seek a merger or acquisition
opportunity in the next five to seven years.  While on a nationwide basis
there is still plenty of competition, the same cannot be said for specific
geographic areas.  The 2012 attempted merger of OSF Healthcare and
Rockford Health, both located in Illinois, is a case in point.  This
merger was cancelled after the Federal Trade Commission determined that the
number of acute health care hospitals in Rockford, Illinois would be reduced
from three to two and that the combined hospitals would control nearly
two-thirds of acute-care inpatient services.  That is pretty much the dictionary definition of an oligopoly.





While many independent hospitals are
clinging to their independence by their figurative fingernails, the writing may
well be on the wall.  It will be increasingly difficult for them to retain
their independence in the face of competition from their larger peers.  On
top of that, once their competition is eliminated, it will be increasingly
tempting for the new mega-health and hospital systems to raise health care
costs for Americans, especially since the Booz study shows that most mergers do not result in higher margins.  Ultimately, the margins will have to rise to positive territory.  Another factor that must be considered is the case where health and
hospital systems load themselves with debt in order to make themselves bigger
and bigger.  Eventually, the debt has to be paid and we all know who will
pay in the end.




Thursday 29 August 2013

Spending on Spies





















Another day, another NSA release.
 Today's release of the so-called Black
Budget document shows American taxpayers how much was budgeted for the Office
of the Director of National Intelligence, covering expenditures on the CIA, the
NSA and other government departments excluding funding for military
intelligence gathering.





Here's the opening page of the FY
2013 Congressional Budget Justification, signed by one James Clapper:










For fiscal year 2013, James
Clapper's objective was to receive $52.6 billion in funding which would be
allocated to the following activities:







The Central Intelligence Agency was
to receive 28 percent of the funds, to be budgeted into the following
categories:










The budget for the CIA has risen by
56 percent since 2004, most of which has been spent on data collection.





The National Reconnaissance Program (NRP) which operates the nation's networlk of spy satellites was to receive 20
percent of the funds, to be budgeted into the following categories:












The Consolidated Cryptologic Program
(CCP) which includes the National Security Agency was to receive 21 percent of
the funds, to be budgeted into the following categories:










In case you wondered, here's a graph
that shows how the funding for CCP has changed since fiscal 2004:










The budget for the NSA alone has
risen by 53 percent since 2004.  The NSA has spent heavily on management,
facilities and support and spends about 20 percent of its budget on data
analysis.





Here's a graph showing how the
number of employees working within CCP (including the NSA) has changed since
2004:










In total, there are just over
107,000 employees in the intelligence community with the equivalent of just
under 84,000 full time equivalent civilian employees and just over 23,000
military positions.  Sequestration has had an impact on the intelligence
community as well; just over 1200 positions have been shed or just under 1
percent of the total workforce.





One phrase that I did find
interesting was under the Objectives section of the report as noted here:





"Counterintelligence
(CI).
To further safeguard our classified networks, we continue to
strengthen insider threat detection capabilities across the Community. In
addition, we are investing in target surveillance and offensive CI against key
targets, such as China, Russia, Iran, Israel, Pakistan, and Cuba.





I found the inclusion of Israel as
an offensive Counterintelligence target in amongst China, Pakistan and Russia
rather odd!





Here's another one:





"The counterproliferation (CP)
mission continues to support a variety of actions to deter, disrupt, and
prevent proliferation. This includes improving our understanding of Pakistani
nuclear weapons and dangerous nuclear material security; intelligence on
proliferators, such as Iran and North Korea, to roll back and block weapons
programs; increasing our ability to ascertain global chemical and biological
threats; and better integrating multidiscipline coverage of WMD targets such as
chemical weapons in Libya and Syria
." (my bold)





So, how well did that work for the
people of Ghouta in Syria?


  


Now at least we know where some of
those tax dollars that are remitted to Washington are headed and how much it is costing American taxpayers to have their emails, text messages and cell phone calls listened to.  




Syria - A Minor Oil Player

Syria has been in headline news off
and on for two years now and it appears that the looming conflict in the Middle
East is once again weighing heavily on the world's oil markets.  That
said, there is very rarely any mention of Syria's oil and gas reserves or
production levels, a situation that I hope to resolve with this posting.







Syria's first oil production began
in 1968 with most of the current oil production being located along the
Euphrates Graben in the northeastern part of the country.  For those of my
readers that are non-geoscientists, a graben is a downthrown block of land that is
bounded on both sides by a series of faults that is created as the earth's
crust is pulled apart.  In the case of the Euphrates Graben, the feature is about 100
kilometres wide and extends for 160 kilometres in a southeast-northwest
orientation.  Here is a map showing
the location of the Euphrates Graben












Here is a cross
section across the Euphrates Graben showing the "sag" in the earth's crust:












Here is a map showing
Syria's oil and natural gas infrastructure:










Here
is a map
 showing the contract areas and oil and gas fields in
Syria:










For my Canadian readers, please note
the participation of PetroCanada in the northeastern-most part of the country.





According to the Energy Information Administration (EIA), Syria
produced around 334,2400 BOPD of oil in 2012 and 315.72 BCF of natural gas in
2011.   This puts Syria at 33rd place in the world of oil production and
41st place in the world of natural gas production.  





Here is a graph showing the peak and
decline of Syria's total oil production:










Here is a graph showing the peak and
decline of Syria's net oil exports and imports:










Here is a graph showing Syria's
proved oil reserves:










According to the Organization
of Arab Petroleum Exporting Countries
 (OAPEC), Syria has 2.5
billion barrels of oil reserves, putting it in 31st place in the world.  





In sharp contrast, here is a graph
showing Syria's growing natural gas production:










Here is a graph showing Syria's
proved natural gas reserves:










Sanctions and security concerns have
put a halt to several international pipeline projects that were scheduled for
Syria and exports of crude and petroleum products were severely curtailed in
2012, also due to sanctions with oil production down by over 50 percent from 2011 to 2012 as shown here:
 










Syria's oil production had been in a
state of decline for a decade and a half since peaking at 583,000 BOPD back in
1996.  Until hostilities began, a successful program of development
drilling, new discoveries and field rehabilitation were expected to increase
production capability and put a halt to production declines.





Oil production and development are
managed by the Syrian Petroleum Company  (SPC), an
offshoot of the Ministry of Petroleum and Mineral Resources.  Foreign oil
companies have been offered a share of Syria's oil industry in an attempt to
stem the country's production decline with formation of the Al-Furat Petroleum Company.
 This joint venture is 50 percent owned by SPC, 32 percent by Shell Oil
and China's CNPC.  China is also active in other parts of Syria through
its Sinochem and Sinopec government oil companies.





For the past 2 decades or more,
Syria has consumed less oil than it has produced.  Domestic consumption
has risen slowly over the past 2 decades from around 200,000 BOPD to nearly
300,000 BOPD in 2010.  As shown in this
chart
, Syria has exported up to 400,000 BOPD back in 1996; this has
declined to 109,000 BOPD in 2010, according to the EIA:










Most of Syria's oil exports are/were shipped to European OECD nations including Austria, Germany, Italy, the
Netherlands and France as shown on this pie chart:










In 2010, EU nations imported a
rather insignificant amount of their oil from Syria, totalling 1.35 percent of
all imports.  On the other hand, these exports provided a significant
amount of Syrian government revenues, reaching 30 percent ($4.1 billion) in 2010.





Syria is estimated to have proven
natural gas reserves of 8.5 trillion cubic feet (Tcf), half of which is
associated with oil reservoirs.  Gas that is non-associated is found in
the central and eastern part of the country.  In 2010, Syria produced 316
billion cubic feet (Bcf) of natural gas, however, due to hostilities, the rate
fell to 278 BCF as shown here:










Approximately 23 percent of Syria's
natural gas production was injected into oil reservoirs in an attempt to boost
oil production with the bulk of the remainder used domestically for power
production and industrial usage.  According to the EIA, Syria plans to
substitute natural gas for oil by 2014 for both power production and industrial
usage since Syria does not have the refining facilities necessary to produce
refined oil for these purposes.  With Syria now producing more natural gas
than it consumes, it is exporting small volumes to both Lebanon and Turkey.





According to this
report
from Syrian Oil and Gas News, the discovery of oil-bearing
shales in the area to the southeast of Aleppo could be another important source
of hydrocarbons with the possibility of over 50 billion tons of reserves.
   





As you can see, while Syria did export a small volume of oil to Europe, those importing nations have easily
substituted oil from other sources for their supply of Syrian imported crude.
 Perhaps this explains why there has been reluctance on the part of both
Europe and America to get involved in Syria's civil war; there simply is no
economic reason to involve oneself as there is in the case of Libya and Iraq.  After all, other than saving a few thousand lives, there is no economic upside as there is in both Libya and Iraq who both had unseemly human rights records.







Tuesday 27 August 2013

New California Law re Attorney's Fees in Wage Cases

Governor Jerry Brown signed SB 462 (here). This law amends Labor Code Section 218.5, which allows attorney's fees to be awarded to the prevailing party in lawsuits over unpaid wages, fringe benefits, or pension fund contributions.  The law previously permitted either the employee or employer to seek attorney's fees as the prevailing party. The revised statute authorizes attorney's fees to employers (or any other party that is not the "employee") only if the court determines the lawsuit was brought in "bad faith."   So, employers, say goodbye to attorney's fees in wage cases.

Sunday 25 August 2013

Fringe Science, Kurzweil’s Singularity, and Six Yogas of Naropa


A few weeks ago, I was watching an episode of the popular TV show Fringe about transferring of consciousness, and it reminded me of a popular topic among technophiles over the past few years: the coming Singularity

The term “Singularity” was first used by John Von Neumann and later by science fiction writer Vernor Vinge as an age of superintelligent computers which were smarter than humans.  Whether these future computers will be more like Asimov’s benevolent robots, or more like Skynet (which takes over the world, trying to eradicate humans in the Terminator vision of the future), is entirely impossible to predict.  In fact, the term singularity itself implies unpredictability: in physics it refers to a point like a black hole which has an event horizon, beyond which it’s impossible to predict what may happen.

More recently, the term has been popularized by well-known futurist Ray Kurzweil (also an MIT alum), who argues that with advances in computing and medical and nano-technology, we will be able to transfer our brain (and our consciousness) onto a super-human computer (or computer chip, or other computing device), allowing us to effectively live forever on silicon rather than biology!

In the episode of Fringe in question (spoiler alert!), the consciousness of William Bell (played by Leonard Nimoy, best known as Mr. Spock from Star Trek) is able to find its way back after his physical death, and embeds itself into FBI agent Olivia Dunham.  In doing so, Bell’s consciousness “takes over” Olivia’s body for a time.  In an attempt to preserve Bell’s consciousness, uber-mad scientist Walter Bishop comes up with a scheme that sounds a lot like Kurzweil’s singularity – he attempts to transfer the consciousness of the now dead Bell from its organic host (Olivia) to a silicon-based host – an electronic device set up to receive Bell's neural patterns and thus his consciousness.

If this all sounds like science fiction, Kurzweil predicts that the date of this singularity may be in the “near future”, as in 2045, and many others agree with him that “The Singularity is Near”!  Some, like Microsoft Co-Founder Paul Allen, object and don’t think it’s coming anytime soon, but may occur much, much later.  Both do seem to think that that the answer to “preserving consciousness” after physical death of the brain lies in ever more sophisticated technology.

In thinking about this type of projection of consciousness out of the human body to some “other place”, I would say that both Kurzweil and Paul Allen may be looking in the wrong direction – to the technological future rather than the past where human consciousness was a more serious study than it is today. 

In science, proposing theories without understanding the existing literature is pretty much a cardinal sin. A few years ago, I went to talk to professor computer science at Berkeley about doing a PhD thesis on a particular subject that I was working on in my startup.  She seemed very upset, and made clear, in that sort of academic haughty way, that I hadn’t taken time to review the existing literature and wasn't giving proper respect to what had already been published in this field!  I might be surprised to discover, she suggested, that many smart people have trod this path before me and that I might even “learn something” from studying what others have already achieved!

So, is there already existing “literature” about the projection of consciousness outside the human body?  Of course there is – anyone who has studied consciousness seriously through meditation and Yoga will note that the “literature” is full of instances of projecting consciousness outside the human body – everything from out of body experiences to near death experiences. Moreover, these have been going on for hundreds (if not thousands) of years so this isn't exactly a rare phenomenon that no one has taken the time to study (except in recent scientific circles, apparently!).

In my opinion, the most promising place to start in the existing “literature” of human cosnciousness is in the  Six Yogas of Naropa. 

Stories of Naropa, not so well known here in the West, have been carried down through the Tibetan traditions.  Naropa was a academic scholar himself, at the ancient Nalanda University in Kashmir, who believed his studies had taught him all he needed to know about consciousness. 

According to the Tibetan sources, Naropa was surprised to discover that all of his knowledge didn’t account for much – that the only way to study consciousness and gain “freedom” from the human body was through subjective experience, not study and debate, which he (and his fellow academics) excelled in. 

After going through many tribulations at the hands of his teacher, Tilopa (another very interesting and enigmatic figure), Naropa realized the illusory nature of physical reality and finally achieved liberation by seeing the true nature of consciousness and how it attaches to and detaches from the physical body.

Afterwards, he systemized the Six Yogas of Naropa and taught them to, among others, Marpa the Translator, a famous Tibetan seeker who had trudged over the Himalayas to Kashmir to lean from him.  Marpa, in turn, taught Tibet’s most famous Yogi, Milarepa, the ropes.

So what do the Six Yogas of Naropa have to do with this episode of Fringe and the Singularity? 

A lot, actually.   The Six Yogas, which have been taught primarily in secret over the years, are all about what happens to our consciousness when we go to sleep and when we die.  Lest modern scientist dismiss these as simply “religious anecdotes”, the Tibetans have developed elaborate descriptions and models of how this process works, which in my opinion rivals in sophistication the models of the natural and electrical world that I learned at MIT (though they are much less reliant on mathematics and more on “conscious experience”).

Two of the Yogas, that of Consciousness Transference and Forceful Projection, are directly related to transferring the consciousness of a person who is dying \out of the body to “somewhere else” so that it can "live on" in the physical world.  Interestingly, many modern listings of the Yogas of Naropa edit out “forceful projection” because it was considered “too dangerous” for all but the most adept Yogis.

According to the literature, adepts at this Yoga were able, at exactly the time of their death, to “transfer” their consciousness out of their body and “forcefully project” it into another living "host" nearby.   Usually this was practiced with various creatures (birds, chickens, foxes, etc.) in the beginning.  As they became more adept, in scenes that are reminiscent of modern horror films, Yogis would practice forcefully projecting their consciousness onto fresh corpses.   They would re-animate the dead bodies, while their “original bodies” would be sitting in a state of suspended animation until they “returned”.

According to the Six Yogas of Naropa, written by Tsongkhapa and translated by Glenn Mullin, the Indian and Tibetan texts were filled with such anecdotes, and the tradition continued in Tibet for some time with gurus repeatedly demonstrating it for their pupils, though usually only under the strictest terms of secrecy.

In one of the most famous stories of this kind, Marpa’s own son, who had learned this art from his father, had an accident on his horse and his neck was broken. He supposedly used the Yogas of consciousness transference and forceful projection to leave his body and “transfer” his consciousness into a pigeon that was flying nearby.  He then had the pigeon fly to the outskirts of the next town (where there were many dead bodies, since only the rich cremated their bodies at that time), and found a young man who had recently died and transferred his consciousness into this recently dead body.  In this new, youthful body, he then took on the name Tipupa (the Pigeon saint) and began to teach the Six Yogas.  In an interesting twist of events, years later Milarepa sent one of his students to go study this particular Yoga with Tipupa, who was, understandably, the expert!

Which brings us back to the episode of Fringe in question and the prospect of “digital immortality” by transferring consciousness after a singularity.

Could it ever be done? 

In considering this we might learn a little wisdom by looking into the past (the Six Yogas of Naropa).  

If we consider our “consciousness” as able to be separate from our brain, then in order to transfer the “software” of consciousness from one piece of hardware (our brain) to another, it seems to me that we would need to find a “compatible” hardware.  We might even need one with a similar operating system.  And this is exactly what the Yoga of force projection is all about - finding an organic host that can carry on our consciousness, even after the physical body is dead.

On this, both the lineage descendants of Naropa and the writers of this particular episode of Fringeagree: forget the computer and learn to project consciousness to another, organic host first.  In the episode of Fringe in question, consciousness was successfully transferred to an organic host (Olivia), but completely failed and was lost when attempting to transfer it to a technological device.  

So, it seems to me that before we barge ahead trying to transfer our brain's neural patterns to a physical device, we might want to invite in the experts at consciousness (Tibetan and Indian Yogis) and see if we can learn something from them about how consciousness works both while we're alive and when we die.  Once we can reproduce the Yoga of forceful projection in a laboratory setting, we could then move on to how we might project our minds onto a superintelligent computing device.

To those awaiting the singularity, I might suggest, as that professor of computer science at Berkeley reminded me a few years ago:  it pays to study what others have done before us...we might even learn something!