Reflection Attitude: Past, Current, and Future (2022)
Reflection Attitude Sample Chapter
Foreword – July 2022
There are more than 80 articles on johnpatrick.com about Bitcoin and cryptocurrencies. I have selected a handful of articles for Reflection Attitude to share how I got interested in the subject in 2013 and my views about the future of the technology.
Written: January 2014
Electronic money is not a new idea. The Electronic Fund Transfer Act was passed by the U.S. Congress and signed by President Jimmy Carter 35 years ago (1978).[i] Other forms of electronic money include payment processors, direct deposit, and digital currencies such as Bitcoin. What distinguishes Bitcoin from other electronic money is it is a cryptocurrency.
Cryptocurrencies are a type of digital currency created on an infrastructure relying on cryptography, decentralization, no central bank, and peer-to-peer networking. Wikipedia lists 47 cryptocurrencies. Bitcoin, established in 2009, was the first. Will Bitcoin replace the dollar, euro, yen, franc, kroner, et al? I believe it is possible, but most authorities say it is doubtful. Will Bitcoin dominate as a new method of payment, replacing Western Union, PayPal, credit cards, and various banking services? I believe it is very possible.
Alan Meckler, chairman and CEO at Mediabistro, recently said Bitcoin has “all the trappings of the web circa 1995”.[ii]
Alan and I met at Internet World in 1994 and we both had a bullish view of the future of the Internet. We were not alone, but there were many naysayers at the time, including Bill Gates. More than a few bank and insurance executives told me the Internet was interesting, but they would never connect their company to it. The web lacked good security, had no authentication, was slow, not always reliable, and was missing the many supporting services needed to make it feasible for electronic commerce. The rest is history.
In the early days of the web, Internet World, created by Alan Meckler, was a thriving tradeshow which attracted thousands of attendees and vendors, attendees to find out if the web was real, and vendors to share their vision and demonstrate their products. Mediabistro, a public company in New York (MBIS) is a provider of jobs, news, education, events, and research for the media industry, has created an Internet World-like tradeshow called Inside Bitcoins, which was launched in December 2013. The main purpose of the show is to allow Bitcoin and the related virtual currency industry to share their vision. The conferences provide the latest information on government compliance, marketing, managing, and launching new businesses in the world of virtual currency.
The WSJ provided a good overview of the conference. Banks, credit card companies, and money transfer companies do not like Bitcoin because the new digital currency model threatens the status quo and related fees. In the early days of the World Wide Web, there were similar views to what we hear about Bitcoin. Music and book publishers did not like the idea of seeing their business model disrupted. Technology companies, including IBM, with large investments in dozens of different proprietary networking software did not like the Internet protocol, TCP/IP, which was a fraction of the cost of their offerings. Many derided the Internet as being slow, insecure, not scaleable, unreliable, not enterprise-ready, etc.
What about the other 46 cryptocurrencies and others likely to emerge? It is certainly possible a superior alternative to Bitcoin may emerge. From my perspective, based on the history of the web, it is all about the grassroots. There is a grassroots movement underway with Bitcoin. You can see it in the blogs and Twitter.
The infrastructure of Bitcoin is built on open-source software, visible for all to inspect and contribute to. It is already evolving. It will get better and better. There are currently more than one million Bitcoin wallets and more than 2,000 vendors who accept Bitcoin. I would never bet against a grassroots movement.
I became an instant believer after attending Inside Bitcoins last month. I purchased two BTC for $568.62 each. I was sure it had nowhere to go but up.
A couple of weeks after the conference, a friend and I were having breakfast at Funky Pelican at the Flagler Beach Pier in Florida. Our discussion made me think of other similarities between the early days of the web and the current early days of Bitcoin.
In the beginning, the web was created to make it possible to share documents on any kind of computer. Scientists at CERN in Geneva and around the world were interested in sharing technical documents about particle physics research. The problem was the thousands of scientists and students had many kinds of incompatible computers. To solve the problem, the web provided a way to make the world’s documents compatible by using a markup language called HTML, which made the documents compatible on any kind of computer connected to the Internet.
Many pundits asked questions in the early days of the web about the purpose of the web. Only documents? No one I knew thought of the web as legitimate information technology. There were no Amazon, eBay, Google, or any other e-business. These things and many more evolved over time.
Today, people are asking similar questions about Bitcoin. Is it just money, a global currency, a platform for payment, or just an investment vehicle? As with the early web, there are many supporting services for Bitcoin not fully developed yet or don’t exist at all. To reach its potential, Bitcoin will need reliable and robust merchant services, hedging, futures, insurance, and many other things. Most important, the evolution of Bitcoin will require adoption by users and merchants. This is beginning to happen.
The only threat I see is from politicians who may want to “protect” us with some legislative or regulatory schemes. I always worried about the potential of political intervention in the early days of the Internet. For this reason, a few of us formed the Global Internet Project (GIP). I served as chair of the GIP for about five years. With support from Harris Miller and the Information Technology Association of America (ITAA), my colleagues and I travelled around the world to convince political leaders to resist the temptation to regulate the Internet.
In 2003, the Federal Trade Commission proposed legislation to stop the proliferation of unsolicited commercial e-mail known as “spam”. I testified as Chairman of the GIP and presented the minority view of why legislation would not work. A video of the hearing is on C-Span.[iii] My testimony began at the 34-minute mark of the video.
Fortunately, most politicians did not understand enough about the net to introduce controls. They were afraid the rapidly growing popularity of the net might lead to something good. What an understatement.
My Reflections – 2022
As of July 2022, there were more than 20,000 cryptocurrencies and tens of millions of digital wallets.[iv] The price of one Bitcoin on December 15, 2014, was $320. As of November 2021, a Bitcoin was valued at $65,000. The Global Internet Project declared victory and ceased operations around 2005. Over the next eight years since I wrote this article, Bitcoin and other cryptocurrencies grew rapidly as did the various ancillary services and relationships I mentioned. Mediabistro no longer exists.
My First Purchase Using Bitcoin
Written: January 2014
Bitpay is an Atlanta startup which says their mission is to make Bitcoin every merchant’s favorite form of payment. They claim more than 20,000 businesses use their services. The official merchant count on Bitcoin Pulse is approximately 2,800 merchants. Whichever number you believe, adoption is clearly rising. Perhaps like others, I was curious about how a Bitcoin transaction would work, so I visited overstock.com, an early e-commerce website and Bitcoin believer.
The unusually cold weather in Florida had caused me to look for a long-sleeved shirt. I found a nice steel blue canvas thermal shirt for $22.99, and I got a 10% discount for opening the Overstock account. At checkout, I was presented with several payment options including credit cards plus PayPal and several other newer payment methods including BillMeLater, RewardsPay, V.me, and Bitcoin. Overstock clearly doesn’t want to lose a sale for a buyer’s lack of ability to pay. The only thing they don’t take is fiat currency cash.
I selected Bitcoin and clicked the Submit Order Now button. I chose to pay with Bitcoin using my Coinbase digital wallet. The dialog presented the details: $23.64 purchase price after discount and shipping, which would result in a debit to my digital wallet at Coinbase of .02862804 BTC, based on the current price of Bitcoin of $825.76. I am not sure of the exact timing used to lock in the price and convert the payment to U.S. dollars for Overstock, but I am sure it works for them, or they wouldn’t accept BTC.
The bigger question one might ask is why would anyone want to buy something with BTC when they could just use their credit card? I think there is more than one reason. The folks at Bitpay say credit cards were not designed for the Internet. True. They further say merchant websites can reach 200 countries, but credit and debit card payment systems reach far fewer.
Anyone with a bank account can create a digital wallet at Coinbase or other cryptocurrency exchange and convert currency to BTC. I predict people anywhere in the world will be able to go to a physical exchange, a dealer, and deposit their fiat currency into a BTC digital wallet using their smartphone. The difficulty of getting and keeping a credit card is well known to millions of people. In theory, a debit card should be easy for anyone to get, although some have hidden fees and restrictive policies of use.
From a merchant point of view, BTC will provide a larger reach, fewer restrictions, and lower fees. Banks collect tens of billions of dollars in fees from credit and debit cards. Merchants face surcharges for Internet transactions, surcharges for rewards cards, surcharges for high-risk cards, and surcharges for cross-border transactions. Bitpay has none of these and in fact has no transaction fees at all for their merchant customers. They charge a flat monthly fee for operating the BTC services.
The billions in fees charged to merchants become part of their cost of business and are passed on to the consumer. The inefficiency of credit cards for online commerce provides a strong motivation for the adoption of BTC. Jamie Dimon, CEO at JPMorgan Chase, said, “I personally think that Bitcoin is worthless.”[v] He further said the question is do we even participate with people who facilitate Bitcoin? Sound familiar? Music companies 15 years ago decided not to participate with downloadable music. Publishers at the time decided not to participate in digital books.
The Internet creates disintermediation industry by industry. Watch out Cable TV. Do you think people will continue to pay $150 per month for 500 channels of content, a few of which they watch? Healthcare is not excluded from the threat either. Stay tuned.
My Reflections – 2022
In a late 2020 estimate of the Bitcoin landscape, 328,370 Bitcoin transactions are processed every day, and 15,174 businesses worldwide accept Bitcoin, according to Fundera, a platform for small business financing.[vi] The case I made about lower fees did not pan out. Bitcoin fees have risen more than anyone expected. The speed of processing Bitcoin transactions was also slower than expected. Retail e-commerce with crypto did not flourish. Fortunately, there is a project underway called the Lightning Network. It promises instant payments, capability to handle millions to billions of transactions per second, low cost, and it will work across other blockchains in addition to Bitcoin.[vii]
Bank and Bitcoin Failures
Written: March 2014
There are a couple of dozen Bitcoin exchanges where you can buy or sell the BTC cryptocurrency. Some exchanges provide digital wallet services, so you have a place to store your BTC. If you buy something, you can authorize the seller to take BTC from your wallet as payment. The question arose about how safe the exchanges and wallet services were.
Last week, the Mt. Gox Bitcoin exchange in Tokyo declared bankruptcy, and the status of nearly a half-billion dollars of BTC is uncertain, at best. Some say Bitcoin exchanges should be regulated like banks. Banks are heavily regulated, but regulation does not prevent them from failing. The Federal deposit insurance Corporation (FDIC) maintains a list of bank failures since October 1, 2000. There have been three so far this year, 24 last year, 51 the year before, and a record of 157 in 2010.
The difference between the Mt. Gox failure and a bank failure is, in the United States, deposits in banks are insured to a limit of $250,000.[viii] Should Bitcoin operators be regulated? A lot of important innovation is occurring around Bitcoin. Credit cards were not designed for the Internet and the fees they charge merchants can be 50% or more of the profit the merchant makes on a sale. Money transfers by working people to family members in other countries incur huge fees. A significant part of the world’s seven billion people have no access to the world of e-commerce.
All these issues can be addressed by Bitcoin, but yes, I feel there should be some “light” regulation. Operators should be registered with some government entity and should provide full disclosure about who they are, how they are organized, how they operate, and what their security procedures are. They should submit to some form of security audit, such as security expert Andreas Antonopoulos just performed for Coinbase.[ix]
Consumers need to take responsibility also. Bitcoin is a new payment platform and should not be viewed as an investment speculation unless you are prepared to lose your investment. The Bitcoin wiki summed it up well. “Warning: Please be careful with your money. When sending money to an exchange or seller you are trusting that the operator will not abscond with your funds and the operator maintains secure systems that protect against theft, internal or external. It is recommended you obtain the real-world identity of the operator and ensure sufficient recourse is available. Because Bitcoin services are not highly regulated, a service can continue operating even when it is widely believed it is insecure or dishonest and webpages recommending them may not be regularly updated. “Exchanging or storing significant amounts of funds with third parties is not recommended.”[x]
My Reflections – 2022
The failures which have occurred have been failures of exchanges, not of Bitcoin or the blockchain, just like a bank failure is not a failure of the U.S. dollar. As of 2022, seven crypto exchanges offer some form of insurance.[xi] Coinbase, the leading crypto exchange in the United States, carries crime insurance protecting a portion of digital assets held across its storage systems against losses from theft, including cybersecurity breaches. The leading exchanges are innovating various protections for crypto holders. Congress is considering various methods of increased cryptocurrency regulation. In 2021, Congress introduced 35 bills focused on U.S. crypto policy.[xii] In my opinion, if regulation is well formed, not overly burdensome, and centralized in one federal agency, it will be a very good thing for the future of crypto.
Reflections on Bitcoin
Written: March 2014
This week on CNBC, Warren Buffett said Bitcoin is a joke.[xiii] This is just one of many derogatory quotes made by the oracle of Omaha. Once again, this reminds me of 1995 when pundits said the World Wide Web was a joke. Many of them had a stake in the status quo. I remain bullish about the future of Bitcoin as a transaction platform. I believe this view is consistent with the evolution of the Internet.
In the beginning, the Internet was a simple communications network allowing messages or files to be transferred from one computer to another. The World Wide Web was built on top of the underlying infrastructure, the Internet. Then along came e-commerce, which was an additional layer built on top of the web. This was followed by social media, which was another layer, and now we have Bitcoin, which is providing a payment, currency, and contracts platform as another layer.
It is certainly possible Bitcoin could go the way of Napster, but I believe the grassroots is gaining momentum.[xiv] The press does not quite get what Bitcoin is about yet. Last week, the New York Times Bits Daily reported “Mystery Swirls Around Unmasking of Bitcoin Inventor”.[xv] A much more relevant news item would have been to invite an expert on cryptography from MIT and get their opinion about the strengths and weaknesses of the Bitcoin platform. Another newsworthy interview would be with the folks at Coinbase, which reported they now have more than 1 million digital wallets.
This past week Coinbase announced Pounce, a retail mobile purchasing app, which will allow consumers to shop at Lord & Taylor and other retail firms and pay for their purchases with Bitcoin. The Coinbase announcement is a sign of adoption, which will be the key to success or failure for Bitcoin.
Some crypto enthusiasts were not happy with my comments about needing some light regulation, but I still stick with the notion. I dislike too much regulation, but without a light dose of it, regulators may attempt to handcuff the Bitcoin innovation.
My Reflections – 2022
Purchases at major retailers using Bitcoin have not materialized as I expected. However, with the development of the Lightning Network described previously, I believe we will see a resurgence of retail activity using Bitcoin. The other unexpected role for Bitcoin has been to invest in it as a store of value. Many individuals and corporations see Bitcoin as an alternative to gold.[xvi]
My Bitcoin Strategy
Written: June 2014
The value of a Bitcoin is up approximately 50% from recent lows. Does this mean just a spike among speculators, or does it reflect increasing belief in the fundamentals as I have described in my blog numerous times? I see coinbase.com as a proxy for the future of Bitcoin.
The company is based in San Francisco, California and claims to support 1,300,000 consumer wallets and 32,000 merchants. Coinbase continues to hire bright young people and build out their infrastructure to support the merchants and digital wallets for consumers. It took years for the entire infrastructure of the web to be built out sufficiently to enable e-commerce. Likewise, Bitcoin has a lot of holes, but they are beginning to be filled.
Coinbase recently announced a merchant refund capability so consumers who return something purchased with Bitcoin can get a Bitcoin refund. Various apps are coming online to support merchants and digital wallets. One significant accomplishment was announced this week. DISH will begin accepting Bitcoin through the Coinbase platform in payment for its pay-tv service beginning at the end of September.
The CEO of DISH said he wanted to offer choice in payment methods for their customers. To the extent consumers pay with Bitcoin instead of a credit card, DISH will save a lot of fees. Meanwhile, consumer digital wallets continue the expansion beyond 1 million. The Coinbase promotion described earlier has attracted 20,000 students in two weeks. One could argue the pedigree of universities leading the pack says something. The top 10 schools include the University of Michigan, Berkeley, University of Texas, UC Davis, NYU, UCLA, and Stanford.
Will the value of Bitcoin continue to go higher? Many years ago, my father said, about investment advice, “Don’t give any and don’t take any”. As I have said many times, Bitcoin may go the way of Napster[xvii], but notwithstanding the possibility of major anti-cryptocurrency actions by governments, I remain optimistic.
The Bitcoin protocols limit the supply of new Bitcoin to 250 every 10 minutes. The ultimate limit is 21 million, currently at 12.8 million. Another way to think about it is Bitcoin has a limited supply. As the number of digital wallets and merchants continues to grow, the demand for Bitcoin logically would increase, and with the limited supply, I believe the price of Bitcoin will increase.
My own Bitcoin strategy is twofold. First, I purchase Bitcoin every Monday morning at coinbase.com. I started at $100 per week but later upped it to $250 per week. The dollar-cost-averaging approach has worked well so far. I purchased some at more than $800 and some at less than $400 with an average cost so far of approximately $600.
The second part of my strategy is to be a Bitcoin miner. Rather than purchase the required specialized crypto-optimized hardware, I use Cloudhashing.com. Since April 7, 2014, I have mined approximately 2/10 of a Bitcoin. I reinvest 30% of the proceeds in acquiring additional mining capacity and now have approximately 5.5 gigahash/sec of mining capacity.
The competitor to cloudhashing.com is the price of Bitcoin – if Bitcoin falls, cloudhashing is not desirable. If the value of Bitcoin rises, the mined Bitcoin becomes more valuable. Time will tell. I am not putting my retirement savings in Bitcoin, but I am making an investment to put some money where my mouth is. I see Bitcoin as analogous to investing in Cisco, Amazon, eBay, Google, and others in the early days of the web.
My Reflections – 2022
The $250 per week strategy from 2013 to 2017 turned out to be quite successful. In 2018, I sold half of what I had accumulated. I continue to hold the other half. I made a philanthropic gift to a healthcare organization at the end of 2021 using Bitcoin. As of this writing, Bitcoin was trading at $30,000. It had traded as high as $65,000. The cloudhashing strategy turned out to be a loser. The company, cloudhashing.com, folded. Fortunately, I did not put much money into it.
Disclosure: I have been an investor in Coinbase since 2017. The company went public in 2021.
Cryptocurrencies and the Scope of Bitcoin
Written: October 2017
I get a lot of questions about Bitcoin, and I do not claim to have all the answers. However, in this post, I will try to clarify some facts, and offer a few opinions. Currently, there are more than 1,000 cryptocurrencies. The total market capitalization, value of all cryptocurrencies, now exceeds $150 billion. The value has grown dramatically but is a drop in the bucket compared to the value of all forms of money in the world, which is approaching $100 trillion.
As of this week, of all the 1,000+ cryptocurrencies, only 12 have a value exceeding one billion dollars. The top three are Bitcoin, Ethereum, and Ripple. The value of Bitcoin is approximately $100 billion. That is 3.5 times greater than the total value of Ethereum and 12.6 times Ripple. These values are as of noon on 10/26/2017.
By the time you read this post, the values could be much different. The values of cryptocurrencies are volatile. This is a concern to many people, but I see it like baby steps. Cryptocurrencies are at their infancy. Coinbase, the San Francisco cryptocurrency startup, recently valued at $1.5 billion, said nearly 50,000 businesses use Coinbase services to integrate Bitcoin payments into their businesses.
There are many other companies which provide similar cryptocurrency payment services. Some of the more well-known companies which accept Bitcoin for payment include Intuit, Bloomberg, USAA, PayPal, United Way, Overstock, Dish, Expedia, Bing, Microsoft, and Tesla. There are many much smaller companies most of us have never heard of which accept Bitcoin.
A debate continues about whether Bitcoin is a currency or an asset. Experts around the world have different opinions. In my opinion, Bitcoin is both. Some are saying Bitcoin is on the way to $10,000, and others say it is on the way to a huge implosion. In my opinion, nobody knows. I continue to view cryptocurrencies as analogous to the Internet of 1995. At the time, some said it was the future, and others said it was a fad.
My Reflections – 2022
As of July 2022, there were more than 20,000 cryptocurrencies. Bitcoin was trading at $23,000 and its market cap was $467 billion. The total market cap for all cryptocurrencies was $1 trillion which was 11% of the market cap of gold. The Ripple cryptocurrency looked very promising in 2014. The price reached $3.30. As of May 15, 2002, the price is 37 cents. Most cryptocurrencies will fail and disappear but more than a few will change the world in how financial activities work, how assets such as digital images are stored, and even how the web works. The trend, made possible by blockchain technology, is toward decentralization. Today’s web is highly centralized with most queries going to a handful of tech giants. The trend toward decentralization may change this with many decentralized networks running on a blockchain. It is possible another in the Attitude series could be Decentralized Attitude.
Applying Blockchain to Container Shipping
Written: March 2017
The 35-year-old twins, Cameron and Tyler Winklevoss, have developed a $100 million Bitcoin exchange traded fund (ETF) for Bitcoin. If the pending decision from the U.S. Securities and Exchange Commission (SEC) provides approval, the result will be a new means for investors to gain exposure to Bitcoin without buying the digital currency itself. The pending decision plus numerous other factors in the growth of usage of Bitcoin have driven the price to nearly $1,300 as of March 5, 2017.
Although I remain bullish on Bitcoin, the underlaying infrastructure which enables Bitcoin to work, the blockchain, is even more interesting to many people. In addition to underpinning Bitcoin, blockchain technology can be used to streamline almost any transaction-oriented process.
IBM, Cisco, Intel, and other technology leaders have gotten behind an open-source collaborative effort, called the Hyperledger Project, created to advance blockchain technology.[xviii] Although initially used only for digital currencies, the Hyperledger Project opens new possibilities in several different industries.
IBM and Maersk, the Danish shipping company, are using a blockchain built on the Hyperledger Fabric to manage the supply chain for container shipping. Shipping is a giant global business, but the container shipping process it depends on is paper-intensive. Up to 15% of the shipping cost goes to support the checking of documents by multiple people in hundreds of interactions.[xix] With blockchain technology, the process can be digitized so that each container can be tracked using the Internet. The potential for improved efficiency and accuracy is quite large.
Another game changing use of blockchain technology is for voting. Each vote could be treated like a container or a Bitcoin. Recording and counting of votes could be much more secure, accurate, and efficient. Read more about the use of blockchain technology for voting in Election Attitude – How Internet Voting Leads to a Stronger Democracy.[xx]
My Reflections – 2022
The Winklevoss brothers’ proposed Bitcoin exchange traded fund (ETF) was rejected by the SEC. Several other crypto ETF proposals have likewise been rejected including one in January 2022 proposed by Fidelity.[xxi] I believe approvals are inevitable and crypto ETFs will have a very positive effect on crypto values. Blockchain technology has enormous potential to change the world, perhaps as much as the Internet has.[xxii] Innovation is occurring at a rapid pace and billions of investment dollars are flowing into blockchain companies.
Three of the key areas of innovation are distributed autonomous organizations (DAOs)[xxiii], distributed financial (DeFi)[xxiv], and non-fungible tokens (NFTs)[xxv]. DAOs are organizations in which holders of the DAO’s tokens have a vote on how the organization will be run. DeFi is a term which refers to innovative new financial services models which use blockchains instead of traditional banking and insurance companies. NFTs are being used to enable digital artists to create pieces of art, store them on a blockchain, and sell them directly to consumers or put them into auctions.
Is MiamiCoin for Real?
Written: December 2021
Wikipedia listed 47 cryptocurrencies in 2014. Bitcoin, established in 2009, was the first. As of December 3, 2021, coinmarketcap.com listed 15,134 cryptocurrencies trading on 436 exchanges and with a total market cap of $2.6 trillion, 26% of the market cap of gold.
Banks, credit card companies, and money transfer companies do not like Bitcoin because the new digital model threatens the status quo and the billions of fees they earn. Nevertheless, behind the scenes, they are hiring crypto skilled people as fast as possible and investing in startups which may represent the future of finance. For example, Goldman Sachs along with some other U.S. banks are exploring ways to use Bitcoin as collateral for cash loans to institutions.
Crypto activity is frenetic. Many new startups are using crypto currencies to fuel ideas for reinventing how finance, insurance, and other industries work. After China shut down Bitcoin miners, many new ones popped up in the United States. They are focusing on methods to make Bitcoin mining more eco-friendly. An interesting development, which some are calling Web3, suggesting an evolution of the World Wide Web, is enabling American cities to use cryptocurrency to redefine how cities are funded and how they relate to their citizens.
Miami Mayor Francis Suarez is a cryptocurrency enthusiast, and he has outlined his vision to make Miami a global hub for blockchain technology and crypto. Working with CityCoins, a new crypto idea which uses smart contracts on the Bitcoin network, Miami has become the first to create its own cryptocurrency. It is called MiamiCoin.
The process is a bit complicated, but it results in the creation of the MiamiCoin cryptocurrency, which anyone can buy. To alleviate the environmental impact of Bitcoin mining, the mayor has offered energy from the city’s nuclear plants. As of December 2, 2021, MiamiCoin was trading at $0.02064 with a market cap of $40,745,738. The mayor’s idea is to enable Miami citizens to become investors in the city. As part of the crypto mining process, a portion of the value of the MiamiCoin goes into the treasury of the city.
The mayor announced citizens of Miami could soon receive Bitcoin as dividends on the growth of MiamiCoin. In doing so, Miami would become the first city in the United States to give residents crypto as dividends. The distribution will require a clear definition of “Miami People.” Criteria being discussed include residents, taxpayers, voters, or other criteria set by the city. The plan is to create digital wallets for the residents. The city will then deposit the yield from MiamiCoin into the wallets. Authorities are approaching technology companies to help create the digital wallets and a registration and verification system to prevent fraud.
According to mayor Suarez, the revenue generated by MiamiCoin over the past three months equals around $80 million if annualized, potentially covering around one-fifth of Miami’s tax revenue. He was quoted as saying, “You could theoretically at one point pay the entire tax revenue of the city, and the city could be a city running without taxes, which I think would be revolutionary.” The mayor is putting his money where his mouth is. He announced he plans to receive his first paycheck as Mayor in Bitcoin.
CityCoin, the company behind MiamiCoin, announced it has launched a similar token in New York, dubbed the NewYorkCoin. New York mayor-elect Eric Adams is also a believer in Bitcoin, saying he will take his first three months’ pay in Bitcoin. As of December 2, 2021, NYCCoin was trading at $0.00005194 with a market cap of $7,467,182.
The CityCoin concept opens many questions about the technology, the partners it requires, and the financial model which returns dividends, just to name a few. The entire idea could go up in a puff of smoke. In my opinion this is the tip of the iceberg of many new ideas we will see evolve from the rise of cryptocurrency. Many will fail, but some will provide disruption to the status quo and introduce some efficient and effective ways to accomplish things.
My Reflections – 2022
As of mid-May 2002, both MiamiCoin and NewYorkCoin are struggling. They may make it, or not. I consider them as experiments. I think there will be many more. Only some will succeed and lead us toward the future.
Will Congress Be Able to Grasp Crypto?
Written: December 2021
The United States House of Representatives Financial Services Committee held its first hearing on digital assets on Wednesday, December 8, 2021, more than 10 years after the birth of crypto. The House is not known for speed, and the Senate is even slower. The House Oversight Committee released a report this week saying the pharmaceutical industry relies on drug-pricing practices which are “unsustainable, unjustified and unfair”. This is something well known and widely written about for a very long time. The committee reached its findings after a nearly three-year investigation.
Wednesday’s crypto hearing was titled, “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States”[xxvi]. The hearing included the full committee of 54 members plus crypto executives including Jeremy Allaire, CEO of Circle, Samuel Bankman-Fried, CEO of FTX, Brian Brooks, CEO of Bitfury Group, Charles Cascarilla, CEO of Paxos Trust Company, Denelle Dixon, CEO of Stellar Development Foundation, and Alesia Jeanne Haas, CEO of Coinbase Inc.
The hearing was chaired by Maxine Waters, 83 years old. I read Wikipedia to look for her education or experience in financial services or technology. I could find none. The most prominent information about her was from the watchdog group Citizens for Responsibility and Ethics in Washington which named Waters to its list of corrupt members of Congress in its 2005, 2006, 2009 and 2011 reports. Wikipedia provided a lot of details behind numerous corruption charges. I am sure Ms. Waters has virtues, but it is clear she was appointed to chair the committee based on seniority, not experience or qualifications. She was appointed by Speaker Nancy Pelosi, 82 years old with approval by the #2 and #3 leaders of the House, Steny Hoyer, 83 years old and James Clyburn, 81 years old. Does older mean wiser? My concern about aging Congressional leaders is bipartisan. Republican Senator Chuck Grassley, 88 years old, has announced his plans to run for another six-year term.
The hearing lasted four hours and 50 minutes. I watched it all. Parts of it were painful. If you are interested in watching any of it, you can see it here. After 5-minute opening statements by the Chairwoman and the Ranking Member, each of the seven CEOs gave their 5-minute testimony. Following these, each of the 54 committee members got 5 minutes to ask questions. The CEO testimonies were exceptionally well organized, clear, and understandable. I could not say the same except for a few of the committee members. Each committee member started out with something like “Thank you Madame Chairwoman and thank you Mr. Ranking Member and thank you to the CEOs for coming to testify. Thank you, Madame Chairwoman, for having this important committee hearing.” Multiply these platitudes times 54.
A dozen or so of the committee members, both Republicans and Democrats, were quite impressive. They had obviously done their homework and had a solid grasp on what crypto is all about, how it can benefit America, what regulation is needed, and how to prevent the digital assets industry from moving to other countries which have already created regulatory environments enabling crypto to operate effectively. Their questions were focused and relevant. About half of the remaining 40 or so committee members added little value. The other half demonstrated a pathetic level of understanding. Some asked no questions, just rambled showing how little they knew. A few ridiculed crypto.
The major theme of the questions was about U.S. federal regulatory supervision. The Chairwoman’s committee report said crypto is an unregulated industry. That is a laughable statement. Sam Bankman-Fried, the 29-year-old physics grad form MIT, is the founder and CEO of FTX, a cryptocurrency exchange. His net worth is $23 billion. Sam described how his company receives regulation of the highest standards, including by the U.S. Commodity Futures Trading Commission (CFTC), the SEC, the U.S. Department of Treasury, as well as stringent supervision by other global and state regulators. All the CEOs acknowledged and embraced the need to fill the gaps in regulation. They all strongly suggested it would be best to operate under one, federal, unified regulatory regime. The sharper committee members, of both parties, strongly agreed. The issues are clearly not partisan. It is a matter of understanding.
Another area of focus from committee members was the transfer of money using blockchain technology. Denelle Dixon, CEO of Stellar Development Foundation, explained how the Stellar crypto platform has pioneered using a more advanced approach for millions of people in the U.S. who send money to family members in other countries. A person in the U.S. can get a digital wallet from Stellar and transfer money from a bank account into it. Alternatively, they can take cash to a MoneyGram location and have them put the money into a digital wallet. The money is converted to USD Stablecoins. These are crypto coins tied to the U.S. dollar. The Stablecoins are transferred instantly across the blockchain to the family member in another country, such as Mexico. The recipient can take their mobile phone to a MoneyGram location in Mexico which can then convert the Stablecoins to pesos. The process is far superior to the current cross-border payment system, which is slow, costly, and fragmented, a problem acknowledged not just by blockchain networks but across the international spectrum from the G20 to the World Bank. Ms. Dixon said 800 million people, about one in nine globally are supported by funds sent home by migrant workers.
Many other examples of how crypto is helping underserved and unbanked individuals were described. The CEOs explained how moving money today uses a series of processes taking days and often carrying large fees. They explained how blockchain technology and crypto enables moving money at the speed of the Internet. Some committee members defended the status quo. Maybe they don’t know 511 banks failed between 2009 and 2020. Maybe they don’t know there were 89,476 bank fraud incidents in 2020 up 52.4% from 2019.
Blockchain technology has the potential to not only be more secure but to be completely transparent. There are a few gaps in regulation which need to be addressed. It is clear leadership on the issue is not going to come from the top. I hope the handful of enlightened bipartisan committee members can win over the benighted members and put a fire under the committee to get it to move faster.
My Reflections – 2022
Reflecting on my learning and experiences with cryptocurrencies since 2013, I remain bullish. I believe all currencies in the world will eventually be digital. Along the journey, I see many startups creating innovative and useful applications based on cryptocurrencies. I agree with Cathie Wood, an American investor and the founder, CEO and CIO of Ark Invest, an investment management firm. She said about Bitcoin, “This is the most secure blockchain technology out there. What’s going on right now would have been [Nobel Prize winning economist] Robert Mundell’s dream: to introduce a global monetary system not under anyone’s control.”[xxvii] In September 2021, Wood predicted the value of Bitcoin would rise to $500,000 in five years.[xxviii] Many people, including me, hope she is right.
Is the NFT Revolution a Bubble?
Foreword – July 2022
Most of the articles in Reflection Attitude were written between one and thirty years ago. The following article was written just before the book was published. The world of crypto, DAOs, DeFi, FinTech, NFTs, and metaverse is changing rapidly. I have commented on each of these in this chapter but, because of the explosion of activity with NFTs, I felt compelled to write something new. NFT (non-fungible token) technology is complicated, but I hope this article will break it down into something which makes sense.
Written: July 2022
NFTs are digital representations of assets including art, music, and many other things. The National Basketball Association setup a platform called NBA Top Shot to sell digital art. The platform sold a clip of Lebron James’ formidable dunk for $ 208,000.[xxix] Musician Lindsay Lohan sold a photo NFT of herself for $50,000 and donated the proceeds to charity.[xxx] The most amazing NFT sale was from Michael Joseph Winkelmann, known professionally as Beeple, an American digital artist, graphic designer, and animator. Beeple gave a boost to the crypto art movement by selling an NFT of his work titled “The First 5000 Days” for $69.3 million, the highest price ever achieved by a digital artist.[xxxi] I think it is reasonable to say something significant is going on here. I will start by explaining what an NFT is.
NFT stands for non-fungible token. First, an NFT is digital, nothing physical. Fungible is another word for interchangeable. If I give you a $5 bill, it is worth $5. You can give it to someone else, save it, or spend it. It is still $5. Non-fungible means something is not interchangeable. If I give you a piece of art I paid $100 for, it may be worth more or less than $100 if you sell it. A token is a representation of something. Casino chips are cheap pieces of plastic which serve as tokens. The different colored chips have different values as assigned by the casino.
NFTs are unique. Each one includes information about it such as date created, person who created it, how much you paid for it, etc. The NFT is stored on a blockchain. A blockchain is a database which resides on many computers, for some blockchains it is millions of computers, all connected by the Internet. Each NFT is encrypted (scrambled) and given a unique ID. Once a majority of the computers which have the distributed database agree the NFT was properly created according to technology standards, the NFT is dropped (stored) on the blockchain. Once it is on the blockchain, it is there forever. The NFT is immutable, a fancy word which means it cannot be altered.
When an artist creates a digital piece of art and wants to convert it to an NFT, they can do so at one of the digital marketplaces on the Internet such as OpenSea, Nifty Gateway, Coinbase, or crypto.com. The artist can then promote their new work of art on social media and the marketplace. They can choose to sell it for a fixed price or initiate an auction to sell to the highest bidder. No longer are galleries, auctioneers, and investors in control of the art market. Digital artists can go directly to consumers.
A person could look at an NFT on their phone or computer and take a screen shot of it. Now they have the piece of art for free, but it is not the real thing. A person could also visit the Vatican Library or the Metropolitan Museum of Art online and take screenshots. The differentiator is the NFT is authenticated, meaning the artist is real and the edition of the piece of art is real. The NFT has the date created and the date placed on the blockchain.
The NFT revolution saw global sales surge to $17.6 billion in 2021, a 21,000% growth over 2020.[xxxii] Venture capitalists continue to pour money into NFT and related startups. The bubble may break, but I do not think so.
The reason I am bullish about NFTs is the potential to modernize the way many types of assets are managed. In addition to art, NFTs could represent games, music, avatars in the metaverse, mortgages, home and auto titles, birth certificates, marriage certificates, death certificates, and even votes. All these things could be NFTs immutably recorded on a blockchain. The way many assets are created and tracked is by paper. Paper trails often get lost and being able to prove certain things happened often requires paying lawyers. Finding a record of missing mortgages can take more than a year.
NFTs and all aspects of crypto have encountered startup problems with technology and legal matters including fraud and insider trading. Regulation for NFTs (and all of crypto) is sorely needed but is slow in coming. Regulations are not being resisted by tech companies. In fact, they are begging for them. In the meantime, there will be business failures and ripped off consumers. One must be careful but not lose sight of the big picture and the long term. A digital world is ahead of us.
[i] “Electronic Fund Transfer Act,” federalreserve.gov (1978), https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf
[ii] John R Patrick, “Inside Bitcoins,” CircleID (2014), https://circleid.com/posts/20140110_inside_bitcoins
[iii] “Unsolicited Electronic Mail Legislation,” C-Span (2003), https://www.c-span.org/video/?176445-1/unsolicited-electronic-mail-legislation
[iv] “Coinmarketcap,” coinmarketcap.com (2022), https://coinmarketcap.com/
[v] Emily Graffeo, “Jpmorgan’s Jamie Dimon Shares His Personal Belief ‘That Bitcoin Is Worthless’,” Fortune (2021), https://fortune.com/2021/10/11/dimon-bitcoin-comment-worthless-jpmorgan-chase-crypto-regulation/
[vi] Chris Kolmar, “How Many Businesses Accept Bitcoin?,” Zippia (2021), https://www.zippia.com/advice/how-many-businesses-accept-bitcoin/
[vii] “Lightning Network,” Lightning Network (2022), https://lightning.network/
[viii] “Deposit Insurance,” Federal Deposit Insurance Corporation (2021), https://www.fdic.gov/resources/deposit-insurance/
[ix] “Andreas Antonopoulos Verifies Coinbase Security,” Reddit.com (2014), https://www.reddit.com/r/Bitcoin/comments/1ywvt8/andreas_antonopoulos_verifies_coinbase_security/
[x] “Buying Bitcoins (the Newbie Version),” Bitcoin wiki (2018), https://en.bitcoin.it/wiki/Buying_Bitcoins_(the_newbie_version)
[xi] “List of FDIC-Insured Cryptocurrency Exchanges,” Cryptosec (2022), https://cryptosec.info/fdic/
[xii] Jason Brett, “In 2021, Congress Has Introduced 35 Bills Focused on U.S. Crypto Policy,” Forbes (2021), https://www.forbes.com/sites/jasonbrett/2021/12/27/in-2021-congress-has-introduced-35-bills-focused-on-us-crypto-policy/?sh=762c1cbdc9e8
[xiii] “Bitcoin: It’s Probably Rat Poison Squared,” Quote Investigator (2021), https://quoteinvestigator.com/2021/02/11/rat-poison/
[xiv] Tom Lamont, “Napster: The Day the Music Was Set Free,” The Guardian (2013), https://www.theguardian.com/music/2013/feb/24/napster-music-free-file-sharing
[xv] “Mystery Swirls around Unmasking of Bitcoin Inventor,” New York Times (2014), https://bits.blogs.nytimes.com/2014/03/07/daily-report-bitcoin-inventor-is-said-to-be-identified/
[xvi] Rob Curran, “Why Crypto Fans Claim Bitcoin Is the New Gold,” Money (2021), https://money.com/bitcoin-vs-gold-inflation-protection/
[xvii] Lamont, “Napster: The Day the Music Was Set Free”.
[xviii] “Building Enterprise Blockchain Ecosystems through Global, Open Source Collaboration,” Hyperledger Foundation (2022), https://www.hyperledger.org/
[xix] “Maersk and IBM Introduce Tradelens Blockchain Shipping Solution,” IBM Newsroom (2018), https://newsroom.ibm.com/2018-08-09-Maersk-and-IBM-Introduce-TradeLens-Blockchain-Shipping-Solution
[xx] John R. Patrick, Election Attitude : How Internet Voting Leads to a Stronger Democracy (Ridgefield, Connecticut : Attitude LLC, 2016).
[xxi] Tanzeel Akhtar, “SEC Rejects Fidelity’s Wise Origin Bitcoin ETF Proposal,” Coindesk (2022), https://www.coindesk.com/business/2022/01/27/sec-rejects-fidelitys-wise-origin-bitcoin-etf-proposal/
[xxii] Zach Winn, “Unlocking the Potential of Blockchain Technology,” MIT News (2021), https://news.mit.edu/2021/unlocking-potential-blockchain-0616
[xxiii] “First DeFi, Then NFTs, Now DAOs, the Next Big Chapter of Crypto Is Already Here,” nansen (2021), https://www.nansen.ai/research/first-defi-then-nfts-now-daos-the-next-big-chapter-of-crypto-is-already-here
[xxiv] “What Is DeFi?,” coinbase (2022), https://www.coinbase.com/learn/crypto-basics/plp-what-is-defi?utm_source=google_search_nb&utm_medium=cpc&utm_campaign=15227540354&utm_content=135277398851&utm_term=what%20is%20defi&utm_creative=560460582848&utm_device=c&utm_placement=&utm_network=g&utm_location=9011509&gclid=Cj0KCQiArt6PBhCoARIsAMF5waikm2ilSga2DBSXAq8wURigFP1OV6env-m5bFWlwfPRVJKocaSdqC4aAkGcEALw_wcB
[xxv] Mitchell Clark, “NFTs, Explained,” The Verge (2021), https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
[xxvi] U.S. House Committee on Financial Services, “Digital Assets and the Future of Finance: Understanding the Challenges And…(Eventid=114305),” YouTube (2021), https://www.youtube.com/watch?v=4oOTvtupND8
[xxvii] Kerry A. Dolan, “Investor Cathie Wood on Bitcoin, Why She Sold Stocks in China, and What Her Firm Is Buying Now,” Forbes (2021), https://www.forbes.com/sites/kerryadolan/2021/12/03/investor-cathie-wood-on-bitcoin-why-she-sold-stocks-in-china-and-what-her-firm-is-buying-now/?sh=1e99ad265820
[xxix] Crypto Dukedom, The NFT Revolution – Crypto Art Edition (Amazon, 2021).
[xxxii] Ibukun Ogundare, “First Half 2022 Sees Highest NFT and Gamefi M&a Deals since 2013,” Coinspeaker (2022), https://www.coinspeaker.com/first-half-2022-nft-gamefi-ma/
Robot Attitude: How Robots and Artificial Intelligence Will Make Our Lives Better (2019)
Robot Attitude Sample Chapter
AI in Healthcare
AI will have a major impact in all industries and all aspects of our lives. However, one of the industries most profoundly impacted may turn out to be healthcare. Delivery of safe, high quality, affordable healthcare is a large challenge, but AI can provide assistance in many areas. I will discuss a number of examples in this section.
Connor Landsgraf, CEO of San Francisco startup Eko Devices, believes it is time to upgrade the stethoscope, which he pointed out has not changed since the 1880s.[i] He claims many physicians do not get adequate training on how to interpret the sounds they hear with a classic stethoscope. He says the result is “rampant misdiagnosis”.[ii]
Eko has developed CORE, an FDA cleared, complete electronic stethoscope with analog and digital capabilities. It can amplify heart and lung sounds and reduce ambient noise. CORE includes a computerized insert for stethoscopes which provides data from the stethoscope to a smartphone app. The app can record, visualize, and save the data with robust data management. The app offers live streaming and HIPAA-compliant sharing to make it easy to share your condition with your health team. In addition, you can sync with your electronic health record (EHR) to help provide a more comprehensive picture of overall well-being.
Adding AI to the digital stethoscope data could have a profound impact. Every time a practitioner listens to a patient’s chest or stomach, the sound is digitized and sent to the cloud. Over time there will be millions of data sets. The data can be enhanced by adding the confirmed patient diagnosis. The reason diagnoses are not always accurate is because the listener may not have enough experience to recognize the diagnosis. With the application of neural networks and machine learning, both subsets of AI, the patient data can be compared to the millions of datasets and produce an accurate diagnosis. Physicians who make data-driven decisions will achieve improved patient outcomes.
Researchers at Johns Hopkins University have taken the digital stethoscope to a higher level as they focused on pneumonia. In 2015, about 5.9 million children died before the age of five worldwide. Pneumonia accounted for 15.5 percent of those deaths around the world and was the top cause of death in sub-Saharan Africa.[iii] Early detection is key to curing the disease, but diagnoses based on a hunch leads to costly treatments which may not be necessary and doing a full work up of tests is unaffordable.
The Johns Hopkins team concluded the limitations of stethoscopes is preventing affordable and effective diagnoses. The limitations have been lived with for more than 100 years. The first limitation is noise. A quiet environment is key. The sounds of pneumonia coming from the lungs can be subtle and background noise can make it difficult to differentiate the disease from the background noise. Unfortunately, there is a big difference between a quiet doctor’s office in the United States and an African village where there may be a lot of noise from children and animals. A second limitation is training. It takes years of experience for a clinician to know exactly where to position the stethoscope on the chest and being able to interpret the sounds, which is more of an art than a science. Experts don’t always agree on a diagnosis and resort to X-rays which may not be available in remote locations.[iv]
An Eye for AI
Earlier, I described how machine learning can be applied to weather conditions resulting in an AI which can forecast the weather. Similarly, machine learning can be applied to medical data and enable an AI to learn how to diagnose a medical condition. AI systems are learning to diagnose disease across a wide range of medical conditions, and gradually they are becoming as accurate as human doctors.
A good example of AI diagnosing is occurring in London. A collaboration is underway there between researchers from Google’s DeepMind subsidiary, University College London, and Moorfields Private, the private patient division of Moorfields Eye Hospital NHS Foundation Trust.[v] The researchers are using deep learning, a form of machine learning, to create an AI which can identify more than 50 common eye diseases based on thousands of 3D scans. With a single scan of a patient’s eye, the AI can recommend a specific treatment. While the research is still in the early stage, not ready for clinical use, the results to date are very promising. The Verge, an American technology news and media network, quoted Dr. Pearse Keane, a Consultant Ophthalmologist at Moorfields who was involved in the research, saying,
The number of eye scans we’re performing is growing at a pace much faster than human experts are able to interpret them. There is a risk that this may cause delays in the diagnosis and treatment of sight-threatening diseases. If we can diagnose and treat eye conditions early, it gives us the best chance of saving people’s sight. With further research it could lead to greater consistency and quality of care for patients with eye problems in the future.[vi]
The software the researchers developed uses algorithms which can identify common patterns in data from 3D scans of patients’ eyes. The scans are made using a technology called optical coherence tomography (OCT). The researchers submitted data from nearly 15,000 OCT scans from 7,500 patients. In addition to the data from the scans, the researchers fed the software diagnoses made by Moorfields doctors. Based on what the AI software learned from the data, it is able to develop a diagnosis without a new scan. The Verge reported the AI’s diagnoses were 94% accurate when compared to the diagnoses made by a panel of eight doctors.[vii]
Assuming the AI achieves equal or better accuracy of diagnoses and the software rolls out to medical providers, there may remain issues of concern about the technology. If an AI makes a diagnosis with no human involvement, who is responsible if the diagnosis turns out to be wrong? Doctors are not comfortable with “black box” diagnoses where the basis of a diagnosis is not known. The researchers at DeepMind and its collaborators are aware of these issues, and they have developed software mitigations. For example, rather than the AI just providing one diagnosis, it can provide several, including information about how the diagnosis was reached and what level of confidence it included. Another ameliorating consideration is the AI can be used for triage. Rather than acting on an AI diagnosis, a provider may look at the diagnoses which are highlighted as the most urgent and consider treatment of those patients with top priority.
Another issue is the ownership of the OCT scan data. Google might argue it owns the data since it expended the effort to store and analyze it. It therefore may argue it has the right to sell the data to other hospitals. Moorfields might argue it owns the data because it came from its patients. Issues such as this are not uncommon in medical research. They are usually resolved with contractual agreements giving the technology company rights to the data for a specific amount of time and then provide royalties to the medical provider.
Regardless of the various issues, it is clear AI may be of great benefit to patients. The Verge reported,
Some 285 million people around the world are estimated to live with a form of sight loss, and eye disease is the biggest cause of this condition. OCT scans are a great tool for spotting eye disease (5.35 million were performed in the United States alone in 2014), but interpreting this data takes time, creating a bottleneck in the diagnostic process. If algorithms can help triage patients by directing doctors to those most in need of care, it could be incredibly beneficial.[viii]
If you want to dig deeper, you can find an excellent research paper in Nature Medicine. The link is in the AI Articles section at robotattitude.info.
Falling in the Hospital
Between 700,000 and 1 million patients fall in hospitals each year, according to the Agency for Healthcare Research and Quality.[ix] Most patients who fall are not seriously injured, but the average cost of one-third of falls resulting in a serious fall-related injury is more than $13,000, and the patient’s length of stay increases by an average of 6.27 days.[x] In 2015, medical costs for falls in the United States totaled more than $50 billion.[xi]
Qventus, Inc., a Mountain View, CA, technology startup is determined to reduce the number of falls in the hospital. The traditional method of prevention is to respond to a call button alarm. If you have spent any time in a hospital, you know the alarms are nearly continuous. It is impossible for the already busy nurses and aides to respond quickly to every alarm. Qventus is applying AI and machine learning to the problem.
The data used to build the software model includes call lights, bed alarms, electronic medical records, patient age, patient medication and when last administered, and the vitals last recorded by a nurse or aide. By applying machine learning technology to this assortment of data, the Qventus software can identify patterns. With enough historical data, the company believes it can accurately identify patients at high risk of a fall. The software would send a special alarm directly to an electronic badge worn by the appropriate nurse for quick response.
At one California hospital, use of the Qventus AI software has resulted in a 29% reduction in falls since 2014.[xii] Some large investors are believers in the Qventus vision, and have invested over $40 million in the company. The cash infusion will enable the company to expand significantly beyond the few hospitals it now has as customers.
Enhancing Emergency Calls
In the United States, people dial 911 to report an emergency. In most of Europe people dial 112. In the Falkland Islands, 999, and in French Polynesia it is 15. An estimated 240 million calls are made to 911 in the United States each year.[xiii] Most of the calls are from wireless devices.
The emergency call interaction relies on a question and answer-based approach, diagnostics as old as medical practice itself. Many problems are inherent in this method. The smallest misunderstanding can lead to fatal mistakes. Corti, a Danish AI software startup company, envisions a future where every medical professional will have an artificial intelligence-based expert agent augmenting them as they diagnose patients. The software eliminates fatal errors and reduces guess work by enhancing the skills of the human agent. Corti analyses everything a caller says and compares it to a huge database of millions of prior calls containing voice data, tone of the voice, background noise, acoustic data, language data, caller dialects, questions asked, and environmental features. All the data are sent through layers of deep neural networks in real time as the conversation proceeds. The dispatcher on the call receives clear advice from Corti, enabling him or her to make faster decisions and initiate better treatment plans.
Bloomberg Businessweek reported, “Danish studies have found that a patient’s 30-day survival rate triples when a dispatcher recognizes cardiac arrest during an emergency call.”[xiv] A study by the University of Copenhagen, the Danish National Institute of Public Health, and the Copenhagen EMS showed the software correctly detected cardiac arrests in 93 percent of cases, vs. 73 percent for human dispatchers. The Corti software made its determination in an average of 48 seconds, more than a half-minute faster than the humans did.[xv] Businessweek further reported, “With a rapid diagnosis, dispatchers can quickly give the caller instructions on how to perform CPR or where to locate a defibrillator to shock the heart back into action.”[xvi]
Predicting Fatal Conditions
Hospitals collect a huge amount of data during the stay of a patient. Unfortunately, it is not always used as effectively as it could be. I saw this vividly when I was doing research for my doctorate. The focus of my research and dissertation was to measure the effect of home telemonitoring for congestive heart failure patients.[xvii] Identifying the optimum technology and techniques for telemonitoring which can reliably predict impending heart failure and provide interventions to reduce readmissions has been challenging. Heart failure is the leading cause of mortality in the world’s population and my study highlighted the significance of the disease among the population served by a community teaching hospital.[xviii] I learned a lot about the treatment of individual patients, but I also learned the larger opportunity is to gain an understanding of the epidemiologic factors affecting the entire community population. By analyzing the large amount of data the hospital collected in electronic health records (EHRs), a broader strategy could be developed. For example, by selecting patients with similar conditions and demographics, clinics could be designed to teach elderly consumers how to recognize congestive heart failure symptoms and what to do about them. The hospital could also gain insight which could provide a basis to develop new standards of care, lead to improved patient safety with a higher quality of care, and improved quality of life for patients and their families.
With the emergence of AI, the potential to use large amounts of data to predict health outcomes will rise to a much higher level. Microsoft, working with scientists from the University of Washington, is studying the potential for AI to detect potentially fatal conditions such as heart, lung, and kidney failure early enough to intervene. The research is based on 10 years of data from 80,000 patients.[xix]
Suchi Saria, a computer science, math, and health policy professor at Johns Hopkins University and several other researchers are studying whether they could create an AI machine learning model to predict the onset of sepsis, the body’s response to an infection.[xx] It occurs when an infection you already have in your skin, lungs, urinary tract or somewhere else triggers a chain reaction throughout your body. The response can be extreme and life-threatening. Without very fast treatment, sepsis can cause tissue damage, organ failure, and death.[xxi] The researchers developed a model containing 54 readily available medical measurements and determined which were most predictive of sepsis using software to track what measurements were present at the onset of sepsis. Using the model as the foundation, the researchers created a scoring system to identify patients at high risk. After further refinements, the researchers gave the software to 300 doctors at a Johns Hopkins hospital for testing. Bloomberg Businessweek reported, “In its first year, nurses and doctors caught cases much earlier and calls to the Rapid Response Team dropped 75 percent.”[xxii]
AI algorithms are being applied to vast amounts of patient data hoping to predict medical emergencies and avoid fatalities. Machine learning is not perfect, and it begs the question of exactly how it made a prediction. AI research in healthcare is gaining momentum and vast amounts of data are being collected. In May 2018, researchers from Google Brain and Stanford University published “Scalable and Accurate Deep Learning with Electronic Health Records”.[xxiii] Using an AI system built with almost 50 billion pieces of data, the research model was able to make a prediction of how likely a hospital patient is to die soon.
The Right Medications
A group of healthcare CEOs expressed their views on AI at The Wall Street Journal Health Forum in Washington, D.C. on April 30, 2019. Most of the comments were hopeful, but cautious about AI. However, the Boston, MA based Dana-Farber Cancer Institute CEO Laurie Glimcher sounded optimistic notes. The Dana-Farber Institute offers to sequence the DNA of all its patients. It combines the resulting data with patients’ electronic medical records and treatment outcomes. Dr. Glimcher said that researchers at Dana-Farber are exploring the use of machine learning to better analyze tumor samples from biopsies combined with the data from the DNA and EMRs.
Within a few years, sophisticated machine learning algorithms could help doctors predict drugs likely to help a patient based on the analysis of “big data” consisting of specific genetic profiles and medical histories. Dr. Glimcher said, “Machine learning and AI are going to be very important. We want to put our patients on the right drug at the beginning. Because they don’t have time to wait. Cancer doesn’t wait. Nor should we.”[xxiv]
One of the most frequently discussed questions in healthcare today is about the impact AI will have on radiology. Robert Schier, MD, a radiologist in Orinda, CA with Radnet, a leader in outpatient imaging, wrote an article in the Journal of the American College of Radiology titled “Artificial Intelligence and the Practice of Radiology: An Alternative View.” He said,
What we will eventually see in radiology are diagnostic image interpretation systems that have read every textbook and journal article; know all of a patient’s history, records, and laboratory reports; and have memorized millions of imaging studies. It may help to imagine these systems not as a collection of circuits in a console, but as an army of fellowship-trained radiologists with photographic memories, IQs of 500, and no need for food or sleep.[xxv]
Schier argues AI will eventually allow computers to surpass human intelligence and writes that computers will eventually replace humans the same as steam and gasoline engines replaced donkeys, horses, and oxen. Schier is not as optimistic about preserving radiology jobs as some of his colleagues in the industry. He said further,
The advent of computers that can accurately interpret diagnostic imaging studies will upend the practice of radiology. The two currently unanswered questions are just how much upending there will be and how long it will take to happen. There are vastly differing opinions, from the apocalyptic claim that AI will make all radiologists extinct to the delusional assertion that computers will always merely assist—and never replace—radiologists. Both extremes are mistaken, but the truth is in the direction of the first.[xxvi]
Evidence is mounting to support Schier’s point of view. Research scientists at Stanford University have developed a new AI algorithm called CheXNeXt which can reliably screen a chest X-ray in seconds for more than a dozen types of disease. The results are equal to or more accurate than the readings of radiologists.[xxvii]
CheXNeXt is trained to predict diseases based on X-ray images and highlight parts of an image which is most indicative of each predicted disease. The algorithm is trained based on a database from the National Institutes of Health (NIH) containing more than 110,000 frontal-view chest X-rays of more than 30,000 patients. The diagnosis given by a radiologist for each X-ray image was tagged by an automated procedure to extract the diagnosis from the corresponding radiology report.
To make a comparison between humans and AI, the researchers selected 420 X-rays which contained 14 different diseases. Three radiologists reviewed the X-rays one at a time. Their conclusions were designated as a ground truth. This ground truth was used to test how well the algorithm had learned the telltale signs of the 14 diseases.
Matthew Lungren, MD, MPH, Assistant Professor of Radiology at Stanford, said,
We treated the algorithm like it was a student; the NIH data set was the material we used to teach the student, and the 420 images were like the final exam. To further evaluate the performance of the algorithm compared with human experts, the scientists asked an additional nine radiologists from multiple institutions to also take the same “final exam.”[xxviii]
Reading the 420 X-rays took the radiologists about three hours. The algorithm scanned the X-rays and diagnosed all pathologies in about 90 seconds. For 10 diseases, the algorithm performed just as well as radiologists; for three, it underperformed compared with radiologists; and for one, the algorithm outdid the experts.[xxix] Lungren summed up the research as follows,
We should be building AI algorithms to be as good or better than the gold standard of human, expert physicians. Now, I’m not expecting AI to replace radiologists any time soon, but we are not truly pushing the limits of this technology if we’re just aiming to enhance existing radiologist workflows. Instead, we need to be thinking about how far we can push these AI models to improve the lives of patients anywhere in the world.[xxx]
Lungren’s last point is important. In the United States we have a significant resource of radiologists in our healthcare system. In other parts of the world such is not the case. As for his statement about not expecting AI to replace radiologists any time soon, it is debatable. Schier said, “If computers can do something now, they will only get better at it. If computers cannot do something now, they will probably learn how to.” His editorial commented on two different opinions about the future of AI and radiology. One is the “apocalyptic” assertion AI will replace radiologists. The other, which he calls the “delusional assertion”, is computers will always assist radiologists, but never replace them. His bottom line in the editorial is,
Today there are 34,000 radiologists in the United States. Unless radiologists do things other than interpret imaging studies, there will be need for far fewer of them. This is a complex situation filled with unknowns, and events are moving fast. We need to figure how to deal with this coming change. And we need to do it in a hurry.[xxxi]
There are many Medical AI research projects underway, but widespread adoption in hospitals and medical centers has not grown substantially. The barrier is not the technology. Shinjini Kundu, a medical researcher and physician at the University of Pittsburgh School of Medicine, said “The barrier is the trust aspect. You may have a technology that works, but how do you get humans to use it and rely on it?”[xxxii] The way AI is being applied in medicine is to absorb a very large amount of data, analyze it, find relationships, and make a diagnosis based on the learning. In effect, a lot of data goes into a “black box” where algorithms are applied, and out comes the diagnosis. This is quite different from how physicians diagnose. If they can’t see inside the black box, they will not trust the accuracy of the diagnosis.
Although major cancer centers acknowledge AI solutions are helping with diagnoses, they have made some criticisms about the accuracy. The Wall Street Journal, in “IBM Has a Watson Dilemma”, said, “In many cases, the tools didn’t add much value. In some cases, Watson wasn’t accurate.[xxxiii] Dr. John E. Kelly III, IBM Senior Vice President, Cognitive Solutions and IBM Research, responded in a blog post saying, “I will close by reiterating we are absolutely committed to be a positive force in applying AI and other technologies to healthcare. The opportunity, including the potential impact on patients around the world, is too important. Our work is only getting started.”[xxxiv] The blog post cited a number of major cancer centers who were very positive about what the Watson AI technology had accomplished and bullish about the future.[xxxv]
We are at the early stages of applying AI to cancer and other diagnoses. The more diagnoses made, the better the accuracy gets because of the cumulative learning the AI achieves. The other encouraging news is researchers are working on techniques to open up the black boxes and share the methodology with physicians. This will likely result in important feedback from the physicians on how the algorithms can be improved. I believe ultimately the diagnosis by Medical AI will surpass the accuracy of human physicians. Now, let’s discuss AI in banking.
[i] “Eko: Stethoscope Intelligence,” Eko Devices (2014), http://ekodevices.com
[iii] Mounya Elhilali and James E. West, “A Smart Stethoscope Puts AI in Medics’ Ears,” IEEE Spectrum (2019), https://spectrum.ieee.org/biomedical/devices/a-smart-stethoscope-puts-ai-in-medics-ears
[v] James Vincent, “Deepmind’s AI Can Detect over 50 Eye Diseases as Accurately as a Doctor,” The Verge (2018), https://www.theverge.com/2018/8/13/17670156/deepmind-ai-eye-disease-doctor-moorfields
[ix] “Fall Prevention Toolkit Facilitates Customized Risk Assessment and Prevention Strategies, Reducing Inpatient Falls,” AHRQ Agency for Healthcare Research and Quality (2018), https://innovations.ahrq.gov/profiles/fall-prevention-toolkit-facilitates-customized-risk-assessment-and-prevention-strategies?id=3094
[x] Lola Butcher, “The No-Fall Zone,” Hospitals & Health Networks (2013), https://www.hhnmag.com/articles/6404-Hospitals-work-to-prevent-patient-falls
[xi] Emma Ockerman, “AI Hospital Software Knows Who’s Going to Fall,” Bloomberg Businessweek (2018), https://www.bloomberg.com/news/articles/2018-06-21/ai-programs-fight-medical-alarm-fatigue-with-patient-fall-alerts
[xiii] “9-1-1 Statistics,” NENA The 9-1-1 Association (2018), https://www.nena.org/page/911Statistics?
[xiv] Jeremy Kahn, “The AI That Spots a Stopped Heart,” Bloomberg Businessweek (2018), https://www.bloomberg.com/news/articles/2018-06-20/the-ai-that-spots-heart-attacks
[xvii] John R. Patrick, “Cardiac Telemonitoring for the Reduction of Hospital Readmissions for Congestive Heart Failure Patients” (University of Phoenix, 2013).
[xix] Dina Bass, “Training Algorithms to Prevent Death Spirals in Hospitals,” Bloomberg Businessweek (2018), https://www.bloomberg.com/news/articles/2018-06-22/training-algorithms-to-prevent-death-spirals-in-hospitals
[xxi] “What Is Sepsis?,” CDC Centers for Disease Control and Prevention (2018), https://www.cdc.gov/sepsis/basic/index.html
[xxii] Bass, “Training Algorithms to Prevent Death Spirals in Hospitals”.
[xxiii] Eyal Oren Alvin Rajkomar, […], Jeffrey Dean “Scalable and Accurate Deep Learning with Electronic Health Records,” Nature NPJ Digital Medicine (2018), https://www.nature.com/articles/s41746-018-0029-1
[xxiv] Joseph Walker, Peter Loftus, and Brianna Abbott, “Ceos in Health Care Discuss Challenges of Working with Artificial Intelligence,” The Wall Street Journal (2019), https://www.wsj.com/articles/ceos-in-health-care-discuss-challenges-of-working-with-artificial-intelligence-11556724253
[xxv] Matt O’Conner, “Jacr Editorial: A Bleak View on the Future of AI and Radiology,” HealthImaging (2018), https://www.healthimaging.com/topics/artificial-intelligence/jacr-editorial-bleak-view-future-ai-and-radiology
[xxvii] Hanae Armitage, “Artificial Intelligence Rivals Radiologists in Screening X-Rays for Certain Diseases,” Stanford Medicine (2018), https://med.stanford.edu/news/all-news/2018/11/ai-outperformed-radiologists-in-screening-x-rays-for-certain-diseases.html
[xxxi] O’Conner, “Jacr Editorial: A Bleak View on the Future of AI and Radiology”.
[xxxii] Eliza Strickland, “Making Medical AI Trustworthy and Transparent,” IEEE Spectrum (2018), https://spectrum.ieee.org/biomedical/devices/making-medical-ai-trustworthy-and-transparent
[xxxiii] Daniela Hernandez and Ted Greenwald, “IBM Has a Watson Dilemma,” Wall Street Journal (2018), https://www.wsj.com/articles/ibm-bet-billions-that-watson-could-improve-cancer-treatment-it-hasnt-worked-1533961147
[xxxiv] Mike Miliard, “IBM Responds to Recent Watson Media Coverage,” ibid., https://www.healthcareitnews.com/news/ibm-responds-recent-watson-media-coverage
[xxxv] Dr. John E Kelly III, “Watson Health: Setting the Record Straight,” Watson Health Perspectives (2018), https://www.ibm.com/blogs/watson-health/setting-the-record-straight/
Home Attitude: Everything You Need To Know To Make Your Home Smart (2017)
Home Attitude Sample Chapter
Parrot, is a Paris based company which creates, develops, and markets high tech wireless products for the retail and professional markets. The company focuses on three market segments: Civil Drones, Automotive communication and infotainment systems, and Connected Objects. The latter is another name for the Internet of Things (IoT). The Connected Objects Parrot has developed are related to gardening. The Parrot smart pot will water your plant for up to one month with no human intervention. The automated pot can control watering from your smartphone. For those with home attitude, you can connect the pot to your home automation hub and provide triggers to not water when it is raining, and send alerts to warn you if there should be threatening high winds or storms which could damage your plant.
The Parrot Pot is approximately 8 by 12 inches, and it is super smart. The pot includes sensors to measure soil moisture, fertilizer level, sunlight, and air temperature. The company describes the irrigation system of the smart pot as a “Perfect Drop”. Your plant only gets watered when it needs it, and it automatically adapts to the plant’s natural life-cycle and adjusts water consumption accordingly. The result gives your plant just the right amount of water at the right time. Parrot says, “Enjoy lush, thriving plants!”
Some readers may find the smart flower pot an over-the-top unnecessary extravagance, or even a useless gadget. Others may find it as innovative, useful, and even a necessity. Some prefer to visit the terrace or deck with a watering can and personally attend to their plants. Others may be frequent travelers who welcome a way to protect and nurture their plants while they are out of town. Both views are fine. A similar dichotomy of views exists for home automation. Some say, why bother? Others say they cannot live without it. I do not argue a home attitude mandates every application of home automation is needed. Some things, like security and heating are essential to have under some form of control. Many of the enhancements I have described can be considered as unessential or even frivolous, but I categorize them as convenience. In the balance of this chapter, I will highlight what I consider to be the essentials, and acknowledge those ideas which are clearly related to convenience.
The most important essential from my experience is water leak detection. Home automation systems provide a lot of flexibility to protect your home and minimize damages. Water leak sensors are inexpensive and can be placed in multiple locations where leaks are most likely to develop. Connecting the sensors to your home automation hubs can trigger alerts to as many people as you want. The trigger can also close the water main valve immediately to stop water flow. Water leaks are not life threatening, but can cause a disaster which is very costly, time consuming, and inconvenient. A modest investment in leak sensors is a small price to pay compared to hiring mold remediation services.
A second essential is applying home attitude for you and your home’s security. Arming your security system protects doors and windows, but the doors do not have to be locked to be protected. With home automation, you can keep your doors locked so no one can walk in when the security is not armed. You could decide to have digital door locks go to the locked position every hour on the hour, at sunset, during lunch hour or dinner, or based on other triggers. I have my hub set to lock the doors at sunset. If you should forget to arm your security system, you at least would want your doors to be locked.
The typical way of arming a security system is to key in a four-digit code and press an Arm button. This works well if you remember to do it. Adding home attitude can help you be sure your system gets armed. You can setup a schedule to have your home automation hub arm your security system every night at a specified time. This may work for some, but the disadvantage of this approach is your evening schedule may have an exception. You may decide to stay up later than normal to read in the family room. The security system gets armed automatically while you are reading. You get up from reading to go to bed, and the motion detector sees you and triggers the burglar alarm. The approach I use and advocate is to have a discrete action, such as pressing the Good Night button on the remote on your night table.
One of my favorite home automation devices is the MiniMote. See figure 12. The MiniMote has four buttons. Button 1 is my Good Morning button and button 2 is my Good Night Button. When I push the Good Night button, the hub turns off the music throughout the home, turns out the lights after a slight delay, and then arms the security system. Because the Good Night action list does other things I want to happen before going to sleep, I am very unlikely to forget to push the button. The by-product is an armed security system.
The other essential I recommend is general enhancement of your security system coverage. The security companies do a good job of recommending what protection to put where, but nobody knows your home like you do. Over time, you get to know it even better, and you may give thought to how you can make your security stronger. It might be surveillance cameras in places you did not originally think of, or more motion detectors in places immune from the existing detectors. Security systems have certain limitations to how many security zones you can have. With a strong home attitude, there are no limitations. You can create virtual zones on outdoor sheds, areas of an attic or basement, or any nook or cranny.
In addition to beefing up your detection, you can strengthen the actions which take place when there is a breach. You can make lights blink, send customized messages to friends, family, or property managers. You can use your home audio system to play the loudest most obnoxious music throughout the home, and issue stark warnings to an intruder.
Making things convenient makes them less difficult or accomplished with less effort. Things which are convenient can be useful, not essential, but easy, or even comforting or fun. If a home automation system which handles the essentials can also provide conveniences, the incremental value can be worth the incremental cost. Perhaps not for everyone, but for an increasing number of consumers.
Using home automation to make things convenient is a very personal choice. One person may want a smart flower pot, another person may want the weather forecast broadcast when they push their Good Morning button. In the following paragraphs, I will provide some examples of how a home attitude can provide some conveniences.
Rooms and Lights
The first area of convenience involves rooms and lights. Affordable LED lights are very efficient, but this does not mean you want them on all the time. You can turn them on or off with traditional switches at each lamp or wall switch, but there are many more convenient home attitude methods to use. The simplest is to have a motion sensor in each room. As you enter the room, the lights turn on, and then turn off after 15 minutes or whatever time you specify. Opening a door can have the same effect. If you come into the mudroom from the garage, the mudroom lights come on. After a set number of minutes, the lights would turn off. It could be five minutes for a closet or mudroom, 10 minutes for a powder room, or an hour for other rooms. The times would be based on your experience and preference.
Further convenience can be obtained by using scenes. For example, walking into the family room could turn on the ceiling lights and table lights. Walking into the kitchen could turn on the ceiling lights and set the under-the-counter lights to 50%. When it is time to sit down to dinner, a tap on an iPhone, a wall keypad, or a MiniMote could dim the ceiling lights, set over-the-table lights at 50%, and turn off lights in adjacent rooms. None of these lighting scenes or actions are essentials, they are conveniences. Over time, you can tailor them to your habits.
Perhaps the ultimate lighting convenience at my home occurs at Christmas time. For decades, my wife has meticulously placed holiday wreathes in all the windows of the home which face the street. Each wreath has a small lightbulb. As it gets dark, she goes to each wreath and screws in the lightbulb, and then, at bedtime, she goes back and unscrews the lightbulb to turn it off (easier than unplugging). When the home became a smart home, the process changed. The home automation hub has a schedule for Christmas lights. Each day, between December 10 and January 2, at 15 minutes before sunset, the receptacles where the wreathes are plugged in automatically turn on. At 11:30 PM, all the wreathe lights turn off.
Under the counter, near the kitchen table where we normally have dinner, is a wine cooler. It is a nice thing to have, but the compressor is noisy. It is not noticeable during the day, but after sitting down to a quiet dinner, it can be annoying. The initial solution was to just turn it off during dinner. The problem became remembering to turn it back on. Applying some home attitude solved the problem. When we start the Dinner action group, the various lights are adjusted, the dinner music channel comes on, and the wine cooler turns off. After one hour, it automatically turns back on.
Room Cleaning Robots
An emerging part of home automation includes the use of home robots. Bilal Athar, CEO at Wifigen LLC and a home automation enthusiast, believes robots will be central to having a smart home. “A smart home should also be a clean home.”, says Athar. ECOVACS ROBOTICS is a company specializing in research and development, design, manufacture, and sales of robotic home appliances. Their mantra is “Live Smart. Enjoy Life.”[i] The company makes robots which add a lot of convenience for cleaning floors and windows. One product, the DEEBOT M81, is designed to clean different kinds of messes in the home.
The M81 vacuum and mop combo can sweep, vacuum, and mop in one pass. The company says the robot can “give your home a thorough and deep clean.” You can choose the cleaning mode to auto mode for general cleaning, edge mode for cleaning specific edges, or spot cleaning when intensive cleaning is required. Everything is controllable from your smartphone. When battery power gets low, the DEEBOT automatically returns to its charging dock. No human intervention is required. You may add some integration with voice assistants like Alexa. A use case could be a child spilled something, and you say “Alexa, ask DEEBOT to clean the kitchen floor”.
Music and Announcements
Music is central to the lifestyle of many people. Convenience can play a major role in making the listening easier and more enjoyable. The same is true for home audio announcements. “Whole home” music systems, such as Sonos, can include a speaker in every room. Each speaker is independent, and can play a different music source and have a different volume setting. Some advanced systems can optimize the sound to the acoustical characteristics of the room itself.
My day starts out with a push of button one on the MiniMote on my night table. The audio begins with a good morning announcement of the day, date, time, current weather conditions, and a short-term weather forecast. Then my favorite music plays. The music source is selected at random from a list of a dozen music streaming channels I enjoy most.
Other conveniences include using triggers to announce when something happens. For example, you can have a short audio announcement throughout the home when a door opens, or a thermostat changed a set point, or a leak was detected. The conveniences you can implement are limited only by your imagination.
The goal for part 1 of Home Attitude was to introduce the concepts behind home automation and home attitude. The specific objectives were to explain what home automation is and what benefits it can offer to homeowners. I hope you are beginning to feel a home attitude and are interested in learning more about home automation and pursuing the benefits.
There are three approaches one can take. First is to outline the specific features and functions you would like to have, and hire a systems integrator expert to develop a custom solution for you including everything you want. A second approach is to subscribe to a home automation service from a communications or security services provider. The third approach is do-it-yourself. From here on, I will refer to do-it-yourself as DIY. Each of the three approaches to deploying a home attitude has pros and cons. I will discuss this in more detail in the last chapter. Before moving on to more details about home automation and how to get started, I will discuss the important subject of home automation security and privacy.
[i] “About Ecovacs,” Ecovacs Robotics (2017), https://www.ecovacs.com/global/about-ecovacs/
Election Attitude – How Internet Voting Leads to a Stronger Democracy (2016)
Election Attitude Sample Chapter
A Better Way to Vote
The American voting system faces major problems. I believe these problems deserve immediate attention. One solution is to spend billions of dollars on updated voting machines and hope manufacturers can make them more reliable and secure. A better alternative is for federal, state, and local election officials, voting technology vendors, and citizens to adopt an election attitude.
Election Attitude for All
An election attitude is a different way of thinking about the voting process. For election officials and voting technology vendors, an election attitude means putting the citizens first, making it easy to register and vote in a way which provides the security, privacy, accuracy, verifiability, auditability, and reliability people expect. While there are differences between Internet voting and e-commerce, there also is an analogy which I described in my book, Net Attitude: What It Is, How to Get It, and Why You Need It More Than Ever (2015). I described in detail how Amazon has a net attitude which makes shopping and buying easy and satisfies customers.
Try to imagine e-commerce operating without a net attitude. For example, you want to buy something from a website. The website company sends you a letter with a password so you can login. After you find the item you want to buy, you click on it, and the website says, “Click here to request a printed catalog, and click here for the name and location of the nearest dealer who carries our product.” You enter your zip code and look at the list of dealers. You find the nearest dealer and click on their link. The website says, “Please call us Monday to Friday between 9 AM and 5 PM.” The scenario I just described is the way it was for most retail e-commerce sites in the mid 1990s. Some e-commerce sites are still difficult to use.[i] A buyer’s priority is to get the product they want. Some companies have websites to describe their products, but their priority is to protect their dealers. Putting the buyer in second place is not a net attitude.
The Internet was not always convenient. I can remember my first attempts at connecting to the Internet in 1993. Getting connected required extensive technical steps. Once connected, there was a good chance you would be disconnected shortly. When connected, the Internet was slow and there was not much you could do other than look at files and documents. The enormous improvement in reliability and capabilities between then and now did not occur overnight. There were many steps along the way.
The structuring and formatting of content for a web page was done using hypertext markup language (HTML). HTML version 1 was introduced in 1992. In 1993, there was only one web browser available to view HTML content. It was called Mosaic. It was followed in 1994-95 by Netscape, Opera, and Internet Explorer. Safari, Chrome, and Firefox were introduced between 2003 and 2008. The World Wide Web Consortium continuously developed enhancements to HTML with increasingly powerful capabilities for formatting of a document. There was no audio and no video on the web in its infancy. In the late 1990s, cascading style sheets were introduced and offered the capability to format a web page so it would look appropriate whether on a big desktop display, a small handheld display, or a tablet.
Between the late 1990s and 2008, there were many incremental improvements to how webpages could be designed and browsed. In 2008, HTML 5 enabled developers to create complex web applications which worked on any kind of device. In 2011, Content Security Policy for the web was introduced to prevent some of the severe web based attacks against users and websites. These are just a few of the key steps of web development. Although the web is continuously evolving, the Internet by itself is insecure. However, by utilizing various protocols, tools, and techniques government, businesses, and consumers have found the Internet to be adequate for their uses. The Internet has evolved from a government and academic file sharing and messaging system to a global network which touches every aspect of our lives. One example of this is e-commerce.
Amazon began selling books online in 1995. Books were the only thing Amazon sold, but founder Jeff Bezos had a vision for the company to become “an everything store”.[ii]Amazon expanded its offerings with a string of investments and acquisitions including Pets.com (1999), CDnow.com (2003), Smallparts.com, an industrial component supplier (2005), Shopbop, a retailer of designer clothing and accessories for women (2006), Audible.com (2008), and shoe and clothing retailer Zappos.com (2009). Between 1995 and 2015, the company made more than 50 acquisitions or significant investments.[iii] Mr. Bezos followed the mantra I described in Net Attitude, “Think Big, Act Bold, Start Simple, Iterate Fast”.[iv] “Think Big”, become an everything store. “Act Bold”, make strategic investments and disrupt existing business models. “Start Simple”, sell just books. “Iterate Fast”, continuously innovate and acquire companies with good ideas.
Amazon’s formula has worked. By 2015, Amazon sold over 480 million products in the USA across dozens of departments including over 30 million items in the combined Clothing, Shoes & Jewelry department, 24 million in Sports & Outdoors, 60 million in Home & Kitchen, and 96 million in Electronics.[v] [vi] In 2014, Amazon sold 63% of all books bought online and 40% of all books sold overall. Amazon’s revenue for 2015 was $107 billion and it was the fastest rate any company reached $100 billion in annual sales.[vii] One of the factors behind the explosive growth at Amazon has been customer service.
Let’s explore a situation where you have a problem with an order you placed at Amazon. The website has extensive and easy to request solutions, but suppose none of the solutions exactly matches your problem. You want to communicate directly. A couple of clicks and you are presented with a choice of E-mail, Phone, or Live Chat. You select Phone and enter your phone number. You then receive a choice of Call Me Now or Call Me in 5 Minutes. You click Call Me Now, your phone rings and you are connected to a customer service associate. They solve your problem and your issue is resolved. This quick process represents a company with a net attitude.
Federal, state, and local election officials, and voting technology vendors could adopt an election attitude. Some officials are working on making changes, creating a voting system which makes it easy for citizens to register and vote in a way they trust because it provides the security, privacy, verifiability, and auditability they expect.
An election attitude for citizens is equally important for a strong democracy. Citizens with an election attitude take voting seriously and give voting a high priority. They inform themselves about the issues and candidates on which they will be voting. Citizens with an election attitude register to vote and keep their registration information current. When election day arrives, they vote and feel satisfied they have done their part to make their voice heard.
More Than Convenience
Voting remotely via the Internet can have a number of advantages in addition to convenience. Dr. Selker told me that too many people often go to a polling place unprepared. It is illegal to canvas at a polling place, so many have no way to learn about their choices at the time they are making selections. He said, “The remote place you vote from may be the place where you can explore and learn about the race you are making a selection on while you are making it.”[viii]
For those overseas, remote voting can mean enfranchisement not easily provided by the absentee ballot process. For people with disabilities, there can be multiple new solutions to ease or eliminate barriers. A voter could use a handheld device such as a smartphone or tablet. They could use voice activated or dictation apps to express their vote. Voters could reflect on their voting decision without the pressure to get back to work or rush to pick up kids from school or get to a doctor appointment. Faster compilation of election results by eliminating paper, faxes, and outdated manual procedures can increase confidence of voters that their votes were counted quickly and accurately. When results are delayed by hours and sometimes more than a day, voters justifiably can question what is wrong with the voting process.
An election attitude includes convenience with a capital C because we are a convenience based society. We can shop, compare, buy, search, learn, and manage our health using the Internet. Previously, the Internet was only available on a desktop computer. Today, the Internet is wherever we are, including on our wrists or in our eye glasses. Mobile technology has enhanced convenience in many areas. However, in most situations, the election process is not convenient. Those who have stood in line in bad weather for hours would say it is very inconvenient.
Retail e-commerce has grown at double digit rates from 1995, when Amazon began, to $340 billion in the U.S. for 2015.[ix] Use of the web in other aspects of the economy also grew dramatically. In the 1980s, the IRS recognized efficient tax collection was becoming more difficult. Converting paper returns into machine readable data was a complex, time-consuming, and error-prone process. In 1986, a pilot of electronic filing began with 5 tax preparers in 3 cities. Twenty-five thousand returns were filed.[x] Tax preparers found the process productive and quickly expanded e-file use. Once consumer programs such as TurboTax were commercially available and supported e-file, its use facilitated quick returns. When the IRS encouraged e-filing, it grew even faster. In 2011, a milestone of one billion electronically filed returns was achieved. In 2015, more than 128 million tax returns, representing 91% of all return, were filed using E-filing.[xi] The IRS said, “Using the Internet is the fastest and most accurate way to file individual and business tax returns”.[xii]
E-filing has not been without its problems. In early 2016, the IRS identified and halted an automated attack upon its Electronic Filing PIN application on IRS.gov. Using social security numbers stolen from outside the IRS, identity thieves used malware in an attempt to generate E-file PINs which could potentially be used to electronically file a tax return. No personal taxpayer data was compromised or disclosed by IRS systems, but approximately 100,000 of the stolen social security numbers were used to successfully access an E-file PIN.[xiii] The number of accesses was less than one tenth of one percent of tax returns filed in 2015. The IRS is continually reviewing and improving security of its servers.
Between 2000 and 2013, numerous Internet services have been started and millions of consumers trust them with their private information. The following is a sample listed in order of their founding: TripAdvisor, Wikipedia, LinkedIn, Skype, Facebook, YouTube, Twitter, Tumblr, Dropbox, Kickstarter, Instagram, Pinterest, Snapchat, and Coursera. The diversity of types of services and the ever increasing number of users demonstrates consumers trust using the Internet.
A 2016 J.D. Power Study of Consumer Banking confirmed the continued growth of Internet banking.[xiv] 80% of customers are satisfied with Internet banking. However, satisfaction with mobile Internet banking is above 85%. The use of ATMs and Internet banking is causing the number of physical bank branches to decline while the percentage of people opening accounts online is increasing.[xv]
While business to consumer e-commerce in companies such as Amazon was growing, businesses were increasing their trust in using the Internet for non-consumer e-business. Business to business e-commerce in the U.S. grew to $780 billion and represented 9.3 percent of all sales of this type by the end of 2015.[xvi] According to research provider Frost & Sullivan, global e-commerce between businesses will be twice as large as retail e-commerce by 2020, growing to $6.7 trillion vs. $3.2 trillion.[xvii]
Public companies are another important segment of the American economy which are dependent on the Internet. They use the Internet for shareholder voting. By the end of 2015, there were 3,700 publicly traded companies.[xviii] Shareholders of these companies vote their shares at annual meetings or when a special vote may be needed. Most shareholders do not attend shareholder meetings. They vote by proxy. In effect, shareholders give their voting preference to an investment firm which holds their shares or they give their proxy vote directly to the company in which they own shares. Prior to the Internet, proxy voting was handled by mail. Today, Broadridge Financial Solutions, Inc., a Lake Success, New York based public company operates an Internet based e-proxy service called proxyvoting.com.
In 2015, Broadridge facilitated the proxy voting for 4,114 shareholder meetings. This Internet based service processed the votes of 455 billion shares, representing approximately 95% of all shares voted.[xix] The remaining 5% were voted by paper ballots. Shareholders vote to approve the company’s audit firm, elect members of their Board of Directors, change company policy on business and societal issues, mergers, acquisitions, and other issues. Due to the critical importance of many of the issues brought to a vote by publicly owned companies, security is of the utmost importance.
Broadridge operates secure Internet servers. Each ballot cast is assigned a unique 16 digit control number so votes can be verified and audited. The company uses an independent auditor to verify random selections of votes. When large blocks of stock are voted, for example 50,000 shares, the vote is audited three times to confirm the owner of the shares is correct. In addition to providing a secure and verifiable election process using the Internet, Broadridge’s technologies and processing saved corporate users an estimated $1 billion in the 2015 proxy season compared to what would have been spent had the companies used traditional printing and mailing.[xx]
Another rapidly growing area of Internet usage is in non-cash payments. A joint venture between the consulting firm Capgemini and The Royal Bank of Scotland produced the 2015 World Payments Report. This Report showed there were 358 billion non-cash payments in 2013, the latest year for which official market data is available.[xxi] Non-cash payments include payments made with instruments other than notes and coins. This includes credit transfers, direct debits, credit or debit cards, and checks. In 2000, checks were used in more than 40 billion transactions, but the number was down to less than 20 billion in October 2012.[xxii] The data is not available for 2015, but based on trends, I believe checks likely represented less than 5% of non-cash payments. The growth in non-cash payments is coming from e-commerce, online banking, payment transfer services such as PayPal and Xoom, and generally wider use of the Internet for financial transactions. Mobile payments through services such as Apple Pay, are relatively small but growing rapidly. Forrester Research estimated 2014 in-person mobile payments at $3.7 billion and growing to $34 billion by 2019.[xxiii] The authors of the World Payments Report said, “Customers expect the ease of use and immediacy they experience with the Internet.”[xxiv]
The Report also highlighted the transformation underway in how money is transferred. Many nations across the globe have implemented Internet payment security measures. The Reserve Bank of India mandated two-factor authentication for all online credit card payments. In this system, an online user must enter login and password credentials plus a numeric security code sent to the user’s mobile phone. Providing security for financial transactions requires continuous innovation and transformation of payment processing. The Report said, “Offerings based upon immediate payments systems and new technologies such as blockchain will increasingly be the route via which customer demands are met.”[xxv]
Dependence on the Internet is evident in many aspects of American everyday life beyond financial transactions and e-commerce. As of 2015, SurveyMonkey had 25 million users.[xxvi] Employees at 99% of the Fortune 500 have used SurveyMonkey online surveys. The users provided 90 million survey responses a month.[xxvii]
Another example of a high level of Internet use is by Kaiser Permanente, a healthcare giant in California. This company is a pioneer in leveraging the Internet, using patient portals, to engage 45 percent of its 9.5 million members for patient communications.[xxviii] Kaiser’s online portals provide secure physician-patient email and access to a comprehensive electronic health record system. In 2015, 72% of Internet users obtained health-related information online.[xxix]
The trends are clear. Consumers and businesses are trusting the Internet with billions of dollars, billions of transactions, and the voting of billions of shares of publicly traded companies. Consumers and hospitals are trusting the Internet with sensitive personal medical information. Americans recognize the security of the Internet is not perfect, but they recognize procedures and technology continue to improve. They don’t compare the Internet to a perfect world, they compare it to a world of paper, faxes, delays, and inaccuracies with legacy processes. There is considerable debate among experts about whether Internet security is getting better or worse.[xxx] Considering all aspects of how we use the Internet, I believe security is getting better. More people are doing more things with increased convenience and positive results. An election attitude can bring the same kind of positive thinking to the voting process.
[i] “Stihl Products,” Stihl (2016), http://www.stihlusa.com/products/.
[ii] Jillian D’Onfro, “14 Quirky Things You Didn’t Know About Amazon,” Business Insider (2014), http://www.businessinsider.com/amazon-jeff-bezos-facts-story-history-2014-5.
[iii] “Amazon.Com,” Wikipedia (2016), https://en.wikipedia.org/wiki/Amazon.com.
[iv] John R. Patrick, Net Attitude : What It Is, How to Get It, and Why You Need It More Than Ever (Palm Coast, FL: Attitude LLC, 2016).
[v] “How Many Products Does Amazon Sell?,” Exportx (2016), https://export-x.com/2015/12/11/how-many-products-does-amazon-sell-2015/.
[vi] Paul Grey, ibid., (2013), https://export-x.com/2013/12/15/many-products-amazon-sell/.
[vii] “Amazon.Com, Inc. (Amzn),” Yahoo! Finance (2016), http://finance.yahoo.com/q?s=AMZN.
[viii] Ted Selker.
[ix] “Quarterly Retail E-Commerce Sales 3rd Quarter 2015”.
[x] “Irs E-File: A History,” IRS (2011), https://www.irs.gov/uac/IRS-E-File:-A-History.
[xi] “U.S. Taxpayers Efiled More Than 128 Million Returns in 2015,” efile.com (2015), http://www.efile.com/efile-tax-return-direct-deposit-statistics/.
[xii] “E-File Overview,” IRS (2016), https://www.irs.gov/Tax-Professionals/e-File-Providers-&-Partners/e-file-Overview.
[xiii] “Irs Statement on E-Filing Pin,” IRS (2016), https://www.irs.gov/uac/Newsroom/IRS-Statement-on-Efiling-PIN.
[xiv] “Improved Technology and Better in-Person Interactions with Millennials Drive Historic Performance Improvement among Nation’s Largest Retail Banks,” J.D. Power (2016), http://www.jdpower.com/press-releases/2016-us-retail-banking-satisfaction-study.
[xvi] Marcia Kaplan, “B2b Ecommerce Growing; Becoming More Like B2c,” PracticalEcommerce (2015), http://www.practicalecommerce.com/articles/85970-B2B-Ecommerce-Growing-Becoming-More-Like-B2C.
[xviii] Barry Ritholtz, “Where Have All the Public Companies Gone?,” BloombergView (2015), https://www.bloomberg.com/view/articles/2015-06-24/where-have-all-the-publicly-traded-companies-gone-.
[xix] “Broadridge Insights,” Broadridge (2015), http://www.broadridge.com/broadridge-insights/Key-Statistics-and-Performance-Ratings-for-the-Proxy-Season.html.
[xxi] “World Payments Report 2015,” Word Payments Report (2015), https://www.worldpaymentsreport.com.
[xxii] Matt Phillips, “The Spectacular Decline of Checks,” The Atlantic (2014), http://www.theatlantic.com/business/archive/2014/06/the-rise-and-fall-of-checks/372217/.
[xxiii] Lance Ulanoff, “Just How Big Is the Apple Pay Mobile Payment Pie?,” Mashable (2015), http://mashable.com/2015/01/29/apple-pay-mobile-payment-pie/#2R5ARcM24ZqY.
[xxiv] “World Payments Report 2015”.
[xxvi] Alex Konrad, “Spurning Ipo, Surveymonkey Now Allows You to Compare Data with Rivals,” (2015), http://www.forbes.com/sites/alexkonrad/2015/04/02/surveymonkey-now-allows-you-to-compare-data-with-rivals-for-a-price/#64727653190e.
[xxviii] Sherree Geyer, “Patient Portals More Useful Than Many Realize,” Healthcare IT News (2015), http://www.healthcareitnews.com/news/patient-portals-more-useful-many-realize.
[xxix] Mary Rechtoris, “5 Trends Sweeping Healthcare,” Becker’s ASCReview (2016), http://www.beckersasc.com/asc-turnarounds-ideas-to-improve-performance/5-trends-sweeping-healthcare.html.
[xxx] “Is Internet Security Getting Better or Worse?,” Zombie Code Kill (2015), https://zombiecodekill.com/2015/11/02/is-internet-security-getting-better-or-worse/.
Net Attitude: What it is, How to Get it, and Why it is More Important Than Ever (2016) V2
Net Attitude V2 Sample Chapter
The Customer Is Always Right
The third chapter was about a concept I learned from Stew Leonard, a grocer in Connecticut. A sign at the door of his stores says, “Rule #1, The Customer Is Always Right; Rule #2, If The Customer Is Ever Wrong, See Rule #1”.[i] I explained how a net attitude can be expanded on the Internet using Mr. Leonard’s concept. This chapter is replete with examples which can be applied across today’s competitive landscape.
In 2001, I suggested call centers and the Internet should be integrated. “Click here” to get your problem solved and if that doesn’t solve the problem, “Click here” to talk to someone. A number of companies have adopted the principle. Amazon is the most advanced in completely adopting the principle. Many other companies do not include a phone number anywhere on their site. Adoption of the customer is always right is a fundamental of net attitude and essential to be a winner in todays highly competitive markets.
While there are some notable exceptional websites, the bottom line is many businesses today are not meeting customer expectations. I described an initial burst of excitement about surfing the web in 1995. Over the next five years the Internet became faster, more reliable, and reached larger numbers of people. New Internet startups or “dot coms” emerged with some great ideas (but not always great business models). Companies in existence for a long time “web enabled” internal mainframe processes. E-commerce flourished. However, by the end of the millennium I believe many users of the Internet began to become disillusioned and frustrated. They couldn’t find what they wanted or were let down when their expectations were on the rise.
Fast forward to today and expectations continue to rise. Banks, airlines, hotels, and healthcare providers are online but some are not exploiting the Internet to the degree they could. How does an organization address the widening gap between client’s expectations and companies service delivery? The answer starts with a change in attitude.
As people have gained newfound power from the Internet their expectations haven increased significantly. They know the potential exists to greatly simplify their lives and they expect this to happen. Their patience will be short when it doesn’t. How good of a job are companies, governments, universities, hospitals, and other institutions doing at meeting people’s expectations? Unfortunately, I would have to say, on average, not very well at all. Although there are many reasons for optimism that the web can and will meet the rising expectations of people, at this stage most websites don’t even come close.
Let’s get specific. The American Customer Satisfaction Index for e-commerce companies was published in late 2000. It resulted from a quarterly survey conducted by the National Quality Research Center at the University of Michigan Business School, Ann Arbor, in partnership with the Milwaukee-based American Society for Quality and the CFI Group, an Ann Arbor management-consulting firm. The survey showed that consumers found large disparities in quality of service and, although there were some standout successes, many websites fell far behind in keeping their customers happy.
Patrick Barta of the Wall Street Journal reported that satisfaction levels are low enough “to cast doubt about many sites’ ability to survive.” He went on to say that American consumers “appear to be only marginally more satisfied with e-commerce sites than they are with the U.S. Postal Service.” The index’s director, Claes Fornell, says E-commerce “companies that don’t provide a positive customer experience will get much less repeat business and therefore be forced out of the marketplace”. It is generally accepted that getting a new customer is at least five times more costly than keeping an existing one. The survey showed that more than twenty five percent of consumers were not satisfied. The bright spot was Amazon.com, which had a satisfaction score of 84, the highest of any site. Even more alarming than the satisfaction score of this survey is how many people leave websites without completing the transaction at all because they couldn’t find what they were looking for or the site did not work properly. In his January 2001 issue of the Release 1.0 newsletter, Kevin Werbach described a survey done by user-experience consultants Creative Good. The consultants ran a test with over 50 consumers on eight leading online retail sites. Forty-three percent of the purchasing attempts ended in failure, because the users literally couldn’t figure out how to complete the transaction. The satisfaction, or lack thereof, also goes beyond the web. People who become dissatisfied with a particular brand on the web will translate their feelings to the “bricks and mortar” part of that brand. They will conclude that if the e-business part of a company doesn’t know how to satisfy people then their company doesn’t know how to satisfy people.
Systems That Don’t Talk To Each Other
There are several categories where websites let people down. One of them has to do with integration of systems. Some recent personal experiences may serve to illustrate what this is about and why people are frustrated as a result. It was a Friday night when my wife and I decided to go to New York the following weekend for an impromptu opportunity that arose. I went to the website of a major hotel chain and checked my frequent guest points balance and looked for an award for a one-night stay. I have plenty of points and, sure enough, I found an award code for a one-night stay at a very nice property in New York City. I could have made an online reservation but a prior experience convinced me that they didn’t have the process streamlined yet so I called the 800 number and asked the person if a room was available for that following Friday night. “Yes sir”, she said, “I can confirm that for you”. “Great” I said. “Is there anything else I can do for you, Mr. Patrick?” “Yes, I would like to pay for the room using Award code XYZ”.
“Oh”, she said, “I can’t do that”. I asked if I was talking to an answering service or the hotel chain itself. “This is the hotel chain”, she said, “but this is the reservations department and I don’t have access to any frequent guest data”. I explained that I was looking at the coupon in my browser and asked if there wasn’t some way she could help me use it. “Oh, no problem, Mr. Patrick”, she said. “Just call us back on Monday morning”. She went on to explain that I would need to call them by long distance, no 800 number, and that I could call anytime during their normal business hours of nine to five Monday through Friday. She said that when I called I could just simply give them my credit card number and for just $35 they would send me the coupon (which I was looking at in the browser!) via overnight express mail. Now is that a “stick in the eye” or what? The problem is lack of application integration. The frequent guest system and the reservations system don’t talk to each other. They are applications that were likely built in different decades and which operate on different and incompatible computer systems. The examples abound.
I ordered three items from an on-line catalog at cdw.com. It was actually a good shopping experience. The FedEx shipping was a relative bargain at $5.49. The next day I received a phone message saying that one of the items I had ordered had been discontinued but that the other two items were shipped. This was quite disappointing since the discontinued item was the most important of the three things I ordered. I called the customer service department and asked why the website was offering an item that had been discontinued. Lack of real time inventory or out of stock conditions is one thing but offering discontinued items for sale seemed like a real process problem. “Oh”, said the customer service representative, “our website is two to three months behind on updating for discontinued items. We are working on that”. The result was I had to order a substitute item and pay additional shipping. Problem: no integration between the inventory system and the web e-commerce system.
Recently I went to the United Airlines website to accept a special offer. It was very smooth. A few clicks and I was finished. Then I got a message that said, “You have selected 10,000 Mileage Plus bonus miles. Your miles will be credited to your Mileage Plus® account in approximately 6 weeks. They are yours to use as you please. Thank you again for this opportunity to reward you for your exceptional loyalty. “ Six weeks? The web application that I interacted with probably can’t talk to (is not integrated with) the application that updates the mileage credit. Ever land at an airport and the gate was not available for the plane to park? Happens to all of us. The Gate Scheduling System is not integrated with the Flight Arrival System.
I had been thinking about getting a cappuccino maker and a friend had one not in use that he offered to loan to me for a trial. The machine is called a Nespresso and is made by Nestle. It uses pre-packaged “capsule” of coffee. I stopped in a local gourmet cooking store that carries the Nespresso line and asked if I could buy some of the capsules of coffee. “Oh no”, said the proprietor. “They can only be bought directly from the company. Didn’t you fill out the form to register for the buying service?” I explained my situation and said I had no form. I was told to call the 800 number. I went home empty handed and rather than call, I decided to visit the website. I was in luck, or so I thought, because I quickly found a “click here to buy” area of the site. Upon landing at the buying page I was asked to enter my customer number. I have no customer number and could find no place on the site to get one. I was really determined to get these “capsules” so I broke down and called. The good news was that it was not 9-5 M-F and a real person answered and I didn’t have to wade through a complex call center menu. The person was very cordial and explained that the only way I could get a customer number was to buy something from them by phone and then I would be sent a customer number in the mail!
Attitude problem: These problems are viewed as very complex with fixes that take a lot of time.
Net attitude: The long-term fix will take time but in the meantime applications can be enabled to send messages to each other behind the scenes and give the customer the effect of a completely integrated solution. Some technology investments will be involved but it is mostly an attitude of wanting to make systems talk to each other. Chapter 12 will describe how this is done.
Click Here To Send A Fax, Fill Out A Form, Or Get Our Phone Number And Hours
I went to the website of a California software company one Sunday afternoon and I was ready to buy some software they had for sale. In fact I wanted it really badly and was ready to pay nearly any price. I clicked to buy and up came a form. No problem, Mr. Patrick. Step one; print this form. Step two; fill it out and fax it to us! This doesn’t sound like e-business. Unfortunately there are a large number of websites that say click here to buy and then present us with a screen of where to call or a form to be printed out and faxed. More recently I was looking for a very unique light bulb for an outdoor lamppost. I search around the web and discovered that I was not alone in having trouble finding unique light bulbs. My search turned up quite a few postings in the Philips Lighting Forum for Home Lighting. In reply to a customer asking for the same bulb I was looking for, the folks at Philips posted a reply which said “Please call 800 555 0050 for the nearest distributor in your area.”
Many websites say they have information about their products and services available but when you click to see it, up comes a webpage form which you are asked to fill out and send to the company so they can mail you a copy of the instruction manual or other information that you are requesting. In other cases you can’t even get the information through the website at all. I bought a new Motorola mobile phone in Australia during the Sydney Games. I was really pleased with it but had a question about how some particular feature worked. I went to the Motorola site and looked around. I found a link to exactly what I wanted to know. When I clicked it I got, “Motorola can assist you in matching one of its newer phones with your existing service plan. Please follow these easy steps: have the name of your service provider handy; call 1-888-647-9988 (Mon.-Fri., 7:00a.m. – 7:00p.m. CST). Motorola’s customer service representative can help you select a phone that is supported by your service provider and discuss the options available to you.”
Contrast this with a visit to the State of Connecticut Department of Motor Vehicles. I was looking for a particular manual and to my delight I found the following on the webpage: “The DMV provides driver’s manuals with all the graphics and illustrations featured in the print edition. These versions are in portable document format (pdf) and must be viewed and printed through Adobe Acrobat. The software is available free from Adobe. To get a free copy of the software, click the “Get Acrobat” image below.” Adobe’s portable document format (pdf) is a de facto publishing standard that can be used to create any kind of printed materials. Adobe Acrobat is free software program that enables a person to read the pdf file. A pdf file can be printed out and it looks exactly like the “real” thing; complete with all the graphics, formatting, and fonts that you would see in printed materials. The United States Internal Revenue Service was one of the first to use pdf files on the Internet. They offer virtually all IRS forms and booklets that way. Radio Shack offers owner’s manuals for nearly all their products as pdf files. Unfortunately, The Connecticut DMV, IRS, and Radio Shack examples are in the minority.
Fax machines arose to ubiquity for two reasons: the information technology industry had no standard for the exchange of documents and the Internet had not yet become ubiquitous. Much of the use of fax machines today is due to habits. Document formats such as Adobe pdf files can enable the sharing of sophisticated graphical information without paper. Webpages can be used for business forms of all kinds. For those who would like to make the plunge and get rid of their fax machine (like I have) but have friends and colleagues who still have them (as I do), there is a good answer. eFax (http://www.eFax.com) offers a fast, free, and easy way to receive faxes — whether you’re on the road, at the office, or working from home. With eFax you receive your faxes and voice mail as attachments in your email account. No more standing around the fax machine waiting for your fax to arrive. No more wandering eyes looking at your confidential documents. For a monthly charge of $9.95 you can also have a convenient way to send faxes. No need to print and manually fax a document anymore. No need to be tied to the location of your fax machine. With eFax you can fax documents right from your computer. The fax machine has served us well. Let it rest in peace.
I was having a problem getting my Hewlett Packard ScanJet scanner working and visited their website to look for a fix. I found a very sophisticated support structure and searched for my particular problem. I was successful in finding the exact problem and I clicked to get the fix. Up came a webpage that said to call during their normal business hours and give them my address so they could ship me a CD. Why not a download I asked? I was told that too many users were downloading the file for the wrong reason and then the users were complaining that the download didn’t fix their problem. Rather than work on a better way of explaining who should download the file and for what purpose, HP decided to take the file off of their site and offer a CD solution instead.
The next example illustrates that email is not yet accepted as an equal in terms of communications. I was in Europe on a business trip and realized that there was a small matter that I needed to take care of with a major financial services company with whom I do business. It was a small but important administrative matter that had a deadline for completion that day. It did not involve any securities trading or movement of money. It was early morning in Europe and very early in America – customer service would not be open. Since I would be busy all day and would not be able to call when the American offices opened I decided to send them an email. I was pleased to find a “mailto” link on their website and I sent my simple request. I got back to the hotel late that night and found an email reply from the firm. I have edited the reply slightly to protect the guilty.
“Dear Mr. Patrick thanks for your recent inquiry. Unfortunately we can’t do that by e-mail, you have to speak to a customer service representative at our customer service department. Call us Monday to Friday, nine to five at 800-999-1234 during our normal business hours. Of course if you have any other questions, send us an e-mail.” Duh. By the way, this response is more insensitive than it may seem on the surface. Call our 800 number? You can’t call 800 numbers from Europe. I later called a manager of the firm and asked why they couldn’t handle my request by email. He explained to me that email is considered correspondence by their legal department and any correspondence has to be reviewed and approved by a manager before it can be sent. Therefore they prefer the telephone where this extra step is not required. In other words, a representative on the phone can tell me anything but if they have to send me an email then it has to be reviewed and approved. This doesn’t make much in a world of converging media where more and more people would say that email is their preferred way of communicating.
I sold my five-year-old car on eBay. The buyer was a gentleman in Kentucky. He had a personal problem and was not able to come get the car in a timely way so he offered to put the money in an escrow account at my bank as a show of good faith that he would definitely be taking the car. I said I would check with them on how this might be done (this was before I knew about escrow.com). My “relationship manager” said he would have to check with the legal department. He called back a few hours later and said it would be “very difficult”. “Things are tough in a big hierarchy like this”. It could possibly be done but the “bank has to protect itself”. “You would have to fill out a lot of paperwork and the bank will take no responsibility for the money or to make sure the escrow would actually work”. This was my own bank!
He said it may not seem very user friendly but they are a very big bank. The two options he said would be possible were to either use a “Letter of Credit” or get a “Court Order”. He had no idea how either would work or how much they might cost. It was obvious that neither of these were appropriate to sell my car to the gentleman in Kentucky. (I later visited escrow.com and they said “No problem”. Just go to the website. Either party can fill out the online form. The other party will be notified by email. When both agree to the terms, the money is deposited. When both have been to the website to agree the terms were actually met, the money is released. Fee: $100. No problem. Expectations met.)
Are these examples of e-business? I don’t think so. I am sure that Motorola’s customer service representative can help me select a phone that is supported by my service provider and tell me about the options available to me but I would think their website could do this too – and do so whenever I want to not just during some selected Central Standard Time hours. I know the financial services firm can help me by phone but why can’t they help me by email? And on and on.
Attitude problem: Many organizations are clinging to the communications methods of the past and not capitalizing on the tremendous power of the Internet.
Net attitude: The technology is here to give people the information and services that they want on the Internet whenever they want it. Information doesn’t need to be free but it does need to be readily available and 24 x 7. Any artificial inhibitors that are created will drive customers to a competitor. Expectations are rising fast and when the Next Generation of the Internet arrives expectations will be even higher.
Down For Maintenance
One of the most significant problems causing user expectations to not be met is site availability. “Site down for maintenance” at midnight seems reasonable for an American hosted website except that it is lunch hour for their Asian customers. One late night, between midnight and 1 AM I visited American Airlines to check on a flight. The homepage said, “Due to scheduled maintenance, AA.com is currently not available”. This was the homepage of one of the largest airlines in the world that in fact is an “international” leader. Websites need to be available all the time. Traditional thinking would tell one that 1 AM is a great time to do maintenance of a website. Nobody is using the site. In fact, a lot of people use the web on their lunch break. It is always lunchtime somewhere in the world. Two in the morning in New York is three in the afternoon in Tokyo. The old model doesn’t work anymore.
I received an email one day which said “Dear JOHN R PATRICK, your American Express Statement of Account for December, 2000 is now available for viewing at the following secure site. Please review this statement at your earliest convenience as your payment due date is December 19, 2000.” A URL was provided in the email and I clicked on it. I got a message that said “We’re Sorry… we are currently upgrading our site to improve American Express Online Services. During this time you may experience intermittent system delays. If you wish to review your account, please call 1-800-528-4800 and a Customer Service Representative will be available to assist you. If you wish to make a payment, you can pay via telephone by calling 1-800-472-9297“. I know American Express has great customer service by phone, with no recordings saying they are only open 9 to 5 Monday to Friday, and I know I could have paid the bill by phone but I was anxious to use the new capability of paying it online. I waited and tried the URL again the next day. Same message. After it persisted for more than a week I called American Express technical support. They said the problem was that my browser had too much history saved and that to use their site I would have to delete all the saved locations from my recent browsing. The support technician was able to step me through correcting the problem but from my point of view he was asking me to give up something to make the site work for me.
Attitude problem: Some organizations are managing their e-business websites the same way they have managed their traditional systems.
Net attitude: Many people tend to do their shopping, banking, and other web transactions at “unusual” times; certainly not all during the hours of nine to five, Monday to Friday. Websites need to be up and running around the clock.
Guitars And Chickens
Another dimension of the dissatisfaction is the difficulty in simply finding something on the web. My mother was anxious to get an 8 inch electric frying pan. My wife looked everywhere and couldn’t fine one. “No problem”, I said, “I’ll find one on the Internet in no time”. I did some looking around and found a site that claimed to be all about electric frying pans. There were four featured links. None of them had anything to do with electric frying pans. There were twelve featured manufacturers of frying pans. Eight of them were dead links. Four were good links to great looking frying pans but none were the small size I wanted. Undaunted I decided to use a more sophisticated search. Search = “Small electric frying pan”. I got two matches.
Lemelson Center Invention Features: Electric Guitars
This exhibit, presented by The National Museum of American History features instruments that illustrate how innovative makers and players combined the guitar with a pickup (sensor) and amplifier to…
Start with a whole fryer wash with water cut breasts and wings in two shake chicken and flour in paper or plastic bag in electric frying pan, brown chicken at high heat
Attitude problem: The web is a great new way to publish information. It is easy to put very large amounts of information on your website.
Net attitude: Having more information on a website doesn’t mean that it is easier for people to find that information. Information needs to be carefully organized and structured so that it can be maintained and so it can be easily searched and retrieved.
Listen Carefully; Our Menus Have Changed
“Surfing” the web has become a very natural thing to do for millions of people. They have also mastered “click here” to buy something or to make a choice. The simplicity of this has raised expectations, and frustrations, with the Call Center. There are many fancy technical terms that are used to describe Call Center technology but the bottom line is that they provide an automated way to interact with people. Seems like every organization of any kind has one. The reduction in staff made possible by substituting a recorded voice response for real people is compelling to the organization. To people, well that is a different story. Simple menus didn’t seem so bad and in fact reduced your time on the phone. Press one for sales; press two for service; press three for parts. Nice. Gets you to the right place in a hurry. But then the success of these simple menus motivated organizations to get more sophisticated. Do they still save us time and increase our satisfaction? Let’s listen in on a typical “dialogue”.
I want to change my mailing address on a service contract I have on my home vacuum system. I call the company’s 800 number. “Welcome to Ajax. Ajax is the world’s leading provider of home vacuum cleaning systems. Press 1 if you are using a touch-tone phone. I press 1. Press 1 for English, 2 for Spanish. Presione 1 para el inglés, 2 para español.“ I press 1. “Please listen carefully because our menus have changed”. Do I really need to hear about the status of their menus?. I care about what it is I am calling about. When do we get to something relevant to my problem? “Press 1 to learn more about our exciting new home vacuum system that is currently being offered at a special introductory price. Press 2 to order one of our products. Press 3 to learn how to use one of our products. Press 4 for detailed instructions on how to return one of our products”. All I want to do is change my address! “Press 5 to request shipping materials to return one of our products. “Press 6 for the locations of our nearest retail centers.” I am ready to scream. “Press 7 for the locations of our nearest repair centers”. I wonder if customer service is going to be 8, 9, or zero? I’ll try 0. “Sorry, that option is not available”. “Press 8 to repeat the menu options.” 8. “Press 1 to learn about our exciting new home vacuum system that is currently being offered at a special introductory price. “Press 2 to order one of our products”. “Press 3 to learn how use one of our products”. “Press 4 for detailed instructions on how to return one of our products”. “Press 5 to request shipping materials to return one of our products”. “Press 6 for the locations of our nearest retail centers.” “Press 7 for the locations of our nearest repair centers”. I’m getting close. I don’t dare press anything. “Press 8 to repeat the menu options”. “Press 9 to speak to a customer service representative”. At last. 9. “We are sorry but our customer service representatives are only available Monday to Friday from 9 AM to 5 PM during our normal business hours.” I look at my watch. It is 5:01 PM. If only I hadn’t pressed that 8 earlier!
The call center is controlling you via its menu structure. It was ok for the simple menu with three choices but the complex labyrinths of today are more than frustrating. In those instances when you finally get to a person you then discover that the computer has not only controlled you, it is also controlling the person you are talking to! “Press 0 to speak to a customer service representative.” “Enter your eighteen digit customer number followed by the pound sign.” A representative comes on the line. “May I have your account number please?” You tell the person you just entered it and the person tells you, “I am sorry but it didn’t show up on my screen.” You give them the eighteen-digit customer number and then the person says, “Thank you sir, now, may I help you?” “Yes, thank you. My name is John Patrick and I would like to change my zip code”. “Ok, sir, I would be glad to help you. What is your name?” The customer service representative probably selected an application for “Change zip code” and a screen came up to “guide” him or her through the steps. Step 1 – what is your name? As soon as a competitor a simple webpage for “add/change/check status” kinds of things, perhaps integrated with the call center, customers will switch to that vendor as fast as possible.
Attitude problem: The web is a great new way to offer “click here to buy” and that is the priority, in some cases the sole priority, of many e-businesses. “Click here” satisfies many people but when they later have to call customer service and talk to a call center their satisfaction goes away.
Net attitude: Call centers and the Internet can be integrated. “Click here” to get your problem solved and if that doesn’t solve the problem, “click here” to talk to someone.
For Your Own Protection
Does that stream of wet ink we call a signature really make things better? Our financial and legal system in most of the world is based on paper and ink. It hasn’t changed for hundreds of years. It doesn’t matter that we can buy things with a mouse click. If we want to transfer securities, open a new account, set up a trust, establish a life insurance policy, or countless other transactions, then a piece of paper with our signature in ink is required. We are told it is a requirement, that is the company policy or, that is “for your protection”. Is it really?
Recently I owed a contractor some money for a project he had completed for me. I accidentally forgot to make the payment when I said I would and as soon as I realized my oversight I decided to write a check and take it to the bank and deposit it directly to the contractor’s account. I knew which bank the builder used and I had his bank account number from a prior transaction with him. I pulled up to the teller window in my car and gave the teller my check made out to the builder and with his account number on it. After she processed the check I started to put my car window up and then I heard the teller say, “Here is your receipt”. When I got home and took a look at the receipt I could see the amount of the deposit and also the builder’s new account balance! By simply knowing the bank account number of the builder I was able to (unintentionally) invade his privacy and see his bank balance. If I want to check his balance again in the future I can just deposit $1 at the drive up window! Maybe the brick, mortar, and paper world isn’t so secure after all. It could have been much more secure and private if I could have wired the money to the builder using the Internet.
Digital ID’s are now legal in America and other parts of the world. They provide authentication, authorization, confidentiality, integrity, and non-repudiation. In fact they are far more durable and powerful than signatures with ink. Digital ID’s will empower us and simplify our lives. Much more about what they are and how they work coming up later.
Attitude problem: Commerce in most of the world has been based on paper and ink. Nothing much has changed for hundreds of years.
Net attitude: The technology exists to make Internet-based digital signatures not only work but make them more secure than paper and ink.
Yes, there are many uses and instances of paper that are just not needed –because they add no value. But paper is not going to go away and it shouldn’t. Just like in all introductions of new media types, the electronic media is a supplement to paper not a wholesale replacement. Sometimes the uses change though. Newspapers actually serve many purposes. Some people use them to keep the rain off of their head, others swat flies with them, and some wrap fish in them. And then there is just plain old writing paper. When you put a fountain pen to it magical things happen. You have this special feeling when using a fountain pen. And if your heart is in the right place you can inspire or uplift the hearts of others with the words you write. Nothing digital has quite the same impact.
Peanuts And Potato Chips
Increasingly people expect to have their providers of goods and services think about customer satisfaction from an end-to-end point of view. Click here to buy is one small piece of this. The end-to-end concept starts from the moment we perceive that we have a need or a want for a good or service up to and including after the sale service and support. There are many aspects to this. Long before a person is ready to buy something they may want to learn about what is available and gain assistance in determining exactly what they need. Carpenter Technology Corporation a leading manufacturer and distributor of specialty alloys has a website called carpenterdirect.com where industrial buyers can purchase stainless steel, aluminum, brass and many other kinds of alloys. The website has an online e-commerce catalog but, more important to their business customers, is a vast amount of technical data to help an engineer determine what is needed for a particular project. A section of their site, called MyMetallurgist, provides descriptions of alloys and detailed technical properties so that engineers can make selections based on corrosion, magnetic, or tooling requirements. Services such as this can become a technical information resource for Carpenter customers and if it is valuable enough the customers will become hooked on it and will find it a very natural step to “click here to buy”.
An example of a step in the cycle after “click here to buy” is packaging. It has to do with problems in the “last analog mile”; referring to the physical delivery of things we buy on the Internet. The issue initially struck me when I had received my very first order from net.grocer (www.netgrocer.com). I ordered an assortment of salsa, condiments, Tabasco, paper towels, potato chips, pickles, and other essentials. I was quite pleased and proud of my e-commerce prowess (e-business hadn’t been invented yet) in walking the talk and acquiring all of my favorite goodies online. I was reveling in my predictions about how everybody would buy everything on the Net. Then I got a lump in my stomach as I looked at these two large cardboard boxes on my kitchen floor. And, the piles of white poly-whatever “peanuts” were all over the place. Some stuck to my hands, arms, and clothing. What was I to do? My wife would be home soon and she would have a lot of questions about my plans to clean up the mess I had created in the kitchen. All the glory I felt about acquiring Tabasco and potato chips would be nothing compared to the wrath she would unleash about the mess if I didn’t get busy. No problem. I’ll just clean it up. All I have to do is separate all the various packaging materials into their respective categories, burst the cardboard boxes, put the “peanuts” into a bag so they don’t end up decorating our lawn, and then stow everything away in our recycling center. Shouldn’t take me more than a half hour. Let’s see — how much time did I save with my Net purchase anyway? Even with the purchase of something really simple, say a small cell phone, the ratio of the packaging material to the cell phone (on a volume basis) must be 100 to 1 or more.
Even later in the cycle than packaging is fulfillment. Some websites remember your prior purchases but soon purchasing agents and consumers will expect fulfillment models where they can set up a list of things they just want to show up on a scheduled basis. Industrial chemicals and supplies for the business and paper towels, printer paper, stockings, and potato chips for the home. More sophisticated e-businesses will monitor purchases and advise their customers of ordering levels that will minimize shipping cost. Really sophisticated e-businesses will provide complete inventory management systems for their customers. When the customer wants to check what is on hand of a particular item they won’t go to their inventory system, they will go their e-business supplier’s website. This is a great way to tie the customer into a long-term relationship.
By paying attention to the end-to-end process, looking at possible annoyances anywhere along the process, successful e-businesses will uncover more and more ways to satisfy their customers. There is room for leadership here and breakthroughs are possible. I used to be so frustrated with opening the half-gallon orange juice cartons. Did I say opening? I meant mutilating. Then along came International Paper Corporation with a breakthrough idea — the screw cap on the carton.
In fact, there are a number of creative and constructive developments going on in the packaging industry. For example, ECO-FOAM (http://www.eco-foam.com/) offers packaging material made from a renewable resource – corn. The product is completely biodegradable and dissolves in water – makes great compost. Another company, Metabolix (http://www.metabolix.com), is developing dissolvable plastics made from two of our most easily attainable and renewable sources: carbon dioxide and water!
Attitude problem: E-commerce for businesses and consumers is here to stay. In the rush to get catalogs of products on line, many businesses overlook the complete end-to-end experience.
Net attitude: Customers are going to expect much more than “click here to buy”. It isn’t a technology problem.
I began thinking about packaging as something important some years ago when trying to open a cereal box without destroying it and its subsequent ability to keep the cereal fresh. It is a nontrivial challenge – maybe an art. If it is a science then I haven’t found the instructions anywhere. One starts by using a sharp knife with a long blade. You carefully slide the knife under the tab in the center of the top of the cereal box. Then you slice the material to one side while applying a slight upward pressure via the tab. Repeat for the other side. I give being able to do this without damaging the box top about 75% odds. You are now almost a third of the way through the task at hand. Now that you have freed up one of the flaps you have to free the other flap by tearing it from the side flaps. Completing this without damage is also about 75% odds if you are quite careful. You are now two thirds of the way to the cereal. Last comes opening the bag inside the box that actually contains the cereal. This is often the hardest part. If you grasp the two sides of the bag and pull very carefully you have about a 50% chance of opening the bag without tearing it. After opening the main part of the bag you need to open the corners of the bag so the cereal can flow smoothly into your cereal bowl instead of bubbling out onto the floor and between the bag and the cereal box. Putting the collective probabilities together gives you a 50-50 chance at best of having an open cereal box that pours the contents smoothly and can be closed to protect freshness. Some packaging! I could go on about jars that require a hammer to open, pill bottles that can only be opened by children, fresh fruit containers that have to be squeezed until they break to open, soap in hotel rooms that is hermetically sealed in thick saran wrap that defies being opened, etc. etc. etc. I suspect those who suffer from arthritis of the fingers could make my examples seem trivial.
It Is Not All Gloom And Doom
There are some e-businesses that are doing a great job with end-to-end satisfaction. Stamps.com is a good example. Stamps.com is the leading provider of Internet mailing and shipping services. The company was started in 1999 and has Marvin Runyon, former U.S. Postmaster General, on its board of directors. The company provides valuable e-services to businesses of all sizes, allowing companies to control costs and efficiently manage their mailing, shipping and returns operations. Its business is anchored in key relationships with the U.S. Postal Service and United Parcel Service (UPS) and other carriers. For consumers and small businesses stamps.com has eliminated hours of waiting time at the local post office. They insert a link in your word processor so that after writing a letter you can select to have an address label printed along with the postage. They actually have a three-part label that prints the return address, the addressee address, and the postage. You can even connect your label printer to a postal scale and weigh a package and automatically print the proper postage. They have integrated their Internet service with the postal service so that each address is checked against a national database over the Internet to ensure that you can’t print an address unless it is deliverable. The nine-digit zip code is automatically inserted if you don’t know it. USPS packaging materials (no “peanuts” included) are integrated with the printing choices. When your packages and letters are ready to go you just put them outside by your mailbox and the USPS mail carrier picks them up and there are no added charges. The fee to stamps.com is ten percent of the postage printed with a minimum of $1.99 per month. This is a bargain considering the convenience it enables. The local newspaper where I live ran a story recently with a headline that read, “Parking, lines giving postal patrons a pain”. This is understandable. What is not understandable is the local cry to build a larger post office to handle the demand. If people were aware of the great service provided by stamps.com they could avoid the lines and gridlock parking and print their postage in the comfort of their homes.
One of the most empowering places on the web has got to be eBay. Buying and selling on eBay is a great experience. They are constantly adding new services to make the process – from end to end — easier for both the buyer and the seller. They create a community around the auction process and people trust it. In the beginning making or receiving payment for your basement artifacts or favorite baseball cards was a real hassle; going to the bank to get a cashier’s check or to the long line at the Post Office to get a money order. eBay has addressed the problem through BillPoint, a credit card based approach, that allows a buyer to pay a seller electronically. It is basically a special purpose electronic funds transfer. The purchase price gets charged to the buyer’s credit card and then the money gets deposited directly into the seller’s bank account. It works very well and charges a modest fee to the seller. EBay empowers people and meets people’s expectations. They keep getting better and better. As a result it is making a profit and growing rapidly. In the first quarter of 2001 the market capitalization of eBay, a relatively brand new company, was identical to that of Sears Roebuck & Company.
All kinds of web-based services are springing up that do meet people’s needs. PayPal allows a person to send money to any other person by simply entering the recipient’s email address at http://www.paypal.com and specifying the amount of payment. The recipient gets an email asking him or her to enroll in PayPal, if they are not already a member, and then they get the payment credited to their PayPal account. Balances earn interest. If they don’t want to use their credit balance to buy things at eBay or elsewhere they can request a check or even a direct deposit to their bank account. People use PayPal for auctions, paying their share of a meal, and sending money to the kids at college. Another payment option for auctions is BidPay (http://www.bidpay.com), which allows a buyer to go to a webpage and enter the physical name and address of the seller and for a modest fee BidPay then sends a money order to the seller. An email is automatically sent to the seller so he or she will know that the money is on the way. Both of these payment methods are simple and effective. They are not banks or credit card companies. Perhaps they don’t have the various protections that those entities have. Who knows if they will be successful? They do work, however, and large numbers of people are using them. Traditional financial services companies should pay very close attention to them.
And Now To The Future
While there are some notable positive exceptions, the bottom line is that most e-businesses, whether they are serving businesses or consumers, are not meeting expectations. The Internet has transferred power to people, both those working inside of businesses and those at home, and each day those expectations are higher than the day before. We saw an initial burst of excitement about surfing the web in 1995. Over the next five years the Internet became faster, more reliable, and reached much larger numbers of people. New Internet startups or “dot coms” emerged with some great ideas (but not always great business models) and existing companies “web enabled” many processes. E-commerce flourished. However, by the end of the millennium many users of the Internet began to become disillusioned and at times frustrated. They couldn’t find what they wanted or e-businesses in some way let them down at a time when their expectations were rising. How does an organization address this widening gap? The first part of the answer lies in anticipating and exploiting the Next Generation of the Internet – the NGi. The second part is about Attitude.
[i] ” Company Story,” Stew Leonard’s (2015), http://www.stewleonards.com/about-us/company-story.
Health Attitude: Unraveling and Solving the Complexities of Healthcare (2015)
Health Attitude Sample Chapter
Chapter 6 Quality and Patient Safety
Quality and patient safety are the most important elements of healthcare. Hospitals can be dangerous places to visit. Thousands of people die each year as a result of medical errors. Patients can get infections or receive other forms of harm inside the place they went for treatment. Unfortunately, our complex and costly system of healthcare does not produce better outcomes for Americans compared to those in other developed countries. I will review how we stack up globally and then take a closer look at some of the most significant quality and patient safety issues in hospitals.
Comparison of Quality
According to the World Fact Book, the United States ranks 42nd out of 223 countries with an average life expectancy of 79.6. Countries with longer life expectancy include Japan (84.5), Singapore (84.4), Hong Kong (82.8), Switzerland (82.4), Australia (82.1), Italy (82.0), Sweden (81.9), Canada (81.7), France (81.7), Norway (81.6), Spain (81.5), Germany (80.4), the United Kingdom (80.4), and South Korea (79.8).[i]
According to the World Health Education Initiative, Americans are not enjoying good health compared to people in other industrialized nations.[ii] The U.S. was ranked the 12th lowest out of 13 countries based on 16 health indicators including life expectancy and infant mortality. The mortality rate in the U.S. is high. Studies have shown American deaths, ranging up to 225,000, were caused by unnecessary surgery, medication errors in hospitals, hospital-acquired infections, and the negative effects of drugs. Barbara Starfield, a pediatrician at Johns Hopkins University, was an advocate for better healthcare worldwide. She concluded that America’s healthcare system is the third leading cause of death in the United States, after heart disease and cancer.[iii]
The Institute of Medicine (IOM) published To Err is Human: Building a Safer Health System in 1999. The book’s finding from two major studies was between 44,000 and 98,000 people die each in hospitals from preventable medical errors.[iv] The report made major headlines, dropped a bomb on the medical community, and set off congressional and public debates about what to do.
Patient safety and quality initiatives were put in place following the recommendations of the IOM report, but five years later, Robert Wachter at the University of California in San Francisco authored “The End Of The Beginning: Patient Safety Five Years After ‘To Err Is Human’”, which was published in Health Affairs.[v] Wachter said that since 1999 there was some progress, but it was insufficient. Stronger regulation, improvements in information technology, and workforce training had helped, but error-reporting systems had little impact, and unfortunately, there was no progress in improving accountability. Wachter’s pessimistic study caused him to describe the patient safety and quality status as “the end of the beginning.”[vi]
Preventable medical errors take a significant toll in addition to the cost in human lives. Not only do errors cost tens of billions of dollars, but also they shake trust and confidence in the healthcare system. In cases where errors cause a long hospital stay or disability, patients pay with physical and psychological discomfort. Health professionals pay too, with negative morale and frustration at not having provided the best care possible and a positive outcome. Society as a whole incurs lost productivity and a lower level of population health.
Medication and Surgical Errors
The IOM highlighted errors in many different areas in healthcare treatment. There were errors or delays in diagnosis. Providers skipped some prescribed tests. Outmoded tests or therapies were used, and there was a failure to act on results of monitoring or testing. Errors were made in the performance of an operation, procedure, or test, and there were errors in the dose or method of using a drug. Avoidable delays occurred in treatment or in responding to an abnormal test. Finally, there were many failures of communication.
More than ten years later, in 2010, the Office of Inspector General for the Department of Health and Human Services said that 180,000 Medicare patients died in a given year as a result of inept hospital care.[vii] Unfortunately, the story gets worse, not better. Using significantly more current data from numerous studies, the Journal of Patient Safety reported the true number of premature deaths associated with preventable harm to patients was more than 400,000 per year, and serious harm is 10 to 20 times more common than lethal harm.[viii] Although there was some disbelief in the IOM number of 98,000 published a decade earlier, Marshall Allen wrote in “How Many Die from Medical Mistakes in U.S. Hospitals?” a spokesman for the American Hospital Association has more confidence in the 98,000 estimate.[ix] ProPublica, an independent, non-profit newsroom that produces investigative journalism in the public interest, asked three prominent patient safety researchers to review the Journal of Patient Safety study, and all three said that the study findings were credible.
In all of the studies, researchers used samples of medical records and then applied statistical techniques to extrapolate what was found in the samples to the entire population of hospital patients. There is room for debate about what the right number is. But, there is no debate, even if the smaller numbers are correct, thousands of deaths due to unintentional medical errors is unacceptable.
For example, a 50 year old woman was hospitalized after taking Flomax, used to treat men with symptoms of an enlarged prostate, instead of Volmax, used to relieve bronchospasm. A 19 year old man showed signs of potentially fatal complications after he was given clozapine instead of olanzapine, two drugs used to treat schizophrenia. Unfortunately, there are many drugs that have similar sounding names, and may have not only different purposes, but also orders of magnitude differences in dosage. At least one and one-half million preventable adverse drug events occur in our healthcare system every year, resulting in hundreds of thousands of injuries and deaths.[x]
Although e-prescribing is gaining rapidly due to government incentives, millions of prescriptions are still scribbled on a piece of paper. Patients take the script to a pharmacy where different situations can arise. One scenario is the prescription is unreadable so the pharmacist calls the physician’s office for clarification. A deadlier scenario is the prescription is unreadable and the pharmacist guesses what he thinks was intended. Sometimes, the guess is wrong, resulting in the untimely death of a patient.
Physicians perform more than 48 million inpatient surgical procedures and more than 53 million ambulatory procedures annually in the United States.[xi] The majority are safe and improve the quality of life for patients. However, errors and adverse events occur in multiple areas including performance of the wrong procedure, malfunction of equipment, administration of an antibiotic despite a noted allergy, nerve damage related to positioning, implantation of non-sterile devices, post-operative deep vein thrombus, retained devices or sponges, and wrong site surgery.[xii]
It is hard to imagine how a surgery could result in the amputation of the wrong limb or the wrong hip is opened for a replacement, but such adverse events occur 2,700 times per year.[xiii] When I had my right knee joint replaced in 2009, I was not only asked to confirm multiple times which knee I was having replaced, but handed a magic marker and asked to place an X on the target knee. Imagine how a 90 year old patient with Alzheimer’s disease and no caregiver to provide assistance can answer those questions. A surgeon may consult an image and depend on an R or L on the bottom of the image which was reversed during the imaging process. By the time a patient is in the operating room, it becomes a hectic place. A lot of information is exchanged among multiple participants and the possibility of significant distractions can occur at any time.
The United States is the largest medical device producer in the world with a market size of approximately $110 billion, and it is expected to reach $133 billion by 2016.[xiv] Medical devices perform previously impossible tasks for patients, but they are not always perfect. If you use a computer or a smartphone, you know electronic devices can make errors. The same thing is true for medical devices. For example, a ventilator might shut off without warning and without sounding an alarm due to a flaw in the underlying software. A nurse may hear an alarm but assume it is the alarm for the warming blanket and may delay checking to see if there is a problem. The ventilator alarm sounds exactly like the alarm on the warming blanket. The consequences can be fatal.[xv]
Of the thousands of medical devices in use, most are beneficial to consumers, but where pre-market evaluations and post-market surveillance were inadequate, significant harm can be done. Medtronic, a Minneapolis device maker, introduced the Sprint Fidelis implantable cardioverter-defibrillator lead. The FDA approved the device in 2004, and more than 268,000 of them were implanted in patients around the world.[xvi] Three years after the device’s approval, independent cardiologists discovered the device had a propensity to fracture. Several deaths were attributed to the device failure, and Medtronic recalled it.[xvii] The consumers who had the implant were left with two very unpleasant choices: pursue a risky surgical removal of the device, or live with the uncertainty of death if the device should fail. The Sprint Fidelis tragedy highlights the need for thorough testing before approval and a transparent reporting system for devices in current use.
Hospital Acquired Conditions
A hospital-acquired condition (HAC) is one that could have been prevented and occurs after a patient is admitted to the hospital. The most common example of an HAC is a hospital-acquired infection, an infection the patient contracted in the hospital. Consumers generally are not aware of HACs, but researchers are extremely interested. Upon searching ProQuest, a database of six billion digital pages from the world’s most important scholarly journals, dissertations, and periodicals; for hospital-acquired conditions, I found nearly 40,000 relevant peer-reviewed journal articles. This is an indication of how important researchers think HACs are to the cost of care and the outcomes for patients.
The Centers defined two-dozen HACs including retention of foreign objects such as sponges or instruments inside a patient after surgery, air embolisms caused from injections, use of incompatible blood, pressure ulcers from being in a bed in the same position for too long, falls, burns, hypoglycemic coma from not managing glucose level properly, catheter-associated urinary tract infections, infections from surgery, deep vein thrombosis, and a number of other more complicated conditions.[xviii] These conditions are serious and can lead to pain, suffering, and even death. The common link of these serious HACs is they can occur after being admitted to the hospital. It is reasonable for people to expect they can go to the hospital to become cured of some acute condition, while in fact many go for routine treatment and end up getting an HAC that is worse than what brought them to the hospital.
The Centers, conforming to a mandate from Congress, implemented financial penalties by refusing to pay a hospital for the additional treatment needed because of an HAC. However, a study of 398 hospitals published in The New England Journal of Medicine found that the penalties had no effect on the occurrence of HACs.[xix]
The magnitude of HACs is staggering. Just the five most common infections patients get after being admitted to the hospital cost the U.S. healthcare system almost $10 billion a year. Five percent of patients admitted to the hospital become a victim to a serious infection. Researchers have estimated half of the infections were preventable.[xx]
Need for Transparency
More transparency about HACs is needed to ensure the public and regulators know how many serious incidents occur. Consider the aviation industry. Even the slightest incident, like a wing hitting a hangar door or a non-essential electronic component in the cockpit failing, must be reported to the FAA. Consumers can see the safety record of every airline in the world on various websites, and the National Transportation Safety Bureau has a publicly available database of every civil aviation accident since 1962.[xxi]
The United States has some of the greatest healthcare providers in the world, significant pharmaceutical innovation, outstanding medical education programs, and contributions of globally recognized clinical research. Nevertheless, healthcare outcomes could be better and safer. Fortunately, reform is underway to create more transparency of patient safety data, better coordination across the continuum of care, a focus on quality, and a shift from entitlement oriented, fee for service to accountability oriented, fee for value. Technology is emerging to provide more engagement for consumers and better tools for providers.
[i] “The World Factbook,” Central Intelligence Agency, http://cia.gov.
[ii] “World Health Education Initiative,” world-prosperity.org, http://www.health-care-reform.net/causedeath.htm.
[iii] Barbara Starfield, “Is Us Health Really the Best in the World?,” JAMA 284, no. 4 (2000).
[iv] Linda T. Kohn, Medicine Institute of, and America Committee on Quality of Health Care in, To Err Is Human : Building a Safer Health System (Washington: National Academy Press, 1999).
[v] Robert M. Wachter, “The End of the Beginning: Patient Safety Five Years after ‘to Err Is Human’,” Health Affairs 23 (2004).
[vii] Marshall Allen, “How Many Die from Medical Mistakes in U.S. Hospitals?,” Shots Health News From NPR (2013), http://www.npr.org/blogs/health/2013/09/20/224507654/how-many-die-from-medical-mistakes-in-u-s-hospitals.
[viii] John T. James, “A New, Evidence-Based Estimate of Patient Harms Associated with Hospital Care,” Journal of Patient Safety 9, no. 3 (2013).
[ix] Allen, “How Many Die from Medical Mistakes in U.S. Hospitals?”.
[x] “FDA’s Safe Use Initiative to Address Preventable Harm Due to Medication Misuse, Errors, and Other Related Problems,” Formulary 45, no. 1 (2010).
[xi] “Inpatient Surgery,” Centers for Disease Control and Prevention (2014), http://www.cdc.gov/nchs/fastats/inpatient-surgery.htm.
[xii] Card R et al., “Health Care Protocol: Perioperative,” Institute for Clinical Systems Improvement. Perioperative Protocol (2014), https://www.icsi.org/_asset/0c2xkr/Periop.pdf.
[xiii] Susan J. Collins et al., “Effectiveness of the Surgical Safety Checklist in Correcting Errors:Aliterature Review Applying Reason’s Swiss Cheese Model,” AORN Journal 100, no. 1 (2014).
[xiv] “The Medical Device Industry in the United States,” SelectUSA (2014), http://selectusa.commerce.gov/industry-snapshots/medical-device-industry-united-states.
[xv] Elizabeth Mattox, “Patient Safety. Medical Devices and Patient Safety,” Critical Care Nurse 32, no. 4 (2012).
[xvi] Sanket S. Dhruva and Rita F. Redberg, “Medical Device Regulation: Time to Improve Performance,” AORN 9, no. 7 (2012).
[xviii] “Hospital-Acquired Conditions,” CMS.gov (2014), http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/Hospital-Acquired_Conditions.html.
[xix] Grace M Lee et al., “Effect of Nonpayment for Preventable Infections in U.S. Hospitals,” The New England Journal of Medicine 367, no. 15 (2012).
[xx] Brenda Goodman, “Hospital-Acquired Infections Cost $10 Billion a Year: Study,” HealthDay (2013), http://health.usnews.com/health-news/news/articles/2013/09/03/hospital-acquired-infections-cost-10-billion-a-year-study.
[xxi] “Accident Database & Synopses,” NTSB Aviation (2014), http://www.ntsb.gov/aviationquery/index.aspx.