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November 2009
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January 2010

Qwest, Vonage and Comcast VOIP

Decided to upgrade my second land line to VOIP.  Kept 1 line in copper because it always works even if the power goes out.   Although the services are very similar, the set up and costs are not.  Comcast costs $40 / month, Vonage costs $25 / month and surprise, Qwest costs $20 / month.  While Comcast and Vonage require you to plug in their box into the cable modem, Qwest uses a Linksys box.  You can optionally plug it into a router if you want to use the phone somewhere remote from the cable modem.

Qwest doesn't advertise their "broadband phone" but I found it here.  If you call, say hi to Henry.


Healthcare Reform: Lessons from the Department of Agriculture

A must read article from the New Yorker.   I love analogies.   In this one the author examines the mess that was agriculture 100 years ago here in the U.S.   40% of a family's income went to food:

America’s agricultural crisis gave rise to deep national frustration. The inefficiency of farms meant low crop yields, high prices, limited choice, and uneven quality. The agricultural system was fragmented and disorganized, and ignored evidence showing how things could be done better.


Health Care Reform: Rationing vs. Gluttony

Health Care is expensive here without the best outcomes.   You would think the conversation would revolve around efficiency: how to get more bang for the buck.  Yet there is a chorus of objections anytime someone actually wants to control costs (like doing studies to find out what drugs, treatments, etc. work best).  Then the outcry of "rationing" can be heard.

Aa  The opposite of rationing is gluttony.  You consume too much and it's not good for you either.   Any treatment, drug, or hospital stay introduces new risks, besides costing money.  Like going to a buffet in Vegas, the true costs are hidden from us.

The solution?  More transparency and more untainted data to us the consumers and our physicians.

You don't get your cars undercoated, why do we want useless undercoating in our health care?  Or do we just enjoy be gluttons?


Corporate Behavior Rooted in Self-Interest?

Sky-high salaries, enormous bonuses, truckloads of stock options and a variety of expense perks, we continually hear about these as part of the compensation schemes for executives (see Forbes listing for this year), and it certainly makes the rest of us salivate.  These payouts are the direct result of compensation plans designed to drive corporate results, ones that allegedly benefit all stakeholders.  Seeing the potential monies at stake certainly drives home the question:  what might we do if we were in the CEO’s shoes?

 

As Pavlov taught us through his experiments with a dog and a bell, appropriately placed incentives can drive and condition behavior.  The corollary to that, however, is what Steven Levitt and Stephen Dubner discovered and reported on in their 2006 best-selling book, Freakonomics and their 2009 follow-on, Superfreakanomics.  In Freakonomics, the example of the teachers who helped students through the standardized tests by cheating, due to financial incentives, corroborates Levitt and Dubner’s point.  They suggest that you need to look for the motivations and their underlying incentives; then the behavior will make sense.   Levitt and Dubner paint a picture of a horse chasing the carrot tied to the end of the stick, but maybe it’s not that simple.

 

A recent article in BusinessWeek entitled The Dark Side of Incentives by Barry Schwartz caught my attention.  Schwartz discusses how financial incentives can many times strip away moral considerations in the decision-making process.  A study by James Heyman (University of St. Thomas) and Dan Ariely (Duke’s Fuqua School of Business), cited in Schwartz’s BusinessWeek article, showed that passersby were less likely to provide assistance lifting a couch from a van, if a token payment was offered.  This example, along with others in the article, comes from Schwartz’s book, The Paradox of Choice:  Why More Is Less.  Key to Schwartz’s thesis is the idea that people are not only motivated by money; they also have a moral conscience and want to do the right thing.  Unfortunately financial incentives can sometimes impair or cloud their moral imperative.

 

Levitt, Dubner and Schwartz have provided some interesting insights into the world of incentives and motivation.  With what we know now, can we change executive compensation, eliminating the excesses we’ve witnessed and better balancing corporate objectives with those of other stakeholders?  I’m not sure, but I’ve added Schwartz’s book to my list for Santa, hoping that it offers some ideas on prescriptions and remedies.

 

Ryck Marciniak

Guest Blogger

http://ca.linkedin.com/in/ryckmarciniak