A general problem of conventional marketplaces

NOTE: This post originally appeared in an earlier blog, The Semantic Marketplace, in 2009. It appears here with minor modifications.

Healthcare is not the only area in which seemingly new and imaginative technical solutions and business models aren’t producing the positive results we expected. There are many parallels in higher education, where costs to consumers are rising consistently faster than the rate of inflation. NASA is seeking desperately to continue its programs in safer but more cost-effective ways. And there are commercial challenges everywhere we look — for example, in transportation, energy, the environment, and business management itself, where management actions and remuneration seem disconnected from results.

All of these difficulties could be characterized as “wicked problems,” described by Dave Pollard as “a term …  coined by Horst Rittel and Melvin Webber in 1973 to describe problems in public policy and planning that defy solution by analytical methods. ” (Pollard’s take on the subject is at http://howtosavetheworld.ca/2005/10/12/wicked-problems/. Others have varying definitions. And wicked problems are hardly limited to public policy and planning.)

Such problems are actually more than “wicked.” They are both wicked and continually evolving. There are reasons, many closely related, why there are seemingly so many more of these intractable problems, including:

  • It’s no longer possible for individuals to adequately understand, select, and apply solutions in broad domains like healthcare. Does the Web help? Think about it: One person searching all the information in the world and expecting instant, meaningful results. That’s a black hole for your time and a guarantee that you’ll collect misinformation. (Still entertaining that conspiracy theory that mercury in vaccines causes autism? Most sources supporting that claim ignore the fact that mercury hasn’t been used in vaccines at all since 2000. Some countries eliminated the mercury more than five years earlier. And the rate of autism did not diminish. And we had autism before drug makers started adding mercury to vaccines.)
  • The audience — the consumers in any particular domain — is much broader, both geographically and socially. Political borders often make no difference at all. This much broader audience is contending with information overload and a far greater overall complexity of life. (Complexity itself is a source of income for many sectors, not a problem. Consulting services and whole industries rely on the burdens of complexity to produce revenue.)
  • The information we need to manage — information that directly affects our lives and activities — vastly exceeds the capacity of human memory. Even the important stuff!
  • We perform these information-/solution-seeking activities largely in isolation. The librarian isn’t there to help you. Ditto for your physician. And while the wisdom of the crowd sometimes emerges from collaboratively developed online resources, the results are often too late … and rarely authoritative.
  • Increasingly, solutions — including technology — are targeted at symptoms, not at problems. Escalating healthcare costs are not the problem. They are a symptom of the problem. HMOs and insurers were supposed to solve that problem. Instead, they exacerbate the problem.

How do we make it right?

There is a broad, fundamental problem in healthcare and other complex domains mentioned above: In the face of complexity, pace of change, and superabundance of information, we stopped letting marketplaces solve problems that are best solved by marketplaces. The answers provided ranged from dictating arbitrary solutions to accepting chaotic complexity. Which is exactly wrong.

You may think that I am flamingly Libertarian, but you would be quite wrong. To me, Ralph Nader is a right-winger. And I think “socialist” approaches to healthcare in Canada and other countries have been far more beneficial — and cost-effective — than the current US model. I believe that denying universal access to medical treatment and wellness programs represents criminal dereliction of social and moral responsibility.

Nevertheless, in the course of discussions with economist David Morf and others, it has become clear to me that the “wicked” problem itself in such socio-economic domains has been misunderstood and that, consequently, a very different approach to solving such problems is needed.

The solution can come in large part from what we have been calling a “semantic approach.” The causes or conditions we have described above … represent changes so fundamental that applying patchwork technologies and “new” business-management theories (like Six Sigma) to the symptoms fails to produce substantive, predictable, or sustainable improvements. Instead, we have to turn to a marketplace approach that depends on a classic free-market economic model — but a model for non-physical goods, enabled by an understanding of how richer representations of meaning can serve both as self-evolving tools for creating sustainable value and enabling price discovery more effectively. Richer, more manageable representations of meaning also serve as a design for a new mode of exchange, where the terms of trade include an explicitly evolving and shared understanding of what is being demanded and supplied.

The first step is an appropriate deconstruction of the exchange of value.

  • Enable consumers to understand and express what they want or need — in granularity that permits high levels of customization of their needs — in spite of overwhelming complexity,
  • Enable suppliers to respond competitively to those  needs.
  • Enable the marketplace itself to grow and change continuously, even when the goods and services are complex.
  • Progressively eliminate unnecessary intermediaries, as happens in the world of consumer goods. The most effective markets are those in which the participants deal with each other as directly as possible — the opposite of what we are currently experiencing in healthcare, for example.
  • Allow new patterns of creation and exchange of value as transactions take place.

Why does a “semantic approach” help?

This is, of course, a somewhat different kind of marketplace. In the case of healthcare, it’s a market in which customers are able to express requests for highly specific services and products without knowing the precise names of the symptoms, services, technologies, and medicines involved. Because if it currently takes you a day or two to perform thorough research on digital cameras before making your purchase, imagine the difficulty in finding reliable services for that special pain in your neck.

It’s a marketplace in which the nature of the information resources — unstructured documents, structured data, and personal or expert experience and information of many kinds — become transparent to the seeker of services. Those resources are “blended,” to use a term preferred by Michael Belanger of Jarg Corp. What the consumer and the vendor both see is, ideally, the meaning of the request — in their own terms — not a library catalog or an order form. (Or, God forbid, an idiosyncratic insurance form or any other special-purpose purchase order.)

Such fluid interactions with complex, changing resources cannot rest on such simple services as full-text search. In fact, we cannot expect individuals to execute the mechanics of such interactions and achieve positive results, except where those individuals have in-depth knowledge of the processes, technologies, and domain.

This is one of the great shortcomings of current information-access and management technology. Such technology relies on an individual’s ability to interact successfully with huge information resources … on the technology’s own terms. In brief, today’s technologies do little to convert information into meaning … and nothing at all to create greater value or efficiency from that experience.

The new world of “wicked” problems requires us to deconstruct the elements of semantic-based transactions so that both people and applications can participate successfully in building a shared, viable marketplace for solutions. The cost of the process of converting information into meaning needs to be redistributed and shared — not duplicated painfully and unnecessarily by thousands or millions of individuals.

Even the most wicked problem does not change continuously in every aspect. Specific facts change at observable times and places. If the problem is described systematically, with (1) precise statements of the meaning of relevant facts and (2) integration of those supporting facts into broader assertions, then the impact of changing facts on the ground can be observed as those changes cascade through a knowledgebase.

And the process must be aided by appropriate, powerful technology and data resources. Did you ever wonder why “personal information managers” (PIMs) don’t work for most people? (There’s a new one almost every week, so we know people still desperately want to manage the information in their lives.) The answer is actually quite simple: The requirements of managing personal information only sound simple, but they are, in fact, incredibly complex. They are as complex as life itself.

Expecting an application that can fit on a single CD-ROM and works in the isolation of your desktop computer to solve these complex problems has never made sense. It still doesn’t make sense. PIMs only “work” when you spend lots of time continually maintaining and massaging the information in those resources.

© Copyright 2017 Philip C. Murray

 

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