Patient Care in Ontario

September 26, 2014

From the medical frontlines

 

Introduction

A recent experience illustrates, at least to me, some of the issues which exist in the delivery of healthcare in Ontario. There is a good and a bad news story to tell. Following earlier postings (cmaule.wordpress.com), I concluded that Ontario, and I assume other Canadian provinces, have well trained and qualified doctors, nurses and support staff. It has modern equipment and operating theatres, some perhaps requiring further expenditures, such as the recent shortage of MRI equipment which seems to have been solved, at least in the Ottawa area where MRI wait times have been reduced. The treatment of emergency and life threatening cases seems to work well, although hospitals can be dangerous places due to a persistent high level of infections which arise after admission. Don’t hang around longer than you have to.

The statistics which are worrying are the wait times to see specialists, and the wait times for patients to be operated on by specialists. The reasons are complex involving different aspects of the healthcare system which include, amongst others, the constitutional dimensions of the system, the authority and responsibility of the different players, actions taken by patients and the methods of funding healthcare. Royal Commissions have studied these issues, so that what follows is a barebones description of what happens, as seen mainly from a patient’s viewpoint.

Wait Times

A typical path for a patient is fairly straightforward. A visit to a GP is followed by referral to a specialist perhaps with some X-rays, ultrasound and blood and other tests. The tests are conducted quickly but delays frequently occur in getting an appointment with a specialist. There appears to be a shortage of specialists, especially in some areas like urology, endocrinology and gerontology. What is a reasonable wait time? Opinions differ, but I would suggest 12 to 24 weeks for many non life-threatening cases. A year seems too long and an indication that the system is malfunctioning. What are some of the problems? Geoffrey Simpson in Chronic Condition and others have pointed to a number of them.

Operating facilities

Operating theatres are not fully utilised and therefore have spare capacity, more than may be needed to handle any possible disasters. There are either not enough doctors, nurses and hospital beds to provide treatment and allow more patients to pass through the hospital system, or the administration of the system is faulty.

The single most important factor for lengthy operating wait-times appears to be the lack of hospitals beds and care for post-operative patients. Why the shortage? The main reason is that hospital wards are full of chronic care patients awaiting transfer to other facilities. The congestion is caused because of the lack of these facilities elsewhere in the system.

A diagnosis of the overall problem of wait times is complicated due to the system established by Canada to deliver healthcare. What follows touches on some of the main factors which seem to me to be important. In some ways Canada has a self-inflicted problem due to past decisions by different levels of government, with advice from interested parties and little input from patients except as tax payers. Other countries have better functioning systems, so it should be possible to see how delivery could be improved.

Who is responsible?

Healthcare is a provincial responsibility according to the Canadian constitution. At the same time provinces have agreed to treat patients from other provinces in certain cases. Thus elements of a nation-wide system are grafted onto one of provincial responsibility. In the case of emergencies, Canadians will receive treatment in any province regardless of their province of residence. In other cases, such as a patients deciding they would prefer to be treated in an out of province facility, that facility can refuse service, provide service and collect funding from the other province, or if this funding is less than that charged in the province of delivery ask the patient to pay the difference.

An example of what happens in practice is that Ottawa hospitals receive patients living across the provincial border in Quebec. Assuming non-emergency situations, the Ottawa hospital can accept patients and receive one or other form of payment or reject the patients, if it is just a case of preferring to be treated in the Ottawa facility. Both things can happen. But if the Quebec patient is treated in Ottawa and patients are treated in the order they arrive, then subsequent Ontario patients will have longer wait times. Service may be delayed to Ontario residents as a result of Quebec not providing certain services within a part of the province.

It could work the other way and at different provincial border locations throughout Canada. For example, a Cornwall, Ontario resident may find desirable healthcare providers in Montreal

This provincial healthcare scheme with certain universal or federal add-ons can have the following results. One province may decide that rather than expanding its own facilities it will depend on those of another province even though it has to pay that province. It may decide that it is cheaper to encourage its patients to travel across a provincial border than to invest in its own facilities. If so, the patients from the province providing the treatment will experience longer wait times. At one time, it was more lucrative for certain hospitals to treat out-of-province patients than Ontario patients. Apparently this is no longer the case but is illustrative of how a province based system with out-of-province features can affect delivery times.

Types of surgery

A more general issue is that there are certain types of surgeries which are routine and repetitive, especially with an ageing population. Hip, knee and other joint replacement, hernia operations, and certain types of eye surgery are fairly standard procedures and could be treated in facilities which cater to the specialties. This happens in the case of the Shouldice Clinic for hernia operations in Ontario. It is a private clinic but is paid for under the Ontario healthcare scheme. Other specialized clinics could be established in order to make better use of resources. At present, too wide a range of different medical procedures are conducted in the operating rooms of general hospitals. If these regular surgical procedures were confined to specialized locations, public or privately owned, then wait-times would be reduced.

Privately operated specialized clinics are seen as creating a two-tier healthcare system. If such clinics are operated efficiently and relieve the pressure on general hospital facilities, then delays of surgeries due to the lack of beds for post-operative care would be reduced.

A related issue is that emergency facilities are used by patients who don’t have emergencies and should be treated in clinics. In part this is because patients are not registered with a GP, although this seems to be changing with the opening of walk-in clinics. Doctors however find that patients who do not get a prescription from one doctor will visit other clinics until they feel satisfied. In 1984, I was part of a commission in Ontario that examined the dispensing fee allowed for prescribed drugs. At that time the government had a record of all drugs prescribed and paid for in Ontario, but would not use the information to reduce the costs of overprescribing within the province. I think this situation prevails today.

Administrative issues

An administrative wrinkle which complicates delivery in Ontario is the Ontario Hospital Act which gives certain responsibilities to the CEO of the hospital, but this does not include the services of doctors who are independent contractors reporting to the Chief of Staff not the CEO. In the case of fees charged, surgeon practices or malpractices, these are dealt with by the College of Physicians and Surgeons, a body of doctors regulating other doctors. This is not the case of the fox guarding the hen house, but the fox guarding the other foxes (or hens the hens). Obvious conflicts of interest may arise affecting both patient costs (either private or via taxation) and services provided.

Some forms of healthcare are either not funded by the government or are only funded in part and may be covered by privately purchased insurance, such as dental work, eye care, hearing aids and some prescription drugs. In Canada, it is estimated that about 70% of healthcare costs are covered by the government and 30% by a combination of private insurance and user pay. What the rationale is for public funding of some healthcare procedures and not others, such as eyes, ears and teeth, is a mystery to me. The original rationale for a public system was to address catastrophic illnesses. Over time it has been extended so that general public care is seen as an entitlement for almost all conditions. Once granted, politically it is close to impossible to withdraw.

A visit to a dentist, optometrist and hearing specialist is possible without a long wait. Their facilities are often spacious and well staffed in contrast to many general practitioners. This suggests that these skilled resources are organized, administered and paid for in a manner which allows for timely delivery of the services. In other segments of the system, as suggested, this is not currently the case. Thus my one year wait to see a specialist for a non-life threatening situation. But when age itself is a life threatening condition, then the wait is not appreciated.

Overall my view is that there are administrative shortcomings to the Ontario healthcare system which could be addressed to improve its performance and reduce costs or the rate of cost increase. Some might actually save money. The most important factor may be increasing the number of beds available for post-surgery patients which would require the assignment of other patients to facilities which specialize in their requirements.

Note

I am grateful to David Rothwell who provided detailed remarks on an earlier draft of these comments. I alone am responsible for the above draft. I recognize that the administration of healthcare services is a highly complicated process. Many countries and jurisdictions do it, so that it should be possible to learn from best practices undertaken elsewhere, which may be adopted by Canadian provinces and the federal government. When healthcare and education account for 70% of provincial revenues in Ontario, and probably in other provinces, then we need all the help we can get to achieve cost efficiency, whatever that might mean. If my experience offers any lesson, it is that there must be room for improvement.

Boots On The Ground

September 23, 2014

The last time I was asked to become involved with armed adversaries, some years ago when undertaking national service, I would not have appreciated it if my side had told the opposition what we would do and not to do if they attacked us. This is not how one usually plays lethal or non-lethal games. And yet this is pretty much what the US and its allies are saying when they state that they will not put boots on the ground in combating terrorist fighters in the Middle East. You don’t tell your opponents on the sports field in advance what plays you will make, and you don’t tell people who are pointing a gun at you that you will not defend yourself, especially when they may behead you. Even Gilbert and Sullivan might have had difficulty in dreaming up such a scenario for a musical opera.

And yet this is the situation politicians have created for themselves and their forces in the Middle East. The US President and his allies including Canada have said they would help. Like the others, Canada is being asked by some to spell out exactly how far it will go in letting its forces intervene in Iraq and Syria. Canada’s parliamentarians want a debate and some want to know what instructions the troops will have. Will they be allowed to shoot if the occasion arises? This is not just silly, but dangerous for those on the ground. The ISIS forces must either be laughing or at least welcoming the good luck they enjoy from having stupid adversaries.

I would expect Canadian troops will be there to assist the anti-ISIS forces, but exactly what they are allowed to do should not be spelled out in public. To do so would be to arm the enemy and place the Canadian forces in more danger than they will already experience.  If the NDP requests more detailed information, then they should be held morally and financially accountable to the troops and their families as well as to the Canadian public for any adverse consequences. Have a debate by all means, but don’t ask for detailed tactical information.

 

On a related topic, why is it that the Iraq army, after all its training by the allies, is so incompetent? A New York Times journalist gave some answers. First, the professional army of Saddam Hussein was disbanded by the US.  Many of these soldiers are now working for ISIS. The replacement Iraq army has few trained professionals and those who command pay the troops while receiving kickbacks from them. At the same time, there is no effective chain of command where orders are passed down and executed. The Iraq army is a poorly run criminal organization except for the transfer of monies to the bosses. In contrast ISIS appears to be fairly well administered, although they have other problems which will become more apparent. This is a war where the enemies’ mechanized vehicles are often Toyota trucks with machine guns mounted on them. Use of captured sophisticated tanks and planes require not only fuel supplies, which ISIS has, but parts and mechanics to service the equipment, which may be in limited supply. Moreover, large items are easier to detect and destroy.

For me, the moral of this story is that when a country fights a war that is largely unconventional relative to many past conflicts, such as the use of beheadings by the enemy, poison gas and fighters living amongst civilians, then it has to be fought using unconventional methods. These may in the future become conventional, such as the bombing of ISIS targets in Syria without asking permission from the government of Syria, if one still exists. Apparently this took place on Septemeber 22, 2014.

The public has to be educated in both the nature of the conflict and the means which our side will need to use. I would hope that our politicians will take the lead in providing this education and not undermine the forces sent to the front lines on their behalf.

An Astronaut’s Guide To Life On Earth – a review

September 10, 2014

Chris Hadfield, An Astronaut’s Guide To Life On Earth, (Random House, 2013).

The title tells it all. Based on the many years that it takes to become an astronaut and be sent on missions, what is it that the rest of us mortals can learn?  Hadfield’s answer is informative and educational. How one conducts one’s daily life, interacts with other people, learns from them as well as instructs them is crucial to understanding both personal success and team achievement.  Astronauts have to be team players, each of whom may have specialties unfamiliar to others but necessary for mission success. Respect and trust are important attributes. This can be especially difficult to achieve when working with people trained in different countries, but who are brought together on a common mission where all have to cooperate in a highly sensitive environment. Mistakes can not only cost millions of dollars but jeopardize lives.

Hadfield’s book achieves two things, a detailed and personal description of what is required to be chosen as an astronaut, and what happens in fulfilling the job both on land and in orbit. There is much more that astronauts can tell us and maybe they have in other books. The following are questions which arose in my reading of this book:

  1. How does an astronaut balance family and work life? Hadfield does a good job of including members of his immediate family in the narrative, but there are many questions that the reader would like to learn from family members. (Maybe they would prefer not to share them.)
  2. How do the parties interested in space collaborate to persuade governments to provide the substantial funding required for something where the payoff, if it exists, is a long way off? Space travel is at the other end of the spending spectrum from building a highway or school, where the results can be seen relatively soon after the funding decision is made, and politicians can claim credit which will benefit them at the polls.
  3. How do you get a crew of astronauts and their ground handlers from different countries with different languages to operate as a team to build the equipment and manage it for launch, in orbit and for return to earth? The close cooperation which astronauts from Russia, the US, Canada and other countries have had tells you that it can be done, but how? What are the issues and how are they managed? Personalities play a part but so does the management and set up of the project.
  4. Once space travel is found to be possible, what are the next stages of exploration and how can financing be provided, either privately or through continued government support? This type of question must have faced Columbus after discovering the American continent. He was able to find valuable commodities for trade which encouraged others to provide further risk capital. How money can be made out of space or space travel is not yet obvious, at least to me?

None of these questions are criticisms of Hadfield’s book. They represent the type of issues which emerge from its content, and will be of interest to those concerned with this frontier for exploration. The book also helps to remind readers that earth is a minuscule object in the solar system, and, if it disappeared by being hit by a large meteorite, no-one elsewhere, if such people exist, would notice. In a universal context, we really don’t matter.

When skim milk looks like cream

September 7, 2014

Numbers provide information about different aspects of the world. But how reliable and useful is the information? Daily temperature, pressure and rainfall are accurate about the past and provide a forecast of the future. Short term forecasts tend to be more reliable than longer term ones. Economic statistics like GDP (Gross Domestic Product), inflation, employment/unemployment, interest rates, and stock market prices are recorded for the past often with forecasts for the future. How reliable are these statistics which each often measures a group of activities not one variable like temperature and pressure? This is the case with GDP which measures the output of all sectors of an economy.

Canada is chastised for not spending 2% of GDP on defense, a level reached by some other NATO countries. But what if the GDP of different countries is not a reliable comparative measure of a country’s yearly output? And what if different countries include different items in their defense expenditures? I will leave the latter for the defense gurus to discuss, and suggest why GDP has always been an approximate measure of output and today is increasingly so and more unreliable as a comparative measure.

 

Consider the following, much of which can be found in Diane Coyle’s excellent book, GDP, A brief but affectionate history (Princeton 2014):

 

  1. In 2010, Ghana’s GDP was increased 60% overnight when the country’s statistical agency changed the weights assigned to each sector of the economy when calculating GDP. Previously the weights for 1993 were being used.
  2. Six other African countries are undertaking a similar exercise which may increase their GDP by as much as 40%. Nigeria, already a large African economy, may then exceed South Africa, at present the largest on the continent.
  3. The service sector of all OECD economies now accounts for a larger share of GDP than previously, over 75% in many cases. Services output is notoriously difficult to measure in contrast to goods. How do you measure the advice given by a lawyer, accountant or economist? By the amount paid for the advice. But what happens if it is given for free (probably an unlikely case)? In the first case there is a record for inclusion in GDP, but not in the latter, even though production has taken place.
  4. Each country’s underground economy is by definition not measured. Services are often activities which are more susceptible to being exchanged without a record being kept, thus diluting the accuracy of GDP accounting. Tax measures often influence the size of the underground economy.
  5. There are many other examples of services which don’t get recorded. The woman who marries her chauffeur, the man who marries his housekeeper both cause GDP to decline while there is no change in the underlying economic activity – although other aspects of their lives may change drastically.
  6. While consumers tend to focus on items which are more expensive today than yesterday, many things have decreased in price and some are now consumed for free. They are not included in GDP as currently measured but do constitute part of a country’s economic output. I use to pay for long distance phone calls. Many today are free with access to the internet. Facetime is free. Skype calls are a fraction of what was formerly charged for long distance calls. Emails substitute for letters and the costs associated with writing and delivering them. In each case the nature of the economic output has not changed but it is no longer measured for inclusion in GDP accounting.
  7. Consider the production and distribution of videos, music, television, newspapers, books, magazines, education (online), all of which are affected by communications technology. Their real output has increased but measured in monetary terms their per unit value has declined. GDP relies on figures which measure monetary not real output, and with the growth of services this is far more difficult to do.

 

Other uses of GDP

Countries are classified as high, medium and low income based on GDP per capita. Their responsibilities and treatment will depend on where they rank. At times, a country may want to advertise that it has moved up the scale, such as its attractiveness for foreign investment. But for receipt of foreign aid, it may prefer to stay as a less developed country. Ghana’s sudden increase in GDP per capita in 2010 may result in it no longer being a recipient for certain types of aid and require it to make a larger contribution to the budgets of international organizations.

A country’s treatment for trade preferences is also determined by its level of per capita GDP. Ghana has become a middle income country and is now required to negotiate a free trade agreement in order to keep its preferences in the EU, and will be removed from Canadian GSP (General System of Preferences) in 2015

 

Conclusion

The foregoing represents only some of the difficulties in measuring and interpreting GDP. These have increased over time especially due to technological change. Like changes in weather conditions, changes in GDP get widely reported. The increasing unreliability of the latter should be an issue of concern for those using this information. GDP data often result in adjustments to fiscal and monetary policies, and inform investors about buying and selling securities.

In the medical arena, doctors prescribe on the basis of indicators like temperature and blood pressure. If the readings are false then the treatment may kill the patient. In the realm of economics, false or misleading information can undermine the health of an economy. This occurs now in the case of an important economic measure. Next time you read about change in a country’s GDP, interpret it with a few grains of salt.

Other economic statistics should also not be taken at face value, like the unemployment rate, inflation and the current account surplus or deficit on the balance of payments. In contrast, the current price of a stock, the interest rate and terms for various types of private and public debt are numbers which mean what they say. The moral is that familiar numbers do not always mean what they appear to say…..there is some quotation about skim milk made to appear like cream, but I have lost the source for this saying

 

Will 2014 mark the start of WW3?

September 4, 2014

One thing which concerns me today is that the present looks a lot like 1939 with Putin playing Hitler and the west unable to decide how to respond. Canada is reported to have sent five jets to the Baltics but they are unarmed, and one ship to the Mediterranean, that’s about half the operational Canadian navy! Not only do we not know what the world will look like five and ten years hence, we don’t know what it will look like tomorrow.

In 1914, Queen Victoria’s relatives headed England, Germany and Russia, countries which went to war over how to divide up Europe and parts of the world. England and Russia had their empires and Germany wanted one. From 1919 to 1939 they took a time out. Later play resumed with much the same teams but different coaches. The boundaries of Europe and the Middle East were redrawn after 1919. Today, borders are being fought over in Eastern Europe and the Middle East.

Or looked at another way, WW1 took place as the Ottoman, Austro-Hungarian and Russian empires were in decline. The British Empire was near its peak and the American one on the rise. After WW2, the British Empire was relegated to the second division, and the USA became the sole super power, with the USSR its only adversary but not a very strong one except for its nuclear weapons. Now there is a weaker American Empire, a weak Russian Empire trying to redraw boundaries in Eastern Europe, and a vague Islamic empire made up of feuding parts. Weakness signals unrest. And none of this includes those parts of the world where half the world’s population lives – China, India, Pakistan, Indonesia and neighbouring Asian countries. They have both their own and interrelated problems because of regional and international interdependence.

In 1914, the German invasion of Belgium triggered England’s declaration of war; in 1939, it was the German invasion of Poland. What might it be for NATO in 2014? Putin has already said (August 2014) that he could occupy Kiev within two weeks. This may say more about his arrogance than good judgment, but the latter seldom prevented the outbreak of wars.

The state of the world – is the glass half empty or half full?

August 27, 2014

“NOW is the best time in history to be alive. Our world has experienced a sustained period of positive change. The average person is about eight times richer than a century ago. Nearly one billion people have been lifted out of extreme poverty over the past two decades, living standards have soared, life expectancy has risen, the threat of war between great powers has declined, and our genetic code and universe have been unlocked in previously inconceivable ways. Many of today’s goods are unimaginable without collective contributions from different parts of the world, through which more of us can move freely with a passport or visa, provided we have the means to do so. Our world is functionally smaller, and its possibilities are bigger and brighter than ever before. Never before have so many people been optimistic about their future.”

 

This is the opening paragraph of the Oxford Martin Commission For Future Generation’s Report (2013, available online). It continues by listing the challenges facing future generations. These are read about and viewed daily. The details sell newspapers by attracting audiences for advertisers. But is Armageddon approaching, or is there a more hopeful story to be told? It depends on how the issue is framed. On population/overpopulation, is it where people live, what they have to eat, what illnesses they have, the environment they live in, the conflicts they face? Pick an issue and depending on geography (one of the frames), the future seems ultra bleak or extremely hopeful.

 

The statement about the threat of “war between the great powers” was written about 365 days before a Malaysian airliner was shot down over the Ukraine, increasing the probability of serious conflict between powerful countries either directly or through their sidekicks. Unexpected, if not unknown, events can change the landscape overnight. The 1914 assassination in Sarajevo was followed by a world war. What are the known unknowns which will occur in the next twelve let alone sixty months? Nobody knows but we can make more and less informed guesses.

 

One difference today from 50 years ago, that’s 1964, is globalization, an omnibus term which, through overuse, has become almost meaningless. But if the focus is on the shrinkage effect of technology and how it has connected all parts of the world, then the implications of how things have changed become clearer. Examples abound. At the firm level, production and distribution involve supply chains so that many final goods involve activities in several countries with intermediate goods and services being traded internationally and domestically. It applies to services as well, such as newspaper publishing where content is collected from around the world with much greater ease than in the past. Haircuts and burials may still remain unaffected by globalization, except that the fashions and practices of one country are imported into another.

 

A second example of increasing interdependence is social media undertaken via a myriad of means, many of which confuse me, from email to text messaging, SnapChat, Instagram, Twitter, Facebook, Facetime, Skype and many others. People interact with each other much more so than in the past. Is this beneficial or harmful? A bit of both. It can be used to further corruption and criminal activities like child abuse, but it can be used to catch child-abusers who were there long before the internet. (The New York Times August 24, 2014, has an article about the Vatican’s representative in the Dominican Republic who has been engaged in child abuse for a number of years. It was detected by a Dominican reporter without the use of the internet, but the internet quickly spread it.)

 

Today is different from the past as might be expected but many things are the same, not necessarily worse, such as the “bads” like corruption, conflict, abuse of human rights, treatment of children, women and disadvantaged groups in society. Today, there are means and a greater willingness to address and alleviate if not eradicate these issues. There is a good news side of the story to be told about the “bads” which are the main focus of the media and of public discourse. Most of the Oxford Martin report is given over to discussing the “bads” and what the commissioners feel needs to be done. Fair enough, but context is required in order to understand and evaluate the state of the world. Many things have got better over time.

 

The environment

I have deliberately avoided mentioning the environment because the debate has become toxic, and whatever is said will result in being branded as a supporter of one side or the other. I will back into this by presenting some facts on the basis that “everyone is entitled to his own opinions, but not his own facts.” (Attributed to Daniel Patrick Moynihan, a four time elected US senator who died in 2003).

In 1972, a group of distinguished writers drafted a report entitled The Limits To Growth (LTG). It became a catalyst for the environmental movement, and had dire warnings about the exhaustion of various natural resources which would limit future growth. Forty-one years later in 2013, LTG was found to be wrong in many respects both about pollution and resource use – see http://www.project-syndicate.org/commentary/economic-growth-and-its-critics-by-bj-rn-lomborg, posting by Professor Lomborg in June 2013.

In 1980, Professor Julian Simon, an economist bet Paul Ehrlich, author of The Population Bomb that the inflation adjusted price of any five commodities Ehrlich chose would have declined in ten years time. Ehrlich chose chromium, copper, nickel, tin and tungsten. The world population grew by 800 million in the decade and the price of all five fell – three in nominal terms and all five in inflation-adjusted terms. Ehrlich lost the bet. (More details on other resource bets are discussed in “Simon-Ehrlich wager” in Wikipedia.)

The environment and global warming is a topic with many facets so that selective use of facts and data can lead to a wide range of conclusions which are then used selectively to support a viewpoint. My non-expert view of this topic notes the following:

  1. The earth has experienced periods of cooling and warming with the onset and decline of ice ages. I vacation in a part of Ontario covered by lakes which were gouged out as the ice retreated northwards. Whatever the temperature data records today it has been subject to change in earlier times.
  2. The extent to which warming is taking place is measurable. The extent to which it is due to human activity is open to debate, as is the extent to which this is a disaster for mankind.
  3. Matt Ridley, a columnist for the Times (London) and a member of the British House of Lords has reported on this issue for 25 years. His summary of the 2014 Report of the International Panel on Climate Change is published in The Financial Post, June 19, 2014, p.FP9

“The IPCC commissioned four different models of what might happen to the world economy, society and

technology in the 21stcentury and what each would mean for the climate, given a certain assumption about the atmosphere’s “sensitivity” to carbon dioxide. Three of the models show a moderate, slow and mild warming, the hottest of which leaves the planet just 2 degrees Centigrade warmer than today in 2081-2100. The coolest comes out just 0.8 degrees warmer.

Now two degrees is the threshold at which warming starts to turn dangerous……That is to say, in three of the four scenarios considered by the IPCC, by the time my children’s children are elderly, the Earth will still not have experienced any harmful warming, let alone catastrophe.”

The fourth scenario produces 3.5 degrees of warming by 2081-2100. It is based on the following assumptions:

The global population will increase to 12 billion – this is at least one billion more than the UN expects, and the rate of population growth is presently declining.

The world will burn ten times as much coal as today, producing 50% of primary energy in contrast with 30% today. Assumptions made in the report about nuclear and renewable energy sources mean that fossil fuels will dominate energy production – Ridley considers these assumptions “very, very implausible.”

“That is to say, even if you pile crazy assumption upon crazy assumption till you have an edifice of vanishingly small probability, you cannot even manage to make climate change cause minor damage in the time of our grandchildren, let alone catastrophe. That’s not me (Ridley) saying this – it’s the IPCC itself.”

  1. The rate at which icebergs and ice sheets melt is one measure of global warming. For Greenland, ice sheet data are reported at http://nsidc.org/greenland-today/ I urge anyone concerned with this topic to interpret the results so as to give an unqualified yes or no re global warming. One comment on what summer 2014 data mean so far is that sea levels might rise 2 mm.

 

Conclusion

My partial list of issues of concern for future generations includes the rate of global population growth, urbanization of populations, age structure of populations, old and new forms of criminal activity facilitated by communications technology – cyber-crime and cyber-terrorism, terrorism combined with the use of nuclear and chemical weapons, and the breakdown of the working of democratic institutions including a growing sense of entitlements which the democratic process generates to plant the seeds of its own destruction. If forced to provide an answer, I see the glass as being half full. More appropriate perhaps would be to apply to the future William Goldman’s conclusion about Hollywood, that despite there being smart people involved “nobody knows anything” that is about the future success of a film.

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Some afterthoughts

A related topic for future generations is a recent Pew study of the impact of robotics on future jobs – see  http://www.pewinternet.org/2014/08/06/future-of-jobs/

AI, Robotics, and the Future of Jobs

By Aaron Smith and Janna Anderson

“Key Findings

The vast majority of respondents to the 2014 Future of the Internet canvassing anticipate that robotics and artificial intelligence will permeate wide segments of daily life by 2025, with huge implications for a range of industries such as health care, transport and logistics, customer service, and home maintenance. But even as they are largely consistent in their predictions for the evolution of technology itself, they are deeply divided on how advances in AI and robotics will impact the economic and employment picture over the next decade.

Key themes: reasons to be hopeful:

1) Advances in technology may displace certain types of work, but historically they have been a net creator of jobs.

2) We will adapt to these changes by inventing entirely new types of work, and by taking advantage of uniquely human capabilities.

3) Technology will free us from day-to-day drudgery, and allow us to define our relationship with “work” in a more positive and socially beneficial way.

4) Ultimately, we as a society control our own destiny through the choices we make.

Key themes: reasons to be concerned:

1) Impacts from automation have thus far impacted mostly blue-collar employment; the coming wave of innovation threatens to upend white-collar work as well.

2) Certain highly-skilled workers will succeed wildly in this new environment—but far more may be displaced into lower paying service industry jobs at best, or permanent unemployment at worst.

3) Our educational system is not adequately preparing us for work of the future, and our political and economic institutions are poorly equipped to handle these hard choices.

Some 1,896 experts responded to the following question:

The economic impact of robotic advances and AI—Self-driving cars, intelligent digital agents that can act for you, and robots are advancing rapidly. Will networked, automated, artificial intelligence (AI) applications and robotic devices have displaced more jobs than they have created by 2025?

Half of these experts (48%) envision a future in which robots and digital agents have displaced significant numbers of both blue- and white-collar workers—with many expressing concern that this will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order.

The other half of the experts who responded to this survey (52%) expect that technology will not displace more jobs than it creates by 2025. To be sure, this group anticipates that many jobs currently performed by humans will be substantially taken over by robots or digital agents by 2025. But they have faith that human ingenuity will create new jobs, industries, and ways to make a living, just as it has been doing since the dawn of the Industrial Revolution.

These two groups also share certain hopes and concerns about the impact of technology on employment. For instance, many are concerned that our existing social structures—and especially our educational institutions—are not adequately preparing people for the skills that will be needed in the job market of the future. Conversely, others have hope that the coming changes will be an opportunity to reassess our society’s relationship to employment itself—by returning to a focus on small-scale or artisanal modes of production, or by giving people more time to spend on leisure, self-improvement, or time with loved ones.

A number of themes ran through the responses to this question: those that are unique to either group, and those that were mentioned by members of both groups.”

In sum, the experts agree that technology will make a difference to employment opportunities in the near future, but are divided on what that impact will be. There is however a broader consensus on the failure of the educational infrastructure to adapt to the swift changes which are taking place.

 

 

The Minerva Project

August 19, 2014

The Minerva Project described in the Atlantic Monthly (August 13th, 2014) signals ways in which higher education is evolving, resulting mainly from developments in communications technology. Institutional structures will change with implications for students, teachers, administrative staff and governments. Minerva is an accredited university in San Francisco and will shortly open six campuses outside the US.

1. The Atlantic article argues that the model of higher education and probably education in general is being hit with a wrecking ball, as the magazine cover depicts.  How the parts will be reassembled and how students of all ages (I include myself but am more interested in those born after 2000) will be affected is a subject for study. Similar changes have occurred in numerous areas including book, newspaper and magazine publishing, film, television, music and video production and distribution, banking and finance and shopping. How often do you now go to your bank, write a cheque or use a broker to make stock transactions? Post secondary education is the next institutional arrangement to be reformed with implications for students, teachers, administrators and governments.

2. Online learning as provided by MOOCs is one model in contrast with in class learning. All current teaching combines some combination of in class and online learning. The latter has a long heritage with correspondence courses and the Open University in the UK (I am sure there were models in other jurisdictions with which I am unfamiliar). These suppliers solved the problems of invigilating, marking exams and creating credentials which employers recognized. A large number of people often register for MOOCs, but a small percentage take the tests which result in some kind of credential. I am one of those who register. I do so out of interest in a subject and it’s free. Others register in order to search the available options before deciding which ones to take. Persons over 30 are more likely to seek a credential, suggesting that online learning is being used as a method of continuing education.

3. What Minerva does is to combine online and in class education in a novel way which creates for-pay education, students selected entirely on the basis of academic ability from around the world – no entitlements for certain groups, awarding of credentials (which will have to prove their worth as is the case with any new brand), and a requirement that faculty teach and conduct seminars and discussion groups in a particular way, not just how they choose. None of us who were in this game before had much if any experience in lecturing and conducting seminars, other than what we had been subject to. We mostly winged it with student evaluations providing some feedback. Today, social media provides often ruthless comments on instructors.

4. Minerva charges a fee of 28k dollars annually with some financial aid provisions. This is about half an Ivy League fee. If fees are considered an annual consumption expenditure then they are high, but if treated as an investment and a capital expenditure then they are similar to taking a mortgage to invest in home ownership or a loan to buy a car. The value of the educational investment will only be known in the future as will the ownership of a house and car. The latter depreciates with time and will become worth less unless it becomes valued as an antique. None of the cars I ever owned fell into the antique category. An education will also depreciate with time and is why the process of continuing education exists either within a firm or by taking external courses. Firms offer training seminars for their employees, while academics are expected to keep abreast of their discipline by reading and undertaking published research and presentations.

5. Would a Minerva type operation grant tenure, a form of long term contract which the institution but not the instructor find it difficult to annul? Not as long as it can hire and retain suitable lecturers. If this is not possible, then it will offer long term contracts and other benefits to retain high quality staff. Note that without a contract a staff member can be fired at any time. And if lecturers with long term contracts wants to leave early, it is probably a good idea to let them go as they may not be delivering the best teaching services thereby reflecting adversely on the institution.

6. My guess is that the Minerva format will be followed by for profit competitors who will try different formats for the delivery of higher education. Change is already evident and only those administrations which experiment and adapt will survive. I am willing to bet $100 that change will be clearly visible within three years – we can negotiate on who should be the judge of the outcome.
Sent from my iPad

Does Prohibition Linger in Canada

August 17, 2014

With the aid of social media (tweets), Nina Caplan in the New Statesman (August 14, 2014) finally gets it right. Her original story states:

“Prohibition was rescinded in Quebec in 1919, about five minutes after it became law, but the hangover lingers. To this day, you can only buy wine in French Canada from the government-run outlets of the SAQ: Société des alcohols du Quebec.”

Today tweeters explain, that’s not the case. Wine of all kinds is sold in Quebec retail grocery stores but it has to have been bottled in the province. The hangover is as much one of protectionism for Quebec bottlers.

Some signs of prohibition remain in Canada and Daniel Okrent’s Last Call is one place to find them. A photograph of Sam Bronfman purchasing a distillery in the US which was about to be destroyed is an example. Bronfman built the Seagram liquor empire which in turn funded foundations. These still do good works in Canada and beyond. Profits were also made from prohibition in the US.

Liquor sales today

In Ontario, the LCBO (Liquor Control Board of Ontario) remains the sole source for retail spirit sales. It also stocks some wines and beer. The latter is available in a near monopoly, the Beer Store run by the breweries. Ontario politicians of all stripes have suggested that they will dismantle the LCBO, but then pull back. They often calculate the total revenue of the stores as benefits to Ontario rather than the net revenues. As a major buyer, the LCBO undoubtedly gets good prices from suppliers, but whether these are passed on to consumers is questionable in the absence of competing retail outlets. In recent years, wine stores associated with wineries have been allowed to operate in Ontario. They are even allowed to mix foreign with Canadian grapes in the wine sold, a dilution of Canadian content (found elsewhere in Canadian cultural content).

Prices for spirits sold in the US are often much lower than in Canada, but taxes have a role in explaining these differences. Smuggling is also encouraged. Residents of Kingston Ontario (and other communities bordering Lake Ontario) have found ways to benefit from lower liquor prices in the state of New York. There is no shortage of entrepreneurs. Taxi services have always been available to deliver liquor for a price to consumers creating another level of retail distribution. And today Wineonline.ca available in Ontario and Alberta is one example of how this type of service is now respectable.

 

Other fading signs of US prohibition are large lakeside properties in the Rideau Lakes just north of the Canada-US border. Through this area liquor was smuggled south from Canada and the folks who made money doing this often built recreational properties there mainly for fishing. On Devil Lake, Ontario there is a Vanderbilt Island reputedly still owned by family members. I have no idea if family members were involved in the liquor business. If they were, it would have been a minuscule part of the Commodore’s commercial empires.

When my father, who had been in the gin distillery business, came to Canada in 1959, he was interested in seeing St Pierre and Miquelon (still part of France) when he sailed past these islands. During prohibition, large amounts of liquor were shipped there for trans-shipment either directly or via Canada into the US. The supply chain at the time contained storage ships anchored outside the territorial limits of the US, with speed boats used to ship liquor to the mainland.

Signs of prohibition remain in Canada but a researcher has to know where to look in different parts of the country. Each province dealt with the issue in its own way. Some have written about the Temperance Movement in the early 20th century, but I have read no Canadian equivalent to Daniel Okrent’s work on prohibition in the US.

Diane Coyle,

August 16, 2014

Diane Coyle, GDP, A Brief But Affectionate History (Princeton 2014)

 

The following should not be taken as a review of Diane Coyle’s recent book. It already has many by respected reviewers. Instead it is more a comment on how the profession can improve both its presentation as well as the content of the discipline.

Since I began studying economics, at first mainly agricultural economics in an agricultural program, the discipline has made big strides, some forward, some sideways and some into the wilderness. Complexity, sophistication for some, has been associated with the increased use of statistics and mathematical modeling. There has been and always will be a use for both. Graduate programs in particular have tended to emphasise these two. MA graduates from respectable programs in Canada, and elsewhere I imagine, will tell you that they learn the tools of applied mathematics, but with instructors who may be unable to explain the economic significance of the model being studied. It’s like a surgeon knowing how to make an incision but not why it should be made.

If you treat economics as a discipline with similarities to medicine, which I often do, then a combined knowledge of theory and the results of empirical studies are necessary to advance knowledge. When methodology displaces theory, the value of the policy advice given is limited, even hazardous.

 

Macroeconomics took a severe hit in the 1930s with a failure to understand the reasons for the depression years and the appropriate remedies. It took another hit after 2007. The depression ended due to a world war which ramped up defense production and drew women into the workforce, rather than by the subtle use of fiscal and monetary policies. The loss of manpower due to death and injury plus the physical destruction of assets caused by war, especially in Europe, Russia (USSR) and Japan created fertile conditions for restoring economic health.

The US and Canada, which suffered human casualties but where almost no physical destruction took place, benefited from postwar demand for their capital, goods and services. Marshal Aid by the US – “an estimated $148 billion – in 2004 dollars from 1946 to 1952.” (Coyle p.18) – provided a means to finance the economic restoration. Marshal saw what Keynes had warned about at the end of WW1, that if the reparations imposed on Germany were too severe, it would not only prevent restoring the economic and political health of Germany, but create conditions for future wars, which unfortunately it did.

Diane Coyle explains the postwar (WW2) periods of growth and recession in clear prose using the tools of economic analysis and making it understandable to the interested lay person. Like medicine, where there is still much to be discovered about the causes and cures for certain conditions but much has already been learned, so with the present state of a nation’s economic health especially at the macro level.

Failure to prescribe appropriate remedies for economic problems where there exists a good understanding of likely cures is often due, in my view, to the strength of groups to lobby politically for their interests and for the growing sense of entitlements which the public now has. These arise in part due to the sense that individuals want more from their governments, especially more for themselves as opposed to others in society. But they also occur because politicians in a democracy offer voters more in order to attract support. Consider a typical income tax return, if such a thing exists. There are provisions according to the level of income earned (a progressive rate structure), deductions for childcare, health services, education, single parents, living in rural areas, flood prevention and so on. Each deduction does two things. It creates a sense of entitlement for those who benefit from the tax treatment, and it encourages others to seek them by lobbying politicians and officials. Up to a point, a democracy thrives on a diet which satisfies entitlements, but at some point obesity sets in with harmful results.

 

GDP, A Brief But Affectionate History, is mainly about what GDP measures, how reliable and useful it is and what might be used in its place. Despite serious shortcomings, Coyle thinks it should be retained for now, and that contending measures don’t provide the necessary information for economic policy making. In making this case, the author’s explanations of economic circumstances are so clear and understandable that the book should be read by economists for form as well as content.

If a case is to be made for replacing the present system of national accounting, it would be in my view, because of the growth of services relative to goods. In its original development, economies were more involved in the production of goods where measurement is easier. Many services are not only difficult to measure but are obtained either free or at low cost but still are part of GDP. For the price of a laptop or pad and internet service, I can receive communications, music, video, newspapers, magazines, books, access to websites, financial and many types of services for free. The benefits exist but they are not measured in GDP. All of this is recognized and discussed by Coyle.

One final thought. The recent financial disaster has forced economists to reexamine their discipline with interesting debate and discussion taking place other than in academic journals. These include numerous blogs where a problem for readers is to decide which ones to follow. One thing which remains unchanged is 24 hours in the day and the need to decide how to use the waking hours. The economic blogs which I find useful are The Conversable Economist, Thought du Jour, Brad de Long and now Enlightenment Economics Managed by Diane Coyle.

Grade Inflation – Some people are smarter than others

August 12, 2014

Introduction

Greek tragedy often involves arrogance leading to foolishness and destruction. This can occur with the assignment of academic grades, where number and letter grades are experiencing a process of grade inflation. It is not unlike price inflation which can give misleading information about the growth of an economy, as in the case of measuring Gross Domestic Product in current dollars. Grade inflation provides misleading information to students, teachers, admissions officers assessing students for entrance to post secondary institutions, to employers and to the public. While neither the educational system nor the economy will be destroyed, both can be weakened. And there are alternatives to consider.

Academic grade inflation

One example of grade inflation is the number of Ontario scholars, those with an average of 80% or more in their graduating school year. It has risen from less than 20% in the 1970s to over 60% today. I found the actual figures hard to come by as the provincial authorities did not answer my requests for what I thought would be easy to access information.

Province wide exams in Ontario were abolished in the 1960s following the Hall Dennis report which recommended that each school mark its own students. Teachers warned that this would lead to grade inflation. Foolishness prevailed, inflation took place and now when standardized testing is proposed teachers (and others) oppose it, recognizing that it could be used as a measure of their teaching as well as the performance of a school. The problem is then passed on to post-secondary institutions, which themselves have issues regarding the assignment and meaning of grades.

University grades are discussed on the freely available website The Conversable Economist for August 6, 2014. A quote from it:

“Here’s a link to a November 2011 post…on “Grade Inflation and Choice of Major.” Rojstaczer and Christopher Healy write: Even if grades were to instantly and uniformly stop  rising, colleges and universities are, as a result of five decades of mostly rising grades, already grading in a way that is divorced from actual student performance, and not just in an average nationwide sense. A is the most common grade at 125 of the 135 schools for which we have data on recent (2006–2009) grades. At those schools, A’s are more common than B’s by an average of 10 percentage points. Colleges and universities are currently grading, on average, about the same way that Cornell, Duke, and Princeton graded in 1985. Essentially, the grades being given today assume that the academic performance of the average college student in America is the same as the performance of an Ivy League graduate of the 1980s.”

 

There has been debate over grades assigned at Carleton and Ottawa Universities in the past, and at other Canadian universities, so that this is not only a US issue.

In 1989, the Ottawa Citizen published the list of Ontario Scholars by school in the Ottawa area, those with an 80% plus average. The top scholar amongst all schools (Lisgar) had a 99.1% average. Of the 41 schools listed, all but 3 had a top scholar with 90% plus average. One of the three was Elmwood, a private school where the top student had an 89.3% average. I had been a member of the Board of Governors of Elmwood where the school was frequently pressured by parents to give higher grades, in order that graduates would be able to compete for university places and for awards with those graduating from the public school system, where higher grades were given.

This was a fair concern, but Elmwood graduates seemed to do all right as university authorities knew that private schools tended to give lower grades and made allowance for it in their admission decisions. I am not sure whether this happened with the award of scholarships.

Grades signal to students, their parents and to outsiders (potential employers and post secondary educational institutions) information about the students. These now have to be evaluated carefully because of inflation. While universities state that they treat a given grade from one school the same as from another, experience suggests that this may not be the case, and they use judgment when making decisions about admissions and awards. In the same way that price inflation undermines the value of a currency, so grade inflation affects the value of or the information provided by a grade.

But the effects do not end there because, as noted, grade inflation takes place at universities as well. Undergraduates want high marks for their first degree so that they gain admission and scholarships for graduate study. Acceptance at graduate school depends on a combination of grades, reference letters from faculty and statement of interest by the candidate.

Are there alternatives?

When a figure or grade loses its information value, other measures are used. At the school level, an obvious one is the use of common exams for different institutions where the grading takes place by independent or common examiners. There are a number of examples:

  • Province wide exams as occurred in Ontario up to the 1970s
  • Some province wide exams in Alberta
  • A-level exams as used in the UK and other countries for university admission
  • The International Baccalaureate (IB) program
  • The Graduate Record Exam (GRE)

In each case there is the criticism that instruction will be focused on passing the exam rather than providing a more general education. While this can be the case, the alternative of a system which results in grade inflation and requires other, often unclear, means of evaluation by those comparing students for admission and awards is in my view preferable.

UK universities have traditionally used the A-level exam process which involves a narrowing of subjects studied, and forces students to decide on a particular discipline before they are knowledgeable about the available choices. The IB which requires a broader set of subjects is being recognized for university admission in the UK and elsewhere. Exactly how IB results and A-level results are compared is unclear to me, but some process must be used by admission officers. Use of the IB moves the British system towards the liberal arts approach of North American universities, where specialization takes place in later years of an undergraduate program or with a postgraduate degree. I prefer the liberal arts approach, but more importantly English speaking students with the right qualifications now have a choice of which program approach to pursue.

The IB program is not without its critics, but these seem to stem mostly from the fact that the Geneva based Director General of the program was caught plagiarizing in a speech he gave, a sin which the program warns about in the case of IB students – See Times Educational Supplement Sept. 17, 2010 and subsequent issues.

Conclusion 

There appears some hope that arrogance and foolishness may not be followed by destruction. The present era of entitlements pressures politicians to create educational systems which grant equal treatment to all students, even though there is clear evidence that the distribution of academic abilities is bell shaped. Some people are smarter than others. Not all will benefit from an academic post secondary education. Some will benefit from the subjects taught in community and trade based colleges. Some will benefit from on-the-job experience, either with or without further education. Some people will earn more than others because they have different skills. There are means to reduce income inequalities other than by weakening, perhaps destroying, the educational system.

Some further sources:
Professor James Cote of Western University is an authority in this field.
The UCAS website deals with conversion standards for universities
The IB website at ibo.org/recognition/
The truthaboutIB website is generally critical of the IB


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