The Future Competitiveness of Corporate v Individual Medical and Veterinary Practice Models. Is AI the key?

Before Christmas I did some work on the future of veterinary surgeons and the education and regulatory changes that might have to occur to move with those changes. One of the things that occupied my mind with that work was the issue of artificial intelligence systems on the competitive position of veterinary practices. My belief is that artificial intelligence augmentation of medical/veterinary capabilities is coming quite quickly and a large scale corporate practice model has significant advantages in this space over the individual practice.

Increasingly we have seen a more large scale corporate model in the veterinary practice market in Australia and around the world. Examples in Australia include Green Cross for major city practices and Apiam Animal Health in rural practice.  This has followed similar trends in medical practices where you have organisations like Medical One and Tristar which started out in rural Australia but has expanded into the cities as well.

The basic business model and value proposition of the corporate model is:

  • Presenting a single branded product almost like McDonalds so a patient or client can be confident of going to the practice no  matter where they are.
  • Increasing purchasing power of all of the back end parts of the business from pathology services down to supplies of bandages, etc. This is more important in the veterinary model where practitioners are able to prescribe and supply vaccines and S4 drugs and make a profit from them.
  • Taking over the administrative and compliance parts of the business to allow practitioners to focus on patients. This can include the standardisation and delivery of training requirements, building management, OH&S requirements etc. It can also extend to the supply of consulting hours as a service package.
  • Networking and support for practitioners in smaller practices.
  • The spread of investment and risk over a larger geographic range and customer base.
  • A much more secure retirement/part time/business sale option for owners and practitioners. On a personal note my previous long time GP semi-retired by moving into a Medical One practice and then progressively handing over his clients to the other doctors in a very caring and professional manner.

These models have expanded quite significantly over the last decade which speaks to the financial viability of the model and while there has been the odd flare up and accusation of over-servicing in general the models seem to have worked. I originally started my working life as a general practice veterinarian and the corporatisation of veterinary practices is a hot topic at the reunions I have attended.

The competitive position of the individual practice has been built around personalised service and attempting to be portrayed as caring more for the animals they serve than the big corporate competitor. many of these practices are still doing quite well but the trend is towards the corporate practice.

Which brings us to future competitive positions. I believe that we are rapidly heading towards a future where augmentation of medical and veterinary skills via artificial intelligence is going to be  a ticket to play in the game. This is going to be a narrow focused intelligence rather than a general intelligence. In the medical space we are seeing story after story emerge of new models where AI systems are getting as good as human doctors or have an edge over human doctors:

This AI Can Diagnose a Rare Eye Condition as Well as a Human Doctor

eye image from motherboard vice artificial intelligence

Predicting non-small cell lung cancer prognosis by fully automated microscopic pathology image features

AI is nearly as good as humans in detecting breast cancer

Self-taught artificial intelligence beats doctors at predicting heart attacks

All of the examples above are based on variants of machine learning and one of the defining characteristic of machine learning artificial intelligence systems is they need large data sets. In the heart attack example above the artificial intelligence trained itself on almost 300,000 case records. As we currently understand artificial intelligence, that system is not transferable to cancer diagnosis, it remains a specilaised cardiac application. The non-small cancer system above was trained  on almost 3,000 images and subsequent patient follow up records.

There are two ways to get a large data set to train on in the medical/veterinary field. The first is to work on aggregated image and case records as in the examples above. That will certainly be a major part of the market. Large capital expenditures will be required to assemble the required images/case files and process them in a way that improves patient diagnosis and outcomes when used in conjunction with human doctors. So we will see services offered for specialised areas such as heart attack prediction, organ by organ cancer diagnosis, etc. As always the areas that have the largest and most affluent markets will be the services that are first offered.

However we are also moving in to a world where artificial intelligence systems can be harnessed by smaller players at much lower cost. Take this example of How a Japanese cucumber farmer is using deep learning and TensorFlow:

cucumber-farmer-14 tensor flow artificial intelligence

The son of a Japanese cucumber farmer (who admittedly had some very good tech skills) built an artificial intelligence based cucumber sorting system for his parents. The problem was training the system required a lot of images and the process took a lot of computing power. More and more in the future you will be able to plug into a cloud based machine learning platform that will enable you to harness much more computing power that is specialised to do this sort of a job for you.

So a large network of medical or veterinary practices could offer services that are not offered in the general market by collecting all the data on their patients across all their practices and using machine learning platforms to train a system that is specific to their patient database.

This will be impossible for the individual practice to match. Is this the killer application for the corporate model to almost completely squeeze out the individual practice?

If so I will be watching for models emerging in the veterinary space because the regulatory hurdles and insurance requirements are much lower. If they are successful then I see those sorts of models flowing into medical practices.

 

 

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Councils and Foresight – Critical Differences

Since I published my Councils and Foresight post last week I have had some comments and questions via social media about the key differences between Councils and Commercial Organisations in particular and what they mean in terms of different approaches to foresight. Along with those questions three comments that were made last week during our foresight session at the VLGA Mayoral Leadership Conference have stuck in my head:

  1. I demonstrated our quick and dirty scenario approach prefaced with the statement that it was useful when you had a spare ten minutes. One Mayor talked to me afterwards and said she would love a spare ten minutes for anything. That is a major concern, No time for strategic thinking.
  2. Two mayors talked to me about reading 300 page briefing reports for council meetings, which ties in with the problem in point 1.
  3. One Mayor talked about the glacial pace of change in councils, which I am sure is true in most people’s experience.

These comments tie in with the different approaches that need to be taken with foresight issues in councils and they relate to the structural issues of how councils operate:

  • Firstly compared to commercial entities councils do not have the luxury of appointing a skills based board (council) based on getting a diverse range of expertise and perspectives. Having said that many commercial boards do not do that well either but at least they have the capacity to do so.
  • Secondly many councillors commonly come to council without a deep understanding of the detailed operations of council or in the management of large organisations while in many cases commercial boards are selected on that basis.
  • Thirdly councils are far more tied into, and exposed to the needs and views of their community while large commercial entities in particular are generally distant from their smaller shareholders. There are pluses and minuses to either situation but there is nothing like being confronted down the street, in the pub, or at the local footy club to bring home the reality of what you are trying to do.
  • Fourthly commercial entities are able to make faster decisions and have a much clearer measurement of success in terms of profit and loss, balance sheets, and share prices, albeit allowing for the weaknesses of some of those approaches.

So in terms of foresight and thinking of the future I think that councillors need to:

1/ Work much harder at bringing a diverse range of perspectives into the foresight and strategy processes of council, and ensure they are not the same old faces. This compensates for the lack of capacity to have a planned diverse council.

2/ Let go of the need to get across of all the detail and concentrate far more on critical thinking and questioning skills. Having been involved in representational agripolitics and party politics I realise that this is a lot easier said than done. Voters expect you to be across all the detail but if you spend all your time reading 300 page briefing papers you will have no time for thinking strategically. Councillors need to allow council officers to do the detailed work but have the capacity to clinically question what is put before them or develop alternative strategy, not try and do the operating job.

3/ Concentrate on areas where there is going to be faster than glacial movement. In areas of the economy that have been disrupted recently the key  has been a strong and direct link between the producer of products and services and the customer. Think books, music, airline travel, etc. In council affairs this relationship is sometimes more diffuse. The key area of direct contact and pressure is either funding by government or rates. In this efficiency and effectiveness of council service provision are critical. My view is that critical areas to be looking at here are:

  • The development of artificial intelligence systems and robotics. MTR in Hong Kong is already using an AI Boss to supervise and schedule its repairs and maintenance system.. X.ai is supplying an AI as a personal assistant which I have had personal experience with, and it already works well. There are going to be huge opportunities for reducing costs and improving the effectiveness of council service sin the next 5-10 years.
  • Crowd funding as a mechanism to test the real desire of people to get various things done in their community, perhaps by providing matching funding for projects. This has to be carefully managed as it raises the value of the voice of people who have money versus those that do not.
  • The rise of social enterprise were world class business operations also have a social purpose. The Bendigo Community Bank is an example of this where 50% of the profits are returned directly to the community in which the bank operates but there is likely to be big developments in this area.

4/ Concentrate on longer term issues and start the discussions well ahead of time. If pace of change is going to be slow then we need to engage the community in longer term discussions on what change looks like. Examples include:

  • Driverless cars are likely to be adopted in a significant way in the future. The time frame of that wholesale adoption is likely to be 10-20 years away (see post : Implementation of Driverless Cars – A case for public subsidy of private transport systems) but will have significant impacts on requirements for parking, public transport systems, road planning, work/living relationships (changing value of certain suburbs versus others). Council needs to be thinking about these issues well ahead of the adoption curve.
  • The future of local democracy. What does that look like in a networked world, tied in with crowd funding systems, electronic voting systems, virtual reality , etc.
  • The possible havoc that improvements in artificial intelligence and robotics might wreak on employment and what it means to the local economy and job market.

The pace of change is likely to accelerate. Councillors need to step back and see where their limited time can be used to create most value in that future.

Paul Higgins

The iQ Zeitgeist: Futurists Forecast the World of Tomorrow

As part of the 2nd birthday celebrations of Intel’s IQ platform they have published a 2 part article interviewing 7 international futurists. I am one of them and I feel in pretty good company  as you can see by the list below. Due to space considerations my answers were edited down so I am putting up links to the articles here but also publishing my answers in their entirety:

Brian David Johnson is a futurist at Intel Corporation. His charter is to develop an actionable vision for computing in 2020.

Dan Abelow is an American inventor, author, speaker, and technology consultant. His latest patent-pending invention, the Expandiverse, is new technology to build an advanced Digital Earth today.

Daniel Burrus is a technology forecaster, the founder and CEO of Burrus Research, and the author of six books, including The New York Times bestseller ”Flash Foresight.”

Paul Higgins is an Australian futurist and keynote speaker with a Masters degree in Strategic Foresight; a guest lecturer at Victoria University (Melbourne Australia); a tech editor on Tumblr; a partner at Social Venture Partners International (Melbourne); and a very slow triathlete.

Whitney Johnson is a Managing Director at Springboard Fund, and co-founder of Clay Christensen’s investment firm.

Frank Rose is the author of “The Art of Immersion: How the Digital Generation Is Remaking Hollywood, Madison Avenue, and the Way We Tell Stories” and a correspondent for Wired.

Vivek Wadhwa is a Fellow at Stanford University; Director of Research at Duke University’s Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering; and Distinguished Fellow at Singularity University; and was listed as one of 2013′s 40 Most Influential Minds in Tech by TIME Magazine.

You can read the articles at:

The iQ Zeitgeist: Futurists Forecast the World of Tomorrow Part 1

The iQ Zeitgeist: Futurists Forecast the World of Tomorrow Part 2

 

My answers to the questions in full are below. For those of you who want to read more on some of these issues please refer to my ongoing series of major disruptors here on this blog :

1. Every piece of technology we own or online service we consume has Gordon Moore’s 1965 law as a common denominator (Moore’s Law = # of transistors doubling in microchips about every two years). Based on this, how do you think the tech landscape will change in 2 years, 4 years, and 8 years from now? Describe what a typical person’s day might be like at the office and at home.

[Paul Higgins]

Our view is that we have reached the point where with all this technology in the hands of hundreds of millions of people who are all capable of innovating both the hardware and the software platforms it is the height of arrogance to forecast what will happen. What I do know is that there will be enormous change and innovation based on the disruptive effect of these technologies.

2. Which technologies do you think will have the biggest impact on the humankind by 2025? 2050?

[Paul Higgins]

By 2025 I think that the most impactful technology beyond what we are seeing today likely to be driverless cars and while by 2050 artificial intelligence is likely to have the greatest impact. It is possible that large scale implementation of driverless cars can be done in many countries by that date although it is likely to be a little slower. Driverless cars have the capacity to create wholesale change across our communities with significant reductions in road trauma, requirements for hospital resources, and greatly reducing the capital investment needed in cars. The effects will go wider than this with significant impacts on the car manufacturing supply chain worldwide, elimination of the taxi industry, airport parking, and big changes in road and public transport infrastructure as well as urban planning.

The effects of significant levels  artificial intelligence are almost unimaginable. Combined with improvements in robotic technology they have the capacity to wipe out large swathes of current jobs and I am unsure whether the new jobs that are created will replace them. If this occurs we may see a fundamental restricting of the economy and a complete rethinking of people’s relationship to work. My fear is that this will be played out as a have and have not type of scenario and while here may be a strong chance of a rosy future that some science fiction paints the path to that future my be traumatic and tumultuous.

 

3. What technology / innovation that’s currently in development are you most excited about?

[Paul Higgins]

Rapid developments in artificial intelligence are the most exciting from my point of view, both in their capacity to enrich our lives but also from a risk point of view. The problems with artificial Intelligence capabilities have been a lot more stubborn than many people envisaged they would be and we commonly underestimate the capacity of our own brains which we should stand in constant awe of. However developments in both understanding of the brain, increases in computing power and the development of systems able to understand natural language and concepts are all driving us forward faster than in the past. Major projects such as The European and US Brain projects, and the development of technologies such as neuromorphic computer chips promise big leaps in our understanding and capacities over the next decade.

 

4. What will the role of tablets be in the future? How do you see personal computers evolving as they’ve gone from desktop, laptop, ultrabook, 2 in 1 and tablets?

 

[Paul Higgins] I think that we will naturally move towards wearable systems that will become more integrated into our lives. I cannot recall who said it but there is a line that I like that goes something like “it is when the technology disappears when it gets really interesting”. So in the not too distant future the use of smartphones and tablets will seem a little archaic. Wearable technology is at its early stages now and people are still fumbling around for a solution or combination of solutions that really work. However we tend to forget that tablets of different kinds were around for a long time before the iPad got such widespread adoption. Ongoing increases in computing power, changes in user interfaces, continuing miniaturisation and reduced energy requirements, plus rapid trialling of different systems and business models will move us a long way down this path in the next five years. The interfaces we deal with are likely to be even more intuitive than the ones that we have today and be a combination of wearable technology, cloud computing and projected interfaces that can be easily controlled through speech and motion.

 

5. Will humans ever decide to forgo real-life companions for virtual ones?

 

[Paul Higgins] Absolutely on several fronts. If we finally move to uploading our own consciousness (which I have significant doubts on) then virtual artificial companions are likely to be indistinguishable from “real” ones anyway. Before that in a world where we have had pet rocks, and people (including my 7 year old niece) have named their Roombas, and increasing people seem to be living alone I think that it is highly likely that semi-intelligent virtual companions are not far away.

 

6. What can we do today to prepare for technological advances of the future?

[Paul Higgins]

I always think of this in terms of a dog getting in a car and being driven along with the window open. They just accept the technology and embrace it and do not care about the technology as such, more about the experience. They just hang out the window with their tongue out and exude pure enjoyment. I think that the best thing that we can do is to embrace new technology and experiment with it continually. I do despair at times though that we are using these great technologies for trivial purposes and that some of the brightest brains in the world are focused on trivial applications because that is where the money is. We need to think a lot more deeply about the human and social applications of existing and new technologies because in the end that is all that really counts. I get depressed about technology when I read stuff like Michael Lewis’ latest book Flash Boys which describes about the use of technology to get a few milliseconds ahead of the market and cream off huge amounts of money without adding any value. At the same time I am enormously buoyed by the large numbers of people who I meet and work with who are totally engaged in making the world a better place. Last year I spoke at the Nexus Youth Philanthropy Summit in Australia and was blown away by the people in the room , mostly in their twenties, who were all doing fantastic things with technology and in particular social applications. It made me tired just to read their biographies but gave me enormous hope for the future.

 

7. Which prediction of yours didn’t come true (if any) that you were most disappointed about?

[Paul Higgins] In our work we actually eschew predictions as we believe that prediction does not work at any meaningful level of detail. Instead we work with people to envisage multiple futures and then to work with the uncertainty that is inherent in that approach and the real world. That has changed over time and we work a lot closer to the present than we used to. Having said that one of my big misses in picking up how things might we be used was the use of cameras on phones. I certainly did not consider how much they would be used and how important they would become in a personal and a political sense.

 

8. What films or books do you think best represent the future of technology? Will the world become The Jetsons soon?

[Paul Higgins] I am an avid reader of science fiction, both for enjoyment and for thinking about my own work. In that area I tend to read further in the future than our work is based. My favourite authors/books are:

 

Iain Banks and the Culture series. Sadly he passed away last year way before his time. The depiction of a society where work is no longer required and where idiosyncratic AIs run much of the systems, and structures is both highly entertaining and stimulating to think about.

 

Ramez Naam who wrote Nexus and Crux and who is on the short list for the Arthur C Clark award this year writes about nanotechnology and the possibilities of inserting it into our brains in order to both have more capacity, but also to commune with others. Couched in a political battle between idealists and governments seeking to control the technology it provides an interesting social perspective. I am also proud to have him as a Twitter follower.

 

Hannu Rajaniemi who wrote Quantum Thief and Fractal Prince and the upcoming Causal Angel writes really interesting fiction on the far future and harnessing of quantum physics. So dense that I have to go back and re-read the previous one to fully understand the next one.

 

Paolo Bacigalupi’s The Windup Girl is a favourite. It depicts a future world where there is conflict between the haves and the have nots where there has been environmental and technological disasters including climate change that are hinted at rather than described.

 

David Brin writes superbly on all sorts of areas of future technology and the dangers of ecological collapse, and is another Twitter follower I am proud to have,

 

And of course William Gibson, whose seminal book Neuromancer contributed significantly to my interest in science fiction and the field in general.

 

I would recommend that people read widely of these authors and others to think of all sorts of possible futures rather than nominating a particular book or film that best represents a future which is inherently unknowable

 

 

 

My job advice to my nephews and nieces for 2025

I spent a few days over the Christmas break down at my parents house near the beach on the Mornington Peninsula and hung out with my brothers, sisters in law, and my nephews and nieces.

During one of our later night discussions which are always willing but friendly one of my sisters in law posed the question of what my view was on what they should be advising their children on their future work prospects and directions. We had a bit of a discussion on that but then I sat down and collated a few thoughts for them and some things I think they should read. This is the gist of that advice:

Bottom line is that I believe that we are at the edge of a technological revolution in robotics and artificial intelligence.

Advances in robotics that include cheaper and better sensors and intelligence capacity will move them beyond manufacturing and into cooperative manufacturing, and assisting and replacing humans in all sorts of physical tasks.

Advances in artificial intelligence due to massive increases in computing power and moves towards much better natural language computers/semantic knowledge/deep machine learning will move computer intelligence out of just replacement of easily routinised jobs due to data crunching capacity, and into many more areas of human work – e.g. computer assisted journalism

There are really two scenarios here – that we will see more changes than we can imagine as in the industrial revolution, and more and more jobs will be created, or large slabs of jobs will disappear for ever and not be replaced, and that will cause significant disruption and competition for work unless we move to a new way of having an economy. Now you can take the Luddite view or you can take an optimistic view but the key to thinking about the future is to create a strategy that deals with multiple possible futures as well as you can, whilst understanding that most of the futures you can think up will probably not go close to mapping what the world will look like.

Just to put this in context my youngest niece will probably not enter the workforce until at least 2025, and more probably 2030 and will then have a working life which is likely to extend to 2080 so we are talking about long time frames here.

So what advice would I give to a parent of a 5-15 year old at the moment.

The key is involvement in :

  • Jobs that are not easily routinised – my brother mentioned plumbing and other trades and he was right– the capacity to carry out a complicated task that is different every time and interact with people will still be highly human centered.
  • Jobs with high levels of manual dexterity – robotics still find that hard to master although some systems of surgery are better than people already.
  • Jobs that require high levels of empathy and capacity to interact with people – e.g. aged care, teaching, although stuff like retail is likely to become more data and network facilitated than through an individual shopping experience.
  • Jobs that require the capacity to coach and facilitate networks to perform rather than the current emphasis on managers and hierarchies – requires empathy as well.
  • Jobs centred around the ability to find insight in data – assisted by AI but value added by people.
  • Jobs that are highly creative and require visions and connection.
  • Jobs that cross the boundaries of the jobs types I have listed above.
  • Jobs centered around the ability to code

In terms of thinking about this more I would recommend looking at the following

Better Than Human: Why Robots Will — And Must — Take Our Jobs – by the fantastic Kevin Kelly

Algorithms, Robots and the Future of Management – a previous post by me with a great addition from my friend and colleague Stowe Boyd

I also recommend you read Stowe’s :Beneath the chatter about the Future Of Work lies a discontinuity which I think is more about the near future than the long future.

The IFTF report on future work skills – details drivers and skills

In the end we can give all the clinical and logical advice we like but the most important thing for them to do is to pursue what they are passionate about with a weather eye out to the fact that you need passion, skills and a market to make a living and:

  • If you have passion and skills but not market you have a hobby
  • If you have skills and a market but no passion you will be mediocre or burnout
  • If you have a market and passion but no skills you will fail in an increasingly competitive world

The great thing about the modern world is that skills are easier and easier to gain, and markets can span the globe for an individual or a small organisation. So passion is the cornerstone.

Paul Higgins

Some readers have requested some further links and reading on these issues. Here are  a a few from our scanning database:
Robots Can’t End Amazon’s Labor Woes Because They Don’t Have Hands

This was written by RACTER, a computer program that can generate original English language prose and poetry at random

SWARM Quadrotors (Aerial Robots): Coordinated Flight of Small Quadcoptors Interacting with Humans

A Mind-Controlled Exoskeleton Will Kick Off the 2014 World Cup

Brainlike Computers, Learning From Experience