Why Blockchain is the “DNA therapy” for Healthcare Economics
The reddish-brown tone of Bruegel’s “Triumph of Death” over earthly things (above), gives his army of skeletons an infernal stage that offers both the poor and rich, no hope. This sense of post-pandemic despair is appropriate, as we witness helplessly in the US the loss of over 100,000 lives and 40 million new unemployment applications, representing the total collapse of our health and economic systems.
But pandemics end and it is necessary to use these times as an opportunity to re-imagine our future (I write about this here).
History has shown us that pandemics end in one of two ways. One is a medical end. Either the virus (think influenza) or germ (think bubonic plague) weakens, to then later on reappear, or are eradicated through a vaccine (think small pox). That is why there is currently a Herculean effort to find a vaccine and “end this pandemic”, while fueling also false expectations.
The second way pandemics end is social. Psychological exhaustion and frustration, combined with existential economic threat, bring people, communities and States to want to return to their life, eager to put the nightmare of disease behind them.
However in order to design this fresh start, it is important not only to understand our ‘patchwork response’ and what went wrong, but more importantly understand our ‘patchwork experiences and legacies’ that will lead I believe to three interdependent phenomena:
(3) the mass adoption of DLT
#1: Vironomics will cause Deglobalization
Our required “lockdown” and other efforts to control COVID-19 have led to the largest quarterly decline in economic activity since 1933 (below). With 25% of US households living from paycheck to paycheck, and 40% of Americans unable to cover an unexpected expense of $400 without borrowing, the impact of extended lockdowns for many, is nothing short of catastrophic.
This is causing not only fundamental shifts in consumption, but also major behavior changes, a New Human Experience, namely:
- The erosion of confidence will make trust much more important than ever before.
- Anything that can be done virtually will be virtual.
- Every business will need to understand how it can be part of a new health ecosystem that will dominate citizen thinking.
- Cocooning — There will be a rise in home spending — on the home and made at home, as people will stay more local (see below).
- Temporarily, there will be greater acceptance for the role of government and companies in society, and the importance of collective behavior.
Personal cocooning and concerns of health and safety will also translate to public sentiment. Although increased global trade and international connections has on the whole been a force for prosperity and peace, the fragility of supply chains, the disruption of travel, trade and investment, combined with an overall sentiment of failing of international institutes, have fueled populism, protectionism and nationalistic instincts.
But just as COVID-19 is a virus with global qualities, globalization is itself viral. Therefore perhaps globalization is not at risk, but rather the need to change our economy from ‘growth’ to ‘degrowth’.
#2: Vironomics will cause Degrowth
Throughout history wealth was gained either by making it, taking it from others, or finding it in the ground. Productivity — i.e., the output per person, driven by learning, building, and inventiveness — has been the main driving force in growing wealth, and has significantly increased with time. However, it has risen at different rates for different people, for different systemic reasons (more on this read here), thus creating significant income inequalities (below).
The post COVID-19 financial collapse has only accelerated these trends, causing many jobs to be gone forever, and exposed many weaknesses of our growth-obsessed capitalist economy.
The idea of Degrowth (in French: Decroissance) attributed in 1972 to the social philosopher André Gorz, focuses on work and working time as a mean to enhance individual and social life, rather than intensifying ruthless economic competition and social division.
Thus Degrowth includes 5 economic features:
(1) Putting life at the center of economic systems.
Instead of growth and wasteful production, life and wellbeing is at the center of healthcare, education, renewable energy and ecological agriculture economies.
2) Radically reevaluates how much and what work is necessary for a good life for all.
COVID-19 for example, has shown that domestic work is essential and needs to be valued and monetized. Similarly remote work has shown we can reduce working time and introduce schemes for work-sharing.
3) Organize society around the provision of essential goods and services.
While we need to reduce wasteful consumption and travel, basic human needs, such as the right to food, housing and education have to be secured for everyone through universal basic services or universal basic income schemes.
4) Democratize society.
Enabling all people to participate in the decisions that affect their lives, in particular marginalized groups is seminal to the economy. Energy, food, housing, health and education need to be decommodified and be used based on an economic cooperation.
5) Political and economic systems should be based on solidarity.
Redistributive justice — transnational, intersectional and intergenerational — must be the basis for reconciliation between current and future generations, social groups within countries, as well as between countries of the Global South and Global North.
The ideas behind Degrowth are not to reign in capitalism, but ponder what future measures can stimulate our recovery, with the focus on creating meaningful work conditions, not only as a source of income, but also a source of identity and individual self-esteem.
However implicit to Degrowth and meaningful work is also the urgency to revise the need for our current rent-seeking economy, where money is extracted from each transaction without adding value.
And indeed one of the reasons for the poor global economic performance and protracted inequality is the structure of the traditional banking system.
#3: Vironomics has shown that Insurers are the Traditional Banks of Healthcare
The financial collapse of Healthcare was quick and swift. Beyond physicians vowing to leave and hundreds of thousands of essential healthcare workers underpaid or undervalued, the healthcare industry lost during the pandemic over 1.4 million jobs! (below).
The loss of 25% of the healthcare workforce during a healthcare crisis is not only surprising (one would think you need more healthcare professionals during a public health crisis), but also points out a poor economic design, of a system overly reliable on elective procedures.
But as hospitals are struggling with increased COVID-19 expenses, dwindling ambulatory activity, and furloughing workers, insurance companies are reporting remarkable quarterly statements considering a recession is imminent. To complicate things, hospitals are bailed out with tax money with premiums likely to increase up to 40% next year!
In essence this means that payers are not paying (with our money), the type of healthcare we need (right now), but rather are holding on to it (with profit), to pay for the type of treatments they will approve (eventually).
Therefore it is urgent we introduce into the market DLT-based payment solutions that support: price transparency, token-curated registries and tokenized assets, in order to create an anti-rivalrous economy able to provide us the treatments we need, when we need them, at affordable prices.
Final Thoughts: Vironomics suggests that DLT is the DNA of Healthcare economics
Marc Alizart in Cryptocommunisme (Presses Universitaire de France, 2019) explained human economics using biology. He eloquently writes:
“…just as money is ATP, blockchain is DNA. Immutable, encrypted and non-fungible, DNA is a distributed ledger (p.116)…”
The ATP molecule provides energy (an ‘energy currency’) to the living cell. It is produced by the mitochondrion, that also organizes and distributes it. Thus mitochondria are in essence banks or insurers and they, by design, maintain our economic health.
However, currently this energy is decoupled from our immediate needs, causing a disease state that requires radical therapy.
Stated differently our current healthcare economic disincentives require gene therapy — a radical treatment that will change its DNA—its very essence.
This is not surprising.
As “Black Death” ended feudalism, post COVID-19 Vironomics calls for a decentralized, interdependent, new economy able to withstand next pandemics, and hopefully, just like Bruegel’s loving couple at the lower right corner of his masterpiece (go check it now)- we will prevail.
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Post-Pandemic Vironomics: Deglobalization, Degrowth and Decentralization was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.