Think Like a Freak?
I enjoy reading the Freakonomics Blog. And I really agree that insightful, counterintuitive, original thinking drives innovation in different form-of-expression of life, socio-cultural, socio-economic, ... and definitely business.
This is the book: Think like a Freak (Levitt & Dubner)
And there is this story that has provoked a lot of response: Steven Levitt, Professor of economics at the University of Chicago - suggested UK's prime minister David Cameron (in a meeting): UK would benefit by replacing their silly publicly funded health care with a truly free market where people have to pay for everything.
What is behind: it seems obvious that if you don't charge people for things (including health care), they will consume too much of it?
This has been commented by Noah Smith here and Cameron Murray here.
Optimal risk in life?
What is interesting to me is Levitt's emphasis on the maximization of a benefit and not the optimization of a risk. How to enjoy life, but avoid severe diseases? How much sport, how much mobility, how much interaction, how much celebrations, how much wine and dine, …. how much medication, … difficult enough.
However, as in finance, it's not only the cost of risk it is also the optimal input fraction of our potential.
Yes, it is much easier to do risk management in quantitative fields - if dangers and opportunities are not quantifiable, we have limited ability to control them. But you are lucky if you are able to make danger and opportunities a positive contribution.
So, it is my strong belief, that we think like a freak, if we want to optimize risk also in health care - and not just look what the "market" says.
Picture from sehfelder