This week I read three parallel articles: one on healthcare, two on transport, all with the same theme: how the introduction of disruptive technology in traditional ‘public services’ led to a flood of new demand, calling sustainability into question.

I’ve thus far painted a positive picture of how new technologies can democratize access to services: Riding in the comfort of a private vehicle is no longer restricted to those who have money to own a car. Tele-health, where patients can consult their doctors online rather than face-to-face, is cheaper and more accessible than a traditional doctor’s visit, cutting down unnecessary waiting and travelling time (issues that disproportionately affect the poor and elderly!).

But improving access often leads to a surge in demand, creating new problems for society. These articles point towards an important trade-off between consumer access and system-level health that I haven’t quite addressed. [Spoiler alert: we should care about both because they are ultimately about the consumer!]

Transport

“The Downside of Ride-Hailing: New York City Gridlock” empirically shows how ride sharing has worsened congestion in NYC because many have replaced their subway rides with an Uber or Lyft. “Average travel speeds in the heart of Manhattan dropped to about 8.1 miles per hour last year, down about 12 percent from 2010”. New Yorkers have famously pushed back against their Mayor’s attempts to restrict the number of Uber cars.

“Autonomous Vehicles: Hype and Potential” shows how autonomous vehicles can also exacerbate traffic congestion, slowing down the movement of people and goods around the city.

• One of the promises of autonomy is that the car can be re-imagined. IDEO imagined how cars might become work-spaces in the picture below. Once the car becomes a comfortable place to work or relax, many of us might not mind spending more time on the roads. I might opt for an Uberpool even if takes twice the time of a train journey because it’s such a comfortable, productive ride.
• If these autonomous vehicles are privately owned, people might send their cars on trips they would normally take. For example, sending their car to the McDonald’s drive-through, or far out of the city center to find cheap parking.
• We will also take some time to get to roads where vehicles are 100% autonomous. In the interim, human drivers are likely to “bully” autonomous vehicles because they know that these autonomous vehicles are programmed to be risk-averse (an autonomous vehicle killing a person is perceived as a greater travesty than a distracted driver killing a person). In such a scenario, we will see autonomous vehicles driving at slower-than optimal speeds, creating more congestion.

Source: IDEO

Healthcare

The parallel in the healthcare system is a study by RAND Corporation, showing how only 12% of tele-health visits have replaced visits to the doctor, while 88% represented new use of medical services. Unsurprisingly, this finding suggests that doctors’ visits are highly price-elastic – by halving the cost, we see a surge in new demand. Net annual spending on healthcare among patients with respiratory illnesses increased by US$45 per tele-health user.

This is a bigger problem if the new users actually didn’t need to see a doctor and a smaller one if they would have deteriorated if not for the medical treatment. The answer is likely somewhere in between – I believe closer to the former – 88% is huge (But a more in-depth study correlating the new use of medical services with health outcomes is needed). There is potential for tremendous waste in our already-stretched healthcare systems if we massively lower the cost of healthcare services without creating disincentives for unnecessary usage.

How can we get the best of both worlds: access and sustainability?

Technologies have amazing potential to help us use scarce resources like doctors’ time and road space more efficiently, creating greater supply. By lowering cost, they also ensure that this greater supply is spread out more evenly across the population, regardless of income.

However, doctors’ time and road space are ultimately still scarce resources that need to be rationed somehow. Capitalist countries are happy to ration these services by income. Countries on the socialist end of the spectrum (think the UK National Health System) tend to ration by waiting time. Neither fully takes into account the most important consideration: need and urgency.

How can we incentivize people to only use these new, accessible services only when they really need it? Here are some ideas.

In transportation

In transportation, cities need to make mass people-mover systems (trains, buses) the core service used by most commuters: ride-sharing must complement, not replace trains and buses. The bulk of commuters should spend most of their journey in trains and buses where the road space per commuter is significantly lower. Ride-sharing can be a first-mile and last-mile solution (e.g. home to train station), but certainly not the default for the whole journey.

To achieve this, cities need to up their game in public transportation. It has to at least be reliable and predictable (which many, many aren’t). Examples of how Singapore has done this here and here. Taking a step further, payments and arrival/departure times should be integrated with ride-sharing platforms so that people can minimize waiting and inconvenience when transiting between ride-sharing and public transportation. Work-friendly design in public transportation (think flip-out work tables in public buses) will also help make these options less unattractive compared to IDEO’s self-driving pods.

When it comes to autonomy, cities also need to think about moving to 100% autonomous vehicles as quickly as possible, since the dynamics between human drivers and autonomous cars will likely increase congestion. A 100% autonomous vehicle scenario also creates the most gains in efficiency and safety – vehicles can travel bumper to bumper (more efficient use of roads) and provide information to each other about road and traffic conditions (safety and efficiency are both enhanced). I cover some strategies in this article though this is a topic worth exploring in greater depth.

Finally, slightly more “interventionist” policies may be needed, such as limiting private-use autonomous vehicles and rationing the total number of cars dedicated to ride sharing so that people are prodded towards mass people-mover systems like trains and buses.

Tech companies sometimes paint these suggestions as the Government acting against the consumer interest. I disagree: it is in the commuter and patients’ interest if we can manage the demands on our roads and doctors such that those who need it most can get the services in an affordable and timely manner.

In healthcare

In healthcare, raising co-payments is a commonly-used tool which helps people think twice before using a service. “Triaging” patients is another way – for example, having them first speak to a nurse practitioner and only passing them to the doctors if it is needed.

But let’s take the patient’s perspective for a minute. What’s motivating them to use a service they may not need? Anxiety that their condition may be more serious than they think, and lack of a place to clarify (short of calling up a doctor). Any new parent empathizes with this. I probably went to the doctor every week in the first month of my daughter’s birth for no good reason at all.

We need solutions that assuage a patients’ anxiety. I believe equipping home caregivers is going to be a big part of this. Home caregiving is currently an informal sector with minimal training, which is an incredible waste. Imagine if home caregivers could be the first line of defence – giving the patient assurance when they do not need a doctor, and quickly helping them access a doctors’ time when it is urgent.

If healthcare systems and healthcare insurance providers want to use tele-health to optimise their use of resources, the technology has to be complemented by human-centred solutions that assuage patients’ anxiety. If not, the technology won’t save them any money at all!

Conclusion

I hope that with the addition of this article, I’ve now painted a fuller picture of the impact of disruptive technologies on public services like transportation and healthcare. Indeed, they will make resources more abundant and accessible to people with lower-incomes. However, complementary policies and services are absolutely necessary to ensure that the system is not over-used – ultimately, so that those who really need the services can get it in both a timely and affordable manner.