Whether in the business world or in society in general, having a short-term view can be dangerous for the economy and health.
If you were told that your business might increase revenue, generate greater profits and create more jobs, you’d be intrigued, wouldn’t you? And if you learned that the global incidence of cirrhosis and cancer might be dramatically reduced while lowering health care costs, you’d probably be just as interested. However, when a short-term view comes into play, the results are much less convincing.
To put it simply, a short-term vision consists in favoring immediate results (or in the near future) at the expense of long-term interests. For a company, short-termism may be to reduce research and development expenses to increase profits for the current quarter.
Plenty of evidence shows that short-termism is bad for business and the economy. FCLTGlobal, a non-profit organization that encourages long-term behaviors in business and investing, has found that long-term oriented investors achieve greater results. In addition, long-term oriented companies are more successful in terms of revenue, profits and job creation. A study by McKinsey & Company revealed that the turnover of companies with a long-term view a increased on average by 47% relative to other companies, and that their profits increased by 36%.
However, there is a danger in sharing these business examples. It’s easy to blame corporate short-termism on the current financial system, which emphasizes quarterly earnings, stock prices, etc., but short-termism is a deep-seated bias. human in general.
Winner of the Nobel Prize for his discovery of the hepatitis C virus (HCV), the Dr Michael Houghton states, “While we have made great strides in containing the hepatitis C pandemic, unfortunately, due to the worldwide consumption of opioids, the number of hepatitis C cases is increasing in some countries.”
The World Health Organization (WHO) explains that globally, it is estimated that 58 millions the number of people with chronic hepatitis C virus infection, with approximately 1.5 million new infections per year. In 2019, approximately 29,000 people died of hepatitis C, largely due to cirrhosis and liver cancer (among the most serious outcomes of chronic hepatitis C virus infection). It should also be noted that hepatitis C is the most common cause of liver transplantation in the United States.
However, it is very interesting to note, as Dr. Houghton does, that “several companies have developed highly curative antiviral cocktails, very well tolerated, and you only need to swallow a pill for two to three months to be cured. While the Li Ka Shing Institute of Applied Virology is working on a hepatitis C vaccine, there is already a cure. Why is it not used to treat the 58 million people currently infected?
This is where short-sightedness comes into play once more. “Existing remedies are patent-protected and cost at least $20,000 per patient,” says Dr. Houghton. You don’t have to be an expert in pharmacoeconomics to do the calculations.
The cost of a cure would not be cheap, nor would an initiative to test at-risk populations. However, the savings are significant. Treating liver cancer, cirrhosis, liver transplants and other pathologies remains incredibly expensive, not to mention the cost of lost work days and lost productivity, as well as other human costs.
According to a study of the hepatitis C virus among people enrolled in Medicaid, the cumulative treatment costs would be fully compensated in regarding six years, and that in the following three years, the annual recurrent avoidance of health care costs will have resulted in an estimated total cumulative savings of $12 billion for Medicaid.
According to a publication of Congressional Budget Office of the United States entitled Options for Reducing the Deficit(Solutions for Deficit Reduction), if the U.S. government cut federal funding for arts and humanities programs, such as Smithsonian Institutionthe Corporation for Public Broadcastingthe National Endowment for the Humanitiesthe National Endowment for the Artsthe United States Holocaust Memorial Museum, etc. The U.S. government would save almost six billion dollars over ten years. The elimination of subsidies for certain meals under the National School Lunchfrom School Breakfastand Child and Adult Care Food Programs would save $9 billion over ten years. Hepatitis C might be cured and lives saved, without harming the arts or food-insecure Americans, while raising $12 billion.
Again, why is this not happening? Short-sightedness is insidious, but it can be fought. Rather than focusing on the immediate costs, one might rather speak of the $12 billion in savingsthat the United States might achieve. If a hepatitis C treatment net-testing program were touted as reducing the multibillion-dollar deficit, it might garner more support.
Otherwise, one might think of the populations most at risk. For example, as Dr. Houghton explained, “We know that baby boomers are at high risk for hepatitis C, as are people who have received a blood product. Treating hepatitis C as an abstract concept is likely to be far less powerful and motivating than fostering a dose of anxiety among most-at-risk populations (who, ironically, hold a good deal of political power). And, of course, all of these arguments might be applied to increase funding for the development of a hepatitis C vaccine.
Similar rules apply to combat short-termism in business. For example, partnering with investors who share a longer-term view is a great place to start. While there are many short-term investors, there are also strong institutional investors with a long-term view. Blackrock, for example, helped found FCLTGlobal, the long-term advocacy nonprofit mentioned earlier.
The bottom line is that short-termism is infecting society, from CEOs, to CFOs, to health experts and frontline workers. It’s bad for business, and it’s very bad for human health and well-being. Dr Houghton put it succinctly when he said, “We can clear the ticking time bomb that’s in our livers, but we need to test and treat our communities at a faster rate.”
Article translated from Forbes US – Author: Mark Murphy
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