The next response is from Al Negrin, a retired CEO whose career ran the gamut from giant multinationals to startups.

“First of all, to provide a social safety net of the type most European and Scandinavian countries do, it is necessary to increase taxes on both businesses and individuals. This of course is a disincentive for both aggressive managements and aggressive employees. Why work hard to further your company’s prospects or your own prospects when any gains are largely taken away in taxes?

That’s why European companies are large, stable and slow moving, and European employees are satisfied to live a middle class existence without fighting to achieve higher paid positions and prefer to balance work and family by taking 5 weeks vacation every year. Election after election has shown this social position is favored by the electorate all throughout Europe (except in the UK).

The United States has achieved the pre-eminent world economy by taking a contrary social position. I don’t see that we want to give up aggressive business and personal challenge by converting to an all-embracing social safety net. That said, however, the Constitution provides that the government shall be empowered to “promote the general welfare.” Having tens of millions of citizens without access to appropriate health care is not “providing for the general welfare.” Thus I favor some sort of universal health care, without however extending it so far as to impede personal or ” business incentivization.”

Do you think that some form of universal healthcare
is possible in the US?

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I constantly hear people say that they’d like what Europe has, but don’t want to pay the increased taxes, business or individual, necessary to provide it.I asked a friend who lives there and she says that it’s not that simple.

She explained that in fact, taxation in the US is higher in absolute terms, Healthcare costs are one of the highest costs for a US employer, but are ignored in terms of taxation.

She says that when considering Europe’s taxes you need to consider that in Europe no business pays healthcare.

From an individual perspective, no one pays for health or for education, including higher education.

Of course, many US corporations, such as GE, pay little to no taxes anyway.

“Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003.

In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion (see box). These companies’ “negative tax rates” meant that they made more after taxes than before taxes in those no-tax years.”

Then, late last night I received the following email. The sender is an executive with a major insurance company. He apologized for requesting anonymity, but said that his comments could cost him his job.

I think what he offers is of vital importance to this discussion.

“Firstly, increasing tax on business is obfuscation of the issue. Providing universal healthcare is a question of prioritizing the enormous tax revenues that the government receives. We can choose to prioritize healthcare and education, or we can prioritize military spending that makes it difficult to do business internationally at the tune of $18 billion per month.

Now, it is clear that the level of taxation in the US is not significantly lower than in countries that have universal healthcare. What differs is that healthcare costs are significantly higher per capita in the US than in all other nations. In addition, the results of healthcare in the US, as measured by infant mortality or life expectancy, is lower than in all comparable nations. Infant mortality and life expectancy is as low as former Soviet republics such as Latvia or Slovenia. It cannot compare with Western Europe, Canada or developed Asian nations. Clearly, since the costs in the US are higher than in any comparable nation and results are lower, it is possible to both improve healthcare for all Americans while reducing the expense. This, however, will affect the profits of very powerful interests.

Rather than focusing the discussion of taxes, maybe we should focus the conversation on why it costs more to deliver less in the US.”

I think that focusing this discussion on who pays may be missing the boat. Maybe along with who pays we need to look at what we’re paying for and why it costs so much. What do you think?

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Healthcare is on everybody’s mind these days. In a recent conversation I had with KG Charles-Harris, CEO of startup Emanio, we touched on the possibility of a tax increase on business to fund health care.

KG said, “It’s clear that the US healthcare situation needs to be improved. However, there are so many different views as to how we may improve healthcare, that the HOW question is completely open. Is increasing taxes the best way of doing it? Or is reforming the system better? America is a great country and we must as a great country do what’s necessary for our people. However, I am unsure that increasing taxes is the best way of doing this.”

In his column, Paul Krugman credits John Edwards for “introducing bold policy proposals — and they were met with such enthusiasm among Democrats that his rivals were more or less forced to follow suit…Edwards plan…giving people the choice of staying with private insurers, while also giving everyone the option of buying into government-offered, Medicare-type plans — a form of public-private competition…”

For the rest of this week (or longer) I’m going to post commentary from business people I know. I asked this question, “Should the US increase taxes on businesses in order to provide universal health care for its citizens as other countries have done?”

I suggested that they look at the question broadly—not just the tax issue—and from whatever prospective they chose.

I’m hoping that you will weigh in also. If you feel your response is more a full post than a comment email it to me along with a short introduction and I’ll give it post status—as long as it’s not just a blatant political statement.

Is healthcare an important issue to you?

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Today we welcome Marc Dorneles, another new voice at MAPping Company Success. Marc is a very untypical commercial insurance broker whose employer won B Corp status (definitely not the norm in his industry), plus he’s extremely knowledgeable about startup needs. (Click About Marc to learn more.)

There it was and here we are, Post Seed Conference SF 2015. There were many pearls of wisdom and insight offered at the event by the likes of John Doerr of Kleiner Perkins and others substantiating its strong attendance. From, Ideas are easy, execution is hard and the notion of challenging thinking to the more precise strategy of Empowering, encouraging OKR’s (Objectives Key Results) because it gets Alignment and Operational Excellence.

It was the place to be if you wanted to hear more about the key ingredients for a leader in the start- up environment. Namely; technical expertise, outstanding leadership, strategic focus on large opportunities, reasonable approach to finances, and having an incredible sense of urgency.

It reminded us that story telling, show and tell, is critical. Equally as instructive; a question to ask yourself when entering any partnership is: do you want to make mistakes with this person? Said another way, can you have the attitude with them that “I’ve got your back, let’s go tackle this problem together.” 

There were market insights discussed such as the analysis that there are approximately 200 unicorns in the world, “Americorns” being a substantive number of them. Today’s dollars are a third of what was around at the height of the boom, making it less likely for unicorns to get acquired. Even a little antidotal comedy, like Unicorns are often albatrosses and bottom line focused zingers quoted from the likes Bill Campbell were offered; “all that matters is that we achieve operational excellence.”

The conference identified markets that comprised major opportunities, such as 

• the online ad market which is at half a trillion dollars. Likewise;
• US Healthcare which is bigger than all but some three economies;
• Public Education;
• Transportation; and
• rounding out with batteries (projected to be three time’s better than they are today)

as additional significant opportunity sectors. Overall market perspective was given: downturns are good things because more attention is given to the outstanding startups.

Operational consultation ideas were shared by many veteran experts including Christine Herron of Intel. Ideas such as, don’t over-capitalize, think long term, and have guts or that venture capital is not the end, it’s a means to an end. When looking for funding, don’t worry about the financing market, focus on the business. Don’t worry about unicorns. Consider “Optionality” i.e. keeping options open, looking for those with large upside and little downside. Rounds are taking longer to close. Be patient.

Concerning founders, a big key is learning.

• Anticipate pre-launch, scaling issues.
• Focus on process and measuring.
• Know that rigorous hiring is extremely difficult and that the best talent usually needs to be lured away from other opportunities.
• Long term, keep in mind that people who started with small companies don’t necessarily want to be there when they’re bigger.
• Four major cities: SF, NY, LA, Boston are the most sought after locals. There’s a significant importance to understanding and adapting to local markets.

Focus on what is needed to prove key initiatives. Questions and actions such as,

• How much did you raise?
• How much accomplished?
• How long is the runway?
• Know exactly what the other side means.
• Avoid grey areas.
• Create your deck around the most effective metric, which is traction!

Keep in mind that investors roughly don’t invest 95% of the time because 40-60% of investments in startups are complete fails but have confidence nonetheless.

Traction = Execution. As soon as you raise equity round, get VC. Never letting company run out of money is the #1 job. Pressure your investors to use their network. “ABR” – always be raising. Don’t be concerned about dilution just raise as much as possible.

Vinod Kholsa generously shared some particularly brilliant insight, imparting the functional dynamic that value equals perception and the perspective to ask what’s valuable about the company. He went on to emphasis that the core business is much more important than valuation which is peripheral to long term success. In addition, to keep in mind, what kind of assets are you adding for long term success? How you approach people – extremely important. Be humble. Where are you today? Is most important. What risks do you need to eliminate or reduce in the next 12 months?

The analogy was made of having a good base camp, meaning a stable business with decent returns. Think big, act small. Think about Everest but plan to get to base camp first. The single biggest help a VC can give is to figure out who you need on your team. A company becomes the people it hires.

Understand the risks you’re taking. Sequencing which risks you prioritize is very important. You want people who will push you to ask the hard, not easy, questions. Talk to as many VC’s as you can. Find out what they think of your risks! Have a plan to eliminate risks one by one.

Wrapping up it was discussed that seed stage investing is both harder and easier than ten years ago because entrepreneurs are more sophisticated, but there are also more VC’s. It also speculated on what the future holds noting the impact of machine learning, which will replace most jobs.

The recognition that there is abundance and income disparity increasing at the same time was also made and that income inequality will have to be addressed. It was speculated that more than 50% of jobs will disappear.

Entrepreneurs have the opportunity to create technology. However, emotional elements can’t be replaced, which is exceptionally valuable knowledge.

The fact that the human element can’t be replaced leads to this article’s concluding point, i.e., why conferences like Post Seed are so valuable!

Innovation is often a direct result of research, but they both depend on a willingness to look at the tangible and intangible in new ways and healthcare and medicine (not the same thing) are starting to benefit. Here are a few things that caught my interest.

The Cleveland Clinic in Ohio, which has long been a medical innovator, has turned its attention to better ways to use IT to improve patient outcomes. (For many years the Clinic has had its own company formed specifically to commercialize its discoveries, leading to conflict-of-interest accusations.)

The clinic is a pioneer in providing information to patients and linking patient involvement with medical records and healthcare practice improvement. It is also vigorously experimenting with medical IT in new forms of patient engagement and education, including social media.

Startup Healthy Labs is creating social websites that target specific chronic medical conditions, such as Crohn’s Disease and Colitis, which are verifiably for patients.

…patient-only networks — people have to be verified as actually being diagnosed with the relevant issues before they can join. This is meant to keep out people shilling for pharmaceuticals and certain holistic “cures,” and keep the community centered around the real folks who are dealing with chronic diseases at hand.

Practice Fusion is for the rest of us, providing the kind of central medical repository that has been talked about for years, but doing it cost effectively.

… a massive database of information for medical professionals and patients that includes everything from records and vitals to doctor reviews, has data for more than 50 million patients. More than 150,000 medical professionals use it to keep track of patient data.

Experts researching the outlandish rising costs of US Healthcare are finally focusing on a major cause—the American attitude of ‘more is better’.

But an epidemic of overtreatment — too many scans, too many blood tests, too many procedures — is costing the nation’s health care system at least $210 billion a year, according to the Institute of Medicine, and taking a human toll in pain, emotional suffering, severe complications and even death.

Thanks to false information that vaccinations are the cause of autism many childhood illnesses that were seen as vanquished have made a comeback. Multiple studies have found that autism is securely tied to the world of auto immune diseases and the problems start in the womb—but the information has not been popularized.

Danish study, which included nearly 700,000 births over a decade, found that a mother’s rheumatoid arthritis, a degenerative disease of the joints, elevated a child’s risk of autism by 80 percent. Her celiac disease, an inflammatory disease prompted by proteins in wheat and other grains, increased it 350 percent.

Finally, did you know that low sperm count is a global problem? And that it is worst in Israel.

… that his stable of superior donors includes only tall, twentysomething ex-soldiers whose sperm has passed rigorous genetic testing. But finding such super sperm isn’t as easy as it used to be. Only 1 in 100 donors makes the cut. A decade ago, it was 1 in 10.

Flickr image credit: pedroelcarvalho

I’ve written several posts focusing on healthcare, starting with the newest way to screw the un/under insured (which I sincerely hope you’ll forward to your federal and state politicians), a series focusing on why US healthcare is an oxymoron and one on doctors’ conflicts-of-interest, so it’s nice to be able to offer up the story of a large medical organization that seems to do it if not right, better than many.

In an interview (free registration) with two senior McKinsey people, Cleveland Clinic’s CEO Delos “Toby” Cosgrove covers a wide range of topics focusing on current and future healthcare.

For those who aren’t aware, Cleveland Clinic is one of the 500 pound gorillas in healthcare with annual revenues in excess of $4.4 billion and more than 37,000 employees, although “some observers believe that a number of these physicians have a conflict of interest.”

Cosgrove himself holds more than 30 patents and “is not your usual executive; he spent 30 years at the clinic as a cardiac surgeon before being promoted to CEO, in 2004.”

Cosgrove’s focus is on prevention, education, transparency and accountability.

He tends to focus on the stuff he can actually do something abut, as opposed to that which he can’t.

“The things that I do have control over—the culture of the organization, a few strategic decisions, and probably most important, the selection of people—I do worry about. It’s not very hard to decide if people are bright enough to fill a role, but if they don’t have the cultural fit or the work ethic, they just won’t last here.”

Do you have direct or close experience with Cleveland Clinic?

Would you go there if you could?

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