Sunday, November 20, 2011

Gingrich is Smarter than Krugman Thinks

On "This Week," this morning, New York Times Columnist Paul Krugman smarmily commented about Republican Presidential candidate Newt Gingrich, "He's a stupid person's idea of what a smart person sounds like." While I do not agree with Gingrich's platform, I have to defend his intellectual capacity.

When I interviewed about electronic health records for Rx Communications newsletter., he displayed an encyclopedic knowledge of electronic records. Unlike many of his Republican counterparts, he has staked out a very progressive position on healthcare. I have reprinted the interview below.

In an interview with HOC , former US House Speaker Newt Gingrich said he founded his Center for Health Transformation because “I wanted to have an effect; I wanted to save lives and money. America ’s healthcare system is becoming obsolete. The changes that are needed are complex and cannot be done bit by bit. We need an overhaul of the entire system.”
Gingrich cites transparency as a major issue in healthcare. For example, a US Congressional Bill requiring hospitals to report the number of infections was challenged by hospitals because, Gingrich contends, “they don’t want anyone to know the number of infections.”
One of Gingrich’s main goals is to secure a “21st century science and technology budget” that will allow significant research in the fields of Alzheimer’s, and cancer. He wants to secure funding for scientific research and technology “not for one year but for a generation. It is the only way we will achieve significant scientific breakthroughs.”
When asked about the challenge of doing all this during the current economic crisis, Gingrich said: “I don’t not feel sorry for a Congress that could find $1.2 trillion on short notice to bail out Wall Street.”
Another priority for the former Speaker: “We need to study what works and adopt it all across the country. We have learned that the practice that leads to the best outcome turns out to be the least expensive in the long run,” he believes.
But Gingrich’s favourite cause is electronic health records, and particularly e-prescribing. To highlight the issue, the Center for Health Transformation published Paper Kills: Transforming Health and Healthcare with Information Technology , a book by David Merritt, a project director at the Center for Health Transformation and the Gingrich Group. Moreover, he considers that the needed infrastructure investment in electronic health records is just as vital to the country as the railroads were in the 19th century. The total devastation of the paper-based health records of the citizens of Louisiana after hurricane Katrina proves his point.
But he thinks that adopting electronic health records is meeting resistance because “Doctors have deeply ingrained habits. They are very conscious of time. For them, time literally means money. Doctors have also been against this because they are instinctively against big government and the insurance companies,” who may force it on them.
Newt Gingrich dismisses privacy concerns. “When I speak in front of a group, I ask how many use an ATM in a foreign country. The hands of almost everyone in the room are raised. I tell them that the information in their accounts has travelled across borders. They were not concerned about that.” But he believes that “fraud is the more insidious reason that doctors oppose electronic health records. With electronic health records, fraud will be easier to detect.” Over-prescribing and over-billing will be more closely monitored. The Wall Street Journal estimates that 10% of all Medicare billing is fraudulent. Asked how he would propose paying for this, he says that eliminating fraud “will allow electronic records to pay for themselves. The federal government should subsidize the conversion to electronic health records.”
While Gingrich acknowledges that adopting electronic health records for 100% of the population will take time but he is pressing for immediate adoption of e-prescribing. He praises the Medicare Electronic Medication and Safety Protection Act, which established bonuses for the adoption of e-prescribing technology.
Finally, Mr Gingrich had this to say about the cost of adoption: “Would we tolerate it if the airline industry said, ‘we would like to be safer but we can’t afford it’?”

Wednesday, November 16, 2011

Former Blue Cross CEO: Company Struggled to Provide Employee Insurance

There has to be wrong with the current national paradigm for health insurance when Blue Cross, which provides health insurance for 1 out of every 3 Americans, struggles to provide for health insurance for their own employees.

Joseph Frick, former President and CEO of Independence Blue Cross, spoke at the America Israel Chamber of Commerce healthcare IT conference. Frick, who currently is Vice Chairman and Managing Partner at Diversified Search, considered the mission of Blue Cross was not to sell insurance but to provide health care security.

From his speech:

"As the former CEO of a company that employed over 6000 employees, I cared deeply about the health and vitality of my workforce and their families, but grappled with the annual, unpredictable costs of over $50 million to provide healthcare coverage. Some asked isn't it free for your company. The answer is no."

He argued that the current system is not maintainable.

 "Despite over $2.6 trillion dollars in healthcare spending (over 16% of GDP), the number of non- insured elderly patients reached 49.1 million in 2010. In short, the current operating model is not sustainable. 

He proposed solutions.

 "We need to accelerate the transformation of our industry from one that is architected around activity and volume to one that is structured, aligned, and incented around outcomes and value.

Female Venture Capitalist: Women Tech Entrepreneurs Can't Cut It

It is 2011, there are still few women in venture capital or  heading tech start- ups. Attending the Israel American Chamber of Commerce on healthcare IT,  I decided to explore this issue with with two women at the Israel America Chamber of Commerce Conference on Healthcare IT.

Donna Usiskin, Vice President of Business Development at Edison Ventures is the only woman employee on the investment side at Edison Ventures, which has 23 employees. Usiskin said, "I do everything that I can do to mentor women tech entrepreneurs." She then listed several female mentoring organizations that she is a member of.

Usiskin continued, "Women are not cut out to be tech entrepreneurs. It is 24 hour a day, 7 day a week job.  Women chose family, a husband over that lifestyle." It was a little disappointing to hear this ancient stereotype about women was being parroted by a woman.

Usiskin was "thrilled" that she had to wait in line for the ladies room at this conference. "This conference is a little different. There are more women. The Israeli army teaches women how to handle a gun and be leaders," noted Usiskin.

Elizabeth Rounsavall, director of Research and Analytics at Chrysalis Ventures voiced the same sentiments. She said, "There are no women on the investment side at Chrysalis. I am sort of a bridge to administration. There is another woman employee in marketing. Part of the problem is lifestyle. A lot of travel is involved with the job."

Rounsavall continued, "The situation is also bad in private equity. A female speaker  at a private equity conference thanked the industry for being more progressive than the Taliban."

Later, she mentioned two women entrepreneurs that Chrysalis works with -  Liz Griggs, CEO of Nextimage Medical and Jan Bruce, who was an entrepreneur-in-residence at Chrysalis before they invested in her startup, Quilibrium. 

Friday, November 11, 2011

See The Artistry Behind a Billion Dollar Fortune

When I saw Cirque du Soleil Quidam last night, I was reminded that 100 million people on six continents have  seen a Cirque show. The founder Guy Laliberte, whose net worth is over $2.5 billion, proves that the secrets of success may be following your dreams and doing what you love. His irresistible charm and nerves of steel  are credited with his success in this compelling Barbara Walter's interview.

Quidam is a captivating mix of clowns, which make you laugh, and death defying aerobic feats that elicit an involuntary gasp. I often found myself literally on the edge of my seat, alternatively holding my breath and saying wow.

Pictures courtesy of Matt Beard

Monday, November 7, 2011

Sex Is Not Why Cain's Sexual Harassment Settlements are Important

As a victim of sexual harassment and sexual assault, many might feel that it is a knee jerk response, on my part, to attach importance to the sexual harassment settlements made on behalf of Republican Presidential candidate Herman Cain. They would be wrong.

I am paying attention to these allegations and settlements because it gives you a window into Herman Cain's character. Since he has only recently arrived on the national scene, we do not know much about him. The national media has not properly vetted him.

The subsequent history of the men that harassed me might be illustrative. One  was my regional sales manager of the brokerage firm that I employed me. Since I filed my charges in the 90's during the Wild West period of Wall Street, nothing happened to the perpetrator after the firm settled with me. 18 months later, he was fired after black brokers named him in a class action discrimination suit. The suit alleged that he poked fun of blacks by performing "in white face during a minstrel type show at the firm's Christmas party". The settlement in that case was in seven figures. The lesson drawn from this case could be that sexual harassers are usually equal opportunity bigots.The firm should have drawn the right conclusion from my lawsuit - they had a problem employee. If they had, they might have insisted that he undergo sensitivity training and avoided the second lawsuit and its multi-million payout.

The second man was a tycoon of finance held in the highest esteem when I leveled my charges. By the way he behaved during the attack and handled my accusations, it was clear that he took too many risks, played fast and loose with the facts, wanted to win at all costs, and did not know how to deal with people.The public discovered this afterwards. His firm shortly thereafter took a company public that went bankrupt six weeks later. Accusations were leveled that his firm knew the company was failing and rushed taking it public so that they could cash in before the bankruptcy. Later, his partners pushed him out the door of the firm that he singlehandly founded in a bitter dispute.

Since Herman Cain has not handled the fallout from the revelation of the sexual harassment charges particularly well, many in the media, who do not like to talk about sex, have decided the pr debacle is the issue. They are wrong. The issue is his character. His lack of knowledge about the settlements indicates arrogance. He did not ask about the settlements because that would have been admitting that he made a mistake. Then, he might been forced to alter his behavior.  Even if he thought that his actions were funny or non -offensive, he needed to change them because it was costing the organizations that he worked for money.

This also says something about our corporate culture.Except in the case of serial harassers, businesses do not tolerate employees, even star ones, that keep costing the company money.

Saturday, November 5, 2011

MF Global Bankruptcy Proves Need for Privatization of Financial Regulation

Here we go again. After all of the public outcry to rein in Wall Street, the eighth largest commodities trading firm in the United States has declared bankruptcy, three short years after the Lehman Bankruptcy.  This bankruptcy comes with a twist - $593 million of customer money is missing. The FBI, as well as the securities regulators, is now camped out the firm's headquarters. Will we ever learn?

I have been arguing for privatization of financial regulation for some time. This bankruptcy proves that we need to find a new paradigm for regulation. The regulations and regulators that we have now in place are not working. After the last financial crisis, it seems incredible that there were no rules in place to limit the leverage and concentration of trades done with firm's money. Once again, one trader has bankrupted an entire firm by taking outsized risks without any fear of a clawback of his earning.

My new paradigm for securities regulations is to empower outside lawyers, with a vote by the commissioners, with the ability to investigate securities and commodities firm, prosecute violators and pocket the fines imposed. I am working on this with the community reporting news site, Spot. us. More details here. 

Regulators are always Johnny Come Lately if they arrive at all. The CFTC did not detect the lack of controls over the segregation of client money. Exactly when MF Global clients  need his insight and wisdom the most, the head of the CFTC, Gary Gensler, has withdrawn from any involvement in the case due to his close relationship with the firm's former CEO Jon Corzine, his former boss at Goldman Sachs.  Funny, that close relationship never seemed to be a problem when Corzine was lobbying for what he wanted.

MF Global clients may lose as much as 40% of the capital in their personal accounts. Some of these losses could have prevented if regulators were paying attention,  Many institutional investors, having their ear to the ground, rushed to withdraw their money last week. A money manager in Chicago told the New York Times that his firm, hearing the rumors, pulled out $5 million last week. The CTFC gave sophisticated investors an advantage by not blocking last week's hastily arranged withdrawals. Maybe, the withdrawals can be clawed back like they are in a Ponzi scheme.

Corzine, who should have known better, was using the commodities firm, which was also a registered broker-dealer, as his own private casino. He was making huge bets, leveraged 40 to 1, on European sovereign debt with the firm's money.  If he won, he would become richer. If he lost, he would walk away as he has done.

The Financial Industry Regulatory Authority, a private organization, first raised the alarm about MF Global's risky bet. Then the panic spread. MF Global tried to sell itself to Interactive Brokers but the missing client money precluded a deal. The firm may not have been properly segregating customer money.; It  may have been using the money to shore up their under the water positions.

We might be able to write this off this speculative use of firm money as a one time incident except that Corzine and the CEOs of other commodity firms were lobbying the CTFC  to even further relax the rules surrounding commodity firms' uses of customers' money. Gensler wanted to tighten the rules, but apparently was unable to stand up to the bulldozer that is Corzine. The Republican commissioners were also against more regulation. Gensler isn't perfect. When he served in the Clinton White House, he was against additional regulation of derivatives.

The coziness of Gensler and Corzine may be unseemly but probably had very little effect on the final result. When I was at Wharton, Gensler and his twin brother were the most intelligent and best prepared students in every class I attended. If Gensler was blindsided by Corzine's actions, then probably no one could have seen it. When traders leave Wall Street and become Washington regulators, something appears to happen to them. It must be the brand of cool aid they serve in Washington.

While many treat Elizabeth Warren as a hero for dreaming up the Consumer Financial Protection Bureau, this bureau also would not have prevented the MF Global disaster.  More regulations and regulators are not the answer. Smart people in the private sector must be given tools by which they can protect the consumer. Regulators are not up to the job.

There may be one good thing to come out of the MF Global bankruptcy. While it is a commodity firm and not a bank, the bankruptcy should shore up support for the Volcker Rule, which is meant to curtail speculative investments by the banks.

Tuesday, November 1, 2011

Biden's Future Jewish Son-In-Law is My Doctor

What woman can resist a Jewish doctor. Apparently not, Ashley Biden, daughter of Vice President Joe Biden.I have been a big fan of Biden since I volunteered and donated to his ill-fated 1980 Presidential campaign. So you can imagine my happiness when I found out that his daughter, Ashley, was engaged to my doctor, Dr. Howard Krein.

Dr. Krein is a very nice, thorough doctor. He is part of a big ear, nose and throat practice at Jefferson Hospital. My only complaint is that he kept me waiting over an hour and did not offer any apology when he did finally see me.

The office is very automated probably due to Krein's sideline. When you enter the office, you are asked to type your name into a computer and sit down.

Howard Krein is Chief Medical Officer at OrganizedWisdom Health. His brother Steve is a serial internet entrepreneur, with Organized Wisdom being the latest. The company "helps doctors set up their digital offices in minutes." The website  boasts, "The Most Effective Way to Save Doctors Time While Creating Healthier, Happier Patients". Former Time Warner CEO Gerry Levin serves on the board of directors of the company while Internet guru Esther Dyson is on the board of advisers.

Employees of Jefferson Hospital told me that Howard is proud of being Jewish so expect some Jewish elements at the wedding. Maybe that will shut up some of Obama's Jewish critics.

While Ashley Biden is marrying outside her Catholic religion, she not marrying outside of her party. She is marrying a liberal.

Mazel Tov Howard and Ashley!

Update: I saw Dr. Krein today. He had a sense of humor about my blog posts. Ashley is a very lucky girl.