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Saturday, May 30, 2009

Mt Hood Climb

Climbing season officially opened for me last Wednesday night with a summit of Mt Hood at 8 am Thursday morning. I had climbed Mt Hood twice before in 2005 and 2006 but this was a different experience since the terrain had shifted. The Hogsback, a snow ridge had previously led right to the Pearly Gates which was a relatively easy snow chute to ascend. The Pearly Gates is in the middle of the 2 cliffs on the right side of this picture. However, snow conditions changed and the Hogsback has been steadily shifting to the left (west). The current route is in the middle of the picture where you can see people ascending (although they look like ants in the picture).

We climbed to the left of the climb parties closer to the West Crater Rim route. It was to the left of the cliffs in the picture below.
It was one of the tougher climbs that I have ever done as the the warm weather had melted a lot of snow making the walls quite steep. We had about 50 feet up and down of almost vertical climbing, digging our ice axes and crampons into the snow. For safety, the 10 of us had roped up and used pickets (a 2 foot metal post that is spiked into the snow. The rope is clipped into the picket) for protection.

Mt Hood is always tough for me since you climb it at night during the spring (The snow is too unstable during the day for climbing). My body won't accept any food other than simple sugars and chocolate since it's not used to eating at night and all blood flow is directed towards my limbs for full sympathetic nervous system reaction. After every Hood climb, I always vow that will be my last one. Many people ask why that is even a question but being on the mountain is a great feeling. There's nothing like the close view of the unique mountain geography, that first view from 10,000 feet when the sun comes up, and the chess game of thinking ahead and figuring out the right moves on your route. The feeling of getting to the summit is only rivaled by that feeling when you get back to camp and can take your boots off. Here's a summit view of Mt Jefferson and the Three Sisters in Central Oregon.

When I tell folks about Hood climbs, some immediately ask if I bring a Mountain Locater Unit (MLU). These are similar to devices that are used to track wolves. If someone knows to look for you, they can find your signal. During the December 2006 search for the 3 missing climbers, the idea of these got very popular and some began to consider MLU's as the epitome of safety. Climbers got very defensive about the public philosophy and we tended not to do a good job of expressing our opinions about these devices but I am going to try.
  1. Having an MLU does not mean that you will be safe. Checking the weather, having the right equipment, training, first aid training, and ability to get yourself off the mountain during an accident is what makes you safe. An MLU is kind of like closing the door after the horse has left the barn. I try to explain to people that I am better off taking climbing classes, studying routes, having necessary safety equipment, and being physically prepared but that doesn't seem to impress people as much as the idea that someone could find my exact location with a tracking device.
  2. An MLU only works if someone knows to look for you. It doesn't send a bat signal or automatically get picked up by a satellite. Someone has to know to activate the tracking devices. Just like all who waunder are not lost, all who have MLU's won't necessarily be found.
  3. Even if someone can pinpoint your location, that doesn't mean that they can reach you. If there is a blizzard or other nasty weather conditions, a rescue team won't be able to do anything.
We did have an MLU with us but what made me feel safe was the skill of our climb leader with setting pickets for protection and finding the route, my rope team leader who followed the route, and my other team members who gave warnings when ice was falling from the cliffs. The pain of the climb has faded and I already can feel the fortitude of my vow that this is my last Hood climb fading away.

Friday, May 29, 2009

New Yorker article: what the Square Dance capital can teach us about the business of health care

I found one of those once in a lifetime articles on Bob Lazewski's health care blog. Atul Gawande's piece in the New Yorker truly captures the US health care system, why we are in this position, and even how we can get out of it.

It all takes place in McAllen, TX which bills itself as the "Square Dance Capital of the World." It's also a border town with one of the lowest incomes in the country and the 2nd highest medical costs. Demographically it is very similar to El Paso, TX but health care costs are 50% lower in El Paso. It's not about a sicker population, medical malpractice, cancer-causing abandoned industrial sites, or anything else. It's about the way that health care operates as a business, how physicians practice, and patient expectations. Here are some highlights.

  • Health care providers didn't have any idea that their costs were so high And why would they? As Gawande explain, hospitals know market share and margin and try to get doctors to send them patients. Therefore, it is impossible for a single provider to change the tide of health care costs.
  • Overutilization There is a fascinating section where the Gawande interviews a group of local doctors and after thinking about their high costs, they come to the conclusion that it's "racking up charges with extra tests, services, and procedures." There's an example of how a patient with chest pains and no other symptoms used be given a stress test and sent home. Today, they receive an EKG and cardiac catherization despite only having chest pains.

  • High quality care does not have to be expensive The Mayo Clinic has locations in Minnesota, Arizona, and Florida. Florida has the highest health care costs in the country. However, the Mayo Clinic has some of the best outcomes, highest quality scores, and their costs are in the lowest 15th percent due to their practice model.

  • It doesn't matter who pays for health care The current debate on health care reform centers around insurance. Should the government fix costs and pay for health care or should private insurance companies wheel and deal and pay for health care. However, who cuts the check will not address these fundamental questions about our health care system.

The author's article points out to hope for reform as there is evidence that there is waste in the health care system. We can cut out the waste, such as Overutilization described above, and no one will get hurt. While, the cardiac catherization might locate a heart problem once out of the 100 times its given, that does mean that other services won't be provided. Health care resources are limited. We can pay for extra cardiac screenings or provide more preventive care.

Personally, I think one way to approach this is to reintroduce the stigma and negative stereotypes associated with hospitals and doctor visits. 30 years ago, hospitals were uncomfortable places where people went when they absolutely had to. Today, hospitals have private rooms, cable, room service, and such wonderful extras that it's no wonder that people want to go there.

When I worked psych crisis, some patients I worked with, wanted an inpatient hospitalization despite it not being necessary. It was viewed as a place to escape their current problems. Our clinical guideliness called for inpatient psych hospitalization in cases where the person was at risk for hurting themselves or others not an escape option. 30 years ago no would have requested to be placed in an inpatient psychiatric facility.

I'm not suggesting that health care delivery return to offering poor and sometimes inhume services. However, as a country, we shouldn't like getting invasive time-consuming procedures done to us. Providers shouldn't feel like they will make us happier if we get another test, take some pills, or have another procedure.

This article is a very good example of how our health care system works exactly the way that we have currently designed it. If we want to fix it,we need to change the design.

Friday, May 22, 2009

A Skeptic's View of Social Media and Business

I read and commented on a Brazen Careerist post about why a business would not use social media. The post's, while more tongue in cheek than I initially realized, list of reasons were being obtuse about technology and unwilling to put a little effort into marketing. In other words even a primate who hasn't typed Hamlet yet gets social media.

At my insurance company we have evolved a bit, embraced the web as a great way to talk to customers, have talked about using more social media more, and have decided not to pursue it for now. There are a lot of other thing that we can use our web resources for, such as making information easier to find, improving our provider search capabilities, accessing personal health information, wellness tools, and an assortment of things to make navigating our health care system a little easier.

There's the old saying that your strategy is not to use a piece of technology but rather use the technology to achieve a strategy.

I sometimes climb with two co-workers. One is our web marketing manager and the other is a doctor who works on our Ehealth initiative. In other words, their jobs are about developing Web 2.0 tools and finding web-based platforms to achieve strategies. Both are in their 40's and have tried Twitter and Del.ici.ous, have Facebook accounts, Iphones, ask me about my blog. However, none of us have decided to use Twitter and the two of them stopped using Del.ici.ous after some initial use. These are the people at my organization who should be advocating the use of social media. However, they have tried it and haven't had their lives changed by it, or had their lives made easier, or even gotten that "value add".

These observations cause me to question how long it will take most social media to reach more than a niche audience. Facebook has become mainstream as there are 150 million users. Blogs have become accepted as mainstream new sources but when I searched for how many blogs there are in the world, current count was 112 million. I supposed that it's logical that there are less blogs than Facebook users since a blog is more effort. That does cause me to question assertions that blogging is a prerequisite for career, social development, and general evolution of the species. Especially since this assertion is mostly made by other bloggers and social media consultants. Regardless, Facebook and Blogs are fairly mainstream. In comparison, Twitter, with 15 million users is a still a larvae. While Twitter's use is rising exponentially, it does seem to be plagued by satire, accusations that is has jumped the shark, or that its evangelists are destroying it. No other platforms seem really close to picking up as many users.

This is the point in the argument where anyone involved in social media would show me a hockey stick graph that shows where users will be in 5 years. They probably are right. I also might be told that I don't get social media yet or I am the evolutionary equivalent of a monkey flinging its own poop. It did take reading a few blogs for me to get that social media is not a vehicle for pushing out marketing messages but rather a great customer feedback loop. The marketing comes from responsiveness to consumers, transparency, etc. Social Meteor's post of "Scared of Social Media?" best helped me understand how social media can be used.

The final piece of skepticism that I have yet to overcome about social media is number of users. At this moment, is it that large of a niche or is it more of an echo chamber of vigilant users? People who should embrace social media at my work don't quite yet. There are plenty of web-based improvements that will impact most of our customers in the next few years rather than a few who are currently hyperconnected.

Social media still remains on our strategy road map, but it's under 2012.

Thursday, May 21, 2009

Republicans reveal their Healthcare Reform Ideas

I had previously decried the Republican party's health care reform ideas as the equivalent of a "I know you are but what am I" childish response. However, in the last few days, they put together a very reasonable incremental approach. It's not reform by any means but a viable proposal. I am pleased that they are at least now participating in health care discussions. However, on an unrelated topic, this pleasure with our political system was blunted by the fact that a credit card reform bill now allows me to pack a concealed weapon in a national park. That deer at the campground better show me some respect in the future!

Back to the Republican's proposal (should be clear that this is the proposal of the conservative arm of the party) which includes the following:
  • Employer-based health insurance is taxed in order to provide a tax credit of $2,200 for individuals and $5,700 for families to pay for coverage. An average individual health plan in my state is $2,400/year for an individual and $6,000 for a family so this will cover health insurance for the most part. That is cover it for those who can get accepted for an individual plan and won't have to pay twice as much for a state plan. There is concern that would this would reduce the incentives for employers to offer health insurance but I think that this is overrated. Health insurance is still a valuable incentive since you can a better group plan on the open market for the same price. Our focus groups have shown that employers do care about their employees and want to offer health insurance. For employers who don't care, they maydrop it anyway.
  • There would be a state run health exchange. This basically means that the state would issue a buyers guide or website for comparing plans. This does provide some objective comparison but there are websites out there, such as http://www.ehealthinsurance.com/ that already do this. Additionally, the government is not very good at explaining things in simple terms. The exchanges are vehemently opposed by insurance brokers since this takes away business from them. Insurance brokers are another middle man in the process but they are actually very good at explaining health insurance to people. Exchanges have had mixed results in the past.
  • States can shift people out of Medicaid into private plans. States can drop Medicaid eligibility already so I am curious what this provision entails. Allowing states to easily revoke the insurance of its most vulnerable citizens could have really bad consequences
  • There would be additional money for preventive services, wellness, improving health care IT, and giving kids ice cream on hot days. In one version of the article there was the obligatory fund for vaccines and other no brainers that everyone agrees on.
Senator Max Baucus pointed out that this was basically aspects of the Democrat's proposal with the employer tax. Here are my thoughts:
  • The shift of people with insurance helping pay for those who don't have insurance was part of McCain's plan and research showed that it would have incremental benefits, covering perhaps 5 million of the 48 million uninsured. This doesn't dramatically change anything about how health care is delivered, paid for, or address costs. It's an incremental step using the tax code. While I don't think that it will destroy the employer insurance model, it will probably reduce employer-based insurance by 5%-10%.
  • I am surprised that the Republicans would support the state exchanges of health care information because it puts a previously private function under state control. Health plans explain their plans through marketing and insurance brokers sell a lot of insurance.
  • My biggest surprise is that the Republicans split with their proposals as this is the conservative Republican's plans. The moderate Republicans will release their plan later. The famed Republican unity looks shaky. The bigger impact will be a possible coalition with conservative Democrats who are not excited about the large price tag of the Obama administration plan.
Overall, this does not feel like a Republican plan since there is some wealth redistribution via the tax code and state involvement in a previously private business function of the health care exchange. However, this plan does offer incremental improvement in health care coverage (it's not really reform) which is good to see. Obama's public plan option is causing everyone to propose ideas in order to avoid that option. If the intent of the public plan was to really just create serious proposals than that may turn out to be a very shrewd maneuver.

Tuesday, May 19, 2009

Go Midwest Young MBA!

A few weeks ago, I read the Slate article on the new hot MBA destination which is University of Wisconsin in Madison. Part of the reason for the article appears to be that the writer, Daniel Gross, really needed to get out of New York City. He was probably amazed by all the trees and seeing animals besides rats and pigeons. Daniel Gross admits that much by calling it a detox center. However, you do have to like a city that calls its capital building on the hill, the Nipple of Knowledge. Here's the main sumary of the article and below is my take with my defense and indictman of Wharton.

Madison struck me as blessedly detached from the ailing financial sector.
Of course, Wisconsin is suffering along with the rest of the nation. Its unemployment rate in March was 8.5 percent. But Madison, with its three-legged economic stool of education, state government, and health care,is faring somewhat better. More significantly, the business school isn't having a dark night of the soul, as so many of its Eastern counterparts are.

Columbia Business School and the University of Pennsylvania's Wharton are
basically satellites of Wall Street. Half the students have memorized the
partnership roster at the Blackstone Group the way I once knew the lineup of
1970s-era Cincinnati Reds. An MBA from Columbia or Harvard or Wharton is
basically a leveraged bet on a student's ability to make it in finance. You pay
a ton of money, most of it borrowed, so that you can land a really high-paying
job with one of the big investment banks or private-equity firms that visit
campus. By their second year, most MBA students at Wharton are already scoping
out the Hamptons for the second homes they know they'll be able to buy in a few
years. But with the gilded pipeline to Wall Street temporarily shut down, the
rising MBAs are suffering the kind of existential crisis more generally
associated with comparative literature majors. The New York Times last month ran an article about students at Wharton who were suddenly at sea. Some were considering working for nonprofits!

When I walked into undergraduate finance classes and asked, "How many want
to go get a kick-ass job on Wall Street and make a ton of money?" not a single
hand was raised. The students are mostly kids from Wisconsin studying the
basics—management, accounting, corporate finance. Some plan to stay in-state and
find a job with a small business or with one of the big local firms: Kohler,
S.C. Johnson, Kohl's, Harley-Davidson. Many head to Minneapolis or Chicago for
jobs with consumer products companies.

Now despite the portrayal of Wisconsin as a meat and potatoes general management school, it does house the Applied Security Analysis Program whose graduates' ferocity for Wall Street jobs would rival their east coast counterparts. They are just slightly more polite about it. The only thing that I know about the program was chronicled in an old blog that was last updated during the Bush administration. However, I do know Wharton and can respond in bullet point format to the points raised:

  • First the defense. There are a total of 1600 full time MBA students and not all are finance jackels looking to suck the marrow out of Excel spreadsheet cells. The diversity has increased since I left and during my time it included 200 students who were really truly interested in non-profits before the Wall Street melt down and produced the Social Impact Mangement Conference series starting in 2003. There are even more marketing students that embrace the quantiative style and compete with Kellogg for telling companies how passionate they are about cereals, snack food, drugs, and over the counter products like KY Jelly. Hey, I even get exited typing that list and I am not a marketing guy. Finally, there are 150 students in the Health Care Management program figuring out new ways to improve bed pan technology. There is a lot of diversity at this here finance school.

  • While the marketing and health care students play frisbee on the green and the non-profit students play with their devil sticks, the finance students do lurk. There are some benevolent finance students but probably 25-30% of the class does make up those finance jackels who are scoping out their future homes on the Hamptons as described above. There is a reason that Wharton is still known as a finance school. It's not the entire school but the finance side does loom large and nothing causes excitements like the investment banking interview schedule as the very beginning of the recruiting session or the stir when the Venture Capital firm posts an opening. However, like every school, there is diversity and with 1600 students, you're bound to find at least 50 fellow classmates interested in whatever you're doing. Except playing with devil sticks. For that, you have to find the undergrads.

  • One final factor is Wharton's finance factory reputation is the Wharton undergrads. While I never actually talked with one of them, there presence did loom since we shared the same building and some classes overlapped. I found them to have the sharpest financial teeth of any of the jackels since they started in the finance world so young. For some, the bitterness of an investment banking career already had the same rotting effect on their brains as crystal meth. When I read article like the one above, I do wonder how many of those described Wharton students were undergraduates. To put in perspective, all of the Trumps went to Wharton undergraduate and their reputations loom large over the entire Wharton program.

Monday, May 18, 2009

Another Healthcare Reform Option: Men's Health

Health care reform is getting more and more serious. Stakeholders have decided that two trillion dollars in savings sounds like a nice round number to offer by reducing the increase in health care costs. There is still debate about Obama's public plan option. My work entails finalizing our Medicare bid which will set our 2010 plans already.

Given all the work and seriousness that is going on, it's nice to know that some Congressman are not being serious. Thanks to The Onion for this piece from American Voices:

Reps. Barron Hill (D-IN) and Tim Murphy (R-PA) introduced legislation that would create an Office of Men's Health within the Department of Health and Human Services. What do you think?

Michael Chodat,
Systems Analyst
“Health is for women and children. I plan to live with chronic pain and die early of an easily preventable ailment, just like my father and grandfather before me.”

Jim Summers,
Medical Technologist
“I don’t understand. I’ve already taken a hunter-safety course and my father showed me how to use a circular saw back in grade school. What other health issues does a man even have to worry about?”
This is satire of course but these two quotes are a really accurate description of men's health or the lack there of. One doctor that I had told me that there was no need for him to see me until I turned 40 (he assured me by then that I would start to fall apart). When we do think of men's health, we think of magazine like Maxim with articles called, "How to lose your beer belly". Solution: Wear a big sweater! Now go out, hit the bars, and get laid tiger!

At least, I hope that the two congressman were not serious . . . . .

Thursday, May 14, 2009

The Bloodiest Health Care War in the 90's

It did not occur in Washington DC with the Clintons. Sure the backroom meetings, the Harry and Louise ads, and screams of the acopalypse were bloody. However, the bloodiest health care war of the 90's happened in the idyllic scenery of Southern Oregon. The Rogue River roars past mountains that are still snow capped in the summer. Crater Lake is nearby and the city of Ashland puts on the annual Shakespeare Festivals. In an equally Shakespearian tragedy, a physician group, two hospitals, and some health plans engaged in a managed care battle in the 1990's that showed what happened when the health care system stop getting nice and start getting real.

Names have been changed to protect the innocent and not so innocent but for those want to do research, it all went down in Jackson County, OR. Hospital A and Hospital B were the only hospitals in the county. One medical staff that included basically all the doctors in town took care of the patients at both hospitals. To have all the doctors all work at the same two different hospitals is a little unusual. Usually half the doctors would work at one hospital and half would work at the other.

As a result of this arrangement, Hospital A and B started a bidding war for exclusivity with the doctors and medical staff. Both started to employ the physicians rather than just have them use their hospitals. They had anticipated that Clinton health care reform would select one of them as the regional care provider and were preparing. That's why I called it bloodier than Washington DC health care reform. It was the local manifestation of DC policies.

Hospital A was a larger hospital and did more joint ventures with the doctors, engaging them in partnerships for imaging services or surgery centers where both would share the profits. Hospital B partnered with a health plan to build a little HMO and employed physicians. A large clinic emerged that partnered with Hospital B. The members of the community now had to pick if they wanted to get their health care at Hospital A or B and it's allied physicians and check with their health plan would allow them. Eventually, an anti-trust law suit was filed against the medical staff that had all the doctors. Some of the players felt that the medical staff had been behaving like a monopoly. After 5 years, Hospital B back down, it's allied health plan left the area, everyone started playing nice again. Hospitals stopped trying to lock up exclusive arrangements and everyone contracted with everyone again.

One doctor further explained the dynamics by offering, "We don't have a lot of primary care here so specialists need to check out everything." That was the explanation for why so many high end medical suites were being built and why residents were receiving so many X rays, lab tests, scopes, and other services.

While this doesn't sound very dramatic and bloody, it provided most of the headlines for the local paper. Picture it like Microsoft and Apple battling it out where the stakes included computers, phones, cameras, music, photos as all these services were linked and would only work on Apple or Microsoft. Only it wasn't electronic but health care where these battles would impact which doctor you could see, where you could get sugeries done, and how much you would have to pay.

The fall out was very high utilization of non-essential medical services like imaging, X rays, cataract surgeries, and other elective procedures and a high price for all these services. When I looked at some recent data, a hospital bed costs 50% as much in Southern Oregon as it does in Portland, OR. Surgeries costs were 40% higher and the cost of a visit to your doctor was 10% higher. There is no evidence nor reason that any of those services in Southern Oregon is twice as good as a hospital bed in Portland. Health Plans don't want to do business in this market because they have to pay the hospitals and physicians so much more than anywhere else in the state. The 2 insurance plans that are in the market charge higher prices because they have fewer competitors and medical costs are higher.

What makes this story slightly compelling was that it takes place in a relatively rural, obscure part of the country. If I had been talking about a Boston hospital bed where costs were higher, that could make some sense since Massachusetts General and other Boston hospitals have good reputations. This might change the debate to a question of would people pay a premium for the reputation. However, your average person couldn't identify a city or a landmark in Southern Oregon let alone explain exorbinately high health care costs. The Dartmouth Atlas Project has been chronicling these unexplained variations in price or utilization which has been steadily attracting attention. Overall, this shows that health care in our country is not based on science but whether certain health care providers have monopolies over services or other factors.

Tuesday, May 12, 2009

To the NY Times, Aww, thanks but you're starting to embarass us

That latest addition in the NY Times lovefest with Portland was published on Sunday and covered the fun of visiting Portland frugally. It was part of the Frugal Traveler Blog and had the following highlights:
  • The article opened by complimenting Portlanders on their fashion which is something that I never thought that I would hear from a New York based publication. "Functional but chic" was used to describe our "form fitting fleece." It's true that fleece is common but looks like that it's very flattering on us. I guess it's not just my eyes that linger on a pair of gortex covered legs.
  • I forget how the availability of good micro brews is a privilege and not a right. The author pointed out how if it's not a microbrew, it's not a beer. This even applies to free beer at art shows. That's true that not only is beer served at movie theaters but it's always good beer. The only exception is the free beer that I got while waiting for a hair cut at Bishops was usually a Miller High Life or Pabst Blue Ribbon. However, for a free beer while waiting for a hair cut, I'm not complaining.
  • Stumptown Coffee, the "best coffee in Portland" is really that good. I'm not exactly a coffee expert but even I noticed how good it tastes. However, Stumptown is opening in NYC in the fall so New Yorkers will be able to enjoy it. When I read about Stumptown's expansion into NYC, I got to say, that coffee place is all growns up.
  • Food carts are not just street meat in Portland. I've never batted an eye about eating mobile food whether it be porksicles at the bus stops of Paraguay, South America or questionable Chinese food in Philadelphia. I always ate happily at Portland's food carts but I learned that they even have a website and the Frugal Traveler was really impressed by them.
  • I also learned of a very tasty looking sandwich place from the article called Bunk Sandwiches. I've been looking for a good sandwich place that's open until 10 pm. Bunk looks tasty but it's only open until 3. My biggest complaint about Portland is the lack of good late night grease. Well, I guess that I shouldn't complain about it as it probably will keep me alive a few years longer.
The NY Times has written about Portland so much that it's almost getting a little embarassing. While I appreciate the attention, I'm starting to realize how multiple Oscar winners feel when they go back for the 4th award. Other highlights include 36 Hours in Portland and how NYC chefs are all opening up restaurants in Portland.

Monday, May 11, 2009

My Proposed Reality TV Show

A Harvard blog post has been circulating the web for about a week called MBAs vs. Entrepreneurs: Who Has the Right Stuff for Tough Times? To summarize, it questions the new source of future business talent now that MBA-led Wall Street has been getting stoned for months (meaning people want to throw stones at them, medieval style, not getting stoned 60's style). That source is identified as entrepreneurs who, according to a Darden professor have an "effectual" thinking style that: "begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with." This is the world of bootstrapping, rapid prototyping, and guerilla marketing."

The MBA training is causal reasoning which "begins with a pre-determined goal and a given set of means, and seeks to identify the optimal — fastest, cheapest, most efficient, etc. — alternative to achieve that goal." This is the world of exhaustive business plans, microscopic ROI calculations, and portfolio diversification."

As you can guess by the title of the blog post, the conclusion is that the effectual thinking of the entrepreneur is better for these recessionary times. The conclusion of the article is a disappointing since 1) there is a much more interesting conclusion that can be drawn 2) that is the same sort of chase the trend thinking that can plague the MBA world and 3) I have a better idea for truly determining whether the entrepreneurial or MBA approach is best.

The really interesting conclusion for me is that this helps answer the question of whether an entrepreneur should get an MBA. Since an MBA teaches a whole different way of thinking to an entrepreneur, I believe that demonstrates the value of an MBA. The effectual thinking helps with the start-up while the causal thinking helps when the start-up becomes a more established company. It shows that an entrepreneur can complement themselves very nicely with an MBA. I view this in some ways as how my social work background supplements my MBA work rather than contradicts it.

Now if the MBA comes at a cost of investing in the business, that's a personal issue decided by everyone. This conclusion leads me to my next question of whether entrepreneurship can be taught at an MBA program? Given the current orientation of MBA classes with providing case studies to build very causal frameworks, it's not likely. But there is a great opportunity that an entrepreneurial MBA professor could address.

The disappointing part of the article is that it chases the current trend of corporate America is a disappointment that is going the way of the Dodo bird. To use the conclusion that entrepreneurial thinking is better than MBA thinking in a recession looks at only about 2 months of history. Not all corporations will vaporize like Bear Stern and Lehman and they need a lot of people to run them and obviously, not run them into the ground by making risky decisions. An MBA is good training for working in a corporation even though both are dirty words right now. The article mentions that the effectual thinking is comfortable with risk and taking big bets while the causal side seeks to mitigate risk. An entrepreneur betting $50,000 of their own money is a very different situation than a corporation betting millions of shareholder dollars. With bets of that size, you want that predictive modeling, ROI calculation, and scenario planning that an MBA teaches.

It's really easy to paint Wall Street as a Kirstie Alley who ate themselves into oblivion and will likely succumb to an obesity-driven chronic disease before acting again. However, Wall Street is cyclical by nature. Popularity dropped during the dot.com period of the late 90's before rising again. Wall Street will figure out what level of bonus it needs to pay for the hours demanded. There will always be a need for financial service and the jobs have always ultimately been about the financial opportunity.

How do we determine which type of thinking is the best? The obvious conclusion is that it's best to be able to use both and I didn't see any research that indicates someone cannot learn both effectual and causal learning. Both are needed and the corporate toiler who can identify an entrepreneurial opportunity and than put together a business plan to sell it internally is in a better position than someone who can only think one way. However, in business, there has to be a #1! Ribbons for everyone is for social work! The best way that I have seen to handle any pseudo-competition is, of course, with a reality TV show.

Now this was already done in some form with The Apprentice Season 3. Donald Trump's reality show incarnation featured Street Smart (entrepreneurs) vs Book Smart (graduate degrees, corporate jobs) to see which approach was the best. The concept fell short since the Street Smart Contestants (half were in real estate) had the bladder control of a 4 year old let alone the attention span. They couldn't discuss a topic for more than 5 minutes without having to trash talk their teammates to the camera. The Book Smart contestants were not that representative either as none of them attended any schools that were ranked in the Top 20 in their fields. While I am using school rankings as a proxy, someone who is on the Book Smart team should be really book smart, right? The Book Smart team's main strength were that the could actually work together as team and listened to customers while Street Smart free lanced and fought with each other.

Ultimately, someone from the Book Smart team won, in this flawed casting. There is plenty of opportunity to do this reality TV concept better. Given no shortage of talented entrepreneurs and MBA's looking for opportunities, let's do the truly American thing and settle this debate with a reality TV show.

Thursday, May 7, 2009

Politics and Health Care Reform: Good Ideas and Parking Lot Ideas

One of my favorite moments in explaining corporate culture to non-cubicle folks was explaining the facilitation idea of the Parking Lot to my wife. I explained that the Parking Lot was ideally used for ideas that are not really applicable to the present topic but don't want to be forgotten. Practically it is often used when someone brings up a bizarre idea and that's the quickest way to get them to stop talking about it. 15 minutes later after this explanation, we were talking about dinner, and I suggested my favorite divey buffet. My wife answered: "That sounds good but let's put that in the Parking Lot for now."

Republicans and Democrats have had some good ideas for health care reform and with some ideas that belong in the Parking Lot. Lately, I just saw a proposal that belonged in the "You're Frickin Kidding Me at Least Pretend Like You're Trying" Lot. Actually, I brought up the Parking Lot just because I just wanted to tell the story about my wife. There have been some horribly dumb health care reform ideas by the parties.

Good Democratic Ideas

  • Expansion of basic government programs like COBRA and SCHIP SCHIP offered coverage to vulnerable, low income citizens and the COBRA subsidy turned an expensive program into a viable one. The COBRA subsidy was also not too high to cause people to bypass other insurance options

  • Just being serious about health care reform By emphasizing it as a priority, the insurance industry has launched a series of proposals such as getting rid of honerous health screening and welcoming more regulation. All of the insurance industry proposals are very do-able and would level the playing field. I never would have imagined that my industry would make the offers that they have been.

  • Framing health care as an economic issue It's true and this simple framing has gotten reform more traction.
Good Republican Ideas

  • Taxing Employer insurance and giving a tax credit to individuals This was McCain's health care reform idea and it raises good questions about why we allow employers a tax break on health insurance but not individuals. While I don't think that it's practical, it brings a possible funding mechanism to the debate.
Pretty Dumb Democratic Ideas

  • The Public Health Plan to Keep Insurance Companies Honest I have blogged about this here and here. Basically the Obama administration thinks that despite having no experience in the health insurance business, they believe that they can launch a better, cheaper health plan by not paying agents any commissions and not making a profit. This Public Plan is a great way to threaten the insurance industry but adds very little value to our health care system. It would not coordinate care, provide more information to consumers, or improve outcomes. Hopefully, this is just a political threat.

  • Not being serious about cost containment The insurance companies can add only so much costs to the health care system. Providers and especially hospitals have been the ones whose costs increase well beyond the rate of inflation every year. Bob Laszewski's Healthcare Policy Blog has been very vigilant about pointing out the lack of hard choices around real cost containment.
Pretty Dumb Republican Ideas

  • Selling Insurance where you're not licensed One of McCain's really unpractical ideas was that carriers could sell insurance in states where they were not licensed and did not follow the regulations. While it was portrayed as a free market ideal, in reality, it was like me allowing to get my medical degree in Guyana and than practice in the states. This removes the power of state insurance divisions, allows one state's laws to apply to other states, and would create a jurisdiction mess.
Republican Idea that was so Dumb, I laughed and it inspired me to write this Post
I am crediting the Republicans with only one good idea and think that their latest proposal was so bad that it warranted this post. You could accuse me of being partisan but in reality, health care is not the Republican area of expertise. They don't really value it and Democrats love health care reform. Therefore, the results are not surprising. However, their press release below ranks right up there with their 18 page budget proposal with no numbers. Today, I saw this article:

On Wednesday, a House Republican health care task force announced several principles that will serve as the foundation for a plan that will be developed over the next few weeks, CongressDaily reports.
In a letter to Republicans scheduled to be sent out Thursday, the task force wrote that it will hold between six and seven briefings over the next two weeks before issuing a final version of its overhaul plan, intended to serve as an alternative to Democratic plans.
According to CongressDaily, the task force's principles include:

  1. Opposing the creation of a public option;

  2. Allowing U.S. residents to keep their current insurance plan;

  3. Keeping the government from intervening in health care decisions; and

  4. Promoting prevention, wellness and disease-management programs
(Edney, CongressDaily, 5/6).

Here is why I find it so lacking:

  1. The Public Option was my 1st pretty dumb Democratic idea so I agree. However, disagreement with the opposition is not a reform principle! This reinforces the Party of No Ideas image. Disagreement with the Democrats is a given, like the sun rising. It does not warrant a separate principle.

  2. How is maintaining the status quo of keeping current insurance a new principle? The whole idea of reform is to change things not to vow to keep them the same. Second, I think that only 30%-40% of America is really happy with their insurance and there just as many who are dissatisfied or feel misled by their insurance. Finally, this is poorly disguised attack on Democratic reform work by creating the impression that they will take something away

  3. The government is involves with health insurance for 1/3 of the country so they are already involved with health care decisions. Health care is a highly regulated industry where laws require government oversight. Does someone need to explain to the Republicans how the health care system actually works?

  4. With this list, why don't they add cute puppies and smiling babies to the list? This is the only proactive idea that is proposed and this is on every single other health care reform list. It's the one thing, along with ice cream tasting good, that we actually all agree on.
I am trying to decide if the fact that a major political party can only come up with a proposal this empty is funny or just pathetic. I think I'll put that thought in the Parking Lot.

    Monday, May 4, 2009

    Deciding between MBA programs

    For those who have been accepted at multiple MBA programs, some are still deciding what program to attend. Some struggle bicoastally between Harvard and Stanford, some are stuck in the middle with Chicago and Northwestern, or some debate between extremes with small rural Dartmouth (Tuck) and large urban Wharton. A lot of the decisions are between schools with less prestige and a scholarship vs a more prestigious school.

    My MBA decision process was truly a demonstration of the bliss of ignorance. Due to my pursuit of a pretty unique dual degree of a joint Masters in Social Work-MBA, my predetermined choices were Wash U in St Louis, Michigan, Chicago, and Wharton. I had never seen an MBA rankings list before applying. Nor was there a Masters in Social Work ranking system but that wouldn't have existed since most social work schools would reject such a hierarchical competitive exercise in favor of a strengths-based approach that provides positive affirmation for all. When the application dust settled, I was wait listed at Wash U and Michigan and accepted at Chicago and Wharton. Since Chicago never resonated with me, the choice of Wharton was pretty easy. If I had been accepted at Michigan, it would have been a very tough decision since I really enjoyed my visit and had a great conversation with a professor who taught at both the Social Work and MBA program. Rankings would have not factored in my decision since I knew that both schools were prestegious and I didn't need Wharton's additional prestige for my career plan.

    However, through my work in admissions consulting and war of words on the Business Week Forums, I've come out of the woods and learned about the issues with deciding between MBA programs and whose advice is helpful. Outside advice is not necessarily helpful those who are deciding between a local, more affordable option and a more prestegious national option. Those are highly personal, case by base decisions, where it depends on the career game plan, and finances, attachment to the local area.

    For decisions between schools within the national Top 50 programs, I have developed a framework and have gotten some experience with evaluating how much r squared of value you get with each additional ranking position. Well, if I went to Chicago, I would have gotten down to that r squared level, but I've just got bullet points:
    • No need to shed a tear, it's all about tiers: Alex Chu of MBA Apply (disclosure, I work with Alex) had a blog post which outlined the tiers nicely. For the top 50 programs, they can be divided into 4-5 tiers in addition to the top international schools of Insead and LBS. The only consensus that generally emerges about rankings is around the tier approach. Companies generally recruit by tiers and geography so this approach has practical applications.
    • What if I really like rankings?: MBA's like clean numbers that allow them to quantify subjective topics. For some it is hard to ignore the data that rankings provide. Ignoring rankings can be like telling yourself that you're not going to finish the whole cylinder of Pringles potato chips. Given that MBA's are drawn to numbers like Brittany Spears is drawn to questionable decision-making, rankings must matter to someone, right? In the end, the exact rankings really only have an impact on the East Coast or MBA-dominant industries like consulting or banking. That part of the US and those industries contain most of the ranked schools, its participants are actually aware these rankings exist, and they are filled with competitive people that actually might care.
    • How does this help me pick a school?: Focus on the tier and know what companies will recruit in what tier. Keep in mind that it should just be where you want to work after graduation but where you may want to work long-term. Going to the highest tier you can is a career safety net. If you are accepted to multiple schools within a tier, pick the one with your favorite curriculum, weather, or where you met that really hot woman or guy during Welcome Weekend. From a typical company stand-point, there is little difference between Columbia, Chicago, and Northwestern. If you're in the east coast at heavy MBA recruiter, they will be aware of the difference in rankings. However, if a recruiter wants to be take seriously, they are not going to make the case to select one candidate over another because their school is one point ahead in the rankings of Agricultural Economics and Farm Implements Magazine. It's hardly a compelling argument.
    • What happens when they offer scholarship money?: It is inevitable that when a student is accepted at schools in different tiers than the school in the lower tier will offer scholarship money. Admissions programs have been doing this for a long time, admissions standards don't change a great deal so schools are probably very good at identifying students that need to be incented with scholarship money. In general, I advise students to stay within the best tier that they can. An MBA has a lifespan of 20-30 years. The scholarship money fades in the long run. There have been some arguments that an MBA has a limited life cyle before it become strictly about your accomplishments. However, there have been lifetime earnings studies that show how tiers impact income over 20 years. 6 years out of Wharton, my MBA still follows me, especially when I change jobs. Senior managers have liked the fact that a Wharton MBA works for them since that makes them look smart. In general, my co-workers assume that I'm smart until I do something to prove them otherwise. Finally, a recruiter will not got criticized for hiring a fancy MBA so it makes you a safer hiring bet in the long-term.

    Friday, May 1, 2009

    Social Media is Change that could just deliver in Health Care

    There have been some chronic unfulfilled promises in our world. For some, it was the season finale of the Sopranos. For me, it's buying organic cereal that never tastes as good (I'm sorry but I really think that Kashi is Sanskrit for "something the dog dumped in your bowl"). On a larger scale, health care reform has been an unfulfilled promise as we continually try to use more electronic medical records, keep the uninsured from seeking and only getting care in the Emergency Rooms, more preventive care, and clean colonoscopies (I'm spoofing clean coal). Social media has promised to transform so much that it really does risk becoming an unfulfilled promise unless the various platforms all connect our avatars with the perfect on-line community that has all the business contacts to give us jobs and socially is filled with people who all want to knit with me while listening to the Grateful Dead and eat Lucky Charms cereal (or at least that's my idea of a perfect on-line community).

    I'm a luddite so I am a slow adapter to Social Media. If I was a cave man, I would be the cave man that thought fire and the wheel would never catch on. Social media does put more personal information on-line that companies can search and send us advertising that truly interests us. My on-line profiles on various sites gets me information about business, knitting, climbing, and hippie music which I would appreciate. Companies are able to deliver that info to me very cheaply. It's a great distribution channel. However, I have managed to resist the ads on my Facebook page for Arrested Development T-shirts so it's questionable if it will ever turn into revenue. Social Media does provide great opportunity for customer feedback but there is only so much feedback that can or ever will be acted upon. Finally, although Twitter and Blogger have grown exponentially, they still are niches for the same hyper connected individuals.

    For the most part, I see social media as a cheaper marketing and distribution channel which is good but not revolutionary for business. However, it can be revolutionary for health care. One of the biggest problems in health care is the lack of information to make purchasing decisions. Hospitals can't tell you how much a procedure costs in advance. There's no way to find out who you should go to for a routine knee surgery. Can you assume that any doctor can do a decent job and pick the lowest price? Or do you want the best and will pay more for it?

    Social media can really help with that information distribution. Health Affairs had an excellent social media article in their March/April 2009 issue that I believe does not require a subscription. It highlights Hello Health, a Brooklyn, NY clinic that does most patient communication over the web. A diabetes blog provides a community who share their experience with this chronic disease. Social media in health care will vastly improve the information exchange and whittle away a significant barrier for health care reform. People will have the information to make purchasing decisions and consumerism will truly come to health care.

    In most other purchase decisions, the information is there but social media just helps you find it quicker (and sellers find you). You can research a stereo by every attribute you can think of but you have no idea how to find information about a surgery (and nor can willing surgeons find you). Now, the draw backs are the validity of the information and health care is personal. However, we use social media to find spouses and look for sex partners who want to dress up as little Bo Beep and role play children's fairy tales. Additionally, a doctor that you meet in person can be just as crazy as the doctor on-line. But you can find more information about the on-line doctor by tapping into blogs, reading their Twitter feeds, on-line profiles, and other sources.

    Finally, if Friendster can still attract millions in venture capital money, health care can fully embrace social media and help each other live up to their promise.

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