Policy

Lasting Results

Why leaders need to shift their focus to long term results.

Uniting our Voices

Taking 2 minutes to watch the trailer for an upcoming documentary about the US healthcare system. It was created by a medical student who is on a quest to find answers relevant to this article.

Disclosure: I participated in the film as a healthcare expert but do not appear in the trailer.

____

I spent a decade talking about lasting and long term results while marketing an e-learning solution to the healthcare industry. The words fell flat.

The value of training and development takes resources and time to realize a return. There is nothing fast or easy about it. When markets are dependent on short term returns, it’s a tough sell. 

I’ve written about it before but the topic surfaced again when Paul Tudor Jones, a long term Hedge Fund Manager, recently acknowledged the shortcomings of capitalism.

Acknowledging the existence of a problem is an important step. The solution will not be easy because it will take a fundamental change in how Corporate America operates.

The Sinking Ship

I’ve done a lot of turnaround work over the years. Turnaround simply means a company or project is underperforming and leaders need help addressing the issues.

One of the issues that I always found puzzling was why people cling to a sinking ship rather than embrace the needed changes. 

Resistance is often chalked up to fear of change, potential harm or inability to imagine something better. All good answers but there might be something more to it.

I’ve been reading Good Economics for Bad Times lately and discovered another perspective to what I refer to as the sinking ship problem.

Identity

For many of us, the work we do shapes our identity and gives our life meaning. I’ve made the mistake of underestimating the importance of a title, role or even the nature of the work itself. 

Comfort with the status quo might actually be more about pride in the work. The longer someone has done a job and the more successful they have been in that job, the harder it may be for them to change.

In other words, change that threatens someone’s pride, also threatens their identity. Reestablishing an identity or developing a new one is hard.

Relocation

If jobs disappear within a community, most expect people to move to find work. Studies of immigrants tells us otherwise.

Think about the last time you moved. It was probably a corporate relocation or early in life when a move amounted to transporting a few suitcases across country. 

What would happen if you’re displaced from the workforce now? Do you have the means, motivation and courage needed to relocate on your own? Probably not. That’s why people don’t move to find work.

Risk

Another issue is that the new jobs available to those who are displaced especially later in life, reportedly pay less and may not provide the same level of meaning.

It’s one of the biggest challenges that many will face in near future as white collar jobs are replaced or augmented by artificial intelligence. Bouncing back will be hard and may not happen at all without the right support.

Righting the Ship

More and more leaders are evidently seeing the challenges ahead if corporations continue to operate with a short term focus of maximizing shareholder value at the expense of other stakeholders.

Change will be hard in part because Americans have been misinformed. Venezuela is not the likely outcome if the country uses taxes, regulations and social programs rather than interest rates and monetary policy to manage the markets. The debate is more about fundamentals versus financial engineering and finding the right balance to better serve all stakeholders.

There are plenty of successful developed countries that are managing the social needs of citizens better than America. We need to look at those countries for ideas and to continue challenging our views of what’s possible.

If leaders are serious about righting the ship, we need to address our dependency on short term gains and make the investments needed to achieve lasting and long term results.

National Dialogue

Healthcare leaders can help shape the national dialogue.

I needed some repairs done over the weekend and got an ear full from the handyman. He couldn’t contain his emotions about the economic impact Covid19 is having on everyone. Who can blame him?

Mixed into some interesting theories about China and the US, were some new perspectives about the environment, the level of inequality and the prioritization of government spending.

Given the level of interested in Stakeholder Capitalism, I’ve been thinking about how to incorporate workers from every level at “the board table”. There is value in hearing the unvarnished perspectives from people of all walks of life. 

However, this experience left me wondering whether there is a way to filter out the disinformation without affecting the value of the input.

Critical Thinking


I’m not the only one thinking about this right now. Jonathan Haber, author of Critical Thinking has been too. He recently hosted a webinar called Essential Knowledge in the Times of Crisis.

As a society, our critical thinking skills have reportedly become a bit lax. Consequently, we’re leaning too far into our biases especially when it comes to political and other issues that help define us.

The good news is that critical thinking can be taught, assessed and mastered if implemented correctly. General and immersion techniques are commonly used in educational settings now but are less effective than infusion which involves explicit instruction.

Explicit instruction requires the teacher or leader to pause and explain the example when critical thinking is infused into a lesson or problem.

Elements of Critical Thinking

According to Jonathan Haber, there are six [6] elements of critical thinking. Specifically: 

1/ Structured Thinking: Developing a form of logical thinking.

2/ Language Skills: Developing the ability to structure statements from your thinking.

3/ Argumentation: Using your structured statements to form an argument.

4/ Background Knowledge: Having a good foundation of knowledge on the topic.

5/ Persuasive Communication: Amplifying your argument with more convincing and compelling language.

6/ Understanding and Controlling for Bias: Being aware of your own biases and being open to new information, facts and ideas rather than dismissing it as “poppycock”.

National Dialogue

There is a role for healthcare leaders to play in shaping the national dialogue.

A few physicians in my social networks are sharing research, explaining the findings and answering questions so that people interpret the information correctly. It’s been really helpful for me and others in the network. Even if they don’t ask questions, they get the benefit from the group dynamic.

Non-physician leaders could build on that momentum to help develop the background knowledge on the environment, inequality, government spending and other related topics. 

A few ideas of things that all leaders could do now: 

1/ Book Clubs: Leaders could host virtual book clubs and facilitate the discussions. Buy the books for participants.

2/ Lecture Series: The Common Wealth Club is hosting virtual events on relevant topics. Tickets are very affordable especially if you’re already a member. Again, leaders could facilitate discussion following the lecture.

3/ Social Networks: Use social networks to engage with people in “positive economics” which is the explanation of the current situation rather than being prescriptive or opinionated. 

In addition to being heard, people need to know you care. Investing your time in their development shows that you care.

Covid19 Stimulus

How long can stimulus be used to sustain the economy?

I’ve been reading Paul Krugman’s latest book, Arguing with Zombies to better understand the stimulus funding and debt. The numbers are eye popping.

Economic stimulus is a proven way to restore confidence and to reduce the severity of market cycles. There is a depression era framework that supports the generous use of stimulus funding to return the economy to full function. The resulting debt gets repaid in following boom years.

However, we might be in some uncharted territory with Covid19 because it’s harder to quantify the need and the impact when the virus hasn’t been contained.

The question then is how long can stimulus be used to sustain the economy? Economists are coming up with different answers and some of the answers are probably making Republicans uncomfortable. Hence, the desire to get everyone back to school and work as quickly as possible.

How + When

No one has the answer to that question yet either but in Arguing with Zombies, Paul lays out a framework for public intellectuals. It is good for everyone to understand and for leaders to use especially during times of disruption and transformation.

Framework for Public Intellectuals [and Leaders]:


1/ Stay with the easy stuff. 

Keep with proven data and things that have a right answers rather than sharing theories of things that may or may not pan out.


2/ Write and speak in plain language.

Maintain the integrity of the content while conveying the information in a way that is accessible to everyone regardless of education and background.


3/ Be honest about dishonesty.

Call out disinformation and policies made in bad faith. Policy decisions that affect human life should be based on verifiable facts.


4/ Talk about motives.

Everyone and every company has a motive. If we can’t be open about our motive and discuss it, than there is probably something fundamentally wrong with it.

Everything doesn’t have to be political.

I was delighted when Gavin Newsom acknowledged President Trump for fulfilling all direct requests that he could. His action follows the old adage of give credit when credit is due.

With that said, we need to look at the whole experience and outcome of the Trump Administration as we head into the 2020 election and consider how much of a role government should play in reducing market risk and inequality.

Covid19 has highlighted the level of existing inequality in deaths and infection rates. Lower socioeconomic classes have paid a higher price.

Companies are writing into the Wall Street Journal [WSJ] about their contributions to the Covid19 relief efforts. Many are backfilling gaps that should have been filled by the Federal Government.

A recent WSJ email questioned whether we’ll see a heightened level of corporate responsibility for all stakeholders following the Covid19 pandemic or a return to business as usual. What are your thoughts?

Arguing with Zombies

As you might guess, Arguing with Zombies explains why we keep having the same debates on key issues such as healthcare, climate change, inequality and debt.

Paul distills the facts and explains the motivations behind the related policies using his framework. It’s a good book to add to your reading list now.

Own the Issue

Why owning the issue will likely result in a better outcome.

A colleague shared the latest podcast from a16z with ideas of how government funds could be distributed to small businesses with the help of accounting software vendors. Sounds like a good idea.

The podcast ended with a discussion about stock buybacks vs dividends that didn’t address any of the related issues with declining levels of R+D, capital investments or the spread in SW+B. Touchy issue and probably one that’s not fair to discuss with such a narrow lens.

However, it got me thinking about the importance of owing the issue.

Valid Reasons

There are valid reasons for stock buybacks. For some companies, debt has been a cheaper way for management to fund the company given that interest rates have been artificially low since the great recession. Returning capital via stock buybacks may also be more tax efficient but the end result for investors is also different.

Stock buybacks may be a problem for some companies trying to qualify for Covid19 relief funding. Given the amount of distrust around stock buybacks, any action other than owning a questionable management decision will likely make matters worse. 

We see the consequences of downplaying issues and denying statements play out every day in the current political landscape. 

Great Recession

During the 2008 financial crisis, I laid off staff and closed my office. It was all done so quickly that I didn’t even have time to think about the fallout. 

The timing unfortunately coincided with my E2 renewal. E2 visa holders have to present detailed business plans, tax returns and other business records to substantiate their [re]application. 

I was informed that other E2 holders were being deported and that the odds of a successful petition were low given the state of my company.

Against legal advice, I wrote the INS. In short, I admitted to be out-of-compliance with the requirements and explained what I was doing about it. It took the INS almost a full year to review my case, but they eventually granted me an extension. Talk about a stressful year.

My attorney chalked up the outcome to the “Immigration Gods” being on my side. For me, it made the “own it” lesson really clear.

Even if the personal consequences at stake are high, own the issue. If you do, the outcome will probably be better than you expect.

Finding some comfort is important.

Lance Armstrong’s books gave me and many others some comfort during the Great Recession. I love the story of him falling down on the 5th tour and how he kept telling himself to get up. He got up and won. His legacy has been tarnished but his words still resonate with me.

Many are reportedly finding comfort in Brene Brown’s books and new podcast now.

If wrapping your brain around the concept of vulnerability is not a high priority, just remember to lean into the tough conversations and know that you’re not alone. Everyone is going to be touched by Covid19 one way or another.

Community Mat update

I have been teaching Pilates Mat to a small group of health tech executives and was supposed to start teaching at the General Hospital this week.

With live classes on a Covid19 hold, I’ll be offering on demand sessions soon. If you’ve never done Pilates, now is your time to try it out. A few Pilates sessions/week will make you feel better.

You can sign up now to get early access. Classes are free.

Covid19 + Beyond

Preparing for the impact of Covid19 and beyond

Years ago, Bill Gates tried to warn us all about the risk of a deadly virus. Unfortunately, we didn’t heed his warning.

The good news is that he has left the boards of Microsoft and other companies to focus his efforts on the Gates Foundation.

His efforts will likely change the way healthcare organizations prepare, governments track outbreaks and how vaccines are developed.

Healthcare

The thought of making a meaningful change might be inspiring you to get more involved in the transformation underway.

If you’re thinking about healthcare venture capital or startup, here are a few takeaways from my studies last week:

1/ Venture is big business: Returns have normalized as more money runs into the sector. That may change if stock markets continue to contract.

2/ Small funds preform better than big funds: Funds less than $500 Million are more likely to return 2x the capital invested after fees. Big funds are reportedly more dependent on the management fees and might be impacted more than smaller funds.

3/ Entrepreneurs are important: If there is no entrepreneur, there is no need for venture capitalists, investors, lawyers, accountants or other professionals. Entrepreneurs deserve your respect.

4/ Terms: Many of the deal terms seem to be driven by scarcity which makes for a really toxic working relationship. If you have to control the company, it’s probably not a deal worth doing.

5/ Fees: The healthcare industry is not the only industry resistant to change. Personal interests often get in the way of much needed progress in venture too.

Hillary

The Hulu documentary about Hillary Clinton is worth watching if you have some down time. It’s available on Netflix and likely other streaming services.

What many Americans didn’t realize, Hillary had the respect of several staunch Republicans including: John McCain, Lindsay Graham and Bill First MD from her work on various bills including the Children’s Health Insurance Plan [CHIP]. Many didn’t get past the name “crocked Hillary” and “lock her up” chant to learn the truth.

Regardless of what you think about the Clintons now or more broadly Democrats, there are some important takeaways for us all.

1/ Media: Headlines are meant to get our attention not provide the substance for a meaningful debate on the issues. Unfortunately, many Americans now seem to have an attention span limited to about 140 characters. That makes it really hard to share the information needed for everyone to make good decisions – even in times of Covid19.

Just remember, the devil is in the details. Before you loose your head, use the three [3] D’s from Radical Candor for good decision making: Discuss, Debate and Decide.

2/ Timing – Some risks can be mitigated. Others come out of the blue and totally change the game. Game changers take out everything that’s weak.

Scale appropriately and sure up your resources to weather the storm ahead. We’re likely not going to see a return to business as usual in the near future. Let’s hope for a U [2001 recession] and not a L [2008 crisis] but consider both in your strategic plans.

3/ Progress: There is often a gap in what we want to do and what we can do within a given political landscape. 

Ultimate success requires a lot of small steps and zigzags to achieve a goal. Progress is good. Celebrate each small win.

Whatever happens, it’s going to be one heck of a ride!

Behavior Contagion

What you should know about behavior contagion.

I started reading Under the Influence which links our behaviors to the economic impact and policies.

One example of how the theory plays out in healthcare is the out-of-network billing strategy. The topic surfaced again this weekend when a physician in my network shared an article called Keep Attacking Doctors: What the New York Times gets wrong about surprise medical billing.

So let’s start with that example and then get onto the other reasons this book is so relevant now.

Out-of-Network Billing

Out-of-network billing is done when healthcare providers are not contracted with the commercial payers. It is often done when a new facility is opening and not fully credentialed or new technologies/products are launched or contracts terminate because the two parties can’t agree on rates and/or terms. It’s not ideal but both parties are usually willing to agree to interim terms to avoid financially penalizing patients.

The problem starts when the word “strategy” is added. Some healthcare providers realized that they could make more money out-of-network and decided not to contract with commercial payers. Instead they relied on the patient’s out-of-network benefits and the patient for payment in full. As insurers close the loop holes in the out-of-network benefits, many patients are now left with really big bills and often have no means to pay.

The headline should have read, “two wrongs don’t make a right”. From my experience, the out-of-network strategy gained traction because physicians felt undervalued and lacked the ability or leverage to negotiate better rates. Knowledge of the out of network strategy spread through their peer networks and more started doing it. Fear of missing out [aka: FOMO] is an example of behavior contagion.

The second wrong was the payer’s reaction to the strategy. The healthcare providers participating in the out-of-network strategy were sent warning letters but few put much creed in them. Many of the strategy diehards were eventually economic credentialed out of the new narrow networks. Now they have few options for getting paid. It’s a big problem.

One way or another, the wrongs need to be righted so that this issue is put to rest and we all move forward.

Green New Deal

There is a good chance some of you are going to scroll to the bottom and hit the unsubscribe button with this topic. Try to resist the temptation. Under the Influence only explains the economic behavior and economics of the Green New Deal.

If you’re not familiar with the Green New Deal, it is a bipartisan plan to address climate change and economic inequality. However, it’s largely associated with the “socialist movement” in the US and more specifically, Bernie Sanders and Alexandria Ocasio Cortez [AOC].

Moral Arguments

First, let’s talk about why it’s hard to get alignment on big policy changes. There are five [5] moral arguments:

1/ Care

2/ Fairness

3/ Loyalty

4/ Authority

5/ Purity + Sanctity

Ideally, our political leaders should have alignment on at least some of the moral arguments similarly to how corporate leaders use values to align their workforce. Unfortunately, there is more of a disconnect.

Democrats subscribe to the first two arguments whereas, Republicans subscribe to the bottom three arguments. Reportedly, facts don’t sway them.

With that said, there are two facts that are really interesting and pertinent to this discussion.

Income Tax

Universally, people cringe when they hear about a tax increase. Everyone automatically thinks they are going to have less discretionary income to spend and consequently, their lifestyle will suffer.

However, unlike a business loss or some other economic event, increasing taxes on really wealthy people has little if any impact on their purchasing power because it’s relative to others in the same class. 

It’s likely why many billionaires such as Bill Gates and Warren Buffet have pledged to give away the majority of their money. They simply don’t need it to live really well. 

The highest marginal tax rate in 1970 was 70%. It has steadily decreased and is now only 37%. Even at that, most wealthy people pay at a lower rate. As a result, the US has unnecessarily racked up a huge deficit.

The loss of tax revenue means that the country hasn’t made the needed investments in education, healthcare, innovation and infrastructure to remain competitive and doesn’t have the funds to do it now.

It might be time to listen to the billionaires and tax them rather than vilify them.

Sales Taxes

The bar for new regulation and taxes is usually harm to others not harm to self. It might be time to rethink the bar if we want to bend the healthcare cost curve.

Cigarettes are taxed and smoking is banded from public places because second hand smoke effects the health of others too. The prevalence of smoking has decreased 60% since the taxes and policy changes were made. When one person quits, another person quits and the overall smoking rate declines.

Despite the clear link between sugar and diabetes, the US has not been able to pass a sugar tax on sodas or more broadly, a tax on refined sugar as other countries have done.

Mexico has implemented a sugar tax and the results are impressive. In the first year, consumption dropped by 5% and in the second year, consumption dropped by 10%. Again, evidence that changing the behavior of one person, usually changes the behavior of others.

With these types of results, it’s hard to deny the fact that taxes are effective at curbing unhealthy behaviors and improving population health.

Talk is Cheap

Why business leaders need to act now.

I met with the CEO of a mental health company last year and remember asking him “what’s the answer” to some of the biggest challenges that we’re facing. Talking is good but if there is no solution for the problems, then what?

It’s something that I’ve been thinking about given the mental health stats and increasing pressure on the middle class. I’ve been reading a few different books related to this topic lately but one of the messages that leaders should take to heart now more than ever is from Leading with Purpose by Nick Craig.

The message that is giving me food for thought is about circumstance vs. purpose.

Purpose 

Purpose is about living your why. A job or a title does not define us or change how we work if we are working in alignment with our purpose. 

You’ve probably heard that message before and had the good fortune to make adjustments when needed. What about your employees? Are they making decisions and acting from purpose or circumstance? My guess is that many are acting from circumstance and fear. 

Most people are pretty aware of the changes underway and likely wondering where they are going to fit in a new automated world and how they are going to survive in the future.

As leaders, we should be easing that pressure by identifying the people most at risk and helping them to re-skill in ways that align with their purpose.

Job Training vs. Education

There is a lot of talk about companies placing more emphasis on skills and job training rather than degrees and schools. It’s a good direction but what happens if we could offer both?

RUSH was an early pioneer in online training. To gain trust and credibility, we had all of our course work evaluated by the NASBA which is an organization that grants permission to companies to award Continuing Professional Eduction [CPE] credit offered to Certified Public Accountants [CPAs].

We discovered that some of our participants used our CPE credits for college credits. That gave them the opportunity to master the needed skills for their current job while also giving them an economical pathway to a degree and future opportunities.

Extending that kind of offering to employees takes some additional work and/or money but it’s the right thing to do regardless of whether they stay with the company.

Housing

The first chapter of the 5 Rules for Tomorrow’s Cities covers some pretty grim statistics. In short, there is very little correlation if any, between wages and housing costs in most major cities. The stock market and housing gains are signs of asset inflation not general market conditions.

During the housing run up just before the 2008 Financial Crisis, I was looking at just two stats: professional level salaries versus the cost of housing. Using the standard ratio for housing costs versus income [25%], it didn’t make sense in San Francisco even with a two income household. San Francisco stats have gotten worse since 2008 but surprisingly, it is not the worse case scenario now.

Leaders should be looking at the housing vs. income stat now and either rebasing salaries or adding a housing subsidy so that employees who need to be onsite, can live within an hour of their office. A commute longer than an hour eliminates the personal time needed for job re-skilling and health maintenance activities.

Action speaks louder than words

Talk therapy is important but without action, nothing changes for the positive. As leaders, we need to help stem the tide and work to address existing economic issues.

We can change the circumstances so that more people have the privilege to act with purpose. This video of leaders at Davos discussing their results of stakeholder capitalism will inspire you.

Building Courage

Courage by definition is the willingness to do something that frightens oneself. 

In a business context it usually requires people to do the right thing rather than acting in their own financial interest. Doing the right thing is frightening for those with a lot to loose.

Ethics and compliance with regulations is comparably a low bar for businesses but still a challenging hurtle for companies focused on maximizing returns to shareholders.

Tenet Health

Tenet is a good example of a leading edge company focused on maximizing shareholder returns that has experienced compliance issues.

The company has made early investments in technologies that help them reduce operating costs, streamline revenue cycle processes and accurately report revenue related numbers.

The problem is that some operators put the financial focus ahead of the company’s purpose of providing high quality care to the patients in the communities that they serve. In some instances, patients paid a very high price. 

If you need details, google Tenet’s issues in Redding, California. Nurses at the facility eventually “blew the whistle” but given the company’s focus on financial operations, others likely new something was wrong but they didn’t have the courage to question the physician or Administrators involved.

Cases like Redding create trust issues with payers, partners, employees and healthcare consumers. The company pays a hefty price for years even when corrective actions are taken.

The question that remains to be answered, is it worth it?

CVS

Did you know that CVS stopped selling tobacco products in all of the company’s pharmacies in 2014? Despite the loss of $2 Billion in annual sales, executives decided it was the right thing to do. 

The company couldn’t be an authentic partner to healthcare providers when they were selling a product known to create significant health issues. They put their mission ahead of their financial gain.

Reportedly, the company didn’t suffer because they were able to replace the revenue stream with new and enhanced services that better aligned with their core mission. Apparently, people in communities with a CVS have changed their tobacco consumption habits as a result – not their purchasing habits.

Other pharmacy companies have continued selling tobacco and claiming they are complying with all laws and regulations. Those companies continue to profit from the sale of tobacco and people continue to smoke.

Is compliance enough when we already know the negative impact to the consumer?

Values

Your answers will reflect your belief and values. For companies, the answers need to reflect how they operate in order to operate authentically and to attract the employees, partners and others that align with their beliefs and values.

Regulation vs. Ethics

Can the healthcare industry self regulate?

I had a discussion recently with a CEO to fortune 1000 companies about the need for proper regulation. At the start of the conversation, he asked what I meant by regulation. So to ensure that we’re all on the same page for this discussion, let’s start with the definition of regulation.

Definition: A regulation is a rule or directive made and maintained by an authority.

Regulations are tricky to get right because they need to be protective but not restrictive – and somehow, they need to be efficiently and effectively enforced to work well. It takes a lot of work to strike the right balance. That may be why some politicians and business leaders would like to do away with all regulation and let the markets self regulate. 

AdvaMed


The AdvaMed Association for medical technology is taking on a self regulation initiative for 2020. They are developing a new code of ethics that is values based to better engage everyone in and involved with the organization in compliance. To do so, they have been reportedly working with all of their stakeholders including teaching hospitals, hospitals, clinicians, device and diagnostic companies to develop the new code.

At this point, they have identified six [6] key values for the new code of ethics:

1/ Innovation
2/ Education
3/ Integrity
4/ Respect
5/ Responsibility
6/ Transparency

It’s not clear yet how they plan to operationalize the values. What we know is that member companies will need to have policies and programs in place signed by the CEO demonstrating compliance in order to be awarded the AdvaMed seal of approval.

There is a carrot for member company participation. The seal will help business partners and customers identify organizations who are in compliance. That may also give companies selling solutions an edge in competitive bid opportunities.

There is no stick for non-compliance. AdvaMed will not initiate investigations or bring any action for non-compliance. 

The question that remains unanswered is whether ethics can protect consumers from corporate wrong doing and greed better than regulations?

However, the industry should welcome the attempt to self regulate even if it’s an added regulatory measure. With all the advances in medicine that are raising new ethical questions and concerns for the healthcare industry, ethics need to be ingrained in the culture for companies to earn the trust of partners, customers and patients around the world.

Relativity applies to physics not ethics.
~ Albert Einstein

Startup Comp

What is the value of your time and risk tolerance?

A member of the Female Founders Network shared her story of working for a successful startup that recently became a public company. She was an early employee but was never offered shares or options and questioned whether or not it was fair.

With the amount of pay inequity in the market, it would be easy to chalk it up to another example of gender inequality. Without knowing the numbers, I have to generously assume it has more to do with risk and reward.

Startups are high risk. It’s easy to look back at a successful startup and wish you were paid in equity. But how would you feel forgoing cash and benefits for a stock vesting plan if the company failed after 4 years? My guess is that the experience gained would not feel like adequate reward for most. That’s the risk – reward relationship of startup.

My advice to the Female Founder Network and you is to know the value of your time and your risk tolerance. Everyone deserves to be fully compensated for the value of their time. The method of compensation needs to reflects your risk tolerance. Methods include:

1/ cash + benefits
2/ stock + options
3/ blended

Time is one of your most precious resources that can only be valued by you. The method of compensation should be negotiated.

From a leadership perspective, we need to think about the person not just the position when offering stock and options. Doing so will help address pay inequity.

Stand Up?

Should you take a stand on important issues?

It’s something many leaders are rubbling with right now.  Eric Topol MD wrote an article for the New Yorker recently about the potential for a new doctors’ organization that would enable physicians to take a stand on important issues affecting the health and wellbeing of Americans. Issues such as vaccines, drug pricing, climate change, stem cell clinics and false health claims spread by celebrities involved in lifestyle medicine businesses. 

In the article, he noted several female physician leaders who took on the NRA and claimed the lack of adequate gun control regulations not only as their lane but as their highway. What gave them the courage to stand up to the NRA?

Dr. Topol hypothesized that their courage was attributable to dealing with long-standing gender inequities in medicine. Possibly but it likely has more to do with their values and their frustration with the lack of change. 

Organizing to take a stand on important issues is commendable but also challenging. The values and interests of the group need to align for the group to have a powerful voice.

Whether physicians organize or not, they should be encouraged to bring their whole self to work as employees in leading edge companies do and to speak out on issues affecting the health and wellbeing of Americans. Otherwise, how can doctors be held accountable for the cost of healthcare if they can’t speak out on the biggest drivers of cost?

Daring leaders who live into their values are never silent about hard things.~ Brené Brown

Valeant

There is a good documentary called the Drug Short that tells the story of Valeant to explain the problem with drug pricing in the US.

Valeant reportedly operated more like a hedge fund than a pharmaceutical company. The model was pretty simple:

1/ Buy companies that have a drug with a monopoly.

2/ Strip out the R+D so that the typical 18% spent on R+D goes to the bottom line.

3/ Raise prices on existing drugs.

The problem is that many of the drugs were life sustaining drugs for people in middle America who couldn’t afford to pay for them.

The company took extraordinary measures to bilk insurance companies for payment. To keep patients quiet about the issue, they provided just enough financial support to them through their advocacy efforts. 

Hillary Clinton started tweeting and talking about the issue during her campaign. Investors and board members could have looked into it and taken action, but they didn’t. They were reportedly paid large sums to look the other way. The company’s stock eventually tanked.

The returns on biotech companies now are largely due to price increases. The company’s can’t afford to lower their prices and profits. So nothing has changed yet.

Change in 2020 is likely because even though the pricing strategy is not illegal, many leaders feel that it is morally wrong.