Entrepreneurial

Hot healthcare investing trends for 2011

– Dr. David J. Brailer is the chairman for San Francisco-based venture firm Health Evolution Partners and served as the National Coordinator for Health Information Technology under President George W. Bush. The views expressed are his own. –

2011 will be a chaotic and unpredictable year for investors.

We will see the first big changes of health reform play through – regardless of what the incoming Congress does. No one can predict what health reform means, particularly alongside the dwindling of the financial crisis and the ongoing jobs bust. The only sure thing is that 2011 won’t be a replay of the last two years where safe deals got done and a lot of companies traded from investor to investor.

Here are a few trends – and a few pitfalls – to pay attention to:

1. Please, no more meaningful use. Health information technology has been hyped into the stratosphere, and every entrepreneur is trying to raise capital while they can. Many are spinning their wheels because they mistake the investment bubble for their own shrewdness. The market will figure out in 2011 that federal subsidies will happen far slower than planned or that they may be cut back by a deficit-hawk Congress. Once the bubble pops and people get their feet back on Earth, deals will start to happen again. There are some very good health information technology companies coming to market in 2011 and they are going to rock healthcare in the coming years.

2. Life science is still alive – barely. The venture pullback and a draconian FDA have thankfully euthanized many me-too bio-therapeutic and device companies. But a lot of promising new treatments got killed in the onslaught as well. Disease hasn’t stopped trying to eradicate the human race, so the unmet demand for new treatments is still growing. And, regardless of what else is happening, Americans won’t tolerate being sick when there are treatments that may help them. Look for a crop of new life-sciences companies – therapeutics and devices in particular – to get traction. They will be different from their predecessors – way more cash-efficient and more attentive to demonstrable clinical value (i.e., if it needs a statistician to prove that it works, it probably doesn’t). Look for the shakeout of biomarkers to continue. The ones that a clinician would really want to use will get funded and others will fall apart.

3. Accountable care wannabes. Investors are searching the globe now for physician groups and other health providers who will be recognized as Accountable Care Organizations (ACOs). Not to matter that the Government hasn’t told us what ACOs are yet, or that some real group of physicians could actually do it. And, let’s remember that many people had the great privilege of losing their fortunes the last time investors funded physician management companies in the 1990s. A sub-trend here is the search for the next generation primary care network. Everyone is on the lookout for the doctor-meets-retail iteration of basic medical services now that more Americans will have health insurance.

Health insurance advice for entrepreneurs

– Ryan Hanley is a Commercial Account Executive for Guilderland Agency Inc and author of the “Albany Insurance Professional” blog located at www.RyanHanley.com. This article originally appeared on Under30CEO. The views expressed are his own. –

For an entrepreneur, skimping on insurance – especially health insurance – is like playing Russian Roulette with your future.

At no time in your business’s growth will the health and wellness of employees be more important than the startup years. Think about the set-back in growth if the founder of a second year business became ill and had to miss a month. A terrifying scenario for most young businesses.

Now think about that same situation coupled with the stress of the same business founder coming straight out of pocket for all medical expenses. I’ve seen this situation where money earmarked for business growth is diverted towards medical costs and it’s not pretty.

Don’t buy into the misconception that health insurance is a luxury just because the price tag makes you sweat. Do not think in terms of price, think in terms of cost.

Don’t get too big for your britches

Take the term HMO (Health Maintenance Organization) and throw it out of your vocabulary. If you can afford an HMO you probably don’t need to be reading this article. For bootstrapping businesses concerned about the health of their employees as well as red numbers in their bank account think about High Deductible Plans, or EPO Hybrid Plans which provide less upfront benefit but also have a less stressful price tag.

Small businesses cheer midterm results

George A. Cloutier

Nov 11, 2010 14:41 EST

– George A. Cloutier is the founder and CEO of American Management Services and the author of the bestselling book, “Profits Aren’t Everything, They’re the Only Thing”. The views expressed are his own. –

Last week’s midterm elections have provided an emotional boost for many small businesses, according to a survey conducted by American Management Services.

About 73 percent of small business owners said they felt more optimistic about the future of their company due to the Republican gains, in a survey of more than 300 small business owners in 25 states following the Congressional elections. The participating companies all employ at least 25 employees and are considered the job-drivers most likely to hire new workers.

Still despite their optimism, just 5 percent said they were considering hiring more workers based on the election results and 64 percent were not planning on adding additional workers at this time – debunking some claims that small business would step up hiring quickly with a new and clear political direction.

Twenty-six percent did indicate they might hire, but are waiting to see if business actually improves.

One St. Louis, Missouri-area business owner stated it succinctly: “I’m from the ‘Show Me’ state and until I see real new business orders, I’m not making a $50,000 bet on a new employee.”

The prospect of potentially lower taxes, enacted job credits and payroll tax holidays does not seem to be having significant effect. Another owner from Houston, Texas stated: “If there is a payroll tax holiday and I save only $5,000 to spend $30,000 to $50,000 per employee, what’s the point of having them sit around doing little or nothing?”

Would you let a robot care for your mother?

Michelle Owusu is a contributor for Reuters.com

The idea of sticking their parents in a nursing home weighs heavily on many Baby Boomers. Martin Spencer has a solution: robots.

“Many people quit good paying jobs to keep their beloved mother or father out of the horrors of a nursing home,” said Spencer, who created the CareBot, a 4-foot, 100-pound, robot with a screen for a face and wheels for legs that reminds owners to take their medication.

If necessary, the CareBot calls emergency contacts and dials 911 and is fitted with a webcam to allow purchasers the ability to monitor and have video chats with their elderly relatives from anywhere.

Spencer said the CareBot – the lone product of his Atlanta-based startup GeckoSystems – should be available next fall for between $12,000 and $15,000 – a price point he said should alleviate pressure on family budgets by paring down the “hidden costs” of the aging crisis. Spencer added the financial hit of quitting a full-time job to become a caregiver or putting a loved one in a retirement home quickly runs into the tens of thousands. The cost savings and peace of mind will guarantee CareBot a spot in the burgeoning personal robot market, he said.

The CareBot should be available by the second or third quarter next year said Spencer, who expects to sell 6,000 robots in the first 12 months. In-home trials have to date been successful. However, the firm still needs to raise $750,000 to build and market the first robots.

Like robot companions being developed by Honda and the European Union-funded CompanionAble project, the CareBot, which took 12 years and cost $7 million to develop, is unlikely to wow consumers with its looks or capabilities but may be a sign of what’s to come.

What the healthcare bill means for small businesses

Reuters Staff

Mar 22, 2010 12:54 EDT

– Christa Rapoport is the chief compliance officer for independent benefits consulting and brokerage firm Corporate Synergies Group, Inc. The views expressed are her own. –

The House of Representatives last night passed the Senate’s Patient Protection and Affordable Care Act (H.R. 3590), as well as the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872).

While the final details are being ironed out, now the big question is: what does that mean for small businesses?

The biggest change is that employers with more than 50 full-time equivalents (FTE’s) will be considered large employers. Therefore, the most essential compliance step is for you to identify how many full time employees (about 40 hours) or FTE’s you have working for you. Employers near the magic number of 50 FTE’s will have to make sure you accurately count your employees. Keep records for each non-exempt worker, and certain identifying information about the employee and data about the hours worked and the wages earned.

Once you understand your employee count, you can determine your options or penalty calculations. You may want to analyze your employee count on a quarterly or monthly schedule based on how close you are to the federal goal post of 50 FTE’s.

Employer coverage mandate (“pay or play”)

Large employers will have to make available to all employees a minimum level of coverage or pay a per-employee penalty (fee). Employers will not be required to provide coverage for part-time employees, but these employees may be counted as partial employees for purposes of determining whether an employer has 50 employees. The bill is still unclear as to how employees will be counted and what formula will be used, but it looks like the real “number” to be counted will be a baseline of total hours worked by all employees. For that reason, keep accurate time records as described above. If the employer offers coverage but employees are forced to purchase insurance through the state-based exchanges because the employer’s coverage is not affordable, the employer must pay separate fees. This “Pay or Play” provision goes live in 2014 upon the creation of the state-based exchanges. Once the exchange is established, it can:

A healthcare proposal too big to succeed

– A. G. “Terry” Newmyer is a serial entrepreneur and the former founding chairman of The Fair Care Foundation, a patient-advocacy group focused on health insurance. The views expressed are his own. –

In recent remarks to business leaders, President Obama declared himself an “ardent believer in the free market.” So, there is at least one person who is an ardent believer in that sentence.

Just this week, I had lunch with a very prominent, sane, and successful Wall Street executive who was CEO of a big-name firm. He left more than a decade ago, during an era when those folks did so with pride rather than with investigations and grand jury subpoenas.

While we ate, we worried aloud about what’s going on in Washington – the new financial capital of the world. My guest cautioned about “becoming too negative as we age.” I tend not to think of myself as aging, though I did note that last year’s inauguration marked the first time a U.S. president was younger than me. And I hardly think our lunch conversation qualifies us as “Grumpy Old Men.”

But if it does, the prospect of Medicare in a few years is looking better and better, particularly in comparison to the vagaries of the private health-insurance market. If the President truly wants us to see him as an “ardent believer” rather than a Socialist, he should be thankful that few have digested his latest healthcare proposal.

The Obama Administration has declared all sorts of institutions as “Too big to fail,” warranting its intervention. His health proposal, while trumpeted as being “scaled-back,” remains too big to succeed.

As an entrepreneur with management and governance roles in several ventures – and a typical small business health insurance plan – I can’t imagine who could understand or make projections based on the latest proposal. Even to those of us with backgrounds in health policy, the Obama plan is too opaque and complex to allow any forward planning.

Small Talk: Healthcare debate heats up

Jon Cook

Nov 9, 2009 12:27 EST

The healthcare debate is just starting to heat up for small business owners. FindLaw, a Thomson Reuters sister publication, has a nice blog post titled “Healthcare reform & small business: 3 bills explained,” in which they break down Obama’s “Affordable Health Care for American Act” legislation, that was approved by a slim majority of 220-215 by the House over the weekend.

In general the reaction by small business to the Obama legislation has been largely negative, with the most damning attacks coming from small business lobby groups, the National Federation of Independent Business and the National Small Business Association. In a Wall Street Journal story, titled “Small Business Crunches Numbers“, NFIB senior VP Susan Eckerly said the bill’s “punitive employer mandates and atrocious new taxes will force small business owners to eliminate jobs and freeze expansion plans at a time when our nation’s economy needs small business to thrive.”

Denver Business Journal reporter Kent Hoover examined the bill from a small business perspective in his article “How small business fares under health-reform bill“. In it Hoover said that while the majority of small businesses oppose the legislation, some support it because “they think the insurance market needs the bill’s reforms, such as barring insurance companies from denying coverage based on pre-existing conditions,” wrote Hoover, adding: “Plus, they think providing a government-run option in new health insurance exchanges would bring needed competition to the insurance market.”

Here’s a roundup of how politicians on both sides view the legislation:

- Democratic Congressman Jerry McNerney (Pleasanton, California) voted for the bill, because he explained that “as a former self-employed small business owner, I’ve personally experienced the effect of rising health care costs and the burden these costs place on our families and small businesses.” McNerney added the new legislation will “improve benefits and quality of care for seniors, help small businesses to stay open and operating, and stop insurance companies from denying coverage for pre-existing conditions or kicking sick people off their plans.” Read McNerney’s full statement here.

- Democratic Congressman Ben Chandler (Versailles, Kentucky) voted against the bill, telling the Lexington Herald-Leader: “I do not believe it is the best course of action for the people of Central Kentucky, specifically our working families, small businesses, and seniors.” Chandler said he was concerned that the new bill “would not adequately protect our rural hospitals and our small businesses — the engines of job creation.” Read Chandler’s full interview here.

- Democratic Congressman Anthony Weiner (New York, NY) released his own “Top 10″ list of reasons he voted for the bill, most of them tailored to his New York City constituents. In the Epoch Times story Weiner said the new Act helps small businesses that already provide health insurance, because they “will receive a tax credit over a two-year period, and small businesses with 25 employees or less with wages of less than $40,000 a year will qualify for tax credits up to half the cost of providing insurance.” Weiner added that 204,200 small businesses in NYC will be able to qualify for the tax credits.

Time to get a grip on health insurance? Survey says yes

As lawmakers grapple with the intricacies of a national healthcare overhaul, many small-business owners are facing a healthcare struggle of their own: determining a suitable health insurance plan for their company.

A new survey reveals that many executives at small firms in the U.S. lack the confidence and know-how to pick a health insurance policy that will meet the needs of their employees and their company’s bottom line.

Of the 500 executives surveyed by the National Association of Insurance Commissioners (NAIC), 64 percent said they don’t feel confident choosing a plan, and 60 percent said they’re unsure of how their taxes would be affected if they shell out to cover a portion of their employees’ health insurance.

More discouraging still, one-third of small business execs who responded said they can’t afford to provide health coverage for their workers.

With employer-sponsored insurance premiums up 119 percent over the past decade, according to another recent study, the odds are certainly stacked against small businesses and their employees.

But financial ignorance about employee health policy seems like bad business, even when none of the options out there seem particularly favorable.

The NAIC suggests boosting your health insurance “IQ” in the following ways:

from The Great Debate:

Women small business owners really need healthcare reform

-- Nancy Duff Campbell is a founder and co-president of the National Women's Law Center, one of the nation's pre-eminent women's rights organizations. A recognized expert on women's law and public policy issues, for over thirty-five years Ms. Campbell has participated in the development and implementation of key legislative initiatives and litigation protecting women's rights, with a particular emphasis on issues affecting low income women and their families. The views expressed are her own. --

Insurance companies and others who profit from our broken health care system are mobilizing to defeat comprehensive reform by using misinformation and scare tactics. A prime example is the allegation that healthcare legislation – specifically the plan being considered by the House of Representatives – will hurt small businesses.

The fact is that small business owners, especially women, are already hurting under our current healthcare system. Leah Daniels, 29, is the owner of Hill’s Kitchen – a gourmet kitchenware store that opened last May not far from the U.S. Capitol. Daniels can’t afford to offer health insurance to her three employees. She purchased her own bare-bones plan on the individual market for protection “in case I get hit by a car,” but not much else. It costs her just under $200 a month and doesn’t cover such services as routine doctor’s visits or maternity care. Daniels, who often works 7 days a week, says that she is constantly worried about getting sick.

Daniels’ problems are, unfortunately, all too typical. A new report by the Council of Economic Advisers (CEA) found that small businesses pay up to 18 percent more than large firms for the same health insurance policy. These higher costs mean that small businesses are considerably less likely than larger businesses to provide health insurance to their employees, and those that do tend to have less comprehensive plans. And Census data show that women-owned businesses are generally smaller than male-owned businesses.

Small business owners and employees who don’t get coverage at work or through a spouse’s plan may shop for insurance individually. But if they are women – and small businesses that don’t offer health coverage tend to have large proportions of female workers – they are likely to face discrimination in the individual health insurance market. A study by the National Women’s Law Center found that insurance companies routinely charge women higher rates than men for individual policies and offer policies that exclude health needs specific to women, such as maternity care.

Women who own a small business know that the current health care system is failing them. At a meeting of women small business owners in May, Daniels says, “We went around the room and everyone either had health insurance through their spouse or didn’t have coverage at all. Women talked about being afraid to go to the doctor because they didn’t want to find out that they might be sick. It was really striking.”

The healthcare reform plans that have begun moving through Congress would help make it possible for small business owners to offer comprehensive, affordable health insurance. The House plan would make insurance more affordable by prohibiting insurance companies from discriminating on the basis of health status or gender and by allowing small businesses to purchase coverage through a new Health Insurance Exchange. The Exchange would reduce administrative costs and offer a choice of plans meeting minimum benefit standards. New tax credits would be available to help some small businesses pay for employee health coverage; the credit would be worth 50 percent of the cost of qualified health coverage expenses for businesses with 10 or fewer employees and average wages of $20,000 or less. It would gradually be reduced until firms reached 25 or more employees or average wages of $40,000 or more.