https://thehealthcareblog.com/blog/2010/07/26/can-cms-be-a-venture-capitalist/ Everything you always wanted to know about the Health Care system. But were afraid to ask. Mon, 23 Jul 2012 14:55:36 +0000 hourly 1 https://wordpress.org/?v=6.3.4 https://thehealthcareblog.com/blog/2010/07/26/can-cms-be-a-venture-capitalist/#comment-47803 Tue, 27 Jul 2010 12:47:32 +0000 http://thcb.org/blog/2010/07/26/can-cms-be-a-venture-capitalist/#comment-47803 “What is great about CMI is that they have the authority to run their programs much more like a business would without many historical governmental constraints.”
The cultivated naivete is really quite charming. To imagine that what is written down on the paper is what actually happens — well, I wish I could also go back to my childhood. Sigh.
I wonder: where do “historical government constraints” come from? Why do they get created? What are the several ways they get created? Are there any risk-averse behaviors — not written in any statute or rule — that develop in a bureaucracy with unionized workers that might not develop in a venture capital firm? How about when that bureaucracy is subject to Freedom of Information requests by large numbers of smart people who only want to replace the head of the bureaucracy with someone they owe a political favor? Can you actually legislate this perennial dynamic away, seeing that the legislators themselves are the people who owe the favors? Can God create a rock that even He cannot lift?
It’s all just too hard to think through.

]]> https://thehealthcareblog.com/blog/2010/07/26/can-cms-be-a-venture-capitalist/#comment-47802 Tue, 27 Jul 2010 03:45:12 +0000 http://thcb.org/blog/2010/07/26/can-cms-be-a-venture-capitalist/#comment-47802 Government could best support innovation by being a buyer instead of an investor. For example they recently funded research in solar cells by a couple companies to the tune of a few billion. The chances of these two companies coming out ahead are very small, like the examples you cited. Like most investments we will most likely have nothing to show for it.
If the federal government had instead announced they will purchase 500 million a year of solar cells, they would create a market for competition in which more skilled investors would invest. They would spurn research and investment in dozens of firms instead of two and in the end have something tangible to show for it.
They buy healthcare for 50? million people or more and do so through a couple dozen similar systems. If they would just open up Medicare and allow other entities to manage blocks of 10-20K they would learn 1000 time more then 1-2 pilot projects they bless and fund. Hundreds of firms would put their capital at risk for the opportunity to prove new ideas. Thus hundreds of new ideas would be tested at any one time. Those that work could be adapted and built upon.

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