Monthly Archives: May 2002

Age of Innocence

The industrialization of health care has had some interesting by-products.

In Arizona, when prestigious St. Luke’s hospital was sold to a for-profit chain, the foundation that formerly supported it was free to become an advocate for public education on health care issues. Today I went to the St. Luke’s Health Initiatives conference on the implications of an aging population on healthcare. St. Luke’s has studied this issue for a year, and the report, posted on the web site (, raises more issues than it answers.

Here’s some stuff to depress you:

We never think about this, but in the US, one in 6 of us is sixty, and that proportion is growing every year. By 2025, 20% of the population will be over 65, compared to about 13% today. There will be as many people over 65 as children under 17. That means 40% of the population will not be working, but will require government services.

As a society, we are not organized to have older people in the work force. If we reorganized jobs and provided public transportation, people could be productive longer, and lower the burden on Medicare and Social Security.

But the elderly can’t work forever. By 2030, we will also have doubled the number of people over 85. The number of people in Arizona who will be over 80 in 2030 will equal the population of Mesa, AZ or Cincinnati, OH (365,000).

Everyone knows that fewer and fewer workers will be paying taxes to support the young and the old. More elderly will seek expensive care at the end of life, and Social Security and Medicare will constitute more of an economic burden on workers in the future unless the real economy grows at a rate equal to or greater than the increase in the 65+ population.

If it weren’t for the natural increase in the Hispanic population, we’d have no one to take care of us. As it is, we will probably have to make a choice to fund either health care or education. And the elderly vote, which doesn’t bode well for education.

We have extended our lives, but raised the costs. In our lifetime, corporate-sponsored health insurance will be going away. Health insurance will no longer be provided by corporations in the future, because it is too expensive.

Ironically, when we preach “active aging,” smoking cessation, diet and exercise, we lower costs in the short term, but raise them eventually. A ten-year increase in life expectancy produces a ten-fold increase in health care costs, because as we get older, we get chronic diseases.

The more people we have in the oldest group, the more likely they are to have a whole set of chronic diseases and to take medications for them. And prescription drug costs can push even middle class people into poverty.

The Baby Boomers who are going to face this problem in the next ten years are in denial. That’s because Social Security and Medicare not only support the elderly, but they really support the middle-aged, middle class who would have to take care of the elderly with their own money.

Only 18% of Boomers think that an aging population will be a serious problem for Arizona, although 75% reported some personal anxieties. Boomers are used to getting health care and having someone else pay for it. Almost 80% of the Boomers feel optimistic about growing older.

In 1960, 40% of those 65 and older lived in the home of an adult child. I remember keeping my grandfather and my Uncle Willie until they died. By 1999, this number dropped to 4 %. Boomers will have half the number of children to depend on for support compared to today’s elderly. Put this together with the current and projected shortage of health care workers and the projected Medicare and Social Security shortfalls, and we’ve got a problem.

Technological advances could help solve this problem.

Mapping of the genome will lead us to the age of bioengineering. Cloning will allow for the elimination of Alzheimer’s Disease. Japan already produces drugs that will eliminate most Alzheimer’s and dementia problems. Osteoporosis is also about to be cured. Statins are coming on the market that will be customized for the individual, lowering your cholesterol to just where you want it. Drugs that eliminate plaque are on the near horizon. Drinkable computers can monitor cells that are dying and cloning can replace them.Bi-ventricular synthesizers now can help patients with congestive heart failure. And most of us have access to self-diagnosis instruments such as blood sugar tests and blood pressure monitors. The optimistic scenario is about to occur: technology will save us.

The pessimistic scenario is also about to occur: only some people can afford to be saved. Although the increase in spending in prescription drugs has decreased the spending on hospitals and a dollar of increase in prescriptions leads to a $4 decrease in health care costs, the need and desire for prescription drugs will soon overwhelm even the government.

Why? Because the government pays sticker price to the pharmaceutical companies for those drugs. Pharmaceutical companies have agreed to price controls in every other part of the world except in America. Here, they won’t even let us use purchasing cooperatives to negotiate big discounts (as Canada’s government does).

Big Pharma makes a lot of compaign contributions. So isn’t campaign finance reform as fundamental an issue for good health as anything else?



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I just saw the most incredible thing

I just saw the most incredible thing. I saw a meeting of about fifty people come to consensus on a large group of issues in an incredibly short time frame. And it was painless; no one spoke, but everyone was heard.

The group was GAZEL (, the industry cluster for e-learning. The place was the Advanced Strategy Center at Pinnacle Peak, a place worth visiting even if it didn’t have this kickass tool for organizational change. (Pinnacle Peak is a mountain in the desert surrounding Scottsdale, Arizona, near which wealthy people build winter homes and then leave them empty three quarters of the time. It’s scenic. That’s an understatement.)

GAZEL groupies thought they were coming for lunch and a speech, but Doug Griffen, who runs the Center, sat everybody down at a laptop and began to demo the tools and techniques by asking participants “in your view, what are the critical issues for Arizona in the future?” Everyone began typing his or her own list.

The trouble with Arizona is a topic being widely addressed everywhere from economic development to karaoke bars, without much useful activity. There seem to be so many things wrong with Arizona that no one knows what to do next. In short order, the group came up with about ninety issues.

Using the Strategy Center’s Categorizer software, the issues were evaluated and reduced to a common fifteen. People whose issues were not represented on the final fifteen were then asked to contribute them. We wound up with eighteen, from water quality to “Fix the Phoenix Suns.”

Then came the Prioritizer piece — or the vote. Everyone simultaneously assigned a 1-10 value (1= not important, 10=critical) to each of the eighteen.

The Prioritizer ranked the issues. At the end of the process, everyone was asked to comment on the most important issue to him or her personally:What’s the most important single issue in Arizona to you, personally? What’s the benefit to the community of addressing it? What’s the downside of not addressing it?

The result was a position statement on all the important issues.

All right, you’ve seen facilitated meetings before. But you probably haven’t seen a computer-aided meeting quite like this, in which there are no BOPSATs. (Bunches Of People Sitting Around Talking) In the meetings with BOPSATs, the individual’s goal is to make his point of view heard; the meeting is about making a good impression. Especially in meetings of community leaders, the BOPSATs don’t accomplish anything except 1)ventilating one’s particular grievance 2)lobbying for one’s particular point of view 3)showing the other people in the room that you are wise and articulate.

In the anonymous, computer-aided meeting, none of this is possible. No one knows who thinks what, except in the individual position statements. But at the end ( probably less than a half hour), everyone knows the feeling of the group.

I want you to focus on the incredible amount of time that could be saved in meetings by people using an automated process like this. I also want you to understand that you don’t have to be in the same room with your fellow attendees to use this process, since it can be facilitated over the Internet. (

But I know all you really care about is how it ended. So here are the original eighteen issues as presented by the Categorizer:
1. Education access and quality
2. Level of traffic and congestion
3. Overall air quality
4. Fix the Suns!!
5. Lack of HQ corporations based here
6. Increasing crime rate, concern for personal safety
7. Lack of a clear and compelling vision for the State
8. Reduction of open land/space…becoming overdeveloped
9. Lack of effective public transportation system
10. The load that immigration is placing on our services
11. Inability to balance the budget
12. Lack of effective telecom infrastructure
13. Lack of career opportunities/activities for teens
14. Lack of effective public leadership
15. Overall reduction in quality of life
16. Concern over wayer supply
17. Lack of access and affordable health care
18. Bringing together multiple cultures

And here are the results of the Prioritizer (the vote):
8.37 1. Education access and quality
7.63 2. Concern over water supply
7.47 3. Overall air quality
7.00 4. Lack of HQ corporations based here
6.89 5. Lack of effective public leadership
6.63 6. Lack of access and affordable health care
6.63 7. Level of traffic and congestion
6.53 8. Lack of a clear and compelling vision for the State
6.53 9. Inability to balance the budget
6.21 10. Reduction of open land/space…becoming overdeveloped
6.21 11. Overall reduction in quality of life
6.00 12. Lack of career opportunities/activities for teens
6.00 13. Lack of effective public transportation system
5.79 14. Increasing crime rate, concern for personal safety
5.68 15. Bringing together multiple cultures
5.32 16. Lack of effective telecom infrastructure
5.21 17. The load that immigration is placing on our services
2.37 18. Fix the Suns!!

Notice that this group doesn’t care much about public transportation, telecom infrastructure, or the load that immigrants place on our services. But what they really *don’t* care about: the Phoenix Suns.



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Every community has human and

Every community has human and social issues in addition to business issues. Although most of us are buried in our businesses, the impact of the social issues is always felt: the legislature will always take away economic development incentives and programs to fund new jails, for example.

In my spare time, I’m on the boards of several not-for-profit organizations, including Social Venture Partners Arizona. This is a group dedicated to venture philanthropy: doing more than just writing a check. SVPAZ has an investment committee that makes investments in not-for-profits and then goes in and helps them with their business models, technology needs, marketing issues, and anything else they need to be more effective.

Unfortunately, Social Venture Partners only funds half a dozen organizations a year, and according to very strict guidelines (Children’s issues and education issues). All the other not-for-profits are out there hanging by their thumbs. And many communities across the nation don’t even have an organization like Social Venture Partners. Most major foundations just go through a grant cycle, read a lot of applications, write a check and hope for the best.

This week, I’ve been thinking that it is time for an incubator or a CEO/Founder’s Roundtable for not-for-profits. After all, in the for-profit arena, founders and CEOs receive coaching on how to perform effectively to accomplish a mission.

They are taught how to present to investors, how to build a team, how to keep the books. Some entrepreneurs have MBAs (although recent research has shown that the MBA is a poor predictor of success as a CEO.) If they don’t learn, they are replaced by more professional CEOs who accompany funds into the company. The founders are bought out, shoved out, promoted, demoted, and otherwise gotten out of the way.

For the past three years, Stealthmode Partners has been the life support system for many entrepreneurs. Although it hasn’t been easy, we’ve been able to keep many of them alive (if not well) and slowly working toward their goals. It’s been a form of group therapy from which we have all become stronger.

Could Stealthmode Partners bring the same skill sets to Executive Directors that it brings to the for-profit community: help them set up the *business* end of the organization so it contributes to the charitable mission, rather than detracting from it? Large not-for-profits often receive management consulting help, either through their boards or through fee-for-service. Smaller ones are left in the cold.

Our idea, which I’m exposing here because I’m looking for feedback, is to form groups of about ten executive directors who would meet with us on a monthly basis, share their issues with each other and us, and receive the benefit of our large network of community resources. To make this affordable for the EDs, some of it could be underwritten by foundation grants (although I’ve been advised that the not-for-profits should have to pay part of the cost so they will take it seriously). (Perhaps a university would be interested in running this as an executive program in “Social Entrepreneurship” and giving the attendees in our groups credit for their participation.)

I started this conversation earlier in the week with an employee of our local community foundation. She told me that many of the not-for-profits they funded would not be “ready” for such change. I told her in response that it was the responsibility of the funding sources to *make* them ready. When a venture capitalist invests in a start-up, he/she often comes with a new CEO in tow. To get the money, the company must accept the CEO.

A founder of a not-for-profit who is not ready to accept a new business model is like the founder of a technology company who develops the product and then is asked to step aside when the money comes in. It’s strange that we require so much proficiency and training from our corporate professionals, and not from our not-for-profit leaders. After all, business is just business, but many not-for-profits deal with life or death issues.

If we’re not in a position to run companies inefficiently, we certainly cannot afford to run charities that way.



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Tonight I give a speech

Tonight I give a speech at the Sedona Conference called “Fostering Creativity in a Digital Media Age.” How appropriate that this marks the the day I write the 174th of my weekly e-zines to my friends and colleagues.

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Ghandi said “Be the change…”

Ghandi said “Be the change you would like to see happen.” Because my business is so wound up in technology, I am always talking to people who assume that changing human behavior, which is *really* what introducing new technology is about, can be accomplished quickly. In fact, if there is one reason technology companies don’t succeed, it’s because they assume the market for their new products will grow much more quickly than it does.

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In a queer twist of

In a queer twist of fate, I’ve been selected as an Eller Center Entrepreneurial Fellow at the University of Arizona. (My business partner calls me an “Eller Feller.”)This honor allows me to mentor students who want to start their own businesses. Yesterday I went to Tucson to see the finals of the Center’s student business plan competition and to be introduced as a Fellow.

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