Monthly Archives: August 2003

What a great week. Red

What a great week. Red wine extends your life, and chocolate protects your heart. I need nothing else. According to the latest food fads, I�m destined to live forever, having consumed enough red wine and chocolate in my lifetime to confer immortality on several people.

But something else good might happen. Yesterday, my friend Richard, whose small public company, Burst (BRST) is suing Microsoft, had a hearing in Baltimore on a motion to compel Microsoft to release some emails that pertain to the suit. Apparently, Microsoft employees, while negotiating with Burst (and before infringing on its patents for the newest versions on Media Player), exchanged some emails about the company�s intentions to avoid licensing Burst�s software. What a surprise. Employees who use email to incriminate their employers. Employers who set a corporate culture of something close to criminality. Raise your hand if you have never seen this before.

Seriously, it looks as if Microsoft is really in trouble here, and will have to settle � either by �acquiring� Burst or by paying a big fine.

This has already been suggested by Robert X. Cringely, who writes a column called �Pulpit� for PBS. (http://www.pbs.org/cringely/pulpit/pulpit20030821.html). Cringely says the EU is already going to force Microsoft to unbundle Windows Media Player from all versions of Windows sold in Europe. That will allow competition in the EU and cost Microsoft something like $3 billion.

That sets a precedent for the US, where Microsoft definitely has a strategy of distributing digital content through Windows Media Player. If Burst prevails, and can license its technology to competitors, Microsoft�s strategy fails. And, according to Cringely, settling with Burst will not be enough: Microsoft will have to actually own all Burst�s patents. So in effect, it will have to buy the company.

But what�s more exciting is that Cringely also suggests that someone else � and there are many out there who don�t love Microsoft � could conceivably buy Burst first. Wow! A bidding war for little Burst!

That would be incredible. Richard started this company in 1988, financed by five or six friends. At that time, it was called Explore Technology. The original investors (I was one) were cashed out by the rock group U-2, which was looking for some investment that would jive with their musical capabilities.

Through a series of patent filings, Burst now possesses all the intellectual property surrounding faster-than-real-time transmission of digital content � and possessed it before the capability even existed to receive digital content.

Well, in the usual manner of overnight successes, engineering has caught up with Richard�s brain fifteen years later.

Microsoft had three years of negotiations with Richard and Burst during the dot com era. Richard thought they were going to license the technology. Instead, they stole it.

Usually when Microsoft does this, the small company puts its tail between its legs and goes out of business. But not Richard. Richard was also the co-founder of GoVideo, and he filed a lawsuit against a consortium of large Japanese manufacturers who refused to supply the company with parts to create a dual-deck VCR because he owned the patents and they couldn�t create one of their own. GoVideo lost that suit eventually, but Richard learned a lot about business. He was a relative babe in the woods during the GoVideo days, but he�s an experienced serial entrepreneur today.

A fancy San Francisco law firm has taken the Burst v. Microsoft case on contingency. That�s huge. It means they think the case is a winner. Before it dissolved, the legendary Silicon Valley law firm of Brobeck, Phleger and Harrison was also involved.

But what constitutes a win? Indeed, Richard has suffered plenty during the past fifteen years. He built a company around his Burstware, took it public, and watched it dissolve after Microsoft�s Media Player came out. He elected to de-list the stock to save money on reporting requirements. He is not really in control of his own destiny, or that of the company; it will all be a function of the lawsuit. Even if he wins, he will not emerge as a CEO; he will be acquired and asked to quietly fade away. I�m sure he would have rather seen the company sell licenses and create jobs, but it seems that�s not going to happen, no matter how the case comes out. The best that can happen is financial and legal vindication. For a true entrepreneur like Richard, that may not be enough.

Reminder: FastTrac Planning begins on 10/1. If you haven�t signed up yet, you may apply at http://www.fasttrac.org/event.cfm?eventID=317. We only have about a dozen spots left.

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Back-to-school issues It�s the end

Back-to-school issues
It�s the end of August and the kids are going back to school. As we gear up for another season of entrepreneurial activity, what�s going on in the world of potential globalization? What is the backdrop against which we are all trying to build our budding businesses?

Let�s see: there�s Al Qaeda still claiming credit for activities in Afghanistan, while Osama bin Laden remains at large�if holed up in a cave counts as being at large. There is Hamas still blowing up busses in Jerusalem. Or maybe it�s that other group who blew up the bus; two groups have �claimed responsibility.� Pretty pathetic when there�s so much cachet attached to blowing up a bus. Not long ago, if you did that sort of dastardly deed, you�d be hiding the fact.

There�s at least one American soldier a day dying in Iraq, where Saddam Hussein is still hiding out somewhere, protected by friends and relatives. Crank in the occasional suicide bombing of an embassy or the demolition of the UN headquarters in Baghdad, and you have quite an international climate.

During the same period of time, England is seeing temperatures of over 100 degrees at Heathrow Airport. 5,000 people died in a heat wave in France, after which the Health Minister was forced to resign.

Here in the United States, there was a two-day blackout on the east coast, which revealed the pathetic condition of the electric power grid– something we all take for granted. Now that the lights are back on, a gasoline transport pipeline has ruptured in Arizona, cutting off 30% of the state�s supply of gas in an area with virtually no mass transit. People are waiting in line for an hour to fill their tanks, if they can get gas at all, and paying $3-4 a gallon for the privilege.

In other news, the health care system is in a crisis; the cost of prescription drugs will break the bank as we baby boomers age. This has caused 8,000 doctors to sign a petition advocating a national health system, something that was anathema as recently as ten years ago.

Education, too, is in crisis, with declining public funding and rising enrollment, teacher shortages and disagreement on everything from standardized testing to a common classroom language. People are pulling their kids out of public school and putting them in private and parochial alternatives, charter schools, and home schools.

Welcome back from your summer vacation (if you took one). More than the mail has piled up during your absence.

What do we make of all this?

Well, it hasn�t been a slow news month, that�s for sure. But I believe we are getting a message from the gods: we can�t fix everything.

Over the past fifty years, we have become increasingly certain in America that we *could* indeed, fix almost everything. On the one hand, we relied on the technological fix � for diseases, for global warming, for food shortages. Related to that is the �throw money at it� fix: more money for prescription drug benefits, more money to build highways, more money for prisons. And, when push comes to shove (bad joke), we have the military fix, also known as the �regime change� fix.

Have you noticed that not one of these fixes really works anymore? Technology produces used computers and discarded Pampers that clog the landfills; money produces corrupted CEOs and accounting fiascos; regimes may change on the surface, but underneath the same terrorists continue to operate. It�s like having an election at the top of an organization and not firing the bureaurats; Iraqi terrorists are the bureaucrats of the Hussein government.

Somehow we have developed an overconfident view of our own ability to control the world. No wonder the rest of the world thinks Americans are arrogant. Everywhere else, there�s a consciousness of interdependence � on tribes, families, governments, farmers or craftspeople. Only in America do we think food comes to the supermarket from the sky, gas should be available on every corner, age should produce no negative changes, and everyone should live in a single family home.

But have you ever seen a woman who has had a facelift? The skin on her face may be tight, but the skin on her neck and hands are wrinkled, and they signal the real condition of the person underneath. We can keep giving the American economy and lifestyle those tweaks and tightenings, but our aging infrastructure will not be denied, and we can�t fix it without the help of the rest of the world.

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Open Up Have you ever

Open Up
Have you ever caught yourself banging an applesauce jar against the edge of your kitchen counter? Opening a bottle of nail polish with your teeth? These activities do not make a pretty picture, but people do them every day. Long ago, I had a jar opener that attached to the top of the jar and provided some extra leverage for the strong-minded but weak-fingered. But it wasn�t really adjustable, and it only did certain kinds of jars. So I regularly did those things, risking my front teeth and my kitchen counter. But not anymore.

Of course somebody has invented a product to solve this problem, especially since hundreds of thousands of people have arthritis. Organizations like the Arthritis Foundation have educational programs that teach people to live with limitations on their strength or their range of motion.

But I found out about this �jarring� new technology, the battery-powered Open Up, from Erika Feinberg, one of the most dynamic exciting businesswomen I�ve ever met. She just gave me one.

Erika and her husband Larry Fugleberg bought a small sleepy company called Independent Living Products (www.ilp-online.com) last year, and have re-launched the company as a powerhouse for people who want to continue to live independently even though they are aging, impaired, or even just recovering from surgery. They have only one retail store, but they have leveraged their technology backgrounds into an online direct mail catalogue of items that range from writing implements to exercise equipment. They also own the domain name http://www.activeforever.com.

You walk into their showroom in Scottsdale and it isn�t your usual home health store selling wheelchairs, walkers, and crutches. Rather, it�s a toyshop of life-enhancing products: a talking remote control for the TV, a light switch enlarger, magnifying mirrors, highly-designed large-faced talking wrist watches, and comfortable supports and pillows.

Erika and Larry lovingly arrange these products into gift baskets with names like �so close and yet so far,� (full of reach extenders) and �kits� like the Magnified Magnificence Kit, the Steady Hands Kit, and the Still Stirrin�Things up Kit. As a result of this creativity, they�ve been asked to drive the gift shop strategy for the Mayo Clinic and co-brand their catalogue with a large pharmaceutical company.

They source products from all over the world, making deals that allow them to bring over 10,000 related products to market at affordable prices. They purposely don�t take Medicare reimbursement so they can sell products less expensively than Medicare providers must: Medicare reimburses at Manufacturers� Suggested Retail Price, so most providers charge full freight. Independent Living Products prides itself on its value as well as its innovative products.

Another market segment for Independent Living Products is the workplace, where ergonomics is all the rage as employers try to control Workmens Compensation costs and comply with the Americans with Disabilities Act. Currently Independent Living Products is in talks with Maricopa County, which has offered to partner with the company on products that deal with injury prevention.

One of the coolest products I saw today was the Underwater Treadmill, a piece of exercise equipment designed to be used in a pool for water aerobics. They also represent a line of very fancy next-generation Jacuzzi tubs, including several that have the Restoration Hardware retro look but are therapeutic. The Balneo Cella is the only therapeutic claw foot tub on the market.

This is classy stuff, made for discriminating Boomers. I saw a device that ties your shoes if you can�t bend over, and one that helps you tip a kettle to pour hot liquids. To me, with my full range of motion, they appear quaint, though logical.

But the bottom line on these products is that they will be more and more in demand as the health care system becomes overwhelmed by elderly people with chronic diseases. The only way to control costs under those conditions is to keep people at home as long as possible, and keep them independent. And the best way to do that is to provide assistance devices.

While Larry and Erika are mission-driven, they are not without business acumen. Looking at the home medical products industry, Larry and Erika decided that this was an industry ripe for a paradigm shift: there was no market leader, there was a growing need for a single source that could be trusted to provide quality and value, there was turmoil in the entire health care space, and there was a rapidly expanding market. So they took their previous entrepreneurial experience, combined it with their highly developed social consciousness, and embarked on the �social venture� that is Independent Living Products.

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HIPAA If you�ve been to

HIPAA
If you�ve been to the doctor since April, you have encountered HIPAA, the biggest thing to hit businesses since Y2K. The doctor�s office probably gave you a form to sign, and neither you nor the office person understood what was in it or why you were getting it.

Originally enacted as legislation to allow patients who change jobs to carry their health insurance with them, HIPAA has come a long way from its original intent, and now serves as a little-understood burden to both doctor and patient. In a system as broken as the US health care system, HIPAA is just another ill-fitting part.

What does it mean to the IT Professional? To the Health Care Provider? Well, to the IT professional it is the only place there is still dependable work, because putting insurance portability in action means making records electronic, securing them, and standardizing them. That�s a big job, and if you think it�s done, you�re an optimist.

HIPAA security rules, which are supposed to prevent unauthorized access, alteration, and destruction of data, don�t even take effect until 2005. There are three general areas of rules:
1)administrative safeguards for managers, such as workforce training, appointment of a security manager, and contingency plans in case something happens to the data;
2)physical security, workstation security and rules for disposing of old equipment; and
3)technical safeguards
The reason security rules haven�t taken effect is that privacy rules were tough enough to implement, and the national code of minimum standards for confidentiality for payers and providers Went into effect April 14, 2003. These rules, which consumed all the mindshare, involved such things as what happens when you are subpoenaed?
How much of a patient�s information do you communicate with payors? How do we figure out whether a state�s (typically) more stringent privacy rules take precedence over federal HIPAA privacy rules.

There are major opportunities for the software industry in these regulations: the software industry could be helpful by building an application to sort through these rules, with algorithms and decision trees for people confronted by search warrants and subpoenas. It could also help build security solutions that scale and are affordable for to both a small practice and the largest providers.

The third major set of rules deals with standardized transaction and code sets, which is how the doctors and hospitals get paid electronically by insurance companies and Medicare. These codes change every year, and thus have been offloaded by many medical practices to medical data clearinghouses, which take non-standard data and translate it into language a claims processor will pay from.

But in the long run, offloading to a clearing house is not a cost effective solution for most providers, who will be looking for a magic pill from a vendor for a process they don�t fully understand and don�t *want* to understand. But there is no magic pill, only websites from standards bodies (WEDISNIP.org, SAN.org) for guidance and white papers.

E-health care transaction set rules are all standardized now. There are ten standard transaction sets, and by 10/16/2003 every medical practice has to have software with those transaction sets. That software has to be created, and has to be affordable. If anyone is wondering why doctors aren�t trying out new workflow software, it�s because all the loose cash is going for this stuff. Providers are terrified that they won�t get paid if they don�t have the right software.

For all health care organizations, HIPAA is an enterprise-level problem, beginning with the questions where does my information reside and who needs access? Once the data is classified (sensitive, strategic, public, protected), organizations can be empowered later to practice good security, like giving staff only minimal access to private information, and only when they need it. HIPAA also requires training and education � understanding about what is and isn�t private health information.

All this somehow has to key into all the other trends hitting the public, like electronic medical records, wi-fi, handhelds and tablet PCs, and so on. It has to include provisioning and de-provisioning people who come and go in medical offices, as well as the �extended organization.� No longer can the password to the computer in the nursing station be �nurse,� or �guest� so the doctor can get on it.

In all of this, whatever happened to the patient? Well, the patient got certain inalienable rights(that he thought he had all along): the right to have access to his own record; the right, in certain cases, to amend his own record; and the right to receive an accounting in writing of disclosures.

By the way, no software does this yet, and there�s a real need for a product that tracks automatic disclosures and integrates them with subpoenas. Are we having fun yet?

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