I'm not sure "run the company better" is necessarily the consideration. Part of the appeal of VC money versus other types of funding is that the VCs have experience and networks from which the company can draw to expand.
Rather than taking over, the VCs want some influence over the management of the company or at least a veto right with respect to fundamental decisions (sell, merge, liquidate, etc...). While protective provisions in the investment documents can provide some of this, buying a large stake on a percentage basis is helpful as well.
That said, "because that's the way its done" is not always strong argument, but when you have the money you usually have the bargaining power. In addition, some investors are simply not interested in a small percentage, passive investments and only engage in transactions where they have a significant stake in the company and influence through ownership or board membership.
I have worked with entrepreneurs who tried EMR and harnassing the power of the Web, etc. . .
There are a number of reasons why it would take so long and doesn't work very well. Determining standards for coding procedures for something that can be a very individual circumstance, differences in treatment standards geographically and across specialties, administrative differences between providers, and so on.
There is also the question of who would develop the platform and the technological standards. If you think DVD vs. Blue Ray vs. Whatever or even Mp3 vs. Wav vs. Wma vs. AAC is a tough battle, wait until you see this fight. If the government decides who wins, you can bet the system will be miserable.
However, like Mike mentioned, none of this addresses the basic issue of cost. The excessive spending has little to do with paper records and everything to do with the third party payor system. If someone else (your employer, insurance company, Medicare, Medicaid, VA) is paying the freight, you do not have any incentive to shop around nor do the providers have any incentive to publish prices. Through various rationing provisions, there is an attempt to hold prices down, but political pressures exist to provide ever-expanding benefits. The move to universal health care will only exacerbate this issue as there is no incentive to incur additional capital costs for an expensive IT system when the government is adjusting your fees downward. It is the separation of payor from customer that drives medical costs.
It is foolish to believe a "risk manager" or some other regulator is going to be able to monitor and manage "systemic risk," whatever that is.
The problem with the Lehman bankruptcy was not the collateral effects of the collapse but the fact that the government acted in a manner that was so arbitrary, unpredictable and unrelated to past behavior that no one had any idea what the ground rules would be. That is not "too big to fail." That is regulatory failure. That is what left everyone scrambling to figure out how to manage their issues and too nervous to do anything until there was some clarity about what the government would permit or prohibit and the situation stabilized.
No amount of "transparency" or regulation is going to address these issues. These companies, public and private, are subject to voluminous reporting requirements to various agencies and government bodies already. There is no lack of "transparency" (a word that has lost all meaning in the last several years anyway).
The only thing that will discipline them is the notion that their failures will actually cause them to fail rather than fall into a governmental safety net.
There is no person or group of persons in government who are smart or capable enough to perform this function, particularly if when you consider the thousands that are already charged with performing these functions. Throwing more money into the regulatory black hole and tying down companies with more bureaucratic red tape and reporting requirements will do absolutely nothing to address any issue in the current environment.
How about Sarbanes-Oxley? Billions of dollars and the beginning of the transfer of capital markets from New York to London in the name of "transparency," increased reporting, enhanced criminal sanctions for things that were already illegal, bowing to the latest trends in corporate governance and enhanced accounting standards and internal controls to address issues of risk. It only took about 5 years until this altar to regulation, transparency, and risk management crumbled into the meltdown.
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Re: ownership (as ddbb)
I'm not sure "run the company better" is necessarily the consideration. Part of the appeal of VC money versus other types of funding is that the VCs have experience and networks from which the company can draw to expand.
Rather than taking over, the VCs want some influence over the management of the company or at least a veto right with respect to fundamental decisions (sell, merge, liquidate, etc...). While protective provisions in the investment documents can provide some of this, buying a large stake on a percentage basis is helpful as well.
That said, "because that's the way its done" is not always strong argument, but when you have the money you usually have the bargaining power. In addition, some investors are simply not interested in a small percentage, passive investments and only engage in transactions where they have a significant stake in the company and influence through ownership or board membership.
(as ddbb)
I have worked with entrepreneurs who tried EMR and harnassing the power of the Web, etc. . .
There are a number of reasons why it would take so long and doesn't work very well. Determining standards for coding procedures for something that can be a very individual circumstance, differences in treatment standards geographically and across specialties, administrative differences between providers, and so on.
There is also the question of who would develop the platform and the technological standards. If you think DVD vs. Blue Ray vs. Whatever or even Mp3 vs. Wav vs. Wma vs. AAC is a tough battle, wait until you see this fight. If the government decides who wins, you can bet the system will be miserable.
However, like Mike mentioned, none of this addresses the basic issue of cost. The excessive spending has little to do with paper records and everything to do with the third party payor system. If someone else (your employer, insurance company, Medicare, Medicaid, VA) is paying the freight, you do not have any incentive to shop around nor do the providers have any incentive to publish prices. Through various rationing provisions, there is an attempt to hold prices down, but political pressures exist to provide ever-expanding benefits. The move to universal health care will only exacerbate this issue as there is no incentive to incur additional capital costs for an expensive IT system when the government is adjusting your fees downward. It is the separation of payor from customer that drives medical costs.
(as ddbb)
It is foolish to believe a "risk manager" or some other regulator is going to be able to monitor and manage "systemic risk," whatever that is.
The problem with the Lehman bankruptcy was not the collateral effects of the collapse but the fact that the government acted in a manner that was so arbitrary, unpredictable and unrelated to past behavior that no one had any idea what the ground rules would be. That is not "too big to fail." That is regulatory failure. That is what left everyone scrambling to figure out how to manage their issues and too nervous to do anything until there was some clarity about what the government would permit or prohibit and the situation stabilized.
No amount of "transparency" or regulation is going to address these issues. These companies, public and private, are subject to voluminous reporting requirements to various agencies and government bodies already. There is no lack of "transparency" (a word that has lost all meaning in the last several years anyway).
The only thing that will discipline them is the notion that their failures will actually cause them to fail rather than fall into a governmental safety net.
There is no person or group of persons in government who are smart or capable enough to perform this function, particularly if when you consider the thousands that are already charged with performing these functions. Throwing more money into the regulatory black hole and tying down companies with more bureaucratic red tape and reporting requirements will do absolutely nothing to address any issue in the current environment.
How about Sarbanes-Oxley? Billions of dollars and the beginning of the transfer of capital markets from New York to London in the name of "transparency," increased reporting, enhanced criminal sanctions for things that were already illegal, bowing to the latest trends in corporate governance and enhanced accounting standards and internal controls to address issues of risk. It only took about 5 years until this altar to regulation, transparency, and risk management crumbled into the meltdown.