Stanford GSB News

Readers' Response

May 2008

Salvaging U.S. Health Care

To the editor:

"'People have been saying for a long time that [the U.S. health care system] can't go on much longer this way,' Enthoven said. But, it's not clear that public anger at the situation has reached a point that will force fundamental change."

I would argue that this is the most salient point in the various healthcare pieces covered in the May 2008 issue. Alain Enthoven [the Marriner S. Eccles Professor of Public and Private Management, Emeritus ] started at Stanford about the same time I did and at a time when it had become fashionable for all the business schools to redirect some of their focus away from profit-optimization modeling to public policy issues. It was clear even then that the delivery system was living on borrowed time and was a disgraceful portrait of inefficiency, disincentives, misincentives, and perhaps even just plain sloth/stupidity.

My two years prior to entering the business school in 1972 were spent as assistant director of clinical administration in Framingham Union Hospital in a suburb of Boston and most famous for the heart study. I suspect the Admissions office assumed I would be part of an emerging generation of trained MBAs who would then take Enthoven's wisdom and put it to work. Little did they know I was escaping--running for my life! It had been like playing basketball without hoops. Scorekeeping was limited the inane practice of creating a budget based on the previous year's actuals and not exceeding it. Brilliant !

We're now into 35+ years of intellectual examination of a very sick patient. During that time, despite some very fine work by our best and brightest, the patient is not only not better, it is decidedly worse.

Transformative change requires enormous financial gain potential, widespread fear and anger, or just dumb luck.  I wouldn't count on the latter but some convergence of the first two is inevitable. It will be a lot less pretty and a lot more painful than had we rebuilt it right in the first place,but, that's just the way us folks seem to do things.

Jim Noyes, MBA ‘74

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To the editor:

As an MD and Stanford MBA I felt that the discourse on health care costs is not complete without an analysis of the hungry gorilla in the room. The HMO was forced on the medical system with a major cost structure and a questionable rationale. An analysis is overdue of whether over 30 percent of the health-care dollar has been well spent. From a business point of view a cost/benefit analysis would be money well spent. All the other items will fall into place if the question of whether the HMO is part of the problem or the solution can be clearly answered.

Robert S. Rosenberg, M.D., MBA '52

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To the editor:

The article "Salvaging US Health Care" had little to offer in the way of saving anything but the same old thinking. It reiterated the hand wringing usually associated with this very complex set of economic players. Let's shift the conversation to a more constructive and creative level by asking the following questions, and asking them frequently.

1. What is the cost of health care for all citizens, compared to the cost of war? And, why be more timid in funding the cost of health care than funding the cost of war? What is the job creation prospect in providing health care for all?

2. Why is the USA using a moribund health care insurance model created during WWII? It is not the model used by other industrialized countries. This business model is inefficient, cumbersome, and expensive for everyone, citizens, health-care providers, and employers. It diverts precious resources of time and money. 
Eliminating health insurance as an employer expense would make our businesses more competitive. Shouldn't the question be "What forces of innovation will eliminate this model while providing excellent health care for all?" 

To wit: Do insurance companies add any value to health care? and,
Is it ethical to profit from health care expenditures? 
Or, should health care, like clean drinking water, which is the most basic public health service, be provided via taxation?

3. How can we get more value from the health-care dollar? As with most social enterprises, outcome studies are lacking. Don't we need a secure national health electronic infrastructure--that includes all patient records-- to evaluate outcome data or identify best practices? Presently, medical care is administered based on "community standard of care" which is to say, "the best we know how based on the literature and our own experience/training." When national data is available regarding outcomes and best practices, and when statisticians/practitioners are trained to evaluate this data, citizens and health care providers can better understand which treatments-- and which doctors-- have the best outcomes, and providers can create treatment protocols and practitioner training systems that provide more cost-effective health care. 

—Cheryl Lilienstein, Palo Alto

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May 2008

The Golden Legacy of Ernie Arbuckle

To the editor:

I greatly enjoyed the Ernie Arbuckle article in the May 2008 issue, as I'm sure did all of my  MBA ‘68 classmates. He was an extraordinary leader.

But the story behind the football game events are a bit more complex than stated. Getting to lead the Stanford contingent in a cheer was a hotly desired prize, one that  all students could vote on--at a penny a vote, if I recall. There was a table near the bookstore where anyone could vote, maybe other locations also. The tally was publicly shown, so everyone knew who was winning at any point, and students could vote for their favorite professors if the professor started falling behind.

This was at the height of the Vietnam war, and I can assure you that no undergrads were voting for Ernie--They didn't know him, indeed probably never heard of him, and the GSB represented everything that  the undergraduate body didn't like in those days. This was the era when David Harris was elected student body president and the main administration offices were taken over by protesters.

Some GSB student--I don't remember who it was--organized a campaign to get Ernie elected. It was known that he planned to retire after 10 years at the helm, following his philosophy of repotting himself every decade, and this seemed like a nice reward. But the campaign was within the GSB only, completely a stealth effort to the rest of the campus, with GSB money until five minutes before the polls closed.

Obviously I can't prove that no undergrads voted for him at all, but he had very few votes until the moment when the GSB money got plopped down, and no one could overcome the big lead for Ernie.

And, of course, he did a great job leading the cheers.

—Jon Holman, MBA '68

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To the editor:

I have read and re-read your May 2008  article, “The Golden Legacy of Ernie Arbuckle”and  was so touched by how youcaught his essence 22 years after his death, and 40 years after he received the first Arbuckle Award.

Part of the essence you caught was contained in the photos: The wonderful bust shot reflecting his vigor, enthusiasm, interest, and good looks; the family shot reflecting his compassion, love of family, (and animals), and showing my mother who was responsible for a large part of his success by always being the “hostess with the mostess” and housing an endearing and enduring love and respect for him and people in general; and, the shots of the infamous “Give ‘Em The Axe” yell that he poured his heart and soul into because of his very deep love and commitment to students, faculty, parents, friends, the GSB, and Stanford in general.

The legacy my father left at the GSB never ceases to amaze me, touch my heart, provide many life lessons for me, and make me grateful for the eternal gift he gave to so many of us of his heart, soul, beliefs, visions, and commitment always mixed with love, honesty, integrity, and humor.  His entire life, from early childhood in Santa Monica until his death, has been an example for many of us to learn from.

Thank you for such an excellent article with so much feeling.

—Joan Arbuckle

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February 2008

Kudos for the February Cover

To the editor:

John Hersey’s illustration on the cover of the February magazine is so captivating, I could not let it pass without admiring comment. I am currently conducting culture shaping seminars with our great employees here in Phoenix and in the home office in San Antonio, part of which cover the value in appreciating how people approach decision making from different perspectives. Nowhere could one find a better visual of the distinctions between “left brain” and “right brain” perspectives than that provided by the decidedly “right brain” brilliance of Mr. Hersey. Or is there some “left brain” at work in there as well? We are left to further inquiry.

Marina Krakovsky’s wonderful article on Professor Shiv’s work [on decision making] is so timely and relevant, it reinforces the enduring value of lifelong learning in general and my cherished association with my alma mater in particular. For that I thank you and your staff for your consistently superb work.

—Bill Putnam, Sloan ’79
Rear Admiral, USN (Ret.)

To the editor:

I want to comment on the cover of the February issue. I am not an artist, but it is the most attractive and visually appealing cover that I have seen in a long time. By long, I mean I am MBA ’72.

—Hoshi Printer, MBA ’72

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February 2008

An Added Risk to Business in China

To the editor:

When we saw the August issue cover article, “Probing the Realities of Business in China,” we were surprised that there was no mention of an alumnus who has faced the harshest “reality” for the past nine years as a result of running a thriving U.S. medical equipment import business co-located in Shanghai and San Francisco. Our friend and classmate, Jude Shao, MBA ’93, might have added his advice to that of the other alums if he were not serving a 16-year prison sentence in Shanghai.

As Professor Glenn Carroll noted during the faculty study trip, China’s political economy is intimately entangled with China’s brand of capitalism. But China’s lack of legal infrastructure extends far beyond the shaky intellectual property rights protection mentioned by Sequoia Capital China founder and fellow alum Fan Zhang, and can actually result in criminal charges for business behavior that in the United States is considered ethical. Jude ran afoul of local government officials who solicited him for a bribe to stop a “special tax audit.” When Jude refused to pay the illegal bribe, he was arrested “to teach him a lesson” and held incommunicado in a local jail for 24 months. Later, without the chance to review the evidence against him, he was convicted of tax evasion in the Chinese courts.

Lest you think this is an isolated case, the Dui Hua Foundation counts over 40 American citizens in Chinese prisons or detentions for so-called “economic crimes.” Most are ethnic Chinese who speak the language and understand the culture, but these advantages, the benefit of American citizenship, and lack of wrongdoing are often not sufficient protection in a country without legal transparency and with ingrained local government corruption. Doing business in China offers many opportunities, but there are also serious risks that were not mentioned in your coverage, particularly to entrepreneurs without deep pockets.

Americans behind Chinese bars also languish despite the best advocacy available. For example, while members of Congress, the State Department, and even President Bush have pressed the Chinese government for Jude’s release during the past nine years, he remains in prison.

For more information on Jude’s case including the latest media coverage, and to learn how to help, please go to www.freejudeshao.com.

The Free Jude Shao Campaign
Chuck Hoover, Cyn Dai, Caroline Pappajohn, Lang Ang Pham, and Mark Williams, all MBA ’93