By MATTHEW HOLT
I was having a fight on Twitter this week and it hit me. America 2024 is Japan 1989.
The topic of the fight was right-wing VC Peter Thiel. In 2001 he put a ton of Paypal stock allegedly worth less than $2,000 into a Roth IRA. The Roth IRA was designed so that working stiffs could put post tax cash into an IRA, grow it slowly and take out money tax-free. (For traditional IRAs you put in pre-tax money and get taxed when you take it out). You may have read the story in ProPublica. Magically Thiel earned less that year than the max allowable income limit (around $100K) to contribute to a Roth IRA, and magically that stock was within weeks worth much more and then, later, hundreds of millions more. Since then Thiel has invested those Paypal returns in Facebook, Palantir and much more, and that Roth IRA has billions of dollars in it that can never be taxed.
My twitter adversary was saying that Thiel obeyed the law. I doubt it, but that’s not really the point. When the Roth was introduced it wasn’t meant to be a loophole that Silicon Valley types could use to hide billions from tax. But neither my twitter “friend” nor Peter Thiel want to take responsibility or pay their fair share.
Japan in 1989 was wealthy and successful and heading off a speculative cliff which it’s since taken 3 decades to dig out of. There were numerous academics pointing this out, but the most interesting analysis was The Enigma of Japanese Power written by a Dutch journalist named Karel van Wolferen. Here’s a summary from wikipedia with my emphasis added
Van Wolferen creates an image of a state where a complicated political-corporate relationship retards progress, and where the citizens forgo the social rights enjoyed in other developed countries out of a collective fear of foreign domination….Japanese power is described as being held by a loose group of unaccountable elites who operate behind the scenes. Because this power is loosely held, those who wield it escape responsibility for the consequences when things go wrong as there is no one who can be held accountable.
In Thiel’s case a collective network of tax accountants, junk philosophers, and purchased politicians like JD Vance ensure that no one has to be accountable. Ultimately Thiel doesn’t feel responsible for paying what he owes. Of course the exposure of Trump’s tax cheating shows that he doesn’t either. And many people find this OK.
Meanwhile I got into it a little with Jeff Goldsmith on last week’s THCB Gang about why hospitals are still paid per transaction when it would be much better for them to be paid some kind of global budget for the services they provide and for doctors to be paid a salary to exercise their best judgment rather than be tempted into providing care just because they get paid for it. Both COVID and the recent Change Healthcare outage put health care providers in a terrible situation financially because they depend on being paid fee-for-service via claims for individual transactions. Did the leadership of America’s hospitals and doctors come out asking for a change to the system? No, they just got a government hand out and begged for a return to standard operating procedure. No one can rationally look at how we pay for health care in America and say “give us more of the same” but there’s no leadership to change it at all.
Talking about lack of leadership, Amber Thurman died in Piedmont Henry Hospital because no-one on the medical team was prepared to give her the D&C that she desperately needed. They were scared of going to jail under Georgia’s draconian anti-abortion law. There are many, many guilty parties here.
None of the doctors or medical staff stood up and said, “this is the right thing”. Trump brazenly appointed unqualified Supreme Court judges because he knew, and Leonard Leo told him, that they were going to overturn Roe. The Georgia legislature and governor knew what they were doing when they passed their abortion legislation.
But it seems to me that Piedmont CEO Kevin Brown has a huge responsibility. His bio says that since he became CEO 11 years ago he “brought to Piedmont a culture of stewardship that is now ingrained into the daily operations”. Even though he knew that Roe was likely to be overturned, there was apparently no stewardship, policy or directive that the medical staff could turn to. Should Brown be responsible? Should he be prosecuted for involuntary manslaughter in Amber Thurman’s case? Would your view be changed if you knew that he gets paid $4m a year to supposedly be accountable and make the big decisions? I’ve Googled hard and have seen nothing from Piedmont or Brown about this case. Again, not even visible, let alone accountable.
The other big news recently, at least for those of us who care about interoperability, is Epic being sued by startup Particle for denying it access to data. But strip away the rhetoric, the behavior alleged in the lawsuit is just what you’d expect from a big bully monopoly–put the little guy in a tough position, go to their clients and make them an offer they can’t refuse. Specifically Epic went to a Particle client called XCures and said “nice business you got there, you wouldn’t want it to go away if you keep using Particle when we have a solution for you instead”. XCures appeared to be a happy client which then canceled its Particle contract. I suspect this may be the first of many incidents that might end in a big FTC investigation into Epic.
But that’s not the heart of the problem. As they let us know at HIMSS each year, basically everyone is on Epic and no major system is replacing them anytime soon. In fact they are adding big regional systems (UPMC, Northwell, Intermountain) and there’s basically no one left for them to sell to. Epic’s sensible solution would have been to pull a Bill Gates in 1997 and give Steve Jobs/Particle, some money and an onramp onto their system, in exchange for agreed transparent behavior. Maybe Epic was worried about turning Apple 1997 into Apple 2015 but I’m sure they could have managed that risk, and I’m sure Microsoft made a massive return on its $150m put into Apple.
Instead Epic is acting like it’s still the vulnerable start up Judy Faulkner launched in a kitchen. Meanwhile, all the hospitals its technology operates have been acting for years as if their only responsibility is to increase their reserves and days of cash on hand, while paying their executives like relief pitchers.
My suggested solution is to nationalize Epic and its provider customers, as they’re all basically monopoly utilities sucking at the teet of the taxpayer, extracting enormous value from their local economies, and giving very little in the way of innovation or universal/charity care back. (Jeff Goldsmith doesn’t agree with me but he’s wrong!). After all, in my homeland of the UK Thatcher and her successors privatized the water utilities in the 1980s & 1990s, and now the executives & shareholders are rich, the sewer infrastructure is broken due to lack of investment, and the rivers and beaches are flooded with shit. We are moving towards that in health care here due to a non-discussed “need” to keep 100 hospital systems and their executives in the top 0.1% of richest Americans. I’m sure Kevin Brown and many of his executive colleagues at Piedmont are among them.
I accept this is America and that is unlikely but it’s what we should do.
We might not have to go there if anyone would stand up and be accountable. But no one will take responsibility for anything, and apparently the buck never stops.
Matthew Holt is the publisher of THCB
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