Health Care or Health Scare

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healing_of_americaOver the past 2-3 weeks I’ve been hearing all sorts of terms such as public option, government option, socialized medicine, death panels, etc…and wanted to take a closer look at the health care crisis the US is facing. There has been a lot of hype lately with people running around and saying “Oh My God, those death panels want to kill grandma.” My take is that if we don’t change the current system, many people like grandma are going to die.

Over the past week I stumbled across T.R. Reid a reporter for the Washington Post who released a new book last week titled “The Healing of America” .  I actually didn’t know about the book, I happened to watch a PBS Frontline special and a couple of days ago listened to an NPR podcast, both chronicling the various health care systems from around the world…both were from Reid. I’m assuming the book expands on his travels and adds more depth to what he saw. If you want to get up to speed on the health care debate I would take a look at the PBS and NPR specials.

Reid outlines 4 basic systems of health care around the world:
1. Completely government run healthcare (aka socialized medicine) – Britain is the prime example. Everyone is covered.
2. Private docs/hospitals and private payments – France & Germany. Everyone is covered.
3. Private docs/hospitals and public payments – Canada. Everyone is covered.
4. Out of pocket (I like to call it out of luck) – US and many 3rd world countries. If you don’t have the money you are sh#@ out of luck.

And, all 4 systems are already running in the US:
1. Completely government run healthcare (aka socialized medicine) – Native Americans and Vet’s
2. Private docs/hospitals and private payments – Large companies
3. Private docs/hospitals and public payments – Medicare
4. Out of pocket – Millions of Americans

In the US, health care is not viewed as a way to help people but a for-profit endeavor and I believe that’s the crux of the matter. Pharma research, clinical trials, medical devices, etc…all target the US market because that’s where the big money is. There is no magic bullet to this situation and until we take out the hugh cost structure and margins associated with health care, this problem will not get solved.

However, the magic bullet might be found in India. While Reid traveled all over the world for his book he also had a shoulder problem and wanted to find out what the diagnoses would be in each country. He finally settled on an ayurvedic solution from India that worked.

Update: Another article I came across this past weekend offers a unique solution – How American Health Care Killed My Father.

Wireless Wars

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tata-docomo-logoWhile most businesses and industries around the world are struggling to get back to their glory days of 2007, one industry that continues to sky rocket is the wireless industry…at least in India.  As of July 31, 2009 there are over 441 million wireless connections.  I don’t think anyone could have predicted the hugh uptake in wireless, just 4 years ago there were only 70 million connections. Of course, the average revenue per subscriber (ARPU) is a paltry USD 4 a month, but it’s a numbers game – the more numbers the better. I could go on and on about the statics of the Indian wireless market but luckily the Telecom Regulatory Authority of India (TRAI) conveniently provides a mind crushing PDF every quarter that slices and dices the data.

On a more local level, the latest wireless carrier to enter the fierce Bombay market is Tata DOCOMO. It’s a joint venture between the largest industrial group in India – The Tata Group and Japan’s NTT DOCOMO. This will be Tata’s second wireless network in Bombay, they have an existing CDMA network while the new venture is based on GSM.

The question arises does Bombay need yet another mobile carrier? Apparently, the Tata’s feel their is space for one more carrier. With the latest entrant we now have 9 carriers: Aircel, Airtel, BPL, Idea, MTNL, Reliance, Tata (CDMA), Tata (GSM) and Vodafone. The Virgin Mobile brand in Bombay is just reselling the Tata (CDMA) service, almost like an Mobile Virtual Network Operator (MVNO).

So what’s the current selling point for Tata DOCOMO – per second billing and a 3G ready network.  That’s not enough of an offer to swing me over as a customer, but if number portability comes into play that’s another story.  You could see many people switch over just for the per second billing feature, remember the average bill in India is USD 4 per month…so seconds count. Of course, Airtel and Vodafone could just turn that feature on as well.

The Guru of Travel Gets Acquired

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tg-logoThe Indian online travel agent (OTA) space became a bit smaller this week, with Travelocity buying out Travelguru. Although the terms were not disclosed the media is reporting the acquisition was valued around USD 9-10 million.  The insiders know the true number but typically when a successful exit is announced all the players want to highlight the fact by saying “we returned 5x, 50x or whatever to our investors…blah, blah, blah.” I didn’t see or hear such a statement and honestly that’s not the point of this post. Instead it’s about the current economic viability of the OTA’s and the Airlines. OTA’s are much more then just airline ticketing but I believe they are a large financial component for most OTA’s.

Let’s first start with the product – air travel.  It’s no secret the airline industry went through a massive airplane buying and airport construction binge since 2005.  With the economic environment we are all feeling the after effects, carriers are delaying deliveries of new planes, newly constructed airports are jacking up their user development fee (UDF) and the aviation turbine fuel (ATF) surcharge is killing everyone’s balance sheet.  The UDF is a catch-22, with the decline in traffic, airports want to charge more to makeup for the short fall but this pushes away consumers. With the drop in tax collection, the government needs money as well and hence the ATF is a way to recover some of that tax money. This puts the airline in a painful spot, Air India is begging for a government bailout of USD 2-3 billion to help alleviate the situation.  Secretly, the private carriers would love a bailout as well, but I doubt Praful Patel, Minister of Aviation, can save face with the public if he bails out Kingfisher or Jet Airways.

One of the ways the airlines have dealt with this situation is to cut the commissions paid to travel agents. This recently led to many travel agents refusing to book flights for certain carriers since it wasn’t worth their effort. The OTA’s that have high fixed costs and shallow pockets are going to face the music very soon.  Most OTA’s started during this binge when the number of passengers traveling in India looked like a hockey stick (J curve) and hence all the VC money thrown at them. Some of the OTA’s have looked at bus and train travel which have very small margins but potentially a hugh number of travelers.  But, most of those travelers are not connected to the internet. How many OTA’s will exist in their current avatar 18 months from now? It’s anyones guess.

Random Fact: TravelGuru was started in 2006 by Ashwin Damera and Ganesh Rengaswamy, they both attended Harvard Business School (HBS). Travelguru was selected in 2005 as the Harvard Business Plan Contest winner.

Monsoon Misery

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monsoon_thunder

Here we are in the thick of the supposed Monsoon season and it’s frikkin’ bone dry all over India.  Usually, most urban Indian residents complain of the Monsoon since it leads to floods and is a general nuisance.  This year the complaining is due to a lack of water which is leading to water cuts and don’t get me started on the effect on farmers – the largest industry in India by revenue and people employed.
Several days ago the news channels were mentioning that the Prime Minister was going to meet with the Chief Minister’s from the affected drought states. What is that meeting going to accomplish? Are they going to schedule a meeting with Mother Nature and fix the problem. Everybody knows that the Monsoons come every year and yet every year India suffers from either too much or too little rain. There seems to be no long term strategy in dealing with this perennial problem.  There are a host of initiatives that could potentially lessen the burden such as rain water harvesting but India always seems to be focused on the short term strategies.
I grew up in Southern Indiana in sea of corn fields and I bet more innovation comes from that small region then all of India. I fail to understand how a country who prospered with it’s “Green Revolution” in the 1960’s seems so left behind in terms of technology. I’m sure there are pockets in India that are using the latest in technology and benefitting but what about the rest. Punjab is the first place that comes to mind, they say there are more Mercedes Benzes in this part of India then anywhere else to give you an idea of the wealth creating from farming. But, beyond that I think most farmers are suffering.  If you goto my dad’s hometown in Madya Pradesh you would be hard pressed to find many tractors farming the land, instead most of it is manual labor.

Here we are in the thick of the supposed Monsoon season and it’s frikkin’ bone dry all over India.  Usually, most urban Indian residents complain of the Monsoon since it leads to floods and is a general nuisance.  This year the complaining is due to a lack of water which is leading to water cuts and don’t get me started on the havoc it has on farmers – the largest industry in India by revenue and people employed.

Several days ago the news channels were mentioning that the Prime Minister was going to meet with the Chief Minister’s from the affected drought states. What is that meeting going to accomplish? Are they going to schedule a meeting with Mother Nature and fix the problem. Everybody knows that the Monsoons come every year and yet every year India suffers from either too much or too little rain. There seems to be no long term strategy in dealing with this perennial problem.  There are a host of initiatives that could potentially lessen the burden such as rain water harvesting but India always seems to be focused on the short term strategies.

I grew up in Southern Indiana in a sea of corn fields and I bet more innovation comes from that small region then all of India. I fail to understand how a country who prospered with it’s “Green Revolution” in the 1960’s seems so far behind in terms of technology. I’m sure there are pockets in India that are using the latest in technology and benefitting, but what about the rest. Punjab is the first place that comes to mind, they say there are more Mercedes Benzes in this part of India then anywhere else to give you an idea of the wealth creation from farming. But, beyond that I think most farmers are suffering.  If you stop by my dad’s hometown in Madhya Pradesh you would be hard pressed to find many tractors farming the land, instead most of it is manual labor.

The government has helped the farming industry with many things such as no taxes, free water and free electricity but I think some of those are band-aid’s on the real problem – lack of innovation.  The government always seems willing to throw USD 5-10 billion at forgiving farmers debts but when it comes to spending the same about on new farming technology it gets politicized. If farmers were committing suicide in droves over the past 2 years, I’m sure this year we are going to hit record numbers. And the government’s response – forgiveness of debt, a couple thousand dollars and a guaranteed government job for the oldest son.