This week the NY Times explores how failing to pass health reform will have an impact on innovation — and archetypal Silicon Valley startups.
In the cradle of American innovation, workers are making career choices based on co-payments, pre-existing conditions and other minutiae of health insurance. They are not necessarily making decisions based on what would be best for their careers and, in turn, for the American economy — that is, “where their skills match and where they can grow the most,” as another Silicon Valley entrepreneur, Cyriac Roeding, says. Health insurance, Mr. Roeding adds, “is distorting the decision-making.”
…Only 46 percent of companies with three to nine employees offer health insurance, down from 56 percent a decade ago, according to the Kaiser Family Foundation…
Without health reform, entrepreneurs will continue to take the wrong risks. Starting a company is the art of making do without resources. This often means limiting your own compensation and forgoing health insurance at the start. When recruiting employees, its difficult in the early stages of a company to offer health benefits that comparable let alone competitive with those of larger companies. This despite the fact that when a startup employee gets sick, it can have a broad impact on the productivity of the company overall.
As the economy is recovering there is no better time to start a new company. Silicon Valley is getting back to what it does best, we need Washington to do the same.
(Cross-posted @ Ross Mayfield’s Weblog)