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Is Lack of Access to Healthcare Stifling Entrepreneurship?

picture-11Paul Kedrosky had a very interesting take on entrepreneurship this week on “Marketplace.”  In an interview with Tess Vigeland, he suggested that access to healthcare, and not access to capital, was a key obstacle to entrepreneurship in today’s economic climate. An excerpt:

Vigeland: So then you have these non-20 somethings who are opening up these businesses. What is standing in their way? You do talk about in the article about how health care is a really big issue.

KEDROSKY: Right. Exactly. One of the myths in entrepreneurship is this idea that the primary obstacle is the availability of capital when most entrepreneurs are ego-driven people who believe that they can manage technology risk, they can manage capital risk, what they can’t manage is health risk.

Vigeland: So this an argument for universal health care, that will then allow people who are more worried about their health, and really need the insurance to go out and start their own businesses.

You can listen to the whole interview and read the transcript here.

So what do you think?  Is lack of access to affordable healthcare a key factor in stifling innovation and entrepreneurship?

Bonus:  Here is a link to Kedrosky’s whole article on entrepreneurship and government in Washington Monthly.

4 Responses to “Is Lack of Access to Healthcare Stifling Entrepreneurship?”

  1. Steve Barsh says:

    Interesting question about healthcare. Maybe the different tech accelerators (dreamit, YC, techstars) could have a pooled healthcare program to help out startup companies.

  2. JD Lasica says:

    It’s interesting to consider the idea that if health care expenses for startups disappeared, there might be a wave of new investment in small businesses by entrepreneurs who no longer have to shoulder those costs.

    Putting aside the likelihood that something approaching universal health coverage is on its way, I wonder if there have been any studies to support that supposition. If true, another decade of robust job growth, similar to the ’90s, could be in the wings.

  3. Christopher Carfi says:

    JD and Steve, agreed. That impact would be felt pretty quickly, I would think, in two ways. (1) Entrepreneurs take healthcare risk off the table, per Kedrosky’s argument, and (2) it would free up a not-insignificant amount of capital to invest in “growth” parts of the business (rather than “overhead”).

  4. Brian Harris says:

    3) It would help entrepreneurs attract the best talent. This is similar to Mr. Carfi’s #1 point above, but extends it slightly. People considering a new job weigh heavily the possibility of continued health care, and it has driven a lot of decisions to not change a job.