Daily Archives: August 9, 2005

The politics of charity in the world of health care

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O'Quinn.gifWealthy Houston plaintiff’s lawyer John O’Quinn (earlier posts here and here) recently proposed to donate $25 million to St. Luke’s Episcopal Hospital — the largest gift in the hospital’s 50 year history — in return for renaming the hospital’s highly-recognizable medical tower the “O’Quinn Medical Tower at St. Luke’s.”
Well, the Chronicle’s Todd Ackerman, who does a fine job of staying on top of Medical Center stories, reports in this article that the St. Luke’s board’s decision to accept the donation from Mr. O’Quinn is not going over well with a number of St. Luke’s doctors:
St. Luke's tower.jpg

The plan to rename the edifice after John O’Quinn in recognition of a $25 million donation by his foundation has infuriated many St. Luke’s doctors, who last week began circulating a petition against it and Monday night convened an emergency meeting of the medical executive committee.

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George Melloan gets it

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melloan2.jpgA couple of months ago, this post noted Wall Street Journal columnist George Melloan‘s op-ed on the Supreme Court’s Andersen decision in which he harshly criticized the government’s abuse of the rule of law to pursue currently unpopular businesspeople. Today, in this WSJ ($) Global View column, Mr. Melloan focuses on a common subject of this blog — the unjust nature of criminalizing corporate agency costs.
Mr. Melloan’s column focuses on the agency cost of corporate accounting:

Corporate accounting, contrary to popular belief, is chock-full of judgment calls. It’s a happy hunting ground for a prosecutor looking for decisions he can say were intended to mislead investors and might thus constitute criminal fraud. If an admiring press rewards him with a big headline, who’s to know, . . ?

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On the Internet’s booms and busts

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karlgaard_r.gifRich Karlgaard is publisher of Forbes magazine and author of Life 2.0 (Crown Business, 2004). In this wonderful Wall Street Journal ($) op-ed, Mr. Kaalgaard examines the tremendous progress of the Internet over the past 20 years by pointing out that the risks taken in the booms and busts during the period are the engine of that progress. He uses the wildly over-priced Netscape IPO of 10 years ago (has it really been that long?) as one of his examples of the risk-taking that did not work out, and wryly passes along the following anecdote about one analyst’s attempt at a joke about pricing Internet companies during those exuberant times:

Analyst Bill Gurley sends out a spoof email. After noting the history of deteriorating valuation benchmarks, from cash flow, to EBIT, to EBITDA, to “price-per-click,” announces the ultimate Internet valuation benchmark: EBE, or “earnings before expenses.” Most readers don’t realize Mr. Gurley is joking.