• WisBusiness

Wednesday, December 22, 2010

GreenBiz: Construction method goes beyond just lumber to focus on 'whole trees'

By Gregg Hoffmann
After he earned his degree in architecture from the University of Minnesota in 1984, Roald Gundersen worked as a project architect on Biosphere 2, a $250 million experiment in creating a sustainable, ecological, indoor living environment and education center in Arizona.

That work had a marked influence on Gundersen, as did his love of spending time in the woods as a kid. When he returned to his native Wisconsin, Gundersen knew he wanted to find a way to spend time in the woods, make an eco-friendly living from the trees that surrounded him and contribute to the environment in the process.

Thus, Whole Trees was born. As the Whole Trees web site says, “Gundersen is an architect by profession and a forester by avocation, and he uses Whole Trees to bring those two callings together by creating healthy, sustainable buildings that create a healthier forest.”

“I work with wood, while most construction works with lumber,” said Gundersen, who is based near Stoddard. “I garden the forest for my wood rather than mine it.”

Through this approach, Gundersen has earned a reputation around the nation, getting coverage in the New York Times, Natural Homes magazine and many other media.

Through Whole Trees Architecture and Construction, he and his staff have designed and constructed more than 30 residential, commercial, greenhouse/agriculture and other buildings since the founding of the company in 1991.

These buildings are unique. As the company promotional materials read, “Whole Tree structures are timeless, deeply familiar and comforting. They are at once ancient and avant garde. Unlike conventional building materials, machined to fit rigid dimensional modules, Whole Trees are sculpturally fluid and elastically supple. Trees love curves and will produce curved structures inexpensively; whereas machines will do curves only at great cost. When we harvest you a home, we will utilize the resources of your land and community, not global construction modules.”

Gundersen said at a recent Driftless Dialogue at the Kickapoo Valley Reserve: “Whole trees, or round wood, is 50 percent stronger than an equal section of lumber. A tree’s strength is derived from tubes of fibers, growth rings, that create tension that allows the tree to resist shear forces of the wind. When we cut them into lumber, we remove the strongest fibers. The strength of any timber cut from any log will be less than a third of the original log.”

Some of the longest standing structures in the world were made of whole trees. They include structures in Egypt and Greece, Il Duomo in Florence, Italy, temples in China and others.

Whole trees also compare nicely with modern materials. They have “weight to strength rations” comparable to steel in compression and twice that of steel in tension.

Gundersen is part of a grant-seeking study with Forest Products Lab and a researcher from the Yale School of Forestry to do some of the first actual tests on the strength of trees as a whole. Observation and early testing indicate that trees are at their strongest at the intersection of branches. That allows for that gardening of the forest mentioned by Gundersen.

“Builders traditionally look for the tallest, straightest tree and take it for the trunk, which can be made into lumber,” he said. “Using the whole tree though, we look for branches, areas curved by the wind. We actually use what many traditionally would consider the waste wood in the forest.”

“Natural architecture” of whole trees also sequesters much of the CO2 given off from any functioning structure and contributes less to global warming.

In addition to using what nature has bent and shaped, Gundersen has been bending and pruning living trees into the shapes he designs. He calls this practice “biofacturing” or “topiotechture” and considers it the next frontier of “growing buildings.”

For more than a decade Gundersen did his work largely on his own. It started with his work at the Biosphere 2 project from 1988-91. “That really focused my work on designing and building structures that could be part of the environment, living structures if you want to use that term,” Gundersen said.

“It was an incredible experience. But, I knew I also wanted to concentrate on buildings that were part of everyday people’s lives. Buildings that could be built for $50 a foot rather than $500 a foot, and still be environmentally friendly.”

Gundersen returned to the Driftless Area and began his work, first from a small facility in La Crosse and later from his own farm. In 2007, he joined with Amelia Baxter to found Whole Trees Architecture and Construction. Several new staffers have joined the company as the workload has expanded.

They work out of a “whole tree” and straw bale office building and a new factory space which gives them room to work on peeling branches, making connections, storing completed piece and other fabrication work.

This home office, and Gundersen’s home, was his first whole tree and straw bale project, with its timber coming from the 140 acres he calls Driftless Farm and Solar Greenhouse.

The solar greenhouses have become one specialty of the company. One can be found at the Wellspring Retreat and Farm in West Bend. Others are part of residences and other developments around the country.

Other Whole Tree completed works can be found at the Chrysalis Farm near Avalanche, Wisconsin, at the Driftless Café in Viroqua, the Ott Spott Cabin in Three Lakes, the Angelic Organics Learning Center in Rockford, Illinois, the Native American Heritage Center in Iowa, the Christine Center at a Franciscan retreat in Willard, Wisconsin, and elsewhere around the Midwest.

The company has been part of Maharishi University’s Sustainable Living Building. That project is in Fairfield, Iowa, and is part of the university’s sustainable living program.

Gundersen also worked on the Punta Vista building in Costa Rica. Whole Trees has attracted more international attention after a story on it appeared in the New York Times. An article ran in La Repubblica, an Italian publication, and a Norwegian online publication called www.oftenposten.no.

Baxter and Gundersen also have started the Driftless Farm Community Supported Forestry program. Its purpose is to “support a new model of forest economy where a healthy forest provides both land owner and members abundance, and preserves that which sustains us ... Trees.”

Members get selective access to whole tree timber, sustainably milled lumber, use of garden plots and greenhouse greens, as well as unlimited access to fresh spring water and a variety of other forest products and activities. The goal is to establish ways of using the forest that also contribute to its health.

The model being used is somewhat similar to that used by CSA (Community Supported Agriculture) programs.

“Movements like those in food, and what we are trying to do, keep the work and revenue local, as well as provide healthy food and products from local sources,” Gundersen said.

“Our efforts are to create sustainable lifestyles,” he added. “The question we ask is ’how can we clean the environment by building buildings?”

-- Hoffmann has written many columns and features for WisPolitics.com and WisBusiness.com over the years. He writes the GreenBiz column monthly.


Tuesday, December 21, 2010

Holiday perks list includes naughty and nice in politics, business

By Tom Still
A source close to the toy industry has once again leaked a copy of Santa’s perks list for Wisconsin politicians and newsmakers. Here’s what the good boys and girls in Madison and Washington will reportedly find in their stockings this Christmas week. But they better not pout and they better not cry if an alert district attorney asks why gifts were delivered down chimneys after midnight.

Gov.-elect Scott Walker: Christmas came early for Republican Walker, who won the November election by 5 percentage points over Democrat Tom Barrett and seemingly took office within hours. His latest gift: Democrats fell short in a lame-duck session called to ratify labor contracts for tens of thousands of state employees. Look for Walker to join other GOP governors around the country in renegotiating public-employee deals.

Gov. Jim Doyle: As he concludes eight years as Wisconsin’s chief executive, Doyle will be remembered for his passion for improving health care and education – and for being caught in the crossfire of the worst recession in a generation. Santa’s gift is a smooth transition to whatever comes next… and a toy train, given the life-size version ran off the tracks.

U.S. Sen.-elect Ron Johnson: Remember him? He defeated incumbent Democrat Russ Feingold in November and promptly went into hiding – or a prolonged congressional training camp. A fat sack of money to help Johnson trim the federal budget deficit would be nice, but with checked bags costing $20 each these days, Santa must travel light.

UW-Madison Chancellor Biddy Martin: What do you give a Big Ten Conference chancellor whose football team is playing in the Rose Bowl? How about a new research building to rival anything on the East or West coasts? Nope, she’s already got that: It’s called the Wisconsin Institute for Discovery. What Martin really needs is management flexibility for a campus unlikely to see a state budget increase. A gift certificate for yoga lessons will help her limber up.

Marty Beil and Russ Decker: These adversaries made headlines last week when Decker, a state Senate leader who lost his bid for re-election, crossed party lines to vote against the state employee contracts. Enraged, state employee union leader Beil called Decker a five-letter word that rhymes with “chore.” Santa’s gift to Beil is a thesaurus for future vocabulary challenges. For Decker, a bricklayer by trade, he’ll need a new union card to replace the Democratic Party card his caucus probably burned.

The Brothers Fitzgerald: It’s not every day that siblings rise through the ranks to run both houses of a state Legislature. Sen. Scott Fitzgerald is the majority leader in the Wisconsin Senate, now controlled by Republicans, while Rep. Jeff Fitzgerald has taken the reins as speaker in the Assembly, also held by the GOP. Now, the trick is to keep the new majorities in each house on task. Santa’s gift to the Fitz Boyz: T-shirts that read, “Mom always liked him best.”

Madison and Dane County politics: Even in a historic Republican election year, voters within a bicycle ride of the Capitol voted Democratic up and down the ballot. Never mind the cooling Madison economy, state government furloughs and stalled public employee contracts. With races for mayor of Madison and Dane County executive on tap for April 2011, will Madison voters remain true blue? Santa’s gift to the Emerald City: A reminder it’s OK to switch horses, especially when the one you’re riding pulls up lame.

Former Madison Mayor Paul Soglin: Speaking of Madison politics, former Hizzoner Soglin is coming back for another run. To get back in the mood, Soglin needs one of the hottest toys of 2010 – the Matchbox “Stinky the Garbage Truck.”

Attorney General J.B. Van Hollen: The state’s chief crime-fighter won another term in November, which means he’ll get another 2010 toy favorite under his tree – a “Spy Net Video Watch.”

Wisconsin’s congressional delegation: It’s tea-party popular these days to hate “earmarks,” which are congressional spending items included in various bills, sometimes as a means of garnering votes. Reviled or no, earmarks represent only three-tenths of 1 percent of all federal spending – with the other 99.7 percent usually dictated in presidential budgets. Given that Wisconsin typically ranks about 45th among the 50 states in its return on federal tax dollars, Santa wants all members of the Wisconsin delegation to remember that Article I, Section 9 of the U.S. Constitution reserves spending powers for Congress.

For Wisconsin’s rising political stars: In an era when sharp personal attacks and partisanship drive more good people away from politics than it attracts, it’s reassuring to know that some quality office-holders continue to be attracted to public service. That’s a gift to Wisconsin citizens. Happy holidays, everyone!

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, December 16, 2010

Remaking Commerce agency only part of the solution for the Wisconsin economy

By Tom Still
The Wisconsin Department of Commerce is the highly visible tip of a larger iceberg – the state’s myriad economic development programs. While proposals to reshape that tip may help Wisconsin’s economy move ahead, reformers shouldn’t ignore what lurks beneath the surface.

Four years ago, a report by the Legislative Audit Bureau noted that Wisconsin’s 152 economic development programs are spread among eight arms of state government – the Department of Agriculture, Trade and Consumer Protection; the Department of Natural Resources; the Department of Tourism; the Department of Transportation; the University of Wisconsin System; the Wisconsin Housing and Economic Development Authority; the Wisconsin Technical College System and Commerce.

While Commerce is the largest single agency devoted to economic and business development, both in terms of its programs and its budget for grants, loans, bonding and tax credits, other agencies touch the economy in many ways. Even within Commerce, no more than a third of its employees are actually devoted to economic, business and community development; the rest are regulators in programs as diverse as building safety, petroleum tank inspection and amusement park rides.

As Gov.-elect Scott Walker and the Legislature consider how to get the most out of state economic development efforts, one emerging answer is to dismantle Commerce and rebuild it along the lines of a public-private partnership, a model followed in some states.

That approach may work, but it could leave programs in seven other state agencies essentially untouched. Another option may be to relieve Commerce of its regulatory functions and make it a central clearinghouse for programs now housed in other state agencies.

No matter where they’re administered, state economic development programs all offer one of these five categories of assistance:

* Direct services, which can be as simple as information and technical assistance;

* Grants and loans, which are generally state tax dollars intended to promote economic development;

* Tax credits, which offset the income tax liability of businesses that meet specific criteria;

* Loan guarantees, which are commitments by state agencies to repay the principal obtained from private lenders in the event borrowers default on their loans; and

* Bonding authorization, which represents the state’s approval for WHEDA or municipal governments to issue bonds on behalf of businesses seeking to finance economic growth projects.

The largest spending category of the five is bonding authority, followed by grants and loans, direct services, loan guarantees and tax credits. At present, however, no single agency is empowered to use all of those tools.

If policymakers are looking for efficiencies, it may make sense to designate Commerce as the “traffic cop” for economic development programs across agency lines. Many of those programs might remain exactly where they are today, but Commerce could become the hub for determining what’s duplicative or outdated, tracking performance data, setting statewide and regional goals, and determining what state-run efforts are best suited for privatization.

Most important, such an approach might be less confusing for start-up and emerging businesses within Wisconsin as well as businesses outside the state that are checking out relocation or expansion opportunities.

In one sense, economic development should be a goal that cuts across all of government. A state that is “open for business” should exemplify that attitude in its public agencies as well as within its private business community. Sooner or later, a positive mindset can be infectious, even among public employees whose jobs may have little or nothing to do with economic development. After all, the jobs of those same public employees ultimately depend on Wisconsin building a healthy economy.

Innovation is the recurring theme of “Be Bold: The Wisconsin Prosperity Strategy,” a joint report issued last week by scores of participants in the Wisconsin Economic Summit process. The report stresses specific innovative approaches in the economy, in education, in government and more. Achieving that kind of broad-based innovation won’t be as simple as dismantling the Commerce Department – or any single state program.

Walker has set a goal of creating 250,000 jobs in four years, and everyone who lives in Wisconsin should hope that goal is met. There’s a choice: Spend valuable time focusing on the sins, real or perceived, of a single state agency – or share the responsibility for growth, in deed and in attitude.

-- Still is president of the Wisconsin Technology Council. He was a co-author of “Be Bold: The Wisconsin Prosperity Strategy,” which is available by clicking on this link or at http://www.wiroundtable.org/summit


Monday, December 13, 2010

No-choice health insurance? Not the American way

By Dan Danner
“People have no choice and there is no way to avoid it.”

With those words, U.S. District Judge Roger Vinson cleared the way recently for the National Federation of Independent Business and 20 states to challenge the constitutionality of President Obama’s sweeping health reform law, a program that has the potential to choke one of the nation’s most important economic engines: small business.

On Dec. 16, NFIB and its co-plaintiffs will argue in federal court that the White House’s so-called Patient Protection and Affordable Care Act denies Americans choice and must be repealed

At the heart of this challenge is a blatant grab for power by the federal government. By demanding that all Americans buy a congressionally-dictated type of health insurance whether they want to or not, the law runs afoul of the basic tenets of liberty.

Calling the mandate to purchase insurance an “unprecedented form of federal action,” Vinson noted in his ruling that people must either comply or be penalized. “It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive.”

Not exactly the American Way is it? For millions of small-business owners, this mandate is a denial of their ability to own, operate and expand their small businesses as they choose. It also is a thinly-veiled trick to divert their cash to pay for a government program that will, like virtually all other federal efforts, deliver less than needed at costs higher than predicted.

If Uncle Sam can force Americans to fork over their shrinking dollars for health insurance, what’s to stop the government from forcing us to buy GM-manufactured automobiles? Or certificates of deposit from one of the bailed out banks?

NFIB will argue that the Commerce Clause of the Constitution does not give Congress the power to force anyone to purchase anything. Another White House in 1994 attempted to saddle small business with a similar mandated health ploy and failed. Even the non-partisan Congressional Budget Office noted the breadth of this new law, saying: “The government has never required people to buy any good or service as a condition of lawful residence in the United States.”

Should Judge Vinson agree with the small-business community that the individual mandate has no constitutional support, he might also overturn the entire health law due to a technical oversight by Congress.

Regardless, small-business owners are adamant about having the ability to choose their health coverage. They overwhelmingly urge NFIB to aggressively fight this anti-free enterprise law. We are steadfast in pushing for legislative repeal, and have been working to convince government regulators to improve sections harmful to small businesses.

Today, the United States is deeply in debt, our government is distracted and the economy is in a mess. Sound familiar? It’s almost the same as in 1787 when a band of revolutionaries made their choice to seek freedom, put their collective wisdom together and wrote “We the People of the United States…”

The people have choice. It’s guaranteed in the Constitution.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.


Thursday, December 9, 2010

Ten who helped take Wisconsin Institutes for Discovery from concept to reality

By Tom Still
From the first conceptual glimmer in the mid-1990s to its grand opening last week, the Wisconsin Institutes of Discovery has been a model of partnership – not to mention innovation – in academic research and development.

These kinds of public-private partnerships usually have many fathers and mothers: People who provide the ideas, the energy, the implementation strategies and, yes, the money and political willpower.

As this $150-million addition to Wisconsin’s research landscape embarks on a new chapter in the University of Wisconsin’s reputation for supplying first-class research to the world and economic benefits to the state, it’s worth celebrating 10 people who helped make it happen.

The donors: John and Tashia Morgridge are high-school sweethearts from Wauwatosa East High School and UW graduates who bleed Badger red. After building Cisco Systems to one of the world’s premier networking companies, the couple decided to give back – starting with their home state. It was John Morgridge who first noted the success of the interdisciplinary Clark Center at California’s Stanford University and asked, “Why not Wisconsin?” The couple’s donation of $50 million to create the private Morgridge Institute for Research, a part of the Institutes, served to answer that question.

The governors: Govs. Tommy Thompson and Jim Doyle rarely agreed on much, but they were united in their belief that Wisconsin’s R&D foundation – built over more than 100 years – was vital to the nation and the state. Thompson engineered the $360-million “BioStar” program during the 1990s to help jumpstart a series of building projects on the UW-Madison campus, and Doyle continued the process by extending $50 million in unused BioStar bonding authority to an interdisciplinary building to tie it all together. Progress can be bipartisan.

The idea managers: Carl Gulbrandsen, the managing director of the Wisconsin Alumni Research Foundation, was the glue who held the idea together. Because WARF is the non-profit intellectual property arm of the UW-Madison and much of the UW System, it was a natural “home” for a concept that would involve public and private visions. Gulbrandsen’s quiet style and lawyerly patience allowed the idea to grow steadily over time. Marsha Seltzer, who guides the UW-Madison’s Waisman Center on a full-time basis, joined Gulbrandsen in managing the overall process – including the important process of faculty involvement – when she became interim director in 2006.

The implementers: With nearly $1 billion in UW-Madison construction projects under way or on the drawing board, Al Fish could be excused if he had treated the Institutes for Discovery as just another building. Instead, the associate vice chancellor for facilities management worked to find the perfect location – in the center of a research cluster representing biotechnology, computer science, engineering and more – as the home for the twin Institutes. Project manager George Austin later brought to bear his experience in managing major construction projects such as Madison’s Monona Terrace Convention Center and the city’s Overture Center for the Arts. The combination kept the project on time and on budget.

The research directors: John Wiley was chancellor of UW-Madison when the Institutes for Discovery started its long road from drawing board to construction, and he used his encyclopedic knowledge of UW-Madison’s research centers to make sure it was truly an interdisciplinary center. Wiley also served as a tireless fundraiser for the Institutes and other projects, making certain a single building didn’t eclipse other university needs. He is now interim director of the Wisconsin Institute for Discovery, the public side of the building. Sangtae Kim, a respected scientist with experience at UW-Madison and within the private sector, has returned to lead the private Morgridge Institute for Research. His role is making sure research gets transferred to the marketplace, quickly and effectively.

Those are 10 people who made a difference – but hundreds more touched the project in other ways, from researchers to architects to construction workers to state legislators who recognized its value to the larger economy and society. Their legacy: A building and an innovative process that will keep Wisconsin at the forefront of research and technology transfer for years to come.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Wednesday, December 8, 2010

The company that solved health care

By John Torinus
Here’s what real health care reform looks like:

Quad/Graphics' health care costs run one-third below the national average because it stresses primary care for its employees.

ThedaCare in Appleton uses the lean disciplines that transformed manufacturing to lower its costs and deliver prices at 30 percent below the Milwaukee averages.

Numerous Wisconsin companies and a few public bodies have deployed plans that include health savings accounts and see costs drop by one-quarter.

Those are huge reductions in the bloated health costs that plague the budgets of most corporations and government at all levels. Put those Wisconsin grass roots reforms together and you have a recipe for a health care delivery system that is more affordable and therefore more accessible.

My just-published book, "The Company That Solved Health Care," tells the story of how Serigraph Inc. in West Bend applied those three innovative platforms – primacy of primary care, value-based care and consumer-driven principles -- and successfully tamed the beast of hyperinflation in health care costs.

The co-workers in Serigraph’s self-insured plan have become engaged managers of their health and their health care costs, and therein lies the solution to the nation’s woes on the economic side of medicine. Engagement of individual citizens has to be at the heart of any effective system. Without heads in the game, without individual responsibility, no system works and costs spin out of control.

The rewards to the Serigraph co-workers are many. Example: they enter 2011 with no premium increases for health care, a stark contrast to the double-digit increases in many health care plans. Small Wisconsin businesses are reporting recent premium increases of 15 percent to 50 percent.

That is the fifth time in eight years that Serigraph co-workers have seen zero increases.

Even with a horrendous year for the company in 2007 because of accidents and cancer cases, total costs for employer and employees have averaged less than 3% per year since 2003.

That was the year I decided to get serious about managing the run-away costs of health care. Our total charges at the time were about $5.5 million, and we were looking at a 15 percent increase in 2004. We simply couldn’t afford an increase of $800,000.

Serigraph is a manufacturer and we often have to meet “the China price” or lose contracts. We live in a world of deflation, where prices in contracts go down in the out-years. It is plain obvious that if your prices are going down, your costs can’t spiral upwards.

Our first big initiative was to become an early mover into what is called a consumer-driven health plan (CDHP). Humana, a big health insurer, had made the move in 2003 to test out the CDHP concept and was getting stunning results. It was holding its annual increases to less than 5 percent.

We decided to follow suit. We made it voluntary, so our people could stay with a conventional plan. But we installed big incentives for taking on a high deductible and 30 percent co-insurance. Today, those incentives add up to about $5,000 for a family plan in the form of lower premiums and health account in the employee’s name.

We made a business bet that people’s behaviors would change enough to offset the cost of the incentives. It worked immediately. Over-utilization disappeared, with overall utilization dropping 17 percent. That pattern has held in the seven years since.

Our experience has been confirmed by two huge studies of consumer-driven plans by Mercer, the big consulting company, and Cigna, the big insurer. Both reported that costs drop by about a quarter. They also reported that people take better care of themselves when they become consumers. They become more active users of prevention and wellness tools.

When people have their own money in play, they act like intelligent adults. When I was in the Marine Corps, martinis were 10 cents at Friday night happy hours. I was occasionally over-served. That’s what happens when any product or service is cheap or free, as it is in standard health plans.

Large corporations have figured it out. More than half now offer a CDHP plan. And 11 percent of covered workers are now enrolled in them, up two points from 2009.

Large corporations are also figuring out what QuadMed figured out 20 years ago, that on-site primary care dramatically improves health and reduces costs. Of the top 1000 corporations in the country, 100 now offer primary care on-site. One projection is for 250 by the end of 2011.

Every health care expert knows that 20 percent of the people with chronic disease conditions cause 80 percent of health costs. On-site primary care doctors and their teams go after those chronic situations and they keep people out of expensive hospitals.

Further, a company’s own doctors become the gatekeepers into the health care system. They order only needed tests, and they refer to specialists only when necessary.

QuadMed is now working its magic with contract clinics at Briggs & Stratton, Northwestern Mutual Life, MillerCoors and others. It employs more than 40 doctors.

Serigraph, with 440 employees, isn’t big enough for a fulltime on-site clinic, but we have contracted for a part-time primary care doctor, nurse practitioner, nurse coach, dietician and chiropractor. Our goal is to help every person with a chronic condition to get it under control.

Such attention to health has helped us drop our average cholesterol count from 209 to 193. We as a group, including spouses, have reduced our systolic blood pressure by three points.

It’s hard to put a dollar value on such prevention and wellness. But it should be totally obvious to any manager that health and health costs go together.

In addition to CDHP gains and primary care, our third major platform for reform at Serigraph is what we call Centers of Value. Prices and quality vary widely in health care, though such variations are hard to see. Medical providers obscure their prices. The sharpest consumers can’t figure out what they are being charged.

Serigraph cut through the fog with a transparency model that shows prices and quality for the most common procedures. Once the curtain is lifted, Centers of Value surface.

We take advantage of the best values by offering rewards to co-workers who buy intelligently. Jerry Minnessale got a check for $2,000 for getting his knee replacement done at a Center of Value, saving the company as much as $10,000. Then he got his other one done and received another $2000.

We reward $500 for colonoscopies at the right place or make them free at the best value centers. In this case, we’re not worried about over-utilization.

Often, we find that providers that have adopted lean philosophies offer the best value. There is no correlation between high prices and quality. Indeed, a reverse correlation appears to be true. As in manufacturing, lean disciplines, low costs, high quality and good prices usually run together.

ThedaCare has been a national leader in the movement toward lean practices. It has eliminated thousands of defects in its practices, millions of dollars of waste and infections in some operating rooms. Gundersen Health also takes lean seriously, and we send people there, too.

Dan Gehres, a screen press operator, needed a discectomy. We offered him a free procedure if he would travel three hours to Gundersen in La Crosse. We were offered a bundled price of $12,500, including the three-day stay for him and his wife. That was about $6,000 below the average in the Milwaukee market. Gehres reported an excellent result and great service.

These major innovations and huge savings found in Wisconsin offer major lessons for reformers of health care at the state and national levels. They constitute major reform from the bottom up, the best kind of reform.

These grassroots reforms work. They are proven models. They’re sweeping across the private sector, and they could still be injected into the top-down access and insurance reform that has yet to be implemented from Washington D.C.

-- Torinus is the chairman of Serigraph, Inc. and author of the book "The Company That Solved Healthcare." Learn more about the book: http://www.thecompanythatsolvedhealthcare.com.


Monday, December 6, 2010

Is the worst over for Milwaukee? Some economic rankings suggest that’s true

By Tom Still
Is the Milwaukee area economy finally bouncing back?

If you’re one of the 60,000 or so people in Wisconsin’s largest metro region who are still looking for a job, the answer is probably still a resounding “No!” When you’re out of work, after all, the unemployment rate so far as you’re concerned is 100 percent.

But if you’re among the people rejoining the job market in Milwaukee, or among the employers who are once again looking for talent, there are some encouraging signs of recovery. Rankings by economic “think tanks,” business publications or industry analysts are typically snapshots in time, but when a collection of reports reach a similar conclusion, a more complete picture can emerge.

Here’s a glimpse at recent reports that would indicate Milwaukee may be turning the corner, not only in terms of its recovery from the Great Recession, but from a much longer period when its growth didn’t come close to matching national and world performance.

The job search engine Juju.com recently placed Milwaukee as 10th best among on its “Job Search Difficulty Index,” a monthly report that weighs populations of major cities and divides the number of unemployed workers by the number of job postings in Juju’s job index. Milwaukee, with an unemployment rate of 7.7 percent, showed 2.40 jobless people per advertised job. Milwaukee was sandwiched between Cleveland, Ohio, at 11th and Denver, Colo., at ninth.

Not surprisingly, perhaps, Washington, D.C., was ranked as the easiest city in which to find a job. That’s not just because Uncle Sam is the leading employer. Washington is also one of the nation’s most vibrant tech-based economies. Other cities with established or emerging tech-based economies were not far behind in the index: San Jose, Calif.; Boston, Mass.; Austin, Texas; and Salt Lake City, Utah, are examples.

Portfolio.com, another online source that often focuses on technology development and entrepreneurship, this month gave Milwaukee some credit for academic “smarts” in its survey of educational attainment in the nation’s 200 largest markets. Milwaukee ranked 66th best on that list, which assigns point values to five rungs on the educational ladder – from high-school dropouts to holders of advanced degrees. The score for a given market depended on the percentage of adult residents (25 or older) on each rung. The higher the score, the stronger a market’s collective brainpower.

Other cities in Milwaukee’s rankings “neighborhood” included St. Louis, Mo.; Salt Lake City; Sacramento, Calif., and Albuquerque, N.M. Madison ranked ninth highest on the list.

Why is the “brainpower” index important? Study after study shows that people earn more as they complete higher levels of education. The U.S. Census Bureau reports a worker with an advanced degree will earn 31 percent more than a colleague with a bachelor’s degree and 128 percent more than somebody who never went beyond high school.

Perhaps the most telling report is from the Brookings Institution, which this month released its Global Metro Monitor to chart economic progress in the world’s 150 largest metropolitan areas. That study revealed Milwaukee wasn’t doing very well during a period when other cities were moving ahead – 1997 to 2007 – but has lately gained momentum.

Milwaukee ranked near the bottom (141st) during a period when other regions were zooming ahead, perhaps in part because it was so strongly linked to a traditional manufacturing economy already in decline. As a result, it actually moved up in Brookings’ rankings during the recession (135th) – in part because much of the economic damage had already taken place – and has since moved up to 83rd in its “recovery” ratings.

While that’s not good enough to place Milwaukee among those cities Brookings described as being in “full recovery” – Minneapolis, Minn.; San Antonio and Austin, Texas; St. Louis and Detroit, Mich. – it’s in a class with emerging tech centers Cleveland and Pittsburgh. And it’s not Las Vegas or Buffalo, which Brookings described as “still in decline.”

Something’s obviously clicking in Milwaukee. The region’s manufacturing economy has transformed itself through technology and other efficiencies, start-up companies are beginning to gain traction with the help of investors, an entrepreneurial ecosystem has emerged and the city’s image has become younger and more energetic. As policymakers consider ways to revive the Wisconsin economy, one answer in Milwaukee and elsewhere should be: Don’t fix what’s already starting to work.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, December 2, 2010

Shooting the messenger: Why tax reform ideas deserve to be heard

By Tom Still
For those who aren’t diehard shoppers, “Cyber Monday” is a marketing term to describe the Monday following “Black Friday,” which is the traditional mad-dash-for-Christmas-deals day after Thanksgiving. While Black Friday is for people who still shop by foot, Cyber Monday is a day when many companies offer online deals.

It’s a great day for online merchants and consumers, but not so good for tax collectors in states such as Wisconsin.

The Wisconsin Department of Revenue has estimated the state loses $150 million each year in sales taxes on Internet sales and catalog purchases made by Wisconsin consumers who order items from out-of-state vendors. The 50 states collectively lose between $16 billion and $18 billion per year in unpaid sales tax, with $8.7 billion coming directly from online sales.

Not your problem, you say? With most states struggling to plug holes in their budgets, it soon may be.

Many states are pushing to make sales tax laws uniform across state lines – and to begin collecting tax dollars from Internet sales. A federally sanctioned approach could mean states would have the authority to reach across borders to collect sales taxes from online vendors.

The “Cyber Monday” sales tax debate is an example of how state tax laws are often worn down by technology, changing times and evolving economies. It’s why states occasionally need to examine their tax laws to make sure they’re fair to taxpayers, not harmful to the economy and generating enough cash to pay the bills.

That’s the point Rick Chandler, a former state Revenue Secretary, was trying to make recently when he suggested Wisconsin could consider raising its 5 percent sales tax to 7.5 percent in exchange for lowering individual income taxes and property taxes.

Chandler, who once worked for Gov. Tommy Thompson, is no fuzzy-headed liberal. His ideas were first aired in a thoughtful report for the Wisconsin Policy Research Institute, which has conservative leanings on some issues. He was not floating the idea as a trial balloon for Gov.-elect Scott Walker, as some press reports suggested, but trying to illustrate how updating Wisconsin’s tax laws could make the state more competitive.

Of course, the idea was crushed like a grape. The Walker team felt obliged to issue a “no-way, no-how” statement on raising sales taxes, as did many legislative leaders.

Lost in this exchange was the sense that Wisconsin needs to get serious about rethinking its tax code. That doesn’t mean more tax dollars should be collected by schools, state and local governments – but that changing times mean the mix could be altered so certain taxes don’t stand out like sore thumbs.

Wisconsin’s sales tax is pretty much middle of the road (31st) among the states. Individual income taxes and residential property taxes, conversely, rank among the top 10 states. Some analysts believe a shift would help the state’s economy; others believe higher sales taxes would fall hardest on the poor – or would tempt consumers to rely even more on the Internet while shunning local merchants.

It’s symbolic of a larger debate that may be healthy as policymakers consider how to begin balancing the state budget while stimulating economic growth. Using residential property taxes to finance most of local government and schools may have made sense in Wisconsin’s purely agrarian past, but does it make sense in an era when most assets are far more mobile and liquid? Is Wisconsin’s corporate tax a disincentive to attracting new companies? Is the personal property tax an accountant’s nightmare? Are state taxes on retirement income forcing some elderly citizens to move – and to take their money with them?

Those questions won’t be answered short of a more comprehensive look at Wisconsin’s tax system. Again, it’s not a debate about collecting more taxes – but collecting them more effectively in a 21st century economy.

Let’s not shoot all the messengers. Some of them, like Chandler, have ideas worth hearing.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


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