Open Source Health with Tripp Johnson

Balancing Equity and Ethics in Healthcare: Part One

Tripp Johnson Season 4 Episode 18

In this episode, Tripp Johnson and Marcus Shumate discuss the intricate process of scaling a healthcare company while maintaining a strong, patient-centered culture. Tripp shares insights on the role of upward mobility and generational wealth in retaining top talent, and how equity compensation structures are key to attracting the right people. The discussion contrasts healthcare business models with those of tech and venture capital-backed companies, highlighting the importance of aligning incentives for sustainable growth. Tripp also explores the complexities of balancing short-term financial goals with long-term company values, and the need for structural innovation in compensation models to foster growth without compromising patient care.

Key Points:

  • Upward Mobility and Generational Wealth: Great companies should enable employees to secure upward mobility and wealth, which is crucial for long-term success and retention.
  • Equity and Compensation Structures: Equity compensation becomes a critical tool for attracting and retaining talent, especially in the context of growing companies.
  • Balancing Growth with Culture: Scaling a company without sacrificing culture or patient care is a key challenge in healthcare businesses.
  • Tech vs. Traditional Models: Unlike traditional businesses, tech companies prioritize growth and market share before profitability, a strategy that could benefit healthcare companies looking to scale.
  • Innovative Equity Models: Tripp discusses the need for flexible, performance-based equity structures to align incentives and ensure long-term success.
  • Equity Buybacks: Companies must plan for scenarios where executives leave, as this could involve buying back their equity, which presents liquidity challenges for smaller businesses.
  • Flexibility in Compensation: The right mix of performance bonuses and equity incentives is essential for attracting the right people and scaling the business effectively.
  • Structural Innovation: Beyond technology, companies need structural innovation in how they operate, particularly in terms of compensation and organizational design.
  • Long-term Incentive Alignment: Getting the incentives right early on is essential for attracting talent that will drive growth while staying true to the company’s core mission of providing high-quality care.

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