#Ebola Czar Ron Klain’s Health Care Conflicts of Interest

10/30/2014

Ebola czar Ron Klain is pictured with AOL’s Steve Case in South America

Ebola czar Ron Klain works for an investment company that has invested in multiple health care and health information companies, Gotnews.com has learned.

The holdings, as well as Klain’s involvement in health policy, raise serious questions about what financial conflicts of interests Klain may have.

Klain was president of Case Holdings and general counsel at Revolution LLC, an investment company founded by former AOL CEO and chairman, Steve Case, before he joined the Obama administration as ebola czar.

Revolution has invested in several health care companies that could very well benefit from Klain’s political ties. Revolution even had a health care division which, after a round of layoffs, was sold for $300 million in 2008, according to the New York Times.

Health care is a focus of Revolution, LLC.  “[I]t’s worth noting that in a lot of these areas, such as health care, government isn’t just a regulator, but often the primary customer.  You may want to ignore it, but you can’t. You have to engage,” Steve Case said at a May 2014 commencement address.

In October 2013 Case even gave an interview where he discussed exactly the sort of public private partnerships that Ron Klain would later join as Ebola czar.

Work with the government, don’t ignore it

Ito and Case agreed that many entrepreneurs think of the government as something to avoid, or stay out of the way of. But Case, who works with the President’s Council on Jobs and competitiveness, said that especially in healthcare and education, the best thing startups can do is be involved with the government.

“You’ve got to engage with the government to make sure policies are supportive of entrepreneurs,” he said. “Increasingly, you’ve got to engage with the government whether you like it or not if you want to change industries that are regulated and largely funded by the government. So it’s a little naive to basically say ‘We’re going to ignore them and just do our own thing.’ If you want to change the way you learn, change the way you live, change the way you stay healthy, change the way we act when we’re sick, these are pretty fundamental parts of our lives and the government’s going to play a role.”

In addition to being policy makers, Case pointed out, the government is the largest customer in many sectors.

“Normally when you’re creating a business, you want to follow the money,” he said. “Well, the money is often in these government hands in healthcare and education, so it kind of makes sense to engage your major customer, not criticize them or talk like they’re morons.”

Healthcare startups have to interact with a range of government groups, including the FDA and sometimes the FCC, which regulate new products. But many other groups provide opportunities for pilots or funding including the NIH, the NCI, the VA, HHS via initiatives like Blue Button, and the CDC. Events like DC to VC at last week’s Health 2.0 conference highlight how health entrepreneurs are already sensitive to the importance of the government in their work.

Case gave a talk on health care in July 2014.

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