Congress Just Lit a Long Fuse Beneath the U.S. Healthcare Industry


The NewCo Daily: Today’s Top Stories

Steve Snodgrass | Flickr

Uncertainty is the bane of business planning. But uncertainty is everywhere — so, mostly, managers just try to roll with it. Sometimes, however, so much uncertainty gets thrown at once on a particular industry that it just freezes up.

That’s what happened to healthcare in the U.S. yesterday, when Republicans in Congress passed a massive repeal/rewrite of Obamacare (Vox). No one had read the whole bill. The Congressional Budget Office hadn’t analyzed its impact. And everyone agreed that whatever the House passed, the Senate was largely going to ignore.

Still, what the House vote means is that nobody really knows what federal healthcare rules will look like next year. A giant question mark hangs over one-sixth of the U.S. economy for the foreseeable future. If you’re running a hospital, an insurer, a medical practice — or, for that matter, if you’re a consumer of any of these services, which means, um, everyone — Congress just tossed a gigantic risk-bomb in your lap.

That’s probably why every single stakeholder group in healthcare — from insurers to doctors to hospitals to AARP — lined up against the Republican plan. Its rules are complex and loophole-ridden, and they allow so many waivers and options for choosing state plans with the laxest requirements that, if it becomes law, even your old-fashioned employer-based health insurance plan could look radically different.

The fight over healthcare is about saving lives; it’s about the safety of your life’s savings. It’s also about freeing entrepreneurs, inventors, and anyone who’s self-employed to pursue their visions without fearing that they and their families will lose their health insurance. If you thought U.S. politics was driven by too much partisan anger already, look for the battle-lines to stiffen and the hot language to sharpen. This story is going to be with us for a long time.

Disruption Is Coming to a Supermarket Near You

Until recently the thinking in the U.S. supermarket business was: We’ll be OK. Amazon can’t kill us, and the online retailing typhoon won’t wreck us, because Americans still like to shop for their groceries in person. And that held true for quite a while — but maybe not much longer (Bloomberg).

For one thing, Amazon will keep trying to push its way into the grocery business, and it’s known for its persistence. For another, traditional supermarkets are also facing more competition from pharmacy chains, convenience stores, and everyone else who’s elbowed into the food biz. And the incumbents in the U.S. business are about to be challenged by newcomers from abroad, like Germany’s Lidl, that have built a reputation for squeezing new efficiencies out of old markets.

All of this is happening at a time when grocery prices are hitting all-time lows — good for consumers, not so good for the market owners. Don’t be surprised if the next year or two see waves of consolidation and buyouts sweeping through this most basic realm of the retail economy.

Engagement, Habit, and Addiction

Three years ago, Nir Eyal’s book Hooked became a hit by teaching companies “how to build habit-forming products.” Of course, one person’s habit is another’s addiction. As we began to navigate a new wave of alarms and jeremiads about “addictive technology” — see, for instance, Sam Harris’s interview with Tristan Harris on that topic — Eyal’s counsel started to look suspect.

Now Eyal is responding with a thoughtful analysis of where engagement leaves off and addictions begin, and it’s worth reading. Eyal argues that addictions are distinguished from habits by the harm they cause to users. He suggests that companies can “identify, message, and assist people who want to moderate use.”

“Instead of auto-starting the next episode on Netflix or Amazon Video,” he writes, “the binge-inducing video streaming services could ask users if they’d like to limit the number of hours they watch in a given weekend. Online games could offer players who cancel their accounts the option of blacklisting their credit cards to prevent future relapses. Facebook could let users turn off their news feeds during certain times of the day.”

Well, sure. But it’s hard to imagine that most for-profit businesses will ever choose to blunt the hooks they plant in customers. Even a company that Does the Right Thing to protect problem users from their own compulsions is going to think twice the next time there’s a quarterly earnings downturn and the pressure is on to goose the results. In other words: Some addictive harms stem not from product design but from the incentives we’ve built into business itself.

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