JH's Profile

John, such an interesting and creative topic! I have honestly never thought about why climate change would matter to payers since I do not typically perceive them to be exceptional contributors to GHG emissions, as you noted. Unlike, say, a manufacturer of goods, Aetna and other payers will be adversely affected by climate change, but have little power to control it. For that reason, to your question, I doubt that investors will approve of lobbying dollars and other resources being directed to this in the face of higher priority societal and political issues.

Honestly, I am not sure this issue should be more important to Aetna than it is to any other player or individual in the economy, many of whom are adding to the problem. But, you are apt to bring up the fact that climate change will impact health, and to the extent to which Aetna’s influence on this issue encourages other players to take notice, I agree that they should speak up and attempt to drive change, at least in the healthcare system. For example could Aetna incentive drug manufacturers to adopt sustainable practices or providers to incorporate sustainability targets by tying those actions to access / reimbursement? If not, feels like Aetna will be in the same camp as many small / low-lying nations: hurt.

Great post! It seems that HMG has a well-thought out approach to mitigating challenges posed by climate change by reducing rainfall dependence. However, I wonder about HMG’s own carbon footprint. While of course the oxygen produced by their olive trees offsets some pollution, the production and transportation associated with their final product and packaging is undoubtedly a contributor given the scale of their operation. Focusing on their trees is a good way to protect their own profitability in the future — and as you suggest is exemplary — but a thorough commitment to sustainability should, I believe, include a broader look across the supply chain. In a similar vein, operational choices focused on efficiency also appear to have an impact on labor (e.g. 200 workers replaced by a man and machine). Has HMG considered the social impact of their choices in the region? At this point, since medium and long-term solutions are in place focused on their olive trees specifically – including the drip irrigation system and study of tree responses to changes in water and weather – I would encourage HMG to look at other ways they can reduce their footprint and waste across their entire operation.

The first thing I thought of after reading this post was the extent to which Walmart sells private label brands. Beyond partnering with universities and other retailers, it seems that Walmart, which operates on a massive scale, could stimulate US manufacturing by investing in plants – either operated by Walmart or third parties — to acquire American-made goods. It seems a little bit like Walmart is operating on the policy level – though grants to universities, policy forums, and announcing measly targets for US-produced goods – while failing to make truly meaningful investments in US manufacturing.

Either way, while public opinion and free trade pressures are stimulating demand for US manufacturing, I have concerns about whether or not the results will live up to expectations. First of all, in response to your question, it seems that Americans are not all that willing to pay more for “Made in America” [1]. This means that US manufacturers will need to produce goods at low cost, which will be difficult in the US labor environment (hence offshoring in the first place). My guess is that this fact, coupled with improvements and innovations in automation and AI, will lead companies to invest in technology rather than jobs, lead to fewer net new opportunities for low skilled labor than anticipated.

[1] Timothy Aeppel, “Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll” Reuters, 18 July 2017, https://www.reuters.com/article/us-usa-buyamerican-poll/americans-want-u-s-goods-but-not-willing-to-pay-more-reuters-ipsos-poll-idUSKBN1A3210, accessed November 24, 2017.

In an age of decreasing consumer loyalty and increasing transparency (read: millennials), maintaining product quality is of utmost importance. For that reason, I very much agree with investments in productivity to protect quality and taste in the face of mounting pressures – and very much disagree with measures like “shrinkflation” which will be all too visible to consumers. While British consumers have been outraged by rising prices in the past, I do think it is very likely that this will become an all-too-common reality for British consumers and not exclusive to Freddos in the wake of Brexit. Though, as you aptly describe, the extent to which prices will rise is uncertain, I believe that British companies should prioritize maintaining quality over maintaining price to please consumers in the long run and maintain some level of loyalty.

Just yesterday, I was in Nordstrom and was shocked by the large number of silver boxes and bags behind a customer service kiosk for in-store pick-up of online orders. Nordstrom is right to understand that digital and live interactions are deeply intertwined for today’s consumer. Buying online and picking up in the store is just one example of this trend; the opposite model – try in store and essentially purchase online – is what Nordstrom local is espousing. I’m impressed that Nordstrom is facing digitization head-on, and agree with their approach to trial a number of ideas through the “local” concept.

However, I am not convinced that the traditional retail store will lose its role for consumers entirely for a number of reasons. Nordstrom sells tactile, fashion goods and health products, which consumers need to try, smell, or feel. Stores enable customers to compare goods in a way that is not possible online by employing all their senses. More importantly, customers can walk out with their goods right then and there enabling immediate gratification. Amazon’s investment in services like Prime Now and next day delivery illustrates that the need to not only choose exactly what you want but also get it immediately remains important even in the age of online shopping. I think that Nordstrom should continue to invest in models that allow consumers to do some of the buying process online, but I think the traditional retail model in which extensive options and inventory are available in store will continue to be important for the foreseeable future.

Just yesterday, I was in Nordstrom and was shocked by the large number of silver boxes and bags behind a customer service kiosk for in-store pick-up of online orders. Nordstrom is right to understand that digital and live interactions are deeply intertwined for today’s consumer. Buying online and picking up in store is just one example of this trend; the opposite model – try in store and essentially purchase online – is what Nordstrom local is espousing. I’m impressed that Nordstrom is facing digitization head-on, and agree with their approach to trial a number of ideas through the “local” concept.

However, I am not convinced that the traditional retail store will lose its role for consumers entirely for a number of reasons. Nordstrom sells tactile, fashion goods, which consumers need to try or feel. Stores enable customers to compare goods in a way that is not possible online by employing all their senses. More importantly, customers can walk out with their goods right then and there enabling immediate gratification. Amazon’s investment in services like Prime Now and next day delivery illustrates that the need to not only choose what you want but also get it immediately remains important even in the age of online shopping. I think that Nordstrom should continue to invest in models that allow consumers to do some of the buying process online, but I think the traditional retail model in which extensive options and inventory are available in store will continue to be important for the foreseeable future.

I think you raise a really important point that there is potential to improve patient outcomes through an increasingly data-driven approach to healthcare, but that cost and risk barriers to implementation exist and must be overcome. It seems like there is a bit of a chicken-and-egg conundrum because data is necessary to create the transparency to enable more value-based payments, which could save the healthcare system money by eliminating extraneous procedures / medicines / devices incentivized by fee-for-service and third-party (insurance) payment models. It also has the potential to reduce medical errors, and consequently costs. However, on top of the financial barriers and increased risk of holding more and more patient health information, there are numerous challenges associated with subverting traditional models. For example, with the implement of EHRs, providers have to spend more and more time on computers, rather than with patients. Nonetheless, the healthcare ecosystem is clearly moving in this direction, and ultimately all players must rely on data to justify treatment decisions. Fortunately, a number of mechanisms are in place – like the Health Insurance Portability and Accountability Act (HIPAA) to protect patient data. Moreover, as benefits are proven by early adopters like BMH, the business case will be impossible to ignore.