Public-Private Interface News

Craig Garthwaite, Co-Director of Health Enterprise Management Program (HEMA) and Associate Professor of Strategy, makes opening remarks to prospective MBA students visit the Kellogg School of Management during Day at Kellogg (DAK) at the Jacobs Center.

Kellogg provides leadership at the intersection of health management and policy

Kellogg provides leadership at the intersection of health management and policy

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Senate's plan to replace Obamacare eases some health industry fears, sparking a rally

06/22/17 –
Article explains the aftermath of the release of the Senate’s plan to repeal and replace Obamacare, quoting Professor Amanda Starc who emphasizes how health insurance and hospital stocks rose and how the bill’s Medicaid cuts could be a large liability for insurance companies and hospitals.

What does Blue Cross' parent company want from a GOP health bill?

06/15/17 – Crain’s Chicago Business
Article discusses how Chicago’s largest insurer, Health Care Service Corp., has yet to state an opinion on The American Health Care Act, which many worry will add increased instability into the health insurance market. Quotes Professor Amanda Starc: "We're currently asking insurers to make strategic decisions without knowing the rules of the game.”

One of the most prestigious brands in medicine is jumping into Obamacare

06/15/17 – The Washington Post
Article explains Cleveland Clinic and Oscar Health’s plan to sell individual insurance plans in five northeast Ohio counties, which strategically allows the hospital to involve itself in the individual market of insurance buying. Quotes Professor Craig Garthwaite on how Oscar, a start-up, will likely benefit from its partnership with a powerful brand in medicine by attracting more customers.

Inside the booming black market for bourbon

06/14/17 – Marketplace
Article explores how liquor stores have less access to expensive bourbon due to its increasing popularity, which has led to consumers turning to a secondary, black market for the alcohol, quoting Professor Craig Garthwaite on how economics provides a simple answer to what’s driving unmet demand.

Public-Private Projects Where the Public Pays and Pays

06/06/17 – New York Times
Article examines the pros and cons of public-private partnerships, quoting Professor David Besanko on these types of projects can cost the public in the end through road tolls or government payments to contractors. “Taxpayers or users are going to need to pay for private infrastructure just as they need to pay for public infrastructure.” David’s quote was published in the The New York Times a second time here.

For insurers, CBO sees more flexibility and instability in GOP’s revised health-care bill

05/25/17 –
Article discusses the positive and negative implications of the Congressional Budget Office’s report on the House’s revised American Health Care Act for health insurers. “There’s nothing in the CBO that suggests that it’s going to be easier for insurers to be in the non-group market. It becomes very hard to offer any comprehensive insurance in those markets because you’re going to attract all the sick people. You can charge them more, but you better hope that you’re getting it right,” said Professor Craig Garthwaite.

CBO says sick folks in some states may never be able to get health insurance

05/25/17 – USA Today
Article explores the new Congressional Budget Office report on the Affordable Care Act replacement; the report states that about one in six individuals who are sick or have suffered from chronic health conditions will pay more for health insurance that covers less, if they can even get insurance at all. Professor Craig Garthwaite says that conservative states are the most likely to opt out of ACA requirements.

CBO’s report card on Obamacare repeal bill could add more fuel to health-care debate

05/24/17 –
Article explores the Obamacare repeal bill, noting that previous versions of the bill were expected to result in 24 million more people being uninsured, and that the House may have to re-vote on the GOP bill if the new Congressional Budget Office report does not show large enough budget savings. The article includes an interview with Professor Craig Garthwaite, who does not expect the new report to significantly impact the debate over the bill.

Leadership through service: Three key lessons from Kellogg Board Fellows

05/22/17 – LinkedIn
Article written by Mike Resman '17 about his time serving on the board of The Night Ministry, as part of the KBF Program.

The Next Market Amazon Could Take Over

05/18/17 – Fortune
Article by Professor Harry Kraemer discusses how expanding into pharmaceutical distribution would be a logical move for Amazon, as the company seeks to continue growing and leveraging its enormous distribution network.

What the Downfall of Michael Flynn Teaches Business Leaders About Hiring Bad Apples

05/10/17 – Fortune
Article by Professor Harry Kraemer explores the Trump-Flynn drama and the management lessons it teaches to business leaders. Some of these lessons include 1) ignoring red flags about the suitability of a candidate almost always leads to bad hiring decisions, 2) without self-reflection, leaders can easily delude themselves and undermine the effectiveness of their decisions, and 3) leaders need a balanced perspective by listening to a variety of opinions, particularly those that take the opposite position.

Health Act Repeal Could Threaten U.S. Job Engine

05/06/17 – The New York Times
Article emphasizes that the health care industry has created jobs at more than three times the rate of the rest of the economy since 2007, and that the Affordable Care Act repeal may hurt local economies. “If there is a group that loses out the most, it’s near-seniors. Their health care is so expensive, but the tax credit in the House bill caps out at $4,000,” said Professor Craig Garthwaite. The article was also picked up by CNBC.

Advocate Health Care to make $200 million in cuts

05/05/17 – Chicago Tribune
Article discusses how Advocate Health Care, Illinois’ largest hospital system, is making $200 million in cuts in response to financial pressures such as reimbursement rates from federal and state insurance programs that don’t cover the cost of caring for patients. “I think some of them [hospitals] are just hitting a pause for a second to figure out what the world’s going to look like in a year,” said Professor Craig Garthwaite.

Investing In India’s Low-Fee Schools

05/05/17 – Forbes
Article discusses how Kellogg student Ashwin Halgeri’s upbringing helped his team, EduIndia Fund, create the winning proposal of the 2017 Kellogg-Morgan Stanley Sustainable Investing Challenge. Halgeri and partners Erica Hoeveler and Chris Shaw developed an investment vehicle to expand access to high-quality, low-fee private schools in India, aiming to help more children from low-income families attend school and remain in class, rather than drop out for financial reasons.

Inside the ‘Scorpion Room’ Where Drug Price Secrets Are Guarded

05/04/17 – Bloomberg
Article discusses how pharmacy-benefit managers (PBM’s) often put auditors in secure rooms, limit the number of contracts they can see, and restrict and review note taking. Professor Craig Garthwaite mentions that any restriction on audits “gives an advantage to the PBM,” and that “PBMs have no reason to want to shine a light on it.”

How do you pay for pre-existing conditions? The GOP plans to charge more

05/04/17 – Marketplace Radio
Article discusses how, in the new GOP health care bill, Republicans plan to have insurance companies charge people more if they have a pre-existing condition. “So imagine we’re making a model airplane. They want to make one with one wing and one landing gear, but not think about ‘What does it take to make this health insurance airplane get off the ground?'” said Professor Craig Garthwaite.

With Anthem-Cigna All But Dead, M&A Speculation Is Back On

04/28/17 – Bloomberg
Article discusses how, in light of the Anthem Inc.-Cigna Corp. merger being shot down, speculation has begun regarding the next health-insurance megadeal, likely involving Humana, which specializes in the business of selling private health plans for the elderly. “There’s a new sheriff in town, so you might be less concerned about what the agencies think of your merger,” said Professor Amanda Starc.

Amazon’s moves beyond retail get Wall Street thumbs up, for now

04/28/17 – Reuters
Although Amazon recently hit an all-time high in sales, there is growing concern that investors may start viewing the company more like a conglomerate, due to its ventures extending far beyond online retail. “High growth covers a lot of sins. Picture yourself running the company where one minute we’re talking about how we’re going to operate air cargo, and the next minute we’re going to talk about artificial intelligence. I don’t think it’s sustainable,” said Professor Harry Kraemer., Business Insider, and The New York Times also picked up the article.

Republicans’ new health amendment lets insurers charge sick people more, cover less

04/25/17 – Vox
Article discusses how leaders of the staunchly conservative Freedom Caucus have reportedly endorsed the new amendment to the healthcare bill, but this amendment also would doesn’t do much at all to assuage concerns about the older proposals. “It’s pretty frustrating to see they’ve [the Republicans] worked so hard to come up with another Rube Goldberg–type solution,” says Professor Craig Garthwaite.

Starbucks is entering a new era — and 4 jokes reveal the biggest problems haunting its business

04/23/17 – Business Insider
Article explores how consumers perceive the Starbucks brand by examining long-held jokes about the coffee chain, emphasizing that the company needs to figure out how it can appeal to everyone, especially with plans to open 10,000 more locations in five years. “Starbucks was an affordable way to get luxury,” said Professor Craig Garthwaite.

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