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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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. CNBC.com, 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.

House GOP members are floating a new health plan. Here’s what’s in it

04/20/17 – Vox
Article covers the potential new amendment to the GOP health care bill, which would allow insurers to charge people more while also covering fewer benefits. “It’s pretty frustrating to see they’ve worked so hard to come up with another Rube Goldberg-type solution,” said Professor Craig Garthwaite.

Bare Market: What Happens if Places Have No Obamacare Insurers?

04/18/17 – The New York Times
Article discusses the growing risk of the “bare-market problem,” which is the issue of no insurance carriers showing up in a given area. This will leave government subsidies worthless, and many would end up without insurance. “The regulatory uncertainty is something that is very hard for these people to price in. How do you develop a model for the thoughts of the Trump administration on what they’re going to do policywise in health care?” said Professor Craig Garthwaite.

Kellogg EduIndia Team Wins Kellogg-Morgan Stanley Sustainable Investing Challenge

04/17/17 – Clear Admit
Article profiles a team of three Kellogg students that recently won the Kellogg-Morgan Stanley Sustainable Investing Challenge, an annual competition that brings together teams of business school students to tackle world issues with sustainable investing principles. The Kellogg team, called EduIndia, provided a creative solution to help meet growing demand in India for higher-quality, affordable K-12 private education.

Why It’s Still Trump’s Fault if Obamacare Fails

04/02/17 – Fortune
Article by Professor Craig Garthwaite explains how the GOP continues to create uncertainty for insurers, which in turn will create a very real consequence of the political gamesmanship over health care, raising the possibility that insurers will leave the marketplaces altogether.

If Trump sabotages Obamacare, rural America will suffer the most

03/28/17 – Vox
Craig Garthwaite shares insights on what might come next for healthcare marketplaces and the Americans who bought insurance on them.

Retirement dreams fizzle for some with 'Obamacare' repeal

03/22/17 – Associated Press
Article explains how the Republican proposal would allow insurers to charge older customers five times as much as younger ones, while cutting the size of tax credits for many, quoting Professor Craig Garthwaite on how the combination of those two factors is going to result in a meaningful increase in costs. Also covered in The Wall Street Journal, The Washington Post, Chicago Tribune, ABCNews.com, US News & World Report, Business Insider, and New York Times.

Here's what the White House can do to dismantle Obamacare even if Congress doesn't go along

03/17/17 – CNBC
Article explains what Tom Price, the chairman of House Budget Committee, can and can’t do to roll back regulations from Obamacare, quoting Professor Craig Garthwaite on the ACA requirement that every plan include 10 essential health benefits.

Prescription drug costs are up; So are TV ads promoting them

03/16/17 – USA Today
Article examines how advertising costs for prescription drugs are increasing, quoting Professor Amanda Starc on how “Drugmakers don’t care ‘whether it’s a rare, expensive drug or a popular cheap drug’…They’re looking at the marginal return on advertising. A small number of customers spending a lot or a big number spending a little.”

Republican Health Care Reform Bill Struggling

03/15/17 – Chicago Tonight (WTTW)
Professor Amanda Starc discusses the repeal-and-replace effort on Chicago Tonight.

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