Recent reading

Scott Galloway explains NFTs.

When studying Big Numbers you often want a sweeping statistic, even if it's flawed. For the pandemic I think excess mortality is one key stat to watch.

Disc golf and its pandemic problems. I didn't know there were so many disc golf firms in Michigan! (Paywall.)

Recent reading

California, Coffee and Cancer: One of these Doesn't Belong.

California is considering putting cancer warnings on coffee. The reason is that it contains a compound called acrylamide that causes cancer in rats in large doses. The problem is acrylamide is also present in half the foods we eat. An article that makes a good case for the public health risks of over-warning about a problem.

It's not about running a pick and pack food line, but it might as well be. Explanations—with aniumated illustrations—about the systems and culture behind slowdowns on New York City's subway.

Do you think that online site changed its prices just for you? Maybe it did. How dynamic pricing works. 

How not to price a product

Our partners group held its annual retreat last week. One of the topics we discussed was health care costs. A little background first: each year Zingerman's benefits committee solicits bids from insurance companies and creates a proposal document to help us understand the menu of costs and changes. It's not typical for us to talk about the proposal at the retreat but this year we had a few more changes than usual.

It took an hour. To say that people were mildly baffled is an understatement. It was a clusterfuck. It's not that things cost different amounts—that part makes sense. It's that each insurance company offers so many different options that cover so many different contingencies you need a degree in Kafka to understand how to read the bid. Explaining it is an exercise in invented language; the health care industry has so much jargon you need a glossary to understand what they're saying.

Yet a one hour meeting explaining a financial bid to seventeen experienced partners is nothing like what happens when we have to share the costs to our crew. That meeting takes two hours—per employee. We have dozens of those meetings during the enrollment period, which for some reason that's never been explained reasonably to me, only happens once a year. (That's right folks. You have the privelege of buying health insurance at most American businesses just once a year.)

Imagine if we had to sell sandwiches this way. Imagine we had to have meetings with our customers that took an hour to explain how to buy a sandwich. Imagine we had two dozen different pricing schemes per sandwich. Imagine we only let customers get in on the sandwich buying action once per year. Imagine any other industry where service remotely this bad is inflicted upon its customers.

The Worst Run Industry In America is my look at the American health care industry, its service, prices and promises, from my view as a merchant

The Worst Run Industry in America No. 1: Your best customers are your worst customers

Last week I sat down with two people who are leaders in a relatively large Michigan health insurance company. (I won't use their names or the company name.) They sought me out because they were redesigning their website and they liked the one I direct at Zingerman's. They appreciated that it was fun and likeable. They wanted to know the philosophy behind the design to see what they could learn from it.

I told them that the fun and likeable parts of our website are not there because we think it's cool and nice to have. They're not a veneer. They're there to solve a customer problem. The problem is that most people find expensive food they've never heard of kind of intimidating. Our job is to remove that obstacle. We make the food approachable with information, humor and cartoons. My advice to them was to find their customer's problems and solve them on their website. Boiled down, that's essentially my philosophy of website design.

Like most of you I've been a student of health care since the minute I had something serious happen to my health as an adult. It happens to all of us. We start paying attention to health care when we really need health care. If you're like me, what you found when you started to use health care in America was inspiring, terrifying and baffling. On the one hand health care professionals and their gizmos and drugs do a pretty good job of making us well. But the health care industry that they work in is, bar none, the worst run industry I've ever experienced. (I used to reserve that line for the airline industry. But health care is run so atrociously it's not even a contest anymore.) When I say it's the worst run I'm not talking about profits and income statements. A lot of health care is profitable. It's everything else that the health industry does that makes it horribly run.

I think there's a lot that health care can learn from American retailers, who, in my admittedly limited travels in the world, can be the most forward-thinking and creative service companies anywhere. We retailers can also learn from health care. Mainly, we can learn what not to do. Because sometimes we're doing the same things to our customers that the health care industry is doing and we don't even know it. To that end, today I'm beginning a blog series I'll call The Worst Run Industry in America. It's not meant to be a venting session. My intention is to share lessons on what not to do from the industry that seems to figure out all the wrong ways to help people.

As my conversation wrapped up with the health care leaders they said something so shocking I can't shake it. We talked about different ways they could give great service to their insurance customers. At one point one of them said, "You know, there's a problem here. If we give service that's too good then what happens is we attract the really needy patients, the ones who need lots of health care. These customers are bad for our bottom line." 

In other words, their best customers — the ones that need them the most — they consider their worst customers, the ones they don't want. It made my jaw drop. No retailer could ever survive if it felt like that. My hope is that, in time, no health care insurance company will survive that thinks like that either.