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Wait Till Health Care Tries Dynamic Pricing

By KIM BELLARD

Nice try, Wendy’s. During an earnings call last month, President and CEO Kirk Tanner outlined the company’s plan to try a new form of pricing: “Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling.” 

None of the analysts on the call questioned the statement, but the backlash from the public was immediate — and quite negative. As Reuters described it: “the burger chain was scorched on social media sites.”

Less than two weeks later Wendy’s backtracked – err, “clarified” – the statement. “This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants,” a company blog post explained. “We have no plans to do that and would not raise prices when our customers are visiting us most.”

The company was even firmer in an email to CNN: “Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. This was not a change in plans. It was never our plan to raise prices when customers are visiting us the most.”

OK, then. Apology accepted.

At this point it is worth explaining a distinction between dynamic pricing and the more familiar surge pricing. As Omar H. Fares writes in The Conversation: “Although surge pricing and dynamic pricing are often used interchangeably, they have slightly different definitions. Dynamic pricing refers to any pricing model that allows prices to fluctuate, while surge pricing refers to prices that are adjusted upward.”

Uber and other ride sharing services are well known for their surge pricing, whereas airlines’ pricing is more dynamic, figuring out prices by seat by when purchased by who is purchasing, among other factors.

Wendy’s wouldn’t be the first company to use dynamic pricing and it won’t be the last. Drew Patterson, co-founder of restaurant dynamic pricing provider Juicer, told The Wall Street Journal that dozens of restaurant brands used his company’s software. The company’s website doesn’t publicize those brands, of course. Still, he emphasized: “You need to make it clear that prices go up and they go down.” 

Dave & Busters is public about its pricing strategy. “We’re going to have a dynamic pricing model, so we have the right price at the right time to match the peak demand,” Dave & Buster’s CEO Chris Morris said during an investor presentation last year.  On the other hand, Dine Brands (Applebee’s/IHOP) Chief Executive John Peyton said. “We don’t think it’s an appropriate tool to use for our guests at this time.”

The potential revenue benefits are obvious, but there are risks, as Wendy’s quickly found out. Mr. Fares says: “One of the biggest risks associated with dynamic pricing is the potential negative impact on customer perception and trust. If customers feel that prices are unfair or unpredictable, they may lose trust in the brand.”

What Wendy’s tried to announce is not ground-breaking. Catherine Rampell pointed this out in a Washington Post op-ed:

In other words, things will be cheaper when demand is low to draw in more customers when there’s otherwise idle capacity. Lots of restaurants do this, including other burger chains. It’s usually called “happy hour.” Or the “early-bird special.” Non-restaurants do it, too. Think the weekday matinee deals at your local movie theater or cheaper airfares on low-traffic travel days.

Indeed, The Wall Street Journal reported: “An estimated 61% of adults support variable pricing where a restaurant lowers or raises prices based on business, with younger consumers more in favor of the approach than older ones, according to an online survey of 1,000 people by the National Restaurant Association trade group.” 

I wonder what the support would have been if the question had been about healthcare instead of restaurants. 

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We Freeze People, Don’t We?

By KIM BELLARD

Perhaps you’ve heard about the controversial Alabama Supreme Court ruling about in-vitro fertilization (IVF), in which the court declared that frozen embryos were people. The court stated that it has long held that “unborn children are ‘children,’” with Chief Justice Tom Parker – more on him later – opining in a concurring opinion:

Human life cannot be wrongfully destroyed without incurring the wrath of a holy God, who views the destruction of His image as an affront to Himself. Even before birth, all human beings bear the image of God, and their lives cannot be destroyed without effacing his glory.

Seriously.

Many people have already weighed in on this decision and its implications, but I couldn’t resist taking some pleasure in seeing “pro-life” advocates tying themselves in knots trying to explain why, when they legislated that life begins at conception, they didn’t mean this kind of conception and that kind of life.

John Oliver was typically on point, noting that the Alabama ruling was “wrong for a whole bunch of reasons. Mainly, if you freeze an embryo it’s fine. If you freeze a person, you have some explaining to do.”

The case in question wasn’t specifically about IVF, nor did the ruling explicitly outlaw it. It was a case about a patient who removed stored embryos and accidentally dropped them, and the couples whose embryos were destroyed wanted to hold that patient liable under the Wrongful Death of a Minor Act. The court said they could. Note, though, that neither the patient nor the clinic was being charged with murder or manslaughter…yet.

Although the Alabama Attorney General has already indicated he won’t prosecute IVF patients or clinicians, the ruling has had a chilling effect on fertility clinics in the states, with The University of Alabama at Birmingham health system and others indicating they were putting a pause on IVF treatments.

Justice Parker has long been known as something of a theocrat; as The New York Times wrote:

Since he was first elected to the nine-member court in 2004, and in his legal career before it, he has shown no reticence about expressing how his Christian beliefs have profoundly shaped his understanding of the law and his approach to it as a lawyer and judge.

His concurring opinion claimed: the state constitution had adopted a “theologically-based view of the sanctity of life.” Alabama is not alone. Kelly Baden, the vice president for public policy at the Guttmacher Institute, told BBC: “We do see that many elected officials and judges alike are often coming at this debate from a highly religious lens.”

Speaker Johnson has said:

The separation of church and state is a misnomer. People misunderstand it. Of course, it comes from a phrase that was in a letter that Jefferson wrote. It’s not in the Constitution. And what he was explaining is they did not want the government to encroach upon the church — not that they didn’t want principles of faith to have influence on our public life. It’s exactly the opposite.

And here we are.

Many Republicans are backtracking on the ruling.

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Why Not, Indeed?

By KIM BELLARD

Recently in The Washington Post, author Daniel Pink initiated a series of columns he and WaPo are calling “Why Not?” He believes “American imagination needs an imagination shot.” As he describes the plan for the columns: “In each installment, I’ll offer a single idea — bold, surprising, maybe a bit jarring — for improving our country, our organizations or our lives.”

I love it. I’m all in. I’m a “why not?” guy from way back, particularly when it comes to health care.

Mr. Pink describes three core values (in the interest of space, I’m excerpting his descriptions):

  • Curiosity over certainty. The world is uncertain. Curiosity and intellectual humility are the most effective solvents for unsticking society’s gears.
  • Openness over cynicism: Cynicism is easy but hollow; openness is difficult but rich.
  • Conversation over conversion: The ultimate dream? That you’ll read what I’ve written and say, “Wait, I’ve got an even better idea,” and then share it.

Again, kudos. One might even say “move fast and break things,” but the bloom has come off that particular rose, so one might just say “take chances” or “think different.” Maybe even “dream big.”


Around the same time I saw Mr. Pink’s column I happened to be reading Adam Nagourney’s The Times: How the Newspaper of Record Survived Scandal, Scorn, and the Transformation of Journalism. In the early 1990’s The Times (and the rest of the world) was struggling to figure out if and how the Internet was going to change things. Mr., Nagourney reports how publisher Arthur Sulzberger (Jr) realized the impact would be profound:

One doesn’t have to be a rocket scientist to recognize that ink on wood delivered by trucks is a time consuming and expensive process.

I.e., contrary to what many people at The Times, and many of its readers, thought at the time, the newspaper wasn’t the physical object they were used to; it was the information it delivers. That may seem obvious now but was not at all then.  

Which brings me to health care. Contrary to what many people working in healthcare, and many people getting care from it, might think, healthcare is not doctors, hospitals, prescriptions, and insurance companies. Those are simply the ink on wood delivered by trucks that we’re used to, to use the metaphor.

And it doesn’t take a rocket science to recognize that what we call health care today is a time consuming and expensive process – not to mention often frustrating and ineffective.

Why not do better?

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Zombie Viruses of the Permafrost

By KIM BELLARD

We’ve had some cold weather here lately, as has much of the nation. Not necessarily record-breaking, but uncomfortable for millions of people. It’s the kind of weather that causes climate change skeptics to sneer “where’s the global warming now?” This despite 2023 being the warmest year on record — “by far” — and the fact that the ten warmest years since 1850 have all been in the last decade, according to NOAA.

One of the parts of the globe warming the fastest is the Arctic, which is warming four times as fast as the rest of the planet. That sounds like good news if you run a shipping company looking for shorter routes (or to avoid the troubled Red Sea area), but may be bad news for everyone else.  If you don’t know why, I have two words for you: zombie viruses.

Most people are at least vaguely aware of permafrost, which covers vast portions of Siberia, Alaska, and Canada. Historically, it’s been literally frozen, not just seasonally but for years, decades, centuries, millennia, or even longer. Well, it’s starting to thaw.

Now, maybe its kind of cool that we’re finding bodies of extinct species like the woolly mammoth (which some geniuses want to revive). But also buried in the permafrost are lots of microorganisms, many of which are not, in fact, dead but are in kind of a statis. As geneticist Jean-Michel Claverie of Aix-Marseille University, recently explained to The Observer: “The crucial point about permafrost is that it is cold, dark and lacks oxygen, which is perfect for preserving biological material. You could put a yoghurt in permafrost and it might still be edible 50,000 years later.”

Dr. Claverie and his team first revived such a virus – some 30,000 years old — in 2014 and last year did the same for some that were 48,000 years old. There are believed to be organisms that ae perhaps a million years old, far older than we’ve been around. Scientists prefer to call them Methuselah microbes, although “zombie viruses” is more likely to get people’s attention.

He’s worried about the risks they pose.

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Au Contraire

By KIM BELLARD

Last week HHS announced the appointment of its first Chief Competition Officer. I probably would have normally skipped it, except that also last week, writing in The Health Care Blog, Kat McDavitt and Lisa Bari called for HHS to name a Chief Patient Officer. I’ll touch on each of those shortly, but it made me think about all the Chiefs healthcare is getting, such as Chief Innovation Officer or Chief Customer Experience Officer.  

But what healthcare may need even more than those is a Chief Contrarian. 

The new HHS role “is responsible for coordinating, identifying, and elevating opportunities across the Department to promote competition in health care markets,” and “will play a leading role in working with the Federal Trade Commission and Department of Justice to address concentration in health care markets through data-sharing, reciprocal training programs, and the further development of additional health care competition policy initiatives.” All good stuff, to be sure.

Similarly., Ms. McDevitt and Ms, Bari point out that large healthcare organizations have the staff, time, and financial resources to ensure their points of view are heard by HHS and the rest of the federal government, whereas: “Patients do not have the resources to hire lobbyists or high-profile legal teams, nor do they have a large and well-funded trade association to represent their interests.” They go on to lament: “Because of this lack of access, resources, and representation, and because there is no single senior staff member in the federal government dedicated to ensuring the voice of the patient is represented, the needs and experiences of patients are deprioritized by corporate interests.” Thus the need for a Chief Patient Officer. Again, bravo.

The need for a Chief Contrarian – and not just at HHS – came to me from an article in The Conversation by Dana Brakman Reiser, a Professor of Law at Brooklyn Law School. She and colleague Claire Hill, a University of Minnesota law professor, argue that non-profit boards need to have “designated contrarians.”

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AI Inside

by KIM BELLARD

Well: 2024. I’m excited about the Paris Olympics, but otherwise I’d be just as happy to sleep through all the nonsense that the November elections will bring. In any event, I might as well start out talking about one of the hottest topics of 2023 that will get even more so in 2024: AI.

In particular, I want to look at what is being billed as the “AI PC.” 

Most of us have come to know about ChatGPT. Google has Bard (plus DeepMind’s Gemini), Microsoft is building AI into Bing and its other products, Meta released an open source AI, and Apple is building its AI framework. There is a plethora of others. You probably have used “AI assistants” like Alexa or Siri.

What most of the large language model (LLM) versions of AI have in common is that they are cloud-based. What AI PCs offer to do is to take AI down to your own hardware, not dissimilar to how PCs took mainframe computing down to your desktop.  

As The Wall Street Journal tech gurus write in their 2024 predictions in their 2024 predictions:

In 2024, every major manufacturer is aiming to give you access to AI on your devices, quickly and easily, even when they’re not connected to the internet, which current technology requires. Welcome to the age of the AI PC. (And, yes, the AI Mac.)

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A Place to Call Home

By KIM BELLARD

Congratulations, America. We have another new record, albeit a dismal one. According to the Department of Housing and Urban Development (HUD), there are now 653,000 homeless people, up 12% from the prior year. As one can imagine, compiling such a number is problematic at best, and no doubt misses a non-trivial number of such unfortunate people.

“Homelessness is solvable and should not exist in the United States,” said HUD Secretary Marcia L. Fudge. Well, yeah, like kids without enough food, pregnant women without access to adequate prenatal care, or people without health insurance, yet here we are.

HUD says that the increase was driven by people who became for the first time, up some 25%. It attributes this to “a combination of factors, including but not limited to, the recent changes in the rental housing market and the winding down of pandemic protections and programs focused on preventing evictions and housing loss.” As with the recent increase in child poverty, the lessons that we should have learn from our COVID response didn’t survive our willingness to put the pandemic behind us.

Jeff Olivet, executive director of the U.S. Interagency Council on Homelessness, told AP: “The most significant causes are the shortage of affordable homes and the high cost of housing that have left many Americans living paycheck to paycheck and one crisis away from homelessness.” The National Low Income Housing Coalition estimates we’re missing some 7 million affordable housing units, so I suppose we should be relived there are “only” 653,000 homeless people.

“For those on the frontlines of this crisis, it’s not surprising,” Ann Oliva, CEO of the National Alliance to End Homelessness, also told AP. Indeed, we’ve all seen news accounts of homeless encampments spreading seemingly out of control, many of us have spotted homeless people as we go about our daily lives, and yet most of us don’t want either homeless people or low income housing units in our neighborhoods.

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From Xenobots to Anthrobots

By KIM BELLARD

There were many things I could have written bout this week – e.g., in A.I., in quantum computing, even “transparent wood” — but when I saw some news about biological robots, I knew I had my topic.

The news comes from researchers at Tufts University and Harvard’s Wyss Institute. Their paper appeared in Advanced Science, introducing “a spheroid-shaped multicellular biological robot (biobot) platform” that they fondly dubbed “Anthrobots.” Importantly, the Anthrobots are made from human cells.

Let’s back up. In 2020, senior researcher Michael Levin, Ph.D., who holds positions at both Tufts and Harvard, worked with Josh Bongard, Ph.D. of the University of Vermont to create biological robots made from frog embryo cells, which they called Xenobots.  They were pretty impressive, capable of navigating passageways, collecting material, recording information, healing themselves from injury, and even replicating for a few cycles on their own, but the researchers wanted to find out if they could create biological robots from other types of cells – especially human cells.

Well, the new research showed that they could. They started with cells from adult trachea, and without genetic modification were able to demonstrate capabilities beyond those Xenobots had demonstrated. Lead author Gizem Gumuskaya, a PhD. student said: “We wanted to probe what cells can do besides create default features in the body. By reprogramming interactions between cells, new multicellular structures can be created, analogous to the way stone and brick can be arranged into different structural elements like walls, archways or columns.”   

The Anthrobots come in different shapes and sizes, and are capable of different motions. Ms. Gumuskaya is quite excited about their capabilities:

The cells can form layers, fold, make spheres, sort and separate themselves by type, fuse together, or even move. Two important differences from inanimate bricks are that cells can communicate with each other and create these structures dynamically, and each cell is programmed with many functions, like movement, secretion of molecules, detection of signals and more. We are just figuring out how to combine these elements to create new biological body plans and functions—different than those found in nature.

Even better, Ms. Gumuskaya pointed out: “Anthrobots self-assemble in the lab dish. Unlike Xenobots, they don’t require tweezers or scalpels to give them shape, and we can use adult cells – even cells from elderly patients – instead of embryonic cells. It’s fully scalable—we can produce swarms of these bots in parallel, which is a good start for developing a therapeutic tool.”

They tested Anthrobots’ healing capabilities by scratching a layer of neurons, then exposed the gap to a cluster of Anthrobots called a “superbot.”  That triggered neuron growth only in that area. The researchers noted: “Most remarkably, we found that Anthrobots induce efficient healing of defects in live human neural monolayers in vitro, causing neurites to grow into the gap and join the opposite sides of the injury.”

“The cellular assemblies we construct in the lab can have capabilities that go beyond what they do in the body,” said Dr. Levin. “It is fascinating and completely unexpected that normal patient tracheal cells, without modifying their DNA, can move on their own and encourage neuron growth across a region of damage.”

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Lead Pipe Cinch

By KIM BELLARD

The term “lead pipe cinch” means something that is very easy or certain. Here’s two things that are lead pipe cinches: first, that ingesting lead, such as from the water or the air, is bad for us. It’s especially bad for children, whose cognitive abilities can be impaired. Second, that the Biden Administration’s latest proposal to reduce the lead in our drinking water is not going to accomplish that.

The new proposed rules would require that lead service lines be replaced within ten years; there are estimated to still be some 9.2 million such lines in the U.S. The trouble is, no one really knows how many there are or where exactly they are, making replacement difficult. So step two of the rules is for an initial inventory by next October. The “acceptable” parts per billion would drop from 15 to 10. Utilities would also have to improve tap sampling and consumer outreach.

“This is the strongest lead rule that the nation has ever seen,” Radhika Fox, the E.P.A.’s assistant administrator for water, told The New York Times. “This is historic progress.”

Erik Olson, an expert with the Natural Resources Defense Council is also hopeful, telling NPR: “We now know that having literally tens of millions of people being exposed to low levels of lead from things like their drinking water has a big impact on the population. We’re hoping this new rule will have a big impact.”

The EPA estimates the replacement will cost $20b to $30b over the next decade; the 2021 Infrastructure Act allocated $15b, along with $11.7b available from the Drinking Water State Revolving Fund. Of course, the cost will be much higher.

Chicago alone claims it will cost $10b to replace its estimated 400,000 lead pipes. The Wall Street Journal reports: “David LaFrance, CEO of the American Water Works Association, a trade group, said the total cost could “easily exceed” $90 billion. He said the average cost to replace a single lead service line is more than $10,000, nearly double the EPA’s estimate.”

If the federal funds aren’t enough, Ms. Fox says: “We strongly, strongly encourage water utilities to pay for it,” but you should probably expect customers will end up paying – or that some of those pipes won’t be getting replaced.

It’s not like any of this is catching us by surprise. You probably remember the 2014 scandal with the Flint (MI) water crisis, with all those people lining up for bottled water. You may not remember similar crises in Washington D.C., Newark (NJ), or Benton Harbor (MI). “The Washington, D.C., lead-in-water crisis was far more severe than Flint in every respect,” Yanna Lambrinidou, a medical anthropologist at Virginia Tech and co-founder of the Campaign for Lead Free Water, told AP.

The EPA issued a set of rules around lead pipes in 1991, but those rules were watered down, and little progress has been made since. Ronnie Levin, an EPA researcher at the times, also told AP: “But, you know, we’ve been diddling around for 30 years.”

Because, you know, that’s what we do, especially when fixing a problem costs too much money.

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(We Don’t) Trust The Science

By KIM BELLARD

I know the A.I. community is eagerly waiting for me to weigh in on the Sam Altman/OpenAI dramedy (🙄), but I’m not convinced this isn’t all a ploy by ChatGPT, so I’m staying away from it.  A.I. may, indeed, be an existential issue for our age, but it’s one of many such issues that I fear we’re not, as a society, going to be equipped to handle.

Last week the Pew Research Center issued an alarming report Americans’ Trust in Scientists, Positive Views of Science Continue to Decline. Now, a glass half-full kind of person might look at it and say – no, it’s good news!  Fifty-seven percent of Americans agree science has a mostly positive impact on society, and 73% have a great deal or a fair amount in confidence in scientists to act in the public’s best interests.  For medical scientists it was 77%. Only the military (74%) also scored above 70%. That’s good news, right?

The glass half-empty person would point to the downward trend in just the past few years: at the beginning of the pandemic (April 2020) the respective percentages were 87% (scientists), 89% (Medical scientists), and 83% military.  The faith in them has continued to drop since.  Things are trending in the wrong direction, quickly.

If the glass was half full, it’s spilling now.

About a third (34%) of the public thinks that the impact of science on society has had an equally positive and negative impact, while 8% think science has had a mostly negative impact. Again, the trend has been negative since the pandemic; the 57% who think science has a positive impact was 73% in January 2019. That’s alarming.

The skepticism about scientists and the value of science has increased generally but is more pronounced among Republicans and those without a college degree.  E.g., only 61% of Republicans have a fair/great amount of confidence in scientists, versus 85% in April 2020 and versus 86% of Democrats now.  Fewer than half (47%) of Republicans think science has had a mostly positive impact on society, versus 70% on January 2019.

In the supposed most developed country in the world, 39% of Americans think the U.S. is losing ground in science achievement versus the rest of the world, and only 52% even agree it is important for the U.S. to be a world leader in scientific achievements.  10% didn’t think it was important at all. Young people, surprisingly, were most skeptical.

I wonder what they do think it is important for us to be the world leader in.

The problem may be that a third thought developments in science were changing society too quickly (43% among Republicans).  They want their new iPhones, they like fast internet speeds, they demand the latest treatments when they get sick, but somehow they don’t connect those to science.

I think about this when I read about the Texas board of education fighting about how science is taught in Texas schools.

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