Tough Times Ahead for the Healthcare Sector?

According to a report published recently in Health Affairs, national health care spending grew at 6.1% in 2007 — its lowest rate of growth since 1998 — mainly as a consequence of slower spending on prescription drugs.

What’s more, IMS Health, a leading provider of market intelligence to the pharmaceutical and healthcare industries, reports that it has cut its estimate for growth of U.S. pharma sales to two percent or less this year … a significant decline from earlier forecasts of four to five percent.

The main causes of this deceleration in growth: fewer blockbusters, more competition from generics and consumers on a tighter budget.

But there’s no reason to throw a pity party for pharmaceutical and healthcare companies just yet. According to an article by Robert Pear in The New York Times, “In recessions, when the economy contracts, health spending usually continues to increase. “ Therefore, it’s likely that healthcare expenditures will increase their share of the nation’s GED during the tough economic times that lie ahead.

A Global Crisis of Confidence in US Financial Markets

There’s a comprehensive and fascinating article in the January 3 issue of The New York Times that should be must-reading for all public relations (PR) and investor relations (IR) consultants who serve financial services companies, including private equity firms and commercial and investment banks. “The End of the Financial World as We Know It,” by Michael Lewis and David Einhorn, begins with a provocative statement: “Americans enter the New Year in a strange new role: financial lunatics. “

As proof of their thesis, authors cite “the strange story of Harry Markopolos,” a former investment officer who tried, for nine long years, starting in 1999, to explain to the SEC that Bernie Madoff, the man who engineered the biggest global Ponzi scheme ever, couldn’t be anything other than a fraud. In response, the SEC undertook a slapdash investigation of Madoff and pronounced him free of fraud.

The Madoff scandal is just one example of a systemic problem … and it’s not just a matter of insufficient oversight of the financial services industry.

According to Clusterstock, many of Madoff’s investors were well aware that his returns were impossibly good, so he had to be cheating. However, they never considered the possibility of a Ponzi scheme. They thought that the scam involved insider trading … and that’s precisely why they chose to invest with Madoff!

In many cases, the Wall Street swindler’s investors willfully chose to become complicit in their own defrauding by ignoring the old adage that “if it sounds too good to be true, it probably is. “

10 of the “21 Dumbest Moments in Business”

I don’t know anyone who wasn’t happy to see the back end of 2008. It was a tough, tough year. There was, however, at least one bright light in the dismal landscape: The “21 Dumbest Moments in Business – 2008”, Fortune magazine’s annual list of the year’s “most laughable corporate moves.” As Fortune reports, it “proves that, even in moments of crisis, stupidity lives on.”

What I found particularly interesting is the number of these crises and scandals that could have been averted if the parties involved had taken a moment to conference with their chief communications officer, public relations firm or PR consultant about what our CEO, Ken Makovsky, calls a “PR bailout.”

Here’s an abbreviated version of the top 10 business gaffes of 2008. Check out the complete list for a look at all 21 of last year’s monumentally dumb moments.

1) Detroit execs flying to D.C.
2) Detroit execs driving to D.C.
3) Henry Paulson's initial $700 bailout proposal:
4) The final bailout
5) The Mozilo e-mail
6) The iPhone 'I am rich' app
7) Paulson's 'bazooka'
8) Tough talk from Fannie Mae
9) Scandal at the Department of Interior
10) GM's Lutz on global warming

Is Nothing Private in Today’s High-Tech Environment? Apparently Not.

Crisis management, public relations, investor relations, financial communications and technology consultants, like those in our New York City PR firm, often talk about the ways in which the Internet has opened a window on private lives. There was a perfect example of this phenomenon this week on the Apple website, where Steve Jobs addressed a new flurry of rumors about his health.

In his open letter, Jobs wrote: “… my doctors think they have found the cause — a hormone imbalance that has been ‘robbing’ me of the proteins my body needs to be healthy. … The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. … I will continue as Apple’s CEO during my recovery.”

In 2004, the media breathlessly followed Jobs’ successful battle against pancreatic cancer. In June 2008, his gaunt appearance gave rise to new speculation about his health. More questions were raised when Apple announced a few weeks ago that, for the first time ever, Jobs wasn’t planning to deliver the keynote address at Macworld.

While there are clear standards for disclosure of material financial information, disclosure concerning matters of health has typically been left to the discretion of the company’s board of directors. Not any more, apparently. According to Henry Blodget, co-founder, CEO and editor-in-chief of the Silicon Alley Insider, “Steve's health is NOT just a ‘private matter.’” He adds, “Steve Jobs is arguably Apple's single most valuable asset. If he's seriously ill, shareholders have every right to know this.”

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The Sorry State of the Nation’s Health Care

Did you know that 67 percent of Americans are overweight? That 40 percent get no exercise? Or that a whopping 96 percent of Americans don’t eat enough vegetables? Even more frightening is the fact that the current generation of American children may be the first ever to have a shorter life span than their parents.

Americans paid out a record 16 percent of our GDP (or $2 trillion) for health care in 2008 … making us the world’s biggest healthcare spender, on a per capita basis, according to a recent article by TIME reporter Alice Park. Notwithstanding the huge sums we throw at the problem of health care, the U.S. is ranked 19th — last! — among industrialized nations when it comes to preventable deaths.

The biggest problem with the U.S. health-care system, Park reports, is that it has been designed to respond to illness rather than prevent it: fully half of U.S. adults in 2005 did not receive recommended preventive care. “When we do get our cardiac health checked, too often it's because we've been rushed to the emergency room suffering from chest pains. When we do get a cancer evaluation, too often it's a diagnosis of advanced disease that has spread beyond the initial tumor site,” she writes.

If our ailing healthcare system is to recover, more attention needs to be paid to education, prevention and early treatment. It’s a strategy which has been shown to deliver promising results — for example, half of adults ages 50+ and older received a colon scan, meeting the colon cancer screening targets established by the Department of Health and Human Services in its Healthy People 2010 report.

President-elect Obama is said to rank health-care reform third on his list of top priorities, just behind addressing the financial crisis and passing an energy bill. From his mouth to our legislators’ ears.

Does the USA Need a Branding Firm?

The issue of America’s image abroad was a campaign platform for Barack Obama, who said in a foreign policy speech in April, “We all know that these are not the best of times for America’s reputation in the world.”

That’s not to say that the last administration was unaware of the nation’s image problems.

According to New York Times writer Jim Arango, shortly after the September 11 terrorist attacks, a number of very senior media executives, including the heads of every major studio, met several times with White House officials to discuss how the entertainment industry could help improve the image of the United States overseas. One of the best ideas to emerge, the participants agreed, was to distribute American TV shows and movies to foreign audiences — especially in the Muslim world.

It worked … sort of … but not the way they expected. “In the last eight years, American pop culture, already popular, has boomed around the globe while opinions of America itself have soured,” Arango writes. The latest (2006) data from the Pew Global Attitudes Project shows that the image of the United States remained negative in the 24 countries in which Pew conducted its surveys.

Bryce Zabel, a TV producer and participant in the 2001 meetings with the White House, argued then that the United States needed to regard itself like a consumer brand.
“Products like Coca-Cola are far more effectively branded around the globe than the United States itself,” he wrote in a memo that was circulated around Hollywood.

Maybe the next administration should consider a pro bono partnership with an experienced branding firm or a public relations/marketing firm with expertise in corporate identity campaigns to do for the USA what has been done for other long-term quality brands that care about their image and reputation.