In a groundbreaking new course, students at the Harvard Chan School and Harvard Business School square off over corporate regulation—and find common ground
Whether it’s a cruise ship line, pharmaceutical company, garment factory—or even a purveyor of e-cigarettes—“every company is in the business of public health,” declared Professor John Quelch early in the first session of a new course offered in Spring 2015 entitled Consumers, Corporations, and Public Health.
The cross-listed class, offered jointly at Harvard Business School (HBS) and the Harvard T.H. Chan School of Public Health, brought together nearly 50 students from the two schools to bridge the frequently uneasy divide between for-profits and the largely nonprofit and government-driven public health sector.
Public health “footprints”
“Every company has a public health footprint, which it lays down through its employee wellness policies, its safety policies, and its environmental policies, as well as directly through the products and services it offers consumers,” says Quelch, an avuncular Brit with master’s degrees from Harvard in both business and public health who holds a joint appointment as Charles Edward Wilson Professor of Business Administration at HBS and professor in health policy and management at the Harvard Chan School. To illustrate the point during one class, Quelch pointed to the example of Royal Caribbean Cruise Lines.
Cruise ships are virtual floating cities, with their own private health care infrastructure, including medical staff, safety checklists, and low-calorie menus to safeguard the well-being of their passengers. As the recent bad publicity around shipboard outbreaks of norovirus has shown, cruise lines have a vested interest in keeping passengers healthy— not only to protect their brand reputations, but also because taking a cruise ship out of service for an unscheduled cleaning can be costly.
Health ratings for cruise ships?
But paradoxically, Quelch noted, few consumers choose cruise lines based on health ratings. “Why do we not find Royal Caribbean saying, ‘Hey guys, we are X better on health than Carnival?’” he said. That calculated reticence frustrated some of the students sitting in the seminar room. “You can imagine an older customer who may find it important to have medical facilities,” ventured Laura Bostwick, MPH ’15, a health policy and management student. Quelch allowed that “for that niche group, it might be the case”— but even raising the issue of health could be a red flag for some consumers unsure whether to take their first cruise, a position reiterated by several Royal Caribbean executives brought in via teleconference from Miami.
“There is no competitive advantage to being better than Carnival or Norwegian at some health metric. It is to our mutual advantage to address those issues together as an industry,” said Joseph Mujwit, director of loss prevention for Royal Caribbean Cruises, Ltd. Even when another MBA student, Katy Lankester, ’15 suggested that a third party such as Expedia could rank cruise ship companies on health, the executives were adamant that they wouldn’t use those numbers against one another—the salubriousness of cruise ships is simply not a top consideration for consumers considering booking a cruise, the executives maintained, and they seem to want to keep it that way.
Case studies spur discussion
The course relied heavily on the case method, a technique used by Harvard Business School for nearly a century that employs real-life business scenarios to spur open-ended discussions. The case method is being employed increasingly at the Harvard Chan School as part of its education renewal efforts. To make sure that business and public health students would feel equally comfortable, Quelch produced a brand- new set of cases—chock-full of scientific data and statistics, as well as consumer marketing data that often highlighted the weaknesses of one-size-fits-all regulatory solutions.
The case studies spanned a wide range of what is typically considered part of the public health domain, looking at such things as the representation of consumer interests in a merger between pharmaceutical giants Pfizer and AstraZeneca, and worker safety in the humanitarian disaster at the Bangladeshi garment factory Rana Plaza.
Business practices can aid public health
In some instances, the cases demonstrated how business practices could aid public health by drawing on industry’s expertise in market segmentation and marketing.
One case, for example, dealt with a public service announcement campaign by Australian train company Metro Trains to promote train safety. Called “Dumb Ways to Die,” it specifically targeted youth with a catchy animated video featuring wrongheaded fatal decisions such as “use your private parts for piranha bait” and “sell both your kidneys on the Internet,” all animated in grisly detail before closing with several examples of dangerous behavior around trains. The video went viral, leading to hundreds of news stories and, according to the company, a 30 percent reduction in “near-miss train accidents.”
“In public health, too often we fall back on scare tactics, but this was funny and catchy, and it was incredibly effective,” says Caitlin McMurtry, SM ’15. The public health world could use more targeted advertising like that, agrees Dervilla McCann, MPH ’15. “Public health has a lot of work to do with its messaging. Sometimes we simply give facts and numbers and charts and assume the public is going to respond to them the same way we do,” she says. “But for-profit companies really know how to get into the public’s head.”
Consumer engagement vs. entrepreneurship
For the most part, the MBAs and the MPHs learned respectfully from one another, says Quelch. “To be honest, I was surprised there was not more dissension between the two groups,” he noted. Disagreement did flare up, however, over a case about 23andMe, the private genetic testing service that markets its services directly to consumers. The company promises a complete mapping of one’s genome and information about diseases one might be at higher risk of developing given one’s genetic makeup.
Several public health students took issue with the idea of consumers having direct access to genetic information—which can be open to misinterpretation without a doctor’s guidance. Some business students, however, celebrated the company’s entrepreneurial moxie in arming consumers with knowledge they could use to drive their own medical care.
“The debate around that case was a metaphor for the whole course,” says Quelch. “On the one hand, consumer engagement can only occur if the consumer is able to access information and decide whether or not to take action based on it; on the other hand, information without knowledge can be a dangerous thing. The conflict between consumerism and paternalism was a major tension in the discussion.”
Regulating e-cigarettes and marijuana
Nowhere was that better represented than in the pair of cases that closed out the course—covering e-cigarettes and marijuana, two products with uncertain health effects that are currently the subjects of debate over regulation. (See cover story, Harvard Public Health, Spring 2015.) “The e-cigarette situation is a difficult one to control,” explains Quelch. On the one hand, advocates argue that electronic cigarettes could help tobacco cigarette smokers quit; on the other, critics worry that the devices could hook a new generation on nicotine. “Is it a gateway drug inbound, or outbound?” Quelch asks. “The way e-cigarettes are regulated can favor one over the other.”
The class’s most controversial speaker of the semester was Craig Weiss, chairman of NJOY e-cigarettes. Some students, such as Chioma Achebe, MBA ’15, came to class strongly opposed to e-cigarettes, but came out much more supportive. “I was surprised that the class helped me reconsider the other side of a controversial public health issue where I thought I knew a hundred percent where I stood,” she says. “The speaker had a ton of data that supposedly showed e-cigs help people quit. While I’m not convinced that e-cigs are safe, he made some interesting points about the disproportionate negative attention on e-cigs compared to other harmful things that people consume—like high-sugar cereals, which can cause diabetes and obesity.”
Other students, such as Harvard Chan’s McCann, weren’t swayed. “He started off saying that nicotine is a misunderstood compound. There is no toxicity to nicotine unless it’s combusted. I listened to this and my blood pressure started going up, and quite frankly I became very disturbed. I don’t think many people in the class had ever seen a snake-oil salesman before.”
Finally, McCann couldn’t hold it in. “If nicotine is nontoxic, then why is it used as an insecticide in the malaria belt?” she asked. “How do you explain the death of a one-year-old who ingested it?” she continued, referring to a child in upstate New York who died after drinking liquid nicotine for electronic cigarettes in December 2014.
Weiss replied that he had faced this kind of cynicism in the past. At that point, McCann stopped talking, but the questions from the rest of the students became more aggressive. “It was one of the most important experiences for me personally, to be given a platform to go head-to-head and challenge a respected guest,” says McCann.
The last case, on legalization of recreational marijuana in the state of Colorado, raised equally difficult questions about the proper regulation of an uncertain substance that is likely to be more widely legalized in the years ahead. “The science on marijuana is not clear one way or the other,” says Quelch. When the marketplace is pushing toward legalization, what should public health do to ensure the public’s safety? “What is the mix of incentives and messaging needed to achieve the protection that’s required?” he asked the class.
The big question with legalization, one student suggested, is whether it would legitimize marijuana and therefore increase its use, or help regulate it and make it safer. “But if by legitimizing it you took away the cool factor, there might be less use by youth,” offered MPH student Laura Bostwick.
“In Milwaukee, we have a lot of breweries—but for most teens, illegal drugs are easier to obtain than alcohol,” agreed Caitlin McMurtry. “With legalization, I think regulations would make it harder for adolescents to get, and you also have a quality-control mechanism, so kids who do smoke don’t have to worry about it being laced with cocaine or PCP.”
By legalizing recreational marijuana, Colorado has also been able to tax sales, devoting some of the proceeds to public health—though not as much as might be expected. With $40 million in tax revenues so far, the state has earmarked only a half-million dollars of that revenue for health. “That’s chump change,” Quelch said in class. “Here you have a public health policy that is being hijacked by the revenue department.”
Market segmentation to prevent black market sales
Yet taxing at a high rate, while good for state coffers, can have the unintended consequence of sending more people back to the black market to buy illegally, or fraudulently obtaining a medical marijuana card to take advantage of lower prices. To get it right, said Quelch, public health officials have to consider market segmentation among users, figuring out what proportion are recreational users willing to pay a premium for a wide variety of marijuana strains, and what proportion are regular, sometimes medicinal, users who are much more sensitive to price.
“It was a great opportunity to emphasize the fundamental point of the course,” says Quelch, who is now working on a new set of cases focused on the health industry for the next iteration of the course. “To have an impact, you have to understand the consumer. You really have to think through consumer behavior and consumer motivations in order to determine the best course of action from both the public health and the business perspective.”