Ask the Bloomberg people why they outlasted the better-connected, better-funded Telerate in the battle for demand, and they’ll tell you, “Telerate didn’t do anything with the data.” Bloomberg did. By 1997, its Princeton center employed nine hundred analysts. Traders flocked to Bloomberg. A year later, Dow Jones threw in the towel, selling its Telerate unit for more than a billion dollars below its purchase price. Reuters found itself forced to invest hundreds of millions to match Bloomberg’s offerings.
Since then, Bloomberg LP has steadily increased the range, depth, variety, and quality of the information it provides for its subscribers. The company started with data on bonds, the business area Bloomberg himself specialized in during his trading days. Then it expanded into stocks, mutual funds, commodity futures and options, foreign exchange, real estate, and an array of complex derivative securities based on mortgages, indexes, interest rates, and more—5 million financial instruments in all. (Like Zipcar, Bloomberg quickly recognized the value of demand variation—understanding that hassle maps differ for different kinds of customers and developing unique products designed to fix hassles for all of them.) To match the breadth and depth of financial information now provided by Bloomberg, an individual trader would need to access up to two hundred exchanges and thousands of other research sources around the world. Bloomberg is the single, dot-connecting source that makes it all instantly accessible.
Bloomberg didn’t slow down. “Any news that touches money” was aggregated to flow through Bloomberg’s custom-designed monitors. A video link in one corner of the proprietary screen offered press conferences, Senate hearings, and news-making interviews by TV host Charlie Rose (whose PBS show moved into a studio at Bloomberg’s New York headquarters). In 1990, Bloomberg launched his own news service, covering business, political, social, economic, and other news. Today it employs 2,300 people in dozens of bureaus around the world, produces radio and television interviews and flash news spots, publishes its own business magazine (Bloomberg Businessweek), runs a cable network and a radio station, and produces a news feed carried by more local papers than Associated Press, Reuters, or any other news service.
Bloomberg proves that a business product can be so magnetic that customers refuse to give it up even when bribed to do so:
Figuring unhappily that the cost of a Bloomberg [terminal] was $18,000 annually and not believing that his value-investing analysts could be getting that much out of it, [the head of an East Coast money management firm] told each of 12 analysts that he would raise their individual bonuses by $15,000 if they would give up their Bloombergs. Eleven out of the 12 said no. One analyst said he would actually prefer to see his current bonus cut by $15,000 rather than give up his Bloomberg.
Mike Bloomberg has not been directly involved with running his company since he was elected mayor of New York City in 2001, but the intense demand for his product continues to grow. There are now more than three hundred thousand Bloomberg machines installed in offices around the world, each generating revenues for the company of about $1,500 per month. Unlike competing firms like Reuters, Bloomberg offers no volume discount, except a single price drop from $1,800 when a company installs its second monitor; the giant Wall Street firm that buys a thousand subscriptions pays the same rate per monitor as the two-person shop. Additional charges are levied for services like execution on stock trades.
In return, Bloomberg delivers a level of service befitting a brand that people casually compare to Mercedes or Rolex. “Our products don’t have a manual,” is Bloomberg’s justified boast. “They have more than ten thousand people ready to help; highly trained and multilingual, providing help twenty-four hours a day, seven days a week.” If the problem takes a few hours to solve, you’ll be handed off from one expert to the next, one time zone to another, receiving help in whatever language you like, from Japanese to Urdu.
And some elements of Bloomberg’s service are so intensely personalized and valuable that it’s easy to understand the magnetic appeal they generate. Our favorite example: Customers who lose their jobs get to keep a Bloomberg machine at home for four months—free of charge, with no diminution of service. Perhaps only a onetime trader who’d been unceremoniously sacked, like Bloomberg himself, would have the intimate understanding of the customer hassle map required to even imagine making such an offer. Think of the psychological boost this service offers a trader battered by a firing—and of his improved odds of finding a new job with the Bloomberg information stream keeping him current. When Amaranth Advisors, a $9.5 billion hedge fund, went out of business in 2006, Bloomberg let its 221 employees keep their machines. Within months, 180 of them had landed new jobs—and insisted on new Bloomberg subscriptions as part of their employment packages.
Bloomberg LP itself is not immune to economic challenges. When Wall Street retrenched during 2009, Bloomberg’s subscriber base actually fell by some 11,000. But the company’s leadership stuck to its agenda of providing more to its customers, purchasing BusinessWeek magazine, and introducing more than two thousand new functions on the Bloomberg terminals. In 2010, the upward march of the subscriber base resumed. “We’ve actually picked up market share,” says chairman Peter Grauer. And they did so without cutting prices.
Bloomberg LP illustrates the huge demand-creating potential in just one corner of One-Click World. Hundreds of other nooks and corners of the demand universe are waiting to be settled by their pioneers.
And this suggests the ultimate goal for all the thousands of people and companies at work in the world of technology: to transform every corner of today’s often disjointed digital world into One-Click World, where the information tools that surround us become so simple to use and so integrated into our very consciousness that they are, finally and delightfully, hassle-free.
CAREMORE CONNECTS THE HEALTH
CARE DOTS
Ellen S., an eighty-two-year-old widow, lives in Anaheim, California, just outside Los Angeles. One Wednesday morning, she got on her scale, as she did every morning. One hundred and forty-six pounds—wasn’t that a little high? Ellen felt vaguely troubled as she poured herself a bowl of oat bran in the breakfast nook.
Half an hour later, the phone rang. It was Sandra at the clinic.
“Good morning, Ellen. Did you notice anything different today?”
“I think my weight’s up a little …”
“That’s right,” Sandra said. “One forty-six. That’s three pounds more than yesterday.”
“I had a feeling it was high.”
“We need you to come to the clinic this morning.”
“I can’t, my daughter’s away this week.”
“No problem, we’ll send a car for you. Can you be ready in an hour?”
“Sure, I’ll be ready.”
For Ellen, who had a history of congestive heart failure, an overnight weight gain of three pounds was bad news—a possible sign of fluid buildup. Ellen’s treatment started that very morning and continued for two weeks until she was out of danger.
Ellen’s friend Rebecca has a different health care provider. Six months earlier, Rebecca had experienced the same weight gain as Ellen. But without a wireless scale transmitting her daily weight to the clinic, it went unnoticed and unaddressed for days. A week later, Rebecca was rushed to the emergency room with shortness of breath and heart palpitations; she ended up suffering a long, painful hospitalization.
Dan A., a retired letter carrier, is eighty-seven and frail, his once-sturdy legs now weak and unsteady. He was at the clinic for two reasons: a session of light-weight training to strengthen his arms and legs, and his usual monthly toenail trimming.
Dan was a classic candidate for a fall. Many of his friends had already been devastated by broken legs or hips, requiring weeks in the hospital and months in rehab followed by years of pain and reduced mobility. But Dan’s doctors knew that weak limbs, long toe-nails, and shag carpets are contributing factors to falls among the elderly. They’d already visited Dan’s apartment and made
sure that his daughter replaced the eighties-vintage shag carpets with low-pile rugs. Now they were following up his regular muscle-toning sessions at the gym with periodic toenail clipping. As a result, Dan and his fellow clinic patients are reducing their fall risk by 80 percent.
Joseph S., a seventy-nine-year-old diabetic, had gotten a cut on his foot (banged it against a door). When it didn’t heal after a couple of days, he limped into the office of his family physician. Dr. Naylor glanced at the cut and sent Joe immediately to the clinic in Whittier, California.
A nurse practitioner there cleaned and dressed the wound. And she told Joe, “I want to see you here in two days so I can fix you up again. And two days after that, and two days after that, until the cut is healed. Understand?”
Joe grinned ruefully and nodded. He’d been through this routine before.
For a diabetic, even a small cut is a serious matter. Untended wounds often fail to heal and contribute to an alarmingly high rate of amputation. But Joe’s foot was saved. And Joe’s wasn’t the only one. Patients served by his clinic experience more than 60 percent fewer amputations than those served by other providers.
Dr. Naylor had started working with Joe’s clinic a couple of years before.
“To be honest, I didn’t like them at first. They had a lot of very definite ideas about how things should be done, and I don’t like to be told how things should be done.
“But after a year or so, I came to appreciate what they have to offer.
“You have to understand my situation as a PCP—a primary care physician, that is. I see sixty or seventy patients every day. Everything you can imagine, from toddlers with ear infections to pregnant teenagers to older folks who are starting to lose their memories. I’m pressed for time and limited in options. When my patients run into serious problems, I have only two choices—send them to a specialist, or send them to the hospital.
“The clinic provides a third option. When it comes to elderly patients, the clinicians know exactly what they’re doing. They’re well staffed. They’re very responsive. They’ll pick patients up if they can’t get transportation. And they’re obsessively focused not just on treatment but also on prevention.
“And you know what else? They understand my problems, too. They help me do a much better job for my older patients, and you just can’t imagine how good that feels.”
Ellen and Dan, Joe and Dr. Naylor are all real people, though their names have been changed. And the clinics that serve them are also real, and are all parts of CareMore. Based in Cerritos, California, CareMore is a combination insurance carrier and health care provider with twenty-six centers in California, Arizona, and Nevada, serving more than fifty thousand Medicare patients. These patients drive health care demand by being able to choose from any Medicare Advantage plan they like. But CareMore isn’t like other plans. Through its unique approach to caring for the elderly, CareMore is routinely achieving patient outcomes other providers can only dream about, preventing needless deaths, reducing hospitalizations, and improving lifestyles.
It’s a level of enhanced care for which most people would gladly pay extra. And yet these outcomes are produced, not through high-tech procedures, intrusive interventions, or exclusive “concierge service” that only the wealthy could afford, but rather through simple, commonsense routines that put a premium on the human connections among doctors, nurses, therapists, and patients—so that lives are greatly enriched and prolonged while overall costs are reduced by nearly 20 percent.
CareMore is an American health care story that nobody knows—but that everybody should. People hearing about CareMore for the first time always come away with the same questions: “How do they do it?” And “Why isn’t the same kind of care available for me, or for my parents?”
THE CAREMORE STORY started almost two decades ago, with a man named Sheldon Zinberg—a gastroenterologist who was deeply concerned about the changing economics of health care in Southern California.
Here as in other U.S. markets, health maintenance organizations (HMOs) had come to dominate the landscape. The theory behind HMOs sounded attractive. “Managed care” was supposed to coordinate and guide treatments so as to maximize both patient well-being and economic sustainability. But under pressure from corporate health insurance sponsors and government agencies (as well as investors seeking profits), the HMOs were increasingly focused on reducing costs by any means necessary—including short-term fixes that often led to worse patient outcomes and, in the long run, even higher medical expenses. The hassle maps of patients were growing ever more complicated, doctors were getting squeezed, and costs were still spiraling upward.
Sheldon Zinberg was alarmed. Back in the 1960s, he’d founded a large internal medicine group that had grown to include some twenty physicians in a range of specialties, from cardiology and oncology to rheumatology and nephrology. Internal Medicine Specialists, Inc., had provided excellent care, and its members had thrived.
But by the late 1980s, with a small number of HMOs growing more dominant, referrals were dwindling and service restrictions were multiplying. Zinberg and his colleagues were being forced to spend more and more time on the phone with “benefits coordinators”—hassle creators whose main job was to find reasons to deny coverage: “Why do a colonoscopy? The patient’s only forty years old. We won’t pay for it.”
Internist Charles Holzner worked for one of the HMOs. He describes its behavior in scathing terms. “It was a complete non-integration of care,” he says. “I could get the patients out of the hospital in two or three days, but they would go right back in because they would disappear into the ether and get none of the follow-up care they needed.”
It was the worst of both worlds: uncoordinated, low-quality patient care combined with punishing economic results.
Sheldon Zinberg was appalled by the destructive impact of managed care. Already in his early sixties, he could have simply retired and walked away from the problem, as many of his colleagues were doing. Instead Zinberg rose at a 1988 meeting of his group’s board to make a fateful declaration: “The only answer is for someone to start a good health care program.”
He spent the next several years figuring out how to do it.
Zinberg was acutely aware of the incredible hassle map that dominated the patient experience. He’d long been mulling the elements of a coordinated care system centered on reducing hassles for patients rather than simply cutting costs. A personal fitness aficionado, he spent time every day in his home gym devising specialized exercise routines to strengthen specific physical systems—the kind of nonmedical wellness program few doctors were knowledgeable about. Traditional medicine tended to view patients as mere collections of organs, symptoms, and conditions rather than as the integrated beings they are. Zinberg began to envision a health care organization in which teams of doctors, nurses, therapists, trainers, and other professionals worked together, continually sharing information and insights about their mutual clients and providing whatever services were needed to keep those clients in the best possible physical and mental health. The organization would connect the dots for the patient, who would be at the center of the system.
This was the kind of care any physician would want for himself, or for a member of his family. But would it work financially? And would doctors whipsawed by the economic changes of the 1990s—and long accustomed to making patient care decisions autonomously rather than as members of a team—be willing to take a chance on Zinberg’s new concept?
Zinberg spent almost two years struggling to recruit physicians to his program. “During 1991 and 92 my wife barely saw me,” he recalls.
I was having dinner four nights a week with groups of doctors, explaining my concept. I was begging them, literally begging them, to help me develop the first integrated system of health care. A lot of them turned me down. “This is a huge job,” they would say. “We’re too busy to take on something like this.” Others were so capitalistically minded they didn’t want to have anything to
do with the project. I wanted them to throw their hearts and souls into an organization that we would all jointly own and that would be focused exclusively on what was best for the patient. “If we put people before profit,” I would tell them, “we will profit.” But the idea made them nervous.
Fortunately, a few doctors understood what Zinberg was trying to do. Charles Holzner was one of those early converts; today he is a senior physician at CareMore. Other long-term colleagues of Zinberg’s were moved to join by their personal connections with him—some were even patients of his—and by the depth and sincerity of his commitment to the cause. And eventually one of Zinberg’s impassioned after-dinner speeches would lead to a breakthrough. Halfway through one presentation at an Italian restaurant, an ophthalmologist jumped up and interrupted Zinberg. “Hey, guys,” he yelled. “This is what we should have been doing all along. This is why we became doctors! Can we all try to remember that?” Several more doctors signed up that evening.
By 1993, physicians operating twenty-eight separate medical offices had agreed to become affiliates of Zinberg’s new system. In June, CareMore Medical Group opened its doors.
Zinberg had always seen his vision of coordinated care as especially suited to the needs of the elderly, where investments in coordinated care programs lead to lower costs and much better outcomes. As a gastroenterologist, his practice naturally included a high percentage of older patients, and as he himself grew older, his interest in the physiology of aging deepened. (His insights into the subject, including not just his unique exercise programs but also his ideas on nutrition, genetics, and memory retention, would lead to his 1993 book, Win in the Second Half.) And Zinberg recognized that elderly patients covered by Medicare—the patients normally regarded as the greatest drain on the health care system—could benefit the most from special attention. Due to the system’s failure to connect the dots, they experienced the worst set of hassles in American health care: avoidable hospitalizations, duplication of effort, misdiagnoses, patient confusion, needless suffering, and sheer neglect. In short, wildly misplaced demand, with costly, uncoordinated treatments leading to complications, poor outcomes, and still more treatments.
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