CEO Daily

By Nicholas Varchaver
December 11, 2016

Good morning.

Imagine being bamboozled into unintentionally checking yourself into a psychiatric hospital—one that is part of a profit-making chain that pushes its employees to admit as many patients as possible and that is under criminal investigation. That’s the deeply chilling scenario described in “Intake,” a BuzzFeed investigation of the chain of mental hospitals owned by Universal Health Services, a $9.6 billion giant and the largest private owner of psychiatric facilities in the country. (UHS’s operations treated 450,000 patients at more than 200 hospitals.) The accounts from employees are extremely disturbing:

When people called in to ask for help or inquire about services, internal documents and interviews show, UHS tracked what a former hospital administrator called each facility’s “conversion rate”: the percentage of callers who actually came in for psychiatric assessments, then the percentage of those people who became inpatients. “They keep track of our numbers as if we were car salesmen,” said Karen Ellis, a former counselor at Salt Lake Behavioral.

“The goal when you’re on the phone with someone is to always get them into the facility within 24 hours,” said a former admissions employee who worked at three UHS facilities in Texas. “And the reason for getting them into the facility is that once they stepped foot in, they are behind locked doors.”

UHS disputes the claims in the article, but the evidence is damning. It includes, for example, a first-hand account of a mildly depressed woman who sought counseling—only to find herself locked into a psychiatric facility and prevented from leaving. Even an industry spokesperson, defending UHS, ends up sounding scary when she endorses the view that the hospital shouldn’t let a person leave until it ascertains they are safe: “This may involve restricting their ability to leave the facility.” Every state has laws allowing involuntary commitment, of course, but this article makes it clear that UHS is particularly prone to citing the risk that the patient might kill themselves. “By 2013,” the article notes, “the code for suicidal ideation appeared in more than half of all of the Medicare claims submitted by UHS hospitals. This is four and a half times the rate for all non-UHS psychiatric hospitals.”


The Meaning of Lego

It’s hard to imagine now, but Lego, the iconic toy-block maker, nearly went under about 15 years ago. New York has a feature that is in part an exploration of how the company found a way to reinvent itself for a generation of videogame addicts and in part a meditation on the nature of play (and whether the blocks are good for children’s development). The article is entitled “Lego Is the Perfect Toy: Even if no one can really agree on what kind of toy it is anymore.” Because the article has multiple goals, it meanders a bit. Yet there are wonderful lines such as, “For parents, Legos seem like the vegetable your kid actually requests and then eats in heaping mounds.” If you stick with the piece, you’ll find interesting ruminations on discovering the essence of a brand and a few surprises (at least, to me):

By the mid-aughts, girls represented only 10 percent of Lego’s market. Then, in 2008, the company undertook a four-year ethnographic study analyzing how girls play. It found that girls did want to build but were bored by mini-figures, which were too blocky and plain. They wanted more lifelike figures, blocks with brighter color schemes, and more interior details in the sets.

Lego made a bunch of changes in line with these findings—over the vociferous objections of some parents, who thought it would be sexist to have a female version of Legos—and all of a sudden girls fell in love with them.


9,000 People Were Going to March On Our Office

In the category of toy-related journalism, San Francisco has an enjoyable oral history of what it was like to work at Niantic Labs, when its creation—the smartphone version of Pokémon Go—absolutely exploded. “Pokémon Pandemonium” captures a moment that sounds like a cross between mass ecstasy and a vengeance-seeking mob:

CTO Phil Keslin: My first encounter was in my own neighborhood in San Jose. That was the first time in a long time that I saw packs of teenagers, from 15 to 20 years old, running around the neighborhood playing Pokémon Go. The second was the San Francisco crawl [on July 20], when like 9,000 people showed up. That was pretty phenomenal. I didn’t go. I was trying to keep the servers from burning down. We were terrified that day because the server went down about 2:30 in the afternoon, and the crawl was supposed to start at 6 p.m. We’d heard through the grapevine—total rumor mill—that if we didn’t get the servers back up in time for the crawl, they were going to take all 9,000 people and march on our office. So we were frantically trying to get the servers back up.

Project manager Carlie Fischer-Colbrie: We weren’t expecting that kind of attention, so we had to go incognito. That’s why we have blackout screens on the office windows. Niantic’s name is not on the [directory] board. We’ve been here for almost a year. We still had people coming to our door. They were just really excited and wanted to meet Niantic.


The Travails of the Mayo Messiah

 

San Francisco has a second worthy article (part of its “power” package), and one with the best headline of the week: “The Agony And Ecstasy Of A Mayo Messiah.” Josh Tetrick, founder of Hampton Creek, the vegan-foods company that makes the eggless Just Mayo, has not lacked for press. That includes both the positive variety (as proselytizer for healthy eating and the ostensible slayer of multinational big food conglomerates) and the negative type (for some sales shenanigans in which employees bought the company’s products off store shelves to drive up sales). This portrait mostly doesn’t break new ground if you’ve been following the saga, but the writing makes it more than worthwhile, particularly in two descriptions of the founder himself:

 For Tetrick, fake mayo is not so much a lowly condiment as a gateway into a better tomorrow of clean eating, humane farms, and enlightened sustainability practices. When he gazes deeply into your eyes and tells you, in his blackstrap molasses Alabama drawl, that he is here on a mission, it is easy to nod along in rapturous belief. If he doesn’t perceive irony, it’s because his confidence in his vision (or perhaps strategically placed blinders) doesn’t leave any room for it. “I want us to do something that extends way beyond our lives,” he says.

Tetrick, who is now 36, made an ideal evangelist for the cause. Endowed with the uncomplicated good looks of a Hanes T-shirt model and an ingratiating tendency to drop f-bombs into conversations with reporters, he was a fresh, authentic, and compelling figure, a vegan in bro’s clothing who knew how to appeal to the mainstream. Hampton Creek’s target audience, he repeatedly told the press, was not “tree-hugging liberals in San Francisco” but big food-service companies and folks like his cost-conscious, Twinkies-eating daddy back home in Alabama.

Passages like that make for a tasty treat.

Nicholas Varchaver
@nickvarchaver
nicholas_varchaver@fortune.com

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