One of the many summer jobs I had growing up was working in a small factory that manufactured underwater lighting and photography equipment. I spent two summer and two winter breaks during college working at the factory, assembling parts for underwater flashlights. During one of those summers, there was an issue with one of the parts in the flashlight that caused the light beam to scatter in all directions. The company issued a recall and spent several days going back and forth with the design engineers to try to determine the root-cause of the problem. Eventually, the problem was identified and we were able to replace the defective part to address the problem. Why am I bringing this up now? I guess reading all about the issues with the Samsung Galaxy Note 7 triggered my memory.
The Galaxy Note 7 smartphone was Samsung's answer to the new iPhone. The Galaxy note 7 was officially released on August 19, 2016 as the successor to the Galaxy Note 5 (it was branded as the Note 7 in order to distinguish it from Samsung's Galaxy S7 smartphone) and was supposed to be technologically superior to any other smartphone on the market. Demand was incredibly high, and Samsung's stock value soared. However, shortly after release, there was a number of reports of the smartphone literally exploding into flames due to the battery generating excessive heat. Samsung issued a product recall and tried to come up with a fix, but continued reports of battery fires, even after the initial product recall and replacement product release, led to Samsung finally pulling the plug on the Note 7 for good on October 11, 2016. The Samsung stock price has taken an absolute beating, and the company expects to lose over $2.3 billion in lost earnings as a result of the recall. Earlier today, the company announced that it will offer a $100 rebate to any customer who exchanges his or her Galaxy Note 6 for another Samsung smartphone. I guess $100 is the price of customer loyalty these days!
It turns out that disastrous product recalls are not that uncommon - there is even a frequently cited list of the "top 10" most disastrous product recalls of all time. The list is old (Samsung is not even on there) but includes Toyota's faulty gas pedal recall in 2010, the Ford Pinto in 1978, and the Firestone tire recall in 2000, just to name a few. Importantly, the list was published before General Motor's ignition switch fiasco that resulted in over 124 fatalities and 274 injuries over a several year timespan. Also listed is Johnson & Johnson's Tylenol recall of 1982. This last case is notable for two reasons. First, while the previously cited product recalls involved manufacturing defects, the 1982 Tylenol recall occurred after 7 people in the Chicago area died after taking cyanide-laced Tylenol. In this particular case, the root-cause of the problem was completely out of the company's control - someone had obviously tampered with the medication (although no one was ever charged or convicted). The case is also notable for how Johnson & Johnson dealt with the issue - the case is used in many business schools as a demonstration for how to effectively manage a corporate crisis. Johnson & Johnson removed over 30 million units from the market. Prior to introducing the product back to the public, Johnson & Johnson issued a formal apology, introduced triple-seal tamper resistant packaging (the company was, in fact, the first company to do so), switched to caplets (instead of capsules, which could be easily tampered with), and offered a significant rebate ($2.50 off coupon on all bottles sold, obtained through a number of newspaper ads or through a toll-free number). While the company's market share decreased from 35% to 8% shortly after these deaths were publicized, Johnson & Johnson recovered in less than 12 months and Tylenol soon became the number one over-the-counter analgesic sold in the United States.
What does all of this have to do with health care? As I posted last week, "Sometimes, sorry is the best thing to say". Medical errors are quite common in health care - in fact, one study estimated that medical errors are the third leading cause of death in the United States. When a medical error is made, the natural inclination is to want to hide the error or not to disclose that the error is made for fear of malpractice litigation. On the contrary, several studies have found that when health care institutions are completely open and transparent (so-called open disclosure programs), the risk of malpractice litigation is decreased, especially if disclosure of the error is coupled with a formal apology. Additional studies are certainly required, and there should be formal policies (and perhaps legal protection) to encourage full transparency and open disclosure. However, being honest and telling a patient or family that a mistake has been made, combined with a simple apology, is absolutely the right thing to do! In other words, health care institutions should take a cue from Johnson & Johnson's playbook (at least the one that they followed in 1982) and not Toyota, Ford, or General Motors.
No comments:
Post a Comment