The Wall St.Journal 24Feb2020

THE WALL STREET JOURNAL. Monday, February 24, 2020 |B5

The bankrupt Philadelphia hospital will cover an insurance gap.

MATT ROURKE/ASSOCIATED PRESS

Clean Day that costs under $4

on Amazon.

“I’ve had to defend our

pricing,” Ms. Weeks said.

It is a multipronged de-

fense: Instead of cheaper

plastic, Ms. Weeks chose alu-

minum bottles (“aluminum is

infinitely recyclable, and it’s

also lighter than glass”) and

while the nozzle is plastic

(“not a lot of options there”),

it is clear and doesn’t contain

a metal spring, giving it a

higher value on the recycla-

bles market.

The bottle itself is reusable

and comes in a terra cotta

matte paint, chosen because

it will likely look attractive on

any countertop.

Customers will only ever

need that one bottle; Veles

plans to offer a $10 refill pro-

gram for its cleaning solution.

Amazon says it works con-

stantly to reduce waste, in-

cluding by collaborating with

manufacturers to monitor

throughout the supply chain.

Its sustainable packaging

initiatives have reduced pack-

aging weight by 27% per

shipment over the past four

years, according to a spokes-

man.

“For packaging Amazon de-

liveries, we’re moving from

mixed material packaging so-

lutions—paper with plastic

cushion mailers—to material

that is fully compatible in ei-

ther paper or plastic recycling

streams,” the spokesman said,

adding that the company ex-

pects the move to be com-

plete by next year.

Sixty percent of Amazon

packaging is compostable, he

said.

Sourcing materials is an-

other challenge for companies

that want to provide a certain

packaging experience. “How

SMALL BUSINESS

experience.”

These moments range

widely, from how a product

feels in a customer’s hands to

whether they feel guilty or

sanctimonious about discard-

ing the packaging later.

Startups in particular are

motivated to find ways to

stand out among larger, more

established rivals.

For some companies, pack-

aging creates a cachet

around the product—espe-

cially when it becomes the

subject of admiring “unbox-

ing” videos on Instagram or

YouTube.

“When you get a beautiful

package, you feel like you’re

part of the brand’s universe,”

said Dianna Cohen, founder

of Levitate, a brand strategy

and marketing consulting

company, and ofCrown Af-

fair Inc., a direct-to-con-

sumer hair-care line.

“You buy

something be-

cause it’s part of

your identity,”

Ms. Cohen said.

“To not address

that on the pack-

aging is a miss.”

The January

launch of Crown

Affair played out

in real time via a host of un-

boxing videos on Instagram

posted by early recipients of

the brand’s pale avocado-

green boxes, each of which

display Crown Affair’s signa-

ture brush, comb and hair oil

with museum-like care.

Other posts played up com-

postable and reusable ele-

ments of the packaging.

New packaging consider-

ations, however, can mean

more cost to companies.

To deliver a sustainable

packaging experience to peo-

ple who order Veles, a new

home-cleaning product made

from acetic and lactic acids

and water found in food

waste, founder Amanda

Weeks sources materials that

account for $5 of a $20 price

tag on a 16-ounce bottle.

This compares with a 16-

ounce bottle of everyday

cleaner from Mrs. Meyer’s

we got here is not glamor-

ous,” Ms. Katz said of Seed

Health’s low-impact packag-

ing system. “The best materi-

als for our future aren’t ready

for scale.”

It took over a year of

sleuthing for small vendors—

“the people on page 10 of a

Google search”—to find mate-

rials that met the needs for

sustainability and still looked

enticing, Ms. Katz said.

“It takes a lot of creativity

to make a mushroom tray

look beautiful,” she said. “It

can easily look like a block of

cheese.”

But the research is getting

easier, she said.

Seed Health shares its ven-

dor information on its site.

Further options can be found

on the website A Better

Source, an online eco-packag-

ing repository that launched

in the fall.

Created by Jennifer

Wright, a graphic designer in

Austin, Texas, the volunteer-

powered site surfaces packag-

ing ideas for small businesses,

and tracks new solutions hit-

ting the market.

“A lot of businesses we talk

to are realizing that consum-

ers are willing to pay more

for sustainable packaging,”

Ms. Wright said.

“There are so many beauti-

ful, fascinating materials

coming onto the market made

from things we wouldn’t ex-

pect,” she said. That tactile

novelty is really enticing to

consumers.”

The first timeSeed Health

Inc.’s probiotics arrive at a

new subscriber’s door, they

come in a handsome glass jar

with a powdery finish and

minimal branding. The cap-

sules nestle in a compostable

mushroom-fiber tray and a

recycled paper box that is the

same moss green as the jar.

This is the only time cus-

tomers will see this presenta-

tion. The following month,

capsules arrive in a com-

postable pouch with corn

foam padding that dissolves

in water.

Seed Health aims to de-

liver a specific experience for

customers: The feeling of

gaining membership to a

club, while making a virtuous

purchase.

“We try to think about the

ritual of filling up the jar

with new capsules—the feel-

ing that you’ve started this

ongoing relationship,” said

Ara Katz, who co-founded

Seed Health in 2018 and de-

veloped the sustainable pack-

aging system in-house.

Orders have increased

600% since early 2019, Ms.

Katz said, declining to be

more specific.

The age of e-commerce

and two-day delivery from

Amazon.com Inc. has

brought a storm of hastily

packed cardboard boxes and

plastic mailers with it.

Consumers received 8.6

billion e-commerce packages

in the U.S. last year, up from

7.6 billion in 2018, according

to ShipMatrix Inc., a software

provider that analyzes ship-

ping data.

More companies are trying

to drive business results by

extending their focus beyond

the actual products for sale

to concentrate on moments

that get increasingly bundled

under terms like “consumer

BYMARGARETRHODES

Startups Look to Feel-Good Packaging

Companies focus on

eco-friendly materials

and the experience

of opening them up

Hair-care line Crown Affair promoted its elegant design and

reusable elements in unboxing videos. The maker of Seed Health

probiotics, photos left, wants buyers to feel like part of a club.

SEED HEALTH (2)

CROWN AFFAIR

tors were in danger of having

their professional credentials

tarnished if they couldn’t find

replacement insurance.

The offer from Hahnemann

and its owners to provide in-

surance came after months of

talks spurred by a threat from

Judge Kevin Gross to oust the

hospital company’s manage-

ment from control, and put a

trustee in charge of Hahne-

mann’s bankruptcy.

Malpractice insurance was

due to be cut off in early Janu-

ary, but after Judge Gross

fired a warning shot at Hahne-

mann’s owners, the insurance

cutoff deadline was postponed

repeatedly.

In an email Friday, Jeremy

Ryan, lawyer for an informal

committee of medical trainees,

said the committee is pleased

with the offer of insurance

from Hahnemann, which will

allow new doctors to start

their careers without worrying

about their credentials.

Hahnemann and its owners

came through with the insur-

ance after an effort to sell the

hospital’s residency program

failed. The proposed sale was

approved by the bankruptcy

court, but foundered and was

terminated by the buyer, court

papers say.

Located in the heart of Phil-

adelphia, Hahnemann filed for

bankruptcy protection in June,

at the start of the medical

training year. Hundreds of

doctors scrambled to find new

berths, anxious to avoid an in-

terruption in their profes-

sional training.

As uncertainty grows about

the future of the health-care

system, the Hahnemann bank-

ruptcy and the insurance crisis

that followed raise questions

about the risks facing health-

care professionals working at

hospitals that depend on pub-

lic funding.

The decision to close Hah-

nemann came less than two

years after Mr. Freedman’s

buyout group acquired the

hospital. According to the own-

ers, government reimburse-

ment for treatment for the

poor and elderly wasn’t suffi-

cient to keep the doors open.

From Maine to Los Angeles,

hospitals that count on Medi-

care or some other form of

taxpayer backing are tumbling

into bankruptcy. Pennsylvania

health authorities warned in

court papers that the disrup-

tion in training and insurance

set off by Hahnemann’s bank-

ruptcy will make it even

tougher to fill a doctor short-

age in the state.

Many displaced Hahnemann

residents were taken on by

other Philadelphia-area hospi-

tals, but the rest scattered

across the country. Months

later, word began to spread

that Hahnemann didn’t have

enough cash to continue pro-

viding insurance to cover the

work the residents and fellows

had done at the hospital.

Volunteers cobbled to-

gether listservs and searched

phones, trying to track down

dispersed former trainees to

alert them to the brewing in-

surance trouble.

American Academic Health

Systems, the private investing

group that bought Hahnemann

and St. Christopher’s Hospital

for Children in 2018, didn’t file

for bankruptcy, and it still

controls the valuable real es-

tate that was the site of Hah-

nemann, close to the legal and

civic heart of Philadelphia.

St. Christopher’s was sold

as part of the bankruptcy case.

The defunct Hahnemann

University Hospital has agreed

to provide insurance for hun-

dreds of new doctors dis-

placed by the historic Phila-

delphia institution’s

bankruptcy.

The hospital and its insur-

ance company—also controlled

by Joel Freedman, the invest-

ment banker who led the

group that acquired Hahne-

mann in early 2018—will cover

a gap that had threatened the

professional futures of resi-

dents and fellows who were in

training at the hospital when

it closed down last year.

Hahnemann will pay about

two-thirds of the $9 million

cost of the insurance, and Mr.

Freedman’s affiliated insur-

ance company will pay for the

rest, according to a Thursday

court filing.

“I and the other former Hah-

nemann trainees I have spoken

with are very happy that the

hospital has agreed to do the

right thing,” said Sukhdeep

Singh, a doctor specializing in

obstetrics and gynecology.

The agreement ends

months of uncertainty for

hundreds of new doctors, who

were trying to find a way to

cover insurance premiums as

high as $95,000 to protect

against lawsuits that might

not be filed for years, stem-

ming from their work at Hah-

nemann. More than 900 doc-

BYPEGBRICKLEY

Closed Hospital Reaches

Deal on Doctors’ Insurance

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