September 01, 2002
BY RAY SCHULTZ
In 1905, muckraker Samuel Hopkins Adams wrote a six-part series in Collier's magazine titled "The Great American Fraud" in which he exposed one of the worst evils of the time.
"Gullible America will spend this year some seventy-five millions of dollars in the purchase of patent medicines," Adams wrote. "In consideration of this sum it will swallow huge quantities of alcohol, an appalling amount of opiates and narcotics, a wide assortment of varied drugs ranging from powerful and dangerous heart depressants to insidious liver stimulants; and, far in excess of all other ingredients, undiluted fraud."
What does this have to do with direct marketing in 2002? Quite a bit: The final installment was "Strictly Confidential - What Becomes of Letters Written 'In Confidence' to Patent Medicine Firms and Quacks." In that piece, Adams exposed a phenomenon that few people knew about - that "letters written by ailing men and women in response to advertisements were sold, after the company had fully exploited them, to other proprietors. These pathetic and confidential missives ended up in huge bundles, packaged according to disease, and brokers sold or rented the letters for several dollars a thousand."
Adams never used the word "privacy," and it is doubtful that the issue would have come up were it not for the fact that people were being swindled at risk to their health. But he described the early mailing list business [among the firms he cited was Guild Co., which is still with us today], and he hinted at an eternal truth: Medical information is different.
That was almost a century ago, and some marketers seem to have forgotten the message.
Take the people [and we're not sure who's to blame] who mailed Prozac samples to depressed patients. At the least, they lacked sensitivity and common sense.
Then there are the firms that market lists of sufferers.
As Kris Oser reports in this issue, you can rent a file of opt-in e-mail addresses for consumers with ailments - 4 million names updated monthly. The ailment selects? Alzheimer's, multiple sclerosis, clinical depression, fungus, hepatitis, ulcerative colitis, bladder control and assorted cancers.
Industry apologists will argue that it is misleading to lump these things together, and they will be right up to a point.
The Prozac mailing [or so it seems] involved the use of information collected by a healthcare provider in the course of treatment. That makes it sacred, and when the Health Insurance Portability and Accountability Act [HIPAA] takes effect next April, it will be illegal to use such data for marketing without permission.
But the normal "suffers from" list is generated by surveys.
The sufferers opted in when they filled out the questionnaire, and that makes it public domain, right?
Hardly. Given the special nature of the data, a firm still has to exercise some judgment.
The people who filled out the BehaviorBank survey 10 years ago had no idea that BehaviorBank was going to go out of business, and that this so-called database asset was going to be auctioned off in bankruptcy court along with the office furniture.
And today's sufferers could not know that these lists are going to be wholesaled out on the open market.
Does the harm approach that caused by the old patent medicine sellers? It depends on how the information is used, but many would argue that sending free Prozac samples to a 16-year-old is harmful enough.
And in today's climate, there is a thin line between harm and lack of value. If you want to use information that a person has, say, diabetes, you had better give them something back besides a rudimentary pamphlet on the illness, telling them things they already know too well.
In 1906, in part because of the uproar over Adams' series, Congress imposed harsh truth-in-labeling restrictions, putting most of the patent medicine sellers out of business.
We seem to be headed toward a similar regulatory environment. HIPAA
may only be the beginning.
© Copyright 2002 by PRIMEDIA Business Magazines & Media Inc.