Mexican Medical Tourism, DOJ vs JetBlue & Spirit, & ChatGPT meets Slack
Good Morning Brew Daily Show. I am Neal Freyman. And I'm Toby Howell. And Neal, it's Wednesday. It's also a day of a lot of celebration.
So I really appreciated the top blurb in the Morning Brew newsletter today. I'm actually just going to quickly read it for everyone who hasn't read the newsletter yet. You guys said Happy Holi, Happy International Women's Day and Happy Belated Purim. Whoever you run into today, just give them a thumbs up and a smile.
Odds are they're celebrating something. I laughed at that a little bit. Yeah. I want to thank Matty, our editor, for helping me craft that with the great joke at the end. Beautiful top player.
But I also actually had not heard of Purim before this, and I was hoping you could just describe it to me. Yeah. I'll give you 20 seconds. Analysis. It's compared often to Halloween because you dress up and you go in costumes.
There are some tricks and there are some treats and it's a Jewish holiday. Yes, it is a Jewish holiday. Sorry. Yeah, I'm Jewish. And basically it's it's very similar to many other Jewish holidays where we celebrate being able to still be here after, you know, a person tried to kill us and wipe us out and we fought them off. And so we all get drunk. That gets a bit interesting.
You learn something new every day. Thank God. I'm sorry, Mom. I didn't do anything for Purim this year. I will go to a party next year. I promise.
We got a really interesting show for you covering a lot of different topics. I want to run through a few of them. The US government is trying to block an airline mega-merger. We'll get into that. We'll also talk about why Jay Powell spooked markets yesterday.
Why everything was read. And then finally, Slack is getting in, is getting achieved. Everybody knows everyone is getting these days. But first, to start off the show, I actually want to take us to Mexico. So last week, some news broke that four Americans were kidnaped in Mexico.
And then yesterday, it came out that two of them were found dead and two of them were found alive. So I'll quickly kind of run through the details of this tragedy and kind of why we're talking about it. So shortly after crossing into the border city of Matamoros, the Americans, the minivan, the Americans were traveling in crashed and was fired upon by a drug cartel that's kind of active in the region. Police think that the cartel actually mistook the American minivan for drug smugglers, which is what prompted the attack and their eyes.
But we now know that at least one of the Americans had traveled to Mexico to receive a cosmetic surgery. And so that's kind of what I want to touch on today, is the rise of medical tourism, especially in Mexico. Yeah, they estimate that nearly 1 million Americans travel to Mexico for health care each year, and that's because it's a lot cheaper. I think we have the stat that it's 40 to 60% cheaper for a wide variety of medical services down there.
The most common are elective surgeries that aren't covered by insurance here. So cosmetic surgeries. I think the tourists there were going for a tummy tuck, tummy tuck. And then another really popular one is dental procedures and getting your teeth whitening. Yeah, it is interesting that these kind of border towns especially actually it's a huge, huge industry for them.
And so the southernmost point of Texas, Rio Grande Valley is actually considered to be a medically underserved area. So that's why you see these border towns. A lot of Americans cross over from kind of this poor medical environment. And go into Mexico in order to have affordable surgeries. Right.
So people were like, well, this is dangerous because the border towns are have a lot of cartel activity. Right. As well. I'd been reading, you know, experts were like this is very rare for medical tourists to be targeted by gangs and cartels like this.
The far more dangerous thing is the actual medical procedures are botched surgeries and people not doing their due diligence and finding, you know, health care practitioners that can actually do the job right. Yeah. And that Mexico this is only going a growing industry. Mexico is the second most popular destination for medical tourism globally right now. Almost an estimated 1.43 million people go down every year.
That's a lot of people. What do you think is number one? I know we're kind of doing some. Do you? It is rather hard to find data so if any listeners are listening to this and can find number one, I guess my yeah, my first guess was the United States because I know people come here, but then we were thinking, well, it's really expensive health care here. That's why people leave to get procedures elsewhere. So maybe it's more specialty things.
So, yeah, if you have any ideas about what the number one medical tourist destination is, let us know. We'll take any guesses. We'll be interesting to find out. But this thing but what I found most interesting is medical tourism is a global thing as a global phenomenon. One of the most famous examples of this is people traveling from Western Europe, UK to Eastern Europe, places like Hungary, Croatia and Turkey for kind of the same things, cosmetic surgery and dental work. Yeah, absolutely.
It's a growing industry, which sounds odd to say, but yeah, yeah. They're actually just opened a 33 story medical facility in Tijuana. Yeah, you see that? Yeah. It's like state of the art. They're branding it the best medical tourism facility in the world. And I don't know if leaning into leaning into it like they're totally and come to us.
Have you been to Tijuana? It's literally right over the border from San Diego. People shuttle in and out all the time. I have not. Maybe I'll maybe I'll give it a give it a go. Okay. So that's all about medical tourism, something, you know, we maybe hadn't focused on before, but this tragedy definitely put it in the spotlight. I want to take us to the airline industry.
The DOJ yesterday sued to block JetBlue's 3.8 billion takeover of Spirit, saying it would raise prices for travelers and leave them with fewer air options. It's really aggressive tack by the Biden administration. We've seen this as a pattern by antitrust officials, particularly in this administration. It is the first time in more than 20 years that the US government has even tried to block an airline merger. Right. It was I was conflicted on this because it was odd to see the DOJ kind of drop the hammer on this particular merger.
When we dug into who controls the airline market. There's the Big Four, which is American, Southwest, Delta and United. They all control right around 17% of the market. So I was like what, in a merger between Spirit and JetBlue actually challenge the supremacy of the Big Four? But it turns out that JetBlue snapping up Spirit would probably drive up prices.
And I'll give a couple of stats that stood out to me. So when Spirit's starts flying any given route, average fares fall by 17%, because Spirit is this ultra low cost airline. So others have to kind of react to them flying a route.
And then JetBlue estimates that when Spirit's stops flying around, average fares shoot up by 30%. So they definitely move the markets whenever they jump into their route. And it's kind of funny that Spirit I don't know if you remember the origins of this deal, but Spirit was kind of fending multiple offers from JetBlue and Frontier. Right.
And I think they agreed to Frontier originally. And what's really kind of funny is that they didn't want to be scooped up by JetBlue originally. And they argued that JetBlue buying Spirit would raise a lot of regulatory hurdles. As you know, their prediction came true and that it would raise prices. So even Spirit in its own internal company, documents said that giving it up would raise prices.
Honestly, the merger with Frontier made a ton more sense because that is where you it felt like it would lower prices truly because those are the two biggest budget airlines. And so combining them and like leveraging the operational efficiencies of of a bigger organization, I thought that one made a ton of sense. So, yeah, it is the airline market's interest. It's very interesting to me because there's been very little disruption over the last 20 years. There hasn't been a new airline startup in cities like Southwest, basically. There have been a couple recently like Breeze Airways, I think during the pandemic.
You remember that And their their goal was to serve the secondary cities that may be overlooked by the Delta's and the Americans. You know, I grew up in Western Mass, and we had Bradley Airport, Hartford. Never heard of it. Yeah. My dad was just flying to Phenix, and he was like, yeah, I got to stop over. And I was like, oh, it's it's a quick read.
I back and he's like, Dude, you forgot. I don't live in New York City. I have to fly to, you know, a hub and then fly back home to my little regional airport. And so there have been a couple of startups serving those markets. Yeah. All right.
Well, that was actually a fun conversation about the airline industry in America. Always fun to talk about. Let's zoom out a little bit. So Jerome Powell talked to us lawmakers yesterday. There's always some big quotes from that. So I just want to kind of highlight some of the key takeaways of his testimony.
The big takeaway is that interest rates are likely to head higher than the central bank had initially expected. I'll actually read you his exact quote from yesterday. The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. So it was kind of we all saw this coming.
It is odd because he's basically saying the economy is doing a little too well. It's overheating a little bit. We're probably going to have to raise interest rates a little bit more, a little bit faster in order to calm down this inflation.
It raises the prospect of a hard landing. So it increases the chances of a recession. And if we can just do a quick timeline over the past year about the Fed and the economy, in its last year, they hiked interest rates by 75 basis points a bunch of times in a row, which was a historic amount to quell inflation. And then earlier this year, we were like, okay, I think it's working. Inflation's coming down and the economy is holding up strong. That is the so-called soft landing scenario, the Goldilocks situation So everyone was super hyped.
The market went up in February because of that. But there have been new economic data releases and inflation reports that suggest that inflation is not coming down as fast as we had hoped and that the economy is really holding up stronger than expected. And that can fuel inflation more.
So the Fed let. Last meeting, the Fed only raised interest rates by 25 basis points. And now, because of Paul's testimony, which is considered hawkish they think that in the Fed's next meeting they're going to re raise interest rates by 50 basis points.
So we took our foot off the gas pedal and now we're putting it back on again. And, you know, it's just, you know, raises the prospect of a recession. And that's why markets you saw a lot of red in the markets yesterday. Right. And then just one final point on that. A lot of good analogies and that, as always, Neal.
I mean, the gas gap is a classic that's not that creative. But so he actually got into it with Senator Elizabeth Warren a little bit in this testimony. Elizabeth Warren's like every time that you raise interest rates on unemployment spikes a little bit, too. So she was basically saying, are you okay with putting 2 million people out of job? Right.
And then Jerome Powell was like, listen, higher inflation affects everybody, like every single worker in America. So yes, I am almost okay with. I mean, he didn't explicitly endorse people losing their jobs, but saying, like, so we can get the inflation rate under control, it's actually going to benefit a lot more people than. Yeah. Than the 2 million. He's sounded that pattern a lot over the past few years because raising rates is unpopular because it hits the economy and it gets people out of jobs.
But he's basically been saying the risks of letting inflation run hot for longer are way, way, way, way, way greater. Than a small hit. And unemployment. And speaking of unemployment, it hasn't gone up. Right. It's at 3.4% or 4.3% or something like that is absolutely miniscule. And it's actually a good preview of what's happening on Friday, which is the jobs report, which will be another huge key economic indicator that will help us understand the path of future rate hikes for sure. All right. I want to move to a I.
We haven't talked about it yet, so we have to. But there's actually big news chatter is coming to the workplace Salesforce is integrating chatbots into Slack to help you become your most productive worker self. So it says there are three main use cases for it.
One is to summarize conversations instantly. Second is to find answers to questions quickly. Okay. I guess that's just search in slack and then it has to draft messages and reply to people and just kind of create emails. Yeah.
When I heard this news, I feel like the central question comes back to the questions we've had about all the advancements recently is how accurate is going to be? Is the time saving benefits that you accrue from this tool going to outweigh the inaccuracies that are inevitably going to pop up? So I don't know. Honestly, people are saying they're very bullish on this because, yeah, you could potentially save a lot of time by having the slack kind of get out ahead of the messages you're going to send to your coworkers. But the tool that this reminded me of was, you know, in Gmail where you're typing an email and it tries to finish a sentence for you. This is that on steroids. And I hate that feature, like really never really says what I wanted to say.
So I think I use it in the you head tab and like let it come sometimes. Yeah. But I think this is, you know, this could be a workplace revolution. You know, it's kind of like Excel we were talking about earlier like was this are you having the same conversation as people did when, you know, Microsoft Office first released Excel? Yeah.
Like, I could see it where you're like, oh, this will never replace like the pen and paper. This is the bad method. So maybe I am shaking my fist at this guy. You're you seem to be very bullish.
I think this is like a great use case application for I I think it will really benefit people that spend time and learn how to use it. Right. I think there might be a lot of people who are intimidated by it and just kind of don't want to learn about it. But I think if people a few enterprising workers can really use it to their advantage, they'll just become like the most progressive people on the planet and people, you know, will love to employ it. And so I think this could be like on your resume.
It could be. I mean, this is completely plausible on your resume. You'll have proficient at excel expert at about querying. And I you know, I'm looking at your resume. I'm like, Dan, this guy can probably reply to six emails in 30 seconds.
Like that's pretty good. Well, I'll ask you, Neil, because fun fact, Neil is actually the top slacker in the entire organization. He sends the most messages on a yearly basis. Do you think that you would utilize this in your Slack habits? Well, I'm not so tech forward, so the people I'm talking about who I said are extremely unemployable. It doesn't really apply to me. Yeah, but you're a power user. Wouldn't you, like, find some? I don't know if I use it for what people, you know, in other industries use it for.
Like, I'm a writer. We're just kind of talking about things but, you know, talking about news stories and what to write and making jokes. It's kind of like a writer's room in our slack, which is not really cheap friendly, in my opinion, but I can see people with a lot of meetings every day just asking chatbots to summarize the meeting and five key takeaways list all the action items and then send it out to everyone in a draft email that it creates. Yeah, I mean, that would be a credible use case. And all these this misinformation stuff that you're talking about. I feel like in a workplace setting, it's really narrow.
Right. Like you're not asking it to tell the history of World War Two or, you know, give political opinions. It's really simple tasks like summarize what we just talked about in this meeting because I don't really feel like it and then send it out in a very commonplace work email. You're saying that this podcast could have been a summarize Slack message? I'm sure if we thought about it, we could probably have achieved summarize the podcast and put it up on our website. Interesting ideas and producers and the producers well, let's let's talk about that. No, but yes, overall, I think this is going to be a workplace revolution.
I think that people should really learn how to use that tech and they'll just become employable as much as anything. Yeah, I could be totally sold. I'm so good. I could be totally wrong. That's my thought. All right, Toby, next story. I know you have a big sweet tooth I have a huge sweet tooth.
It's horrible. And I don't, which is crazy. But I do want to talk about artificial sweeteners, which are those sugar substitutes that are put into food that make them sweet without using sugar, which people are increasingly avoiding. There's new research fruit, new research out about one of those substitutes, which is called erythritol it's the most one of the most popular artificial sweeteners. The study shows that erythritol, erythritol. All right.
It's closely associated with risk for major adverse cardiovasc ocular events, making them more prone to heart attacks, strokes and even death. So basically, if you if you have more erythritol in your blood, you're at elevated risk of major heart problems. Yeah. This study had a lot of interesting layers for me.
First of all, I loved how the doctors conducted this study where they took 4000 people across the U.S. and Europe and just who are at elevated risk for cardiovascular events and looked for compounds in their blood that kept popping up. And Erythritol was like one that really, really stood out.
So I love that kind of reverse engineered it and found this substance. And then to the reason why Erythritol is in so buzzworthy is because it's a naturally found compound in our bodies already. It is a sugar alcohol that we make. And so a lot of kind of food scientists and researchers thought that it was safe because, hey, it's already in our body. But obviously when you make it in a lab, you make it artificially and you have elevated levels.
It does bad stuff for your body. So there were some criticisms to that point that you're just talking about that erythritol is naturally made in our body. So this one guy, this one physician wrote in the Montreal Gazette a pushback to this research he criticized. They poked a bunch of holes in it and said that, look, you shouldn't say it's an artificial thing because we do produce it.
And then he says, I just want to quote him because it's kind of like a mike job. It is easy to say, as the authors of this paper do, that more research is needed but I would argue we don't need more research. We need better research. Yeah. So savage, honestly. So it's kind of savage. And there are some caveats that the researchers did make in this erythritol study.
And it's this classic correlation does not equal causation. Right. So they found that high erythritol in your blood is associated with heart attacks and strokes. But it doesn't necessarily cause them. Yes. I love a good old scientific discourse. I love when studies come out and people refute it is kind of the scientific method at work.
I think it's true, but it kind of belies the rise in artificial sweeteners because I think they used to just be in Diet Coke and now it's in aspartame and stuff like that. Now it's in a ton as sugar. People don't want to consume added sugars anymore. And so food companies are decreasing their use of sugars. It says the number of new food products containing sucrose has fallen by 16% in the past five years.
It makes a lot of sense. This is why this is such a big issue. If there is, the child does actually lead to adverse health outcomes. It's because most of the people who are targeting these products, they see no sugar, they see low sugar and they think healthier. And those people are probably already at risk for a preexisting condition. So now you're combining a less than healthy population, also maybe drinking or eating something that has bad health outcomes.
You can see how that's very alarming to the medical community. So I just thank God every day I don't have a sweet tooth now. Or should I? It's fine. No, it's the worst. I said I pass a bakery and I'm just like, oh, literally, last night I ate an entire bag of Pop-Tart minis.
I didn't even know this was a thing, but I feel horrible after it. So no, I'm much more savory. Like I'll eat anchovies while you eat while you eat muffins.
That's disgusting. Okay, let's take us into our final story of the day. It's about Lego.
Basically, meal Lego is on fire. Right now. Sales rose 17% last year to 9.2 billion compared to the previous year. Net profit was up 4%, just an awesome year. And just to put it in perspective, Barbie maker Mattel, their 2022 sales were flat at 5.4 billion. And then Hasbro, another big toymaker, declined by 9% to 5.9 billion. So Lego is not only almost double the size of both of those, but it's also still growing.
And it was only became the largest toy maker less than a decade ago. It was the same at the same revenue as Mattel. Less and less than ten years ago. And now it's double that.
Right. So Lego is just executing on another level right now. And so I actually want to talk about kind of their strategy that led to this growth. So Lego CEO Niels Christiansen.
I thought you were just saying something to me. Now, Neal's with an estimate and he attributes it to a few main things. Well, first off, store expansion, especially in China, they've opened a ton more stores. They've also bolstered their e-commerce presence.
But also he attributes it to the increase of new products that they have released into digital engagement. On that first point, 48% of Lego's products last year released were brand new. So they're not kind of resting on their laurels.
They're not just releasing the same Bionicle figures year after year. They really, really have this diverse product line, which consumers love, obviously. And then on the digital engagement piece, this is where I think Lego is crushing it. First of all, the Lego movies have been smashing success. Everything is awesome.
Just popped into my head right now as we're saying that the Lego Star Wars and Harry Potter video games have also crashed. And then the kind of headline news is they are releasing this massive metaverse within Fortnite, which they've also invested $1,000,000,000 into epic games. So they're really, really betting and hanging their hat on this digital engagement piece. It's kind of funny because when another brand said they're getting into the metaverse, everyone kind of rolls their eyes.
And then when Lego says it, you're like, oh, this is going to be incredible. Well, it's also I think it just talks. Yeah. It speaks to their brand. I mean, they're just such piece. Yeah. And also, it makes sense. They bet on Epic like $1,000,000,000 investments.
And they they know that Epic is probably the leading. I don't even like buying Fortnite or Epic a metaverse. It is just it's like an immersive game. I think it gets a bad rap when it's especially in the metaverse. But it shows Leo's extremely savvy.
They know what they're doing. They know where the kids are hanging out. And so I'm I'm actually me genuinely as the person is excited for this to come out because I'll check it out. And I know during the pandemic, we can consume a lot of Lego content. Tobey would come over and we bought a Lego Masters that show on Fox. Yeah. If it's people building like these absurdly fast Lego builders in the world and they have to build really crazy builds, it's.
And then I got tired after five episodes. Give your other Lego facts about the precision of it. Final Lego facts. If you just Google Lego facts I highly encourage you to do it because there are some really it's just a really interesting company that's built about bricks. But a brick you play with now will fit into a brick made in 1958 that they have such precise manufacturing and they just haven't changed anything. I love that.
Whenever we talk about semiconductors, I actually think about Lego bricks because semiconductors need these highly, highly precise machines in order to make them. Now I'm thinking someone leverages Legos machines because those things are just as precise. Precise, yeah. All right. That is all the show we got for you today. It is Wednesday.
Hope you have some awesome celebrations. Whatever you're celebrating and especially International Women's Day. Remember, you can always reach us at morning for your daily morning. Bukom hit us with what you think. The number one medical tourism destination is because we are lost.
And a few shoutouts to our amazing crew behind the scenes. The show's producer and editor is Emily Miller Ion, the show's technical director. Is a huge show.
Our supervising producer is Bruce Bryce Beloff. Sorry, Bryce. The show's audio ninja is down.
HBO's hair and makeup got blocked by the DOJ Devin Emery is our chief content officer and our show is a production of Morning Build. Great show today, Neal. Let's run it back tomorrow.