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Thanks to COVID-19, this member of Congress says the future of work is already here

Rep. Lisa Blunt Rochester says the COVID-19 crisis could create new opportunities for American workers.

Rep. Lisa Blunt Rochester

Rep. Lisa Blunt Rochester launched the House of Representatives' Future of Work Caucus with Rep. Bryan Steil.

Photo: Bill Clark/CQ-Roll Call Inc. via Getty Images

When she launched the House of Representatives' Future of Work Caucus back in January, Delaware Democrat Lisa Blunt Rochester hoped to reach some bipartisan consensus on what the future of work will look like and the best way to prepare American workers for it.

Then the COVID-19 pandemic tanked the economy, spurring more than 45 million in the U.S. to seek unemployment benefits. Suddenly, any heady discussions about the future of work were superseded by the more urgent issue of getting people back to work today — or at least giving them a life raft to stay afloat until that's possible.

Yet, while the pandemic may have derailed Blunt Rochester's initial agenda, she says that in so many other ways, the COVID-19 crisis has actually hastened the future of work, ushering in the widespread adoption of remote work, telehealth and benefits for gig workers.

At a virtual event on the transformation of work hosted by Protocol and Workday, Blunt Rochester talked about this shift, how to ensure Congress' "bold" actions continue beyond the current crisis, and how the economic recovery from COVID-19 stands to create new opportunities for workers.

This interview has been edited and condensed for clarity.

You started the Future of Work Caucus a couple months ago when we were in a very different economic reality in this country. So tell us what was on your to-do list back then and how that's morphed and changed the last few months.

I was elected in 2016, and I had never run for anything before. I had a background serving as [Delaware's] secretary of labor, head of state personnel, and also Urban League CEO, where economic improvement and development was important. And I started having all these meetings, whether it was with corporations or universities, even our newspaper, and everybody was talking about "the future" of whatever it was. I really got concerned because what I noticed was that there was not a sort of North Star or a common vision for where we were going as a country. I was seeing one member of Congress was introducing bills on autonomous vehicles, another was introducing bills dealing with classification of employees, but there really wasn't this place where we could come together and focus as a country.

So, the real thought here was to create a bipartisan caucus that would allow us to talk across party lines and focus on being a convener, number one. And number two, a clearing house, so that there was one place where many of these ideas were being put together. And lastly, the hope was that we would be able to start having real serious dialogue to develop a vision for our country.

We had our kickoff earlier this year, which was standing room only. I mean members were being turned away, because there were so many people, from the Black mayors to the unions to the chambers. It was just that much interest. Then COVID-19 hit. And it really shifted the focus for us, because for members of Congress, including Rep. Bryan Steil, who is my co-chair, our focus really had to be on that pandemic and how we deal with that.

What were some of the policy priorities that you hope to get to later this year or in the next session?

We've been able to have conversations on issues surrounding benefits. Because of COVID-19, it's really not only shifted the conversation, but it's made us go into action. COVID-19 shined a light on what we already knew existed in terms of inequities in our society and magnified those things, but it also accelerated the future of work.

Artificial intelligence, machine learning, the necessity for broadband in our society — COVID-19 brought to fruition all the things we talked about for decades. Distance learning — we've been talking about that for a long time. That's not new, but it made it a reality. Telework — it made it a reality. Even real estate. I've heard employers say, "We're not going back, renting all of this space when we're being even more effective in this way." And then telehealth — before this there was about 13% penetration in telehealth and telemedicine, but after COVID-19, it's skyrocketed to over 80%. So it's had us not just talk about the issues, but actually be forced to really do something about the issues.

How do you think this shift to remote work might open up opportunities for people with different skill sets in different parts of the country?

This morning I was talking to our Federal Reserve Bank of Philadelphia and Cleveland, and they just put out a document, Exploring a Skills-based Approach to Occupational Mobility. One of the things that this report looks at is: Are there jobs that are at risk from automation that are low-wage jobs, but with a certain credential or the right shift in your skill sets, could increase wages and create upward mobility? This report is showing that for many of these jobs — they're now calling them opportunity occupations — they almost double the salary with the right skills. So for the nonprofit sector, the government sector, for the private sector, what kind of things can we do to incentivize and enable people to shift to those new skills that they need?

Incentives need to go two ways, right? You need to incentivize the workers to get the skills, but then you need to incentivize the employers to look at those skills and say, it doesn't matter if you don't have a degree from Yale, I'm still going to hire you. How do you incentivize that?

Sen. Mark Warner and Rep. Raja Krishnamoorthi have legislation that looks at worker training. We, as a government, can incentivize [businesses] by tax credits, but it's also about [businesses] providing flexibility, even in how we classify positions.

I used to hire people, and I remember there was a certain criteria: Did you get this particular credential? And if you didn't, the system automatically kicked you out. I think it's going to be a public-private partnership that's going to make the difference. We've seen companies even doing things where they're training employees in areas that are not what their mission is.

I went to Amazon, and they were training people to be phlebotomists, because the wages the employees were going to make as phlebotomists or CDL drivers was going to be higher than what they were making right there at the distribution center.

You've sat in all of these seats. You're in government. You were in the state government as secretary of labor, and you were the head of the National Urban League in Delaware, where you were looking to promote advancement of economic equality. You've seen these conversations for years. Why have we done so much talking and not enough accomplishing, and what are the biggest barriers that you saw in all of those seats to actually closing the skills gap?

Why all the talk? I think because a lot of times we are in these individual silos. And we don't really look systemically. We create a program. We create a pilot. We don't tend to make bold systemic changes.

COVID-19 accelerated and pushed us to move. I mean, we've had conversations about paid sick time for years. We have a gig economy, and before, unemployment insurance wasn't open to those individuals. [Now it is]. The social contract of our country has to change.

COVID-19 made us make some bold systemic changes. You would think during COVID-19 the poverty rate would have gone up. But there was an article in The New York Times that said the poverty rate has gone down some. [Editor's note: The story referred to studies that showed government funding limited the growth in the projected poverty rate this year.]

It's because we did a comprehensive bold investment and shifted how we do things. We changed the rules so that people could do telehealth. We were flexible in how we provided the funding. And so I think what has to happen is that we have to get away from: "Here's a little program. Here's a little pilot." That's why we created this caucus, because I wanted us to get in the room and hash it out.

One way that companies today fill the skills gap in tech specifically is to employ foreign workers on each H-1B visas. Just yesterday, President Trump put a hold on H-1B and other visas. What is your take on that move?

I think this is a serious problem from a tech perspective and a health care perspective. We actually were discussing this in our staff meeting this morning trying to understand the full ramifications of what is being proposed. I'm hopeful, and this is true on many issues, that my Republican colleagues will come together with us to share our concerns about this. This to me is a step in the wrong direction.

Do you think that any of your colleagues on the other side of the aisle agree with you on that?

I do. Will they speak up? That's a different story.

Since we are in election season, and you happen to be a family friend of another famous Delaware politician, Vice President Joe Biden, I wanted to ask what guidance you have given him or what guidance do you plan on giving him about these issues of workforce development and inclusion in the future of work?

First of all, I am really proud to have known him for over 30 years and be working with him, as he embarks on this big, big, big, big moment. I've shared with him my desire that the future of work is something that really presents an opportunity, as we transition from recovery, to reimagine what our country could look like. Part of the conversation we're having is about that new social contract. What does it look like, and how do we support businesses and how do businesses support the country?

We are in the midst of this really challenging time, but it really presents an opportunity for us to be bold, creative, evidence-based and equitable, and to try to lift all boats.

Image: Yuanxin

Yuanxin Technology doesn't hide its ambition. In the first line of its prospectus, the company says its mission is to be the "first choice for patients' healthcare and medication needs in China." But the road to winning the crowded China health tech race is a long one for this Tencent- and Sequoia-backed startup, even with a recent valuation of $4 billion, according to Chinese publication Lieyunwang. Here's everything you need to know about Yuanxin Technology's forthcoming IPO on the Hong Kong Stock Exchange.

What does Yuanxin do?

There are many ways startups can crack open the health care market in China, and Yuanxin has focused on one: prescription drugs. According to its prospectus, sales of prescription drugs outside hospitals account for only 23% of the total healthcare market in China, whereas that number is 70.2% in the United States.

Yuanxin started with physical stores. Since 2015, it has opened 217 pharmacies immediately outside Chinese hospitals. "A pharmacy has to be on the main road where a patient exits the hospital. It needs to be highly accessible," Yuanxin founder He Tao told Chinese media in August. Then, patients are encouraged to refill their prescriptions on Yuanxin's online platforms and to follow up with telehealth services instead of returning to a hospital.

From there, Yuanxin has built a large product portfolio that offers online doctor visits, pharmacies and private insurance plans. It also works with enterprise clients, designing office automation and prescription management systems for hospitals and selling digital ads for big pharma.

Yuanxin's Financials

Yuanxin's annual revenues have been steadily growing from $127 million in 2018 to $365 million in 2019 and $561 million in 2020. In each of those three years, over 97% of revenue came from "out-of-hospital comprehensive patient services," which include the company's physical pharmacies and telehealth services. More specifically, approximately 83% of its retail sales derived from prescription drugs.

But the company hasn't made a profit. Yuanxin's annual losses grew from $17 million in 2018 to $26 million in 2019 and $48 million in 2020. The losses are moderate considering the ever-growing revenues, but cast doubt on whether the company can become profitable any time soon. Apart from the cost of drug supplies, the biggest spend is marketing and sales.

What's next for Yuanxin

There are still abundant opportunities in the prescription drug market. In 2020, China's National Medical Products Administration started to explore lifting the ban on selling prescription drugs online. Although it's unclear when the change will take place, it looks like more purely-online platforms will be able to write prescriptions in the future. With its established market presence, Yuanxin is likely one of the players that can benefit greatly from such a policy change.

The enterprise and health insurance businesses of Yuanxin are still fairly small (accounting for less than 3% of annual revenue), but this is where the company sees an opportunity for future growth. Yuanxin is particularly hoping to power its growth with data and artificial intelligence. It boasts a database of 14 million prescriptions accumulated over years, and the company says the data can be used in many ways: designing private insurance plans, training doctors and offering chronic disease management services. The company says it currently employs 509 people on its R&D team, including 437 software engineers and 22 data engineers and scientists.

What Could Go Wrong?

The COVID-19 pandemic has helped sell the story of digital health care, but Yuanxin isn't the only company benefiting from this opportunity. 2020 has seen a slew of Chinese health tech companies rise. They either completed their IPO process before Yuanxin (like JD, Alibaba and Ping An's healthcare subsidiaries) or are close to it (WeDoctor and DXY). In this crowded sector, Yuanxin faces competition from both companies with Big Tech parent companies behind them and startups that have their own specialized advantages.

Like each of its competitors, Yuanxin needs to be careful with how it processes patient data — some of the most sensitive personal data online. Recent Chinese legislation around personal data has made it clear that it will be increasingly difficult to monetize user data. In the prospectus, Yuanxin elaborately explained how it anonymizes data and prevents data from being leaked or hacked, but it also admitted that it cannot foresee what future policies will be introduced.

Who Gets Rich

  • Yuanxin's founder and CEO He Tao and SVP He Weizhuang own 29.82% of the company's shares through a jointly controlled company. (It's unclear whether He Tao and He Weizhuang are related.)
  • Tencent owns 19.55% of the shares.
  • Sequoia owns 16.21% of the shares.
  • Other major investors include Qiming, Starquest Capital and Kunling, which respectively own 7.12%, 6.51% and 5.32% of the shares.

What People Are Saying

  • "The demands of patients, hospitals, insurance companies, pharmacies and pharmaceutical companies are all different. How to meet each individual demand and find a core profit model is the key to Yuanxin Technology's future growth." — Xu Yuchen, insurance industry analyst and member of China Association of Actuaries, in Chinese publication Lanjinger.
  • "The window of opportunity caused by the pandemic, as well as the high valuations of those companies that have gone public, brings hope to other medical services companies…[But] the window of opportunity is closing and the potential of Internet healthcare is yet to be explored with new ideas. Therefore, traditional, asset-heavy healthcare companies need to take this opportunity and go public as soon as possible." —Wang Hang, founder and CEO of online healthcare platform Haodf, in state media China.com.

Zeyi Yang
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.

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