Given I am living with brain cancer, it’s probably not a surprise that I give a lot of thought to the health-care debate. Ultimately, I believe that the only true solution to the nations health and insurance crisis to establish a nationalized health-care system that drives preventive care programs, medical research and direct care through all stages of life.
That said, it seems that the industry has done far to good a job of convincing the population that somehow it is better to trust the nation’s health to corporations that answer to their board and shareholders than to trust a government that, at least in principle, answers to the people. Sigh.
So, if the forces of corporate greed are intent on a corporate-driven health-care system I would suggest that the following approach has the best chance of actually benefiting the people of the United States:
Implement regulations that:
1: Standardize premium prices based on a defined set of coverage levels
2: Ensure that coverage cannot be denied, except for cases of fraud, etc., and make it as easy to switch insurers as it is to switch banks, while still respecting contract terms (similar to mobile phone service plans).
If price-based competition is eliminated, companies need to focus on customer retention and acquisition, along with operational efficiency, to maintain growth, profits and market share. This of itself does not create a powerful incentive to deliver quality care since the consumer still faces barriers to entry and limited ability to switch providers due to pre-existing condition clauses.
Once the barriers for entry are eliminated, and the opportunity to exercise freedom of choice is enforced, the competitive imperative of customer acquisition and retention becomes fundamentally customer driven. If individuals are dissatisfied with the quality of their care, they can migrate to another provider. Thus, the delivery of quality care has been structurally linked to economic success, and profit is derived via operational excellence in the delivery of customer value; the objectives of fiscal success and societal benefit have are mutually served.
Costs also need to be controlled of course, but in this model cost reduction is driven primarily through operational factors rather than cutting corners on quality, service and care (since failures in those areas equate to customer attrition). Cost controls within the supply chain need to be put in place as well, but as soon as the profit engine of the entire industry is driven by quality, value and consumer choice, competitive pressures in all parts of the chain would need to re-align around these same elements.
This approach would not only allow for competition based on true innovation, it would also shake out the dead weight of companies that serve themselves at the expense of society.
Approaches that expect a price-driven market to deliver quality clearly have ignored the lessons of Walmart. While a cheap plastic chair for $20 may seem like good value at the time of purchase (because it is the cheapest option to satisfy the immediate need), if it breaks in a year and becomes waste that must be replaced, the true value is significantly reduced. If we replace the chair with, say, surgery to remove a tumor or repair a damaged organ or limb the quality and value equations are radically different.
I’ll say again, I do not believe that any market-driven solution will best serve the fundamental needs of the nation when it comes to health-care. While governmental programs have the potential for corruption and waste, they do ultimately need to answer to the population at large, rather than a few privileged board members.