Differentiating Health Providers: Health Sector as Lake Wobegon Kills People

Oct 16, 2009

: Image via Wikipedia

Lake Wobegon was a place where “all the women are strong, all the men are good looking, and all the children are above average.” We all recognize that Lake Wobegon is a quaint fiction; so why then do we act as if our doctors and hospitals come from a place where all are superhuman and there are no below-average doctors or hospitals?

A recent article in the WSJ highlights the benefits of using top-rated hospitals…that by making transparent the success rate of various procedures in Pennsylvania, companies that work with the best performing hospitals find significantly better outcomes for their employees…and save lots of money.

Although at times premium care can be exorbitant, there’s evidence some in Pennsylvania saved money using top-rated hospitals. Hershey Co. offered workers medical coverage based on the state agency’s reported outcomes, and cut the company’s expenses by 50% over several years. The Philadelphia police union’s benefits-management company says it uses the state reports to steer officers to the best hospitals; as a result, it say its costs fall about 17% below those of comparable plans.

Tom Lamb, administrator of Philadelphia police health benefits, says he frequently explains to members why they should go to hospitals with better outcomes. “If an officer’s 7-year-old daughter has to go in for surgery,” he says, “I’ll sit down with the father and say, ‘Are you just going to shake your head yes when your pediatrician wants to send her to his golfing buddy?’ ”

So what is keeping us from seeing the tremendous shift of patients from sub-par to above-average performers? In a word…its a coverup. Data allowing consumers to objectively understand performance have been kept from them…so that there is no objective way to compare performance. Payment via claims is locked into a group discount model…better performers see no rewards financially or through transparency. Reputation tends to be based on institution rather than individual performance…and so varies tremendously between physicians.

It is differentiation…and the celebration of better performance that pushes the rest of our economy to offer better, more segmented value propositions to sophisticated consumers. Why, when it comes to our health, are we left to hope that we get lucky and get someone above average?