John Goodman in his blog dismisses the results of the EBRI/Commonwealth study, and separates what consumers say they want (for free) vs. what they actually do when they make a choice.
“If the question is: Would you rather have a rich, generous plan from your employer than a skimpy plan? Don’t do a survey. Assume the answer is: yes.”
“If the question is: Do people who have the opportunity to choose between health care and other uses of the money make those choices more often than people who do not have that opportunity? Don’t do a survey. Assume the answer is: yes.”
For some reason, healthcare research finds it surprising that people make different choices when everything is free. Most people also struggle a little when adapting to new products. As an entrepreneur in the space, I find it amazing how little people equate our healthcare system to the rest of the realities of a capitalist system…
John Goodman makes a very interesting argument pointing to 3rd party payment as a primary cause of the lack of innovation in health services. He highlights a lack of incentive for more efficient care, as it is combined more often with financial penalty instead of reward.
“There is no systematic reward for excellence and no penalty for mediocrity. As a result, excellence tends to be the result of the energy and enthusiasm of a few individuals, who usually receive no financial reward for their efforts.”
However, Goodman takes two aspects: price and quality too far. In citing the retail clinic, he claims that transparent pricing and quality of service allows success outside of 3rd party payment.
However, in discussions with Linda Hall Whitman, former CEO of MinuteClinic, this example falls somewhat short. 3rd party payment was a key to the financial viability of the MinuteClinic, including significant funds from BCBS MN. MinuteClinic’s success was based instead on SUPERIOR service combined with SUPERIOR quality at half the price.
There appears to be three approaches that consumer-focused innovation can improve upon to drive real adoption: 1) Out-of-pocket price, 2) Expected quality of care, 3) Expected level of service.
