Consumer Focused Health

Was listening to a podcast with Robert Nesse, CEO of Franciscan Skemp Healthcare, which is part of the Mayo system.

In talking about High Value Health care, he put forth an interesting equation I hadn’t heard to date.

His take on the Value Equation for health was that is was:

Value = (Outcomes + Safety + Service)/(Cost + Time)

This is interesting to me as it is a mechanistic equation that seems to be based in a belief that there is some optimal value we can all agree on. One would imagine that would allow society to set some absolute value on each service, which fits in the overall approach taken by Medicare, Medicaid, health insurance, etc.

If we believe in a retail marketplace, value suddenly looks very different than the equation mentioned above. Per Karl Menger, in his Principles of Economics in 1873:

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The massive controversy over caffeine levels of decaf reported in the NYTimes Well blog highlight that people can have massively different perspectives about the value of the same product, which is what makes economics so fascinating, and top-down regulation so hard.

The Well blog got a java jolt this week as nearly 300 readers debated the merits of decaf, caffeine and espresso. The coffee smackdown was prompted by my post highlighting a Consumer Reports article about decaffeinated coffee. The CR coffee sleuths found relatively high levels of caffeine in several cups of decaf sold by popular chains.

Decaf drinkers were grateful for the information, noting that stealth caffeine is cause for concern for people who are prone to migraines or other health problems.

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