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None of us wants to go broke

The Balanced Pursuit of Self-Interest

The balanced pursuit of self-interest is so much a part of our daily lives that we take it for granted.  If you want to buy a product or service, you seek out someone who has what you want at a price that’s acceptable to both of you.  I call this ‘balanced’ because the only condition under which the transaction takes places is when both parties feel the terms are acceptable.  Buyer and seller roles are clear.  The motives of both buyers and sellers are clear.  As the buyer, you have alternatives, and so does the seller.  Both can walk away from the deal if the terms are not acceptable, or, better yet, if another alternative is more acceptable.  This is the essence of a free market economy, and technology has brought incredible levels of transparency to our every day buying decisions.

Imagine that you and your partner decide to finally make two decisions that have been lingering for years; you’re going to purchase the antique clock you’ve always wanted to put over the mantel, and you’re going to get the rotator cuff surgery you’ve been putting off.  One of you will research each purchase decision.

If you draw the straw to purchase the antique clock, you’d open your web browser and, in about 15 minutes, you’d know pretty much every one of the antique clocks fitting your description that were available for sale around the world.  You would know the asking price (or could submit a bid), and you’d be able to compare the price, condition, and other variables to help inform your choice.

You’d know the history of the seller including past buyer satisfaction (or lack thereof).  If you bought through a commercial channel like eBay, you’d know that you’d have recourse if the transaction wasn’t to your satisfaction.  Chances are you’d make your choice with a high degree of confidence and, when the clock arrived, you’d be happy. And so would the seller.  Chances are, no surprises.

Call it a ‘win/win’.

This is how virtually every one of our daily decisions is made – willing sellers and buyers brought together for mutually beneficial transactions.


Why the Consumption of Sick Care products and services is different

So what if you were the unlucky partner responsible for researching who and where to go to for a rotator cuff surgery? Whoa. How would we know what our range of choices was? And if we identified multiple choices, how would we judge and compare the relative quality of each? And how much each would cost? How would we know if what we received was of the highest possible quality, or even if we’d received what was promised?   And even if we knew when to be dissatisfied, where would we go for recourse? How could we use our good (or bad) experience to inform other consumers, and how could we provide dissatisfaction feedback to encourage our chosen provider to improve?

The unfortunate truth is that today you’d find very few answers for the questions above, and what you could find would be inconsistent and of poor utility in informing your decision. Of all the things that our existing healthcare system has been called, a ‘free market economy’ isn’t one of them. The lack of transparency and misalignment of financial incentives amongst the stakeholders are two of the primary impediments to high quality and high value healthcare products and services.

Why? My answers are sad and simple.

1.  Buyer and seller roles are confused and motives are misaligned.  In our current healthcare system, most of the decisions about what to consume are not made by the patient – the one who is either helped or harmed.  They’re made by the provider, who is also the seller.  And nobody really perceives the patient to be the buyer either – it’s the patient’s health insurance plan that negotiates Allowed Amounts, pays really big bills (above the deductible), and pays some smaller bills depending on the terms of that plan (copay, coinsurance, and deductible levels).  So the provider/decision maker/seller isn’t motivated to control costs to be competitive;  they’re actually motivated to escalate price regardless of cost to increase their profits. And since neither the patient nor the insurance plan is an active participant in many consumption decisions, this results in a complete lack of demand for the information that normally drives value-based decision making and allows sellers to escalate prices with little to no market pressures to control them and little to no correlation between costs and quality or outcomes. It actually motivates sellers to resist quality and pricing transparency. And since the insurance plan/buyer has little to no influence on individual consumption decisions, they apply leverage by lowering Allowed Amounts, excluding some providers, and passing the costs on to the patient in the form of higher premiums and deductibles.   Every transaction between providers and insurance plans becomes ‘win/lose’. One benefits at the other’s expense.

2.  Under our current Fee for Service revenue model, providers are heavily incentivized to do more. More diagnostic tests, more medications, more procedures – regardless of whether doing more helps the patient or not. This model literally encourages waste instead of minimizing it.


So – should the moral of the story be, if you’re ever confronted with a situation like choosing the antique clock/rotator cuff responsibility, grab the antique clock quickly?

No – the moral of the story is …

You deserve a chance to collaborate with your providers and be engaged in choosing the treatment alternative that is right for you.

You deserve to pursue and your own self-interest.  To understand the motives of other players in the game of healthcare, and why they behave the way they do.

You deserve a chance to learn from the patient satisfaction stories of others prior to making decisions, and to share your satisfaction from your own experience afterwards.

You deserve choices, including accurate and, when available, evidence based information on the chances that a treatment will help or harm you.  And you deserve to know what happens if you do nothing (let the body heal itself), or make lifestyle changes.

You deserve the chance to avoid waste and overpayment.  And at least a chance of estimating the costs of services you choose to consume.

Most important, you deserve a chance to stack the odds for high quality care in your favor.


Putting this into perspective …

Take a peek here to understand just how different the Old (current) Game of healthcare is relative to other consumer experiences such as booking airline travel, eating at a restaurant, or understanding a hotel bill.

Remember:  We coach, support, educate, and empower.  We illuminate options you may not have known you had.  But we don't decide what's right for you in your unique circumstances; only you can do that.  And we don't provide medical, financial, or legal advice; nor do we replace the valuable counsel of those who do.