If Healthcare Were Run Like Retail – It Can Be.

I read an interesting post over on the Action For Better Healthcare blog today that caused me to stop and actually leave a comment. The blog which serves as an advocate for non-profit hospitals and the value of those hospitals, featured a post by Kester Freeman, the retired CEO of the largest integrated healthcare delivery system in South Carolina, Palmetto Health.

In the post titled, “If healthcare were run like retail…” It isn’t, nor can it be, Freeman takes on one of the icons of consumer-driven health care, Regina E. Herzlinger the Nancy R. McPherson Professor of Business Administration Chair at the Harvard Business School. She was the first woman to be tenured and chaired at Harvard Business School and the first to serve on a number of corporate boards. She is widely recognized for her innovative research in health care, including her early predictions of the unraveling of managed care and the rise of consumer-driven health care and health care focused factories, two terms that she coined.

In what will be a five-part series, Freeman promises to dissect Herzlinger’s recent article for BusinessWeek, If healthcare were run like retail…, in which she argued that a consumer-driven system would cut costs and improve service.

It the fist of the series, appearing today, Freeman takes on the first point in Herzlinger’s ideal world scenario: “Consumers tailor their own healthcare coverage, navigating in a national insurance market.”

While the Business Week article does not go into any detail about what the professor means by this statement, Freeman writes,

I think it’s rather unrealistic to believe that consumers have the in-depth knowledge required to accomplish such a feat. As Eugene Borukhovich wrote in a January 3 blog entry, most people have yet to establish a personal health record (PHR), such as Google Health or Microsoft HealthVault. Even if set up, the lack of providers that are technologically advanced to synch up with these PHRs makes true accessibility near impossible. Additionally, data and information on procedures, costs, and payer reimbursement that can be obtained by consumers through simple Internet searches has yet to exist. Patients aren’t doctors. Patients aren’t insurance companies. How can a patient-or in Herzlinger’s words, consumer-be expected to intelligently navigate such extensive choices and clinical detail with limited information and knowledge?”

That is where I had to clear my throat and leave a comment. I mean what does tailoring health care coverage have to do with PHRs?

Here’s what I wrote:

I think the issue of being able to tailor one’s own coverage by navigating a national health insurance market is being misconstrued and overcomplicated in the above post. What this really boils down to is having the choice about what you as an individual want to have covered. Today, in addition to basic coverage, each state Department of Insurance mandates all sorts of medical procedures be covered in policies sold in that state. Not to pick on anyone, but mandated coverage for chiropractic visits is a good example, and these mandates add to the cost for everyone. I for one have never been to a chiropractor. So, if given the choice not to buy this coverage, I would forgo it for the premium savings. Or, maybe choose to spend the savings on increased vision benefits because my back is fine, but my eyes need help. This is not that much different than deciding whether to add towing to your car insurance. I would think most people with a high school education can reasonably be expected to be able to make that kind of choice.

I attended the New Product Design & Development in Chicago this past October and heard first-hand several major health plans report on how they have already developed the ability to deliver just such tailored products.

The technology is there, the market demand is there, now all we need are willing DOI’s and health systems.

1 thought on “If Healthcare Were Run Like Retail – It Can Be.

  1. Great post! I agree. Let’s put the people at the center of their healthcare decisions and give them reliable information to support these decisions.

    Although there are issues for data exchange between providers, facilities, etc. (as you mention above) you are correct in your assertion that the technology does indeed exist today. Now we just need to get busy putting it to good use.

    Thanks for sharing.

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