Steve Case, co-founder and former CEO of America Online, has exited AOL and made his new passion consumer-directed health care. Steve started a company called Revolution Health, and blogs regularly on the company’s site.
In a recent post entitled “Sicko,” referring to the Michael Moore documentary film, Steve outlines why consumer driven health care can help us as a country. I recommending reading the post, which is pithy and short, but here’s a summary of his points:
(1) most (70-80%) of the multi-trillion dollar health care budget goes towards treating and managing chronic diseases brought on or exacerbated by lifestyle choices.
(2) telling people they should change their lifestyle choices (e.g. lose weight, stop smoking, etc.) doesn’t work.
(3) people must have the right incentives to change their behaviors.
(4) by encouraging people to get involved in their own health care, they will make more informed choices and put less financial burden on the government, their families, and themselves.
Steve sees a light-handed government and de-regulated health care administration industry as a way to spark innovation. He cites the telephone industry as an example. Back when the government controlled telecommunications, Bell System was pretty much the only phone company. Phones were expensive and ugly… When the system broke up in 1984 after de-regulation, there was a torrent of innovation that hasn’t slowed down in 23 years. Today we have cheap, functional cell phones and PDAs. If the government had done to telecommunications what it is doing to health care, we certainly wouldn’t have cell phones. We’d probably be communicating fairly similarly to the way we did in 1984.
Now think about what could be done with medicine with a little more healthy competition…
[...] The S-Class was the first major production car to have a 3-point seatbelt (1965). It was the first car to offer anti-lock brakes (1978). It was the first car to have an airbag (1981). It was the first car with crumple zones (1959). It was the first car with electronic stability control (1995). It was the first car with satellite navigation. These are all standard equipment on most cars today, and if you note the dates above, it often took nearly a decade for these innovations to flood the mainstream. The S-Class is the laboratory and testing ground for automotive safety innovation. In fact, many of the innovations conceived in the S-Class, once thought ridiculous extras, have become so critical to public safety that they are required by law on all production vehicles. If there hadn’t been an S-Class, or, really, an automotive marketplace that encourages competition and innovation, we would be living in a much more dangerous (and expensive) world. I’ve written about how competition drives innovation before: in this post. [...]