People like to scoff at the idea of blending health care with shopping. Uttering the very words “consumer driven health care” sends shivers down the spines of “purists” - your local medical specialist, whose life-saving work necessitates the confidence and ego driving the indignancy of the thought. Does consumerism cheapen health care? Well, yes…if you caught the double entendre. Those of you who are too good to have your profession sullied by associating it with value probably think so as well…but not in the good way.
Check out these two posts from Brian Klepper on The Doctor Weighs In Blog. The first, entitled “The Myth of Healthcare Consumerism” points out a recent study that shows only 19% of people would research their doctors and switch providers if they found their doctor had received a low rating. Now, even if this number is lower than expected, I don’t think healthcare consumerism has anything to worry about. First of all, as the post points out, 19% is 38 million adults. Secondly, the data says nothing about using online research to find a provider in the first place. Switching doctors is difficult and inconvenient. Picking one in the first place isn’t…and it certainly will only get easier as more information comes available to make an informed decision. This is sort of the point. Surveys ask people to describe what their behavior will be in a given set of circumstances. These circumstances have never existed…so the utility is unknown. However, the early sites seem to be showing promise. How many hits do you think drugs.com or wedmd.com get in a day? My startup, doctorpricing.com gets thousands a month and it’s still a beta version.
Klepper’s second post: “Health Care and the Gathering Storms“ compromises the theme of his first. Warren Brennan, the CEO of SMA Informatics in Richmond, provides economic data (S&P/Case Shiller Home Prices Indices, wage data) that supports what any informed American already knows - we are experiencing and economic contraction that may become, or possibly already is, a recession. The individual consumer makes up 70%+ of our country’s economy, and health care has been riding a wave of economic prosperity that is ending. The conclusion? Health care businesses (doctors, hospitals, technology companies, etc.) are going to hurt just like every other industry. What can we deduce from this? Health care consumers are, at some level, price sensitive, just like every other type of consumer. It is a basic tenet of economics.
Why do Americans spend more per-capita than any other country in the world on medical care? Because they can…. When the can’t any longer, they won’t. Price matters. And it’s going to matter more as health care costs continue to outpace inflation by 200-500 basis points. Employers will no longer be able to provide standard insurance to employees…cheaper alternatives like High Deductible Health Plans will become more mainstream. People will have to manage some of their own health care risk…one way or another.
At least I hope so…for the sake of all of us…
Ha! I think I have some ColecoVisions to sell the people that find it “impure” to shop for healthcare (or to do it on price)… the idea that physician selection isn’t truly consumer-driven is obsolete.
Physician selection is one of the most consumer-driven activities possible… smart consumers ask friends, family, and co-workers for recommendations of doctors. That’s as consumer-oriented as it gets. Perhaps you could even say that it always has been. True referral-driven businesses are signs that consumers have POWER.
The biggest reasons that most people don’t shop on price are that they don’t know that they can, and they don’t know how, or that their health coverage gives them no incentive to.
thank you jeremy. you said it better than i did…
I agree with everybody else: awesome story.! Much food for thought… It really made my day. Thank you.
I had an interesting experience trying to see a rheumatologist last year.
We are part of the great uninsured mass of working-class America (They ask 2/3 of my husband’s salary for insurance. We like to pay our utility bills and eat instead.), and so consequently we are self-pay for all our medical bills. If I schedule one of us to see a doctor or have a test run, I ask, “How much does this cost?” Some of this I know by heart; the annual thyroid test is $15, the yearly pelvic $80, and it’s $56 to see my primary care doctor for continuing management of my or my husband’s health.
So I called the rheumatologist’s office, and asked, “How much does a visit cost?”
“Well…it depends on what he does, and we generally just bill the insurance, and so you don’ t need to worry about….”
I interrupted. “No, listen, please. We are self-pay. There IS no insurance. There isn’t going to be any insurance. I want to know how much money to bring to the office to pay for my ten minutes with the doctor.”
“Uh….I’m not really sure, can you hold please?”
I found this very very strange. My hairstylist can quote prices for her time and labor. My mechanic can quote me labor costs, which factor in time spent. If I have the cab wait, he can certainly compute the cost of his time and services. If I have the plumber come out, he can quote me a basic charge for taking a look under my sink. Why can’t this doctor?
I was eventually transferred to a different person, who said that I should bring $150. At the end of the visit, I paid $150 cash and arranged to be sent a bill for the other thirty, as we didn’t have it at that precise instant. When the bill came, it was for $180. I called and pointed out that I had the reciept for $150 in cash, and they promptly altered the payment to indicate that, but I found that very suspicious.
And in the end, I decided I preferred to spend ten minutes with my family doctor, who knows me as an individual, and pay $56 rather than pay $180 for five minutes with someone who wasn’t properly listening to what I said.