Opening the Marketplace: The Next Steps for Healthcare

Buying fruit is far simpler than choosing a doctor.
But as a patient, you still need to be an educated shopper.

Whether or not you believe in the new Health Insurance Exchange, it's hard to argue against the economic principle behind it: an open marketplace encourages competition, better products, and lower prices. The problem is that the the exchanges don't go far enough. The issue is not about how much you pay, but about how much others pay for the same service.

Most insurance plans only partially cover the price of a medical procedure and often, doctors will require patients to pay whatever their insurance doesn't cover. These extra costs can vary widely, and together with copayments and deductibles, leave many patients with medical bills they can't afford. We don't want to be cheap when it comes to our health, and asking for prices upfront somehow seems a little uncomfortable.

So how do we solve this problem? Obviously, there's no panacea. But here are two concepts that I think need to be part of the solution:

Reviews: Patients need to rely on more than just referrals to decide on their doctors. They need honest recommendations and facts. The website ZocDoc.com already provides physician reviews and allows patients to book appointments online; but to be effective, reviews need to be more widespread. There are privacy concerns for sure. Many patients don't want to talk about their medical struggles online. Still, to make healthcare more affordable, patients must be able to evaluate the quality of the doctors available.

Price Lists: Patients need to know the prices of procedures. Obviously, cost is not the only factor in deciding which doctor to see. But it is a factor and needs to be addressed. There are ways for people who can look up insurance and have a lot of time to research prices, but that is not practical for most patients. There are also websites that provide average rates for procedures by area, including Healthcare Blue Book and FAIR Health. But they don't tell you which doctor in your area has the best price. Customers need to be able to comparison shop and evaluate the quality of the available products to make educated decisions.

These are just a couple of ideas, and I would love to hear what you think. Feel free to comment below or on social media.

If Life's Not Fair, Does Justice Matter?

Read enough blogs and e-books about leadership and success, and you'll see one bit of advice that overshadows all others: don't be a loser. Or, to be more precise: don't let a few losses keep you from winning in the end. This concept has created an endless number of platitudes that offer little comfort to the aggrieved: focus on wars instead of battles, be resilient in the face of adversity, and remember how long it took to build Rome. But embracing failure seems to deny one of our basic traits: a desire for justice.

If people are hardworking, kind, and generous, we want to see them rewarded with success; if they are hurtful or lazy, we want to see them punished. Our desires often don't become reality, leaving us with the conventional wisdom: "life's not fair" and "business is business." But the reality is that no matter how much we try to shake off this concept of justice,  we can't. Fairness is a part of us.

In a blog post today on the Harvard Business Review website, N.  Taylor Thompson, a fellow at Harvard University's Forum for Growth & Innovation, writes about how fairness is an integral factor in consumers' decisions. When Netflix decided to split its DVD and video streaming subscriptions two years ago from $10 total to $8 each, they expected to attract some customers interested in just one of the services eager to pay less for renting movies. But what happened? Many Netflix users considered the split an unfair price increase for the services and more than a million of them cancelled their subscriptions. What should Netflix have done? Explain why it had to raise prices. Maybe the company should have said how movie rights are more expensive on streaming video than on DVD, and that it wanted to provide as many movies as possible to its members? Or maybe it should have talked about the new costs associated with developing original content for subscribers, like the popular show House of Cards? No matter what, providing a reason would have been far better than telling people nothing. By sharing their rationale, Netflix executives would have shown that they wanted to be fair.