Comments on: Business models for health care: Andy Kessler’s take on the future of medicine http://www.mcgeesmusings.net/2009/01/04/business-models-for-health-care-andy-kesslers-take-on-the-future-of-medicine/ "The cure for boredom is curiosity. There is no cure for curiosity." - Dorothy Parker Sat, 11 Feb 2012 17:14:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: CA http://www.mcgeesmusings.net/2009/01/04/business-models-for-health-care-andy-kesslers-take-on-the-future-of-medicine/comment-page-1/#comment-103075 CA Tue, 14 Apr 2009 19:39:28 +0000 http://www.mcgeesmusings.net/2009/01/04/business-models-for-health-care-andy-kesslers-take-on-the-future-of-medicine/#comment-103075 Imagine for a moment that when purchasing groceries, clothing, gasoline, furniture, a car, accounting services ,anything at all, etc., you learn of its price only at the checkout counter and further, once at the checkout counter, you cannot return any item because you think it's too expensive. I will venture to guess that under this scenario, prices for any commodity or service would be far higher than they are today. Welcome to the world of medical pricing. Hospitals and medical providers should be required to prominently post online or otherwise their cost of services. Hospitals can easily calculate their average cost - say, over a one year period - of, say, a double bypass any other procedure. Doctors should be able to do likewise. Posted prices should be ALL INCLUSIVE. True, the actual cost of a service provided will differ from the calculated average, but over time, actual costs will regress to the calculated mean. Medical care, because of govt. interference and private medical insurance has been insulated from any and all forms of competition. Some time back in Kiplinger's an article dealt with an internet site that actually helped folks find the best price for medical procedures (e.g., open heart surgery). An uninsured chiropractor actually found a midwest hospital that performed a surgical procedure for tens of thousands of dollars less than his local California hospital. Once hospitals and doctors are forced to publish price lists, internet sites will appear all over the net allowing patients to seek the most cost effective care as well as posting competency ratings of hospitals and doctors. This is no panacea, but it will go a long way to introducing competition into the medical services business. Currently, there is no price competition at all. By the way, just the other day, I took my 14 year old daughter to the doctor (just the flu). Behind the counter at the receptionist area there were about 8 people who appeared merely to be retrieving medical files. My guess is that most of them were employed just to fill out insurance forms and handle paperwork and that perhaps one or two were actually nurses. What a waste of money. I understand that medical services cannot be sold and marketed like personal computers, but price competition ALWAYS leads to better consumer choices and cost effective solutions. In today's world of instant information access via the internet, it is inconceivable that competition cannot be generated in the world of medical services. Imagine for a moment that when purchasing groceries, clothing, gasoline, furniture, a car, accounting services ,anything at all, etc., you learn of its price only at the checkout counter and further, once at the checkout counter, you cannot return any item because you think it’s too expensive.
I will venture to guess that under this scenario, prices for any commodity or service would be far higher than they are today.
Welcome to the world of medical pricing.
Hospitals and medical providers should be required to prominently post online or otherwise their cost of services.
Hospitals can easily calculate their average cost – say, over a one year period – of, say, a double bypass any other procedure.
Doctors should be able to do likewise.
Posted prices should be ALL INCLUSIVE. True, the actual cost of a service provided will differ from the calculated average, but over time, actual costs will regress to the calculated mean.
Medical care, because of govt. interference and private medical insurance has been insulated from any and all forms of competition.
Some time back in Kiplinger’s an article dealt with an internet site that actually helped folks find the best price for medical procedures (e.g., open heart surgery). An uninsured chiropractor actually found a midwest hospital that performed a surgical procedure for tens of thousands of dollars less than his local California hospital.
Once hospitals and doctors are forced to publish price lists, internet sites will appear all over the net allowing patients to seek the most cost effective care as well as posting competency ratings of hospitals and doctors.
This is no panacea, but it will go a long way to introducing competition into the medical services business. Currently, there is no price competition at all.
By the way, just the other day, I took my 14 year old daughter to the doctor (just the flu). Behind the counter at the receptionist area there were about 8 people who appeared merely to be retrieving medical files. My guess is that most of them were employed just to fill out insurance forms and handle paperwork and that perhaps one or two were actually nurses.
What a waste of money.

I understand that medical services cannot be sold and marketed like personal computers, but price competition ALWAYS leads to better consumer choices and cost effective solutions.

In today’s world of instant information access via the internet, it is inconceivable that competition cannot be generated in the world of medical services.

]]>