Wednesday, November 5, 2008

Consumers Need to Take Charge

Regina Herzlinger, Professor of Business Administration at the Harvard Business School, and author of “Market Driven Health Care: Who Wins, Who Loses in the Transformation of America’s Largest Service Industry”, discussed issues affecting healthcare in the U.S. The keynote presentation via video took place at the Partner’s Center for Connected-Health Symposium held October 27-28, 2008 at the Harvard Medical Conference Center.

Professor Herzlinger posed the question as to why employers are in charge of our healthcare. Health insurance in the hands of the employers means that people sometimes stay in big companies simply because of the availability of health insurance. As a result, small innovative companies don’t have access to all the people that they might hire and therefore, new positions aren’t expanding. Also, limited insurance choices result in fewer physicians, fewer innovations, uneven quality, high costs, and leaves millions of individual’s uninsured and underinsured.

Consumers if they could would like the choice of remaining with the employer’s insurance or buying their own insurance. Making choices is good for everyone and would produce a competitive, more personalized, and innovative society. Consumers would like to seek health insurance policies that would provide long term care, high deductibles if desired, and rewards for lifestyle if the individual is taking care of themselves and staying healthy. In other words, consumers are looking for more control and a customized healthcare plan.

Herzlinger emphasized that in a single payer system, innovations aren’t likely to happen especially when the government controls the money. Having a single payer system controlled healthcare system results in rationing healthcare is simply not acceptable in this country. In a consumer controlled system, individuals would be able to buy their own health insurance, healthcare services, and technology. Also, in a consumer driven system there would be a heavy IT system of care with information provided from all connected providers.

According to Herzlinger, Switzerland is a good example of a country that is consumer driven. Consumers buy their own health insurance and are able to demand information on costs and the quality of insurance plans. The defining feature of the consumer driven system is that when consumers make choices, the system becomes competitive, innovative, and provides many more choices.

A consumer driven system would also help entrepreneurs develop innovations in medical devices. For example, some of these innovations may include implantable devices such as continuous glucose sensor systems and the further development of real-time wireless systems. Plus a consumer driven system would also encourage scientists to make further advances in genetic testing. Healthcare entrepreneurs starting companies have a deep knowledge of how underlying technologies work and if they were helped by a consumer driven system, this alone could take healthcare innovations to a new level.