Several years ago I consulted to one of the largest cable television companies—an industry that may be extinct in five years, can you say ‘streaming’—about their marketing strategy. The cable company was excited about their ability to execute marketing campaigns to entice subscribers to subscribe to premium movie packages like HBO and Showtime.
During one meeting they told me about all of the customers who had signed up for a package of HBO and Cinemax for eighteen dollars a month. I asked if they knew whether the campaign had increased their revenues and their chief marketing officer looked at me like I was an idiot—I get that look a lot.
What we uncovered was that even though thousands of people subscribed to the new package, most of those subscribers were people who had been paying twelve dollars and ninety-five cents each for HBO and Cinemax. This created a net revenue loss for the company of about eight dollars a month for each person that switched. This was a classic strategy of “We’re losing money but we’re making it up in volume.”
There is no segue for this piece as none is needed.
The Affordable Care Act. The next time the government creates a program I am willing to bet it does not give it a title with a built-in oxymoron. Sadly, the Act has become healthcare’s example of the cable company’s premium movie package.
The stated idea behind the Act was to ensure that more people had access to healthcare. That was supposed to happen because healthcare would be more affordable—nobody ever promised it would be affordable. The result so far? Some people who did not have insurance now have insurance. Many people who had health insurance have lost their insurance. Others who had it are now being charged more than they can afford and pretty soon they will not have insurance.
If the goal of the Affordable Care Act was to give insurance to people who did not have insurance, they may have minimally succeeded.
If the goal of the Affordable Care Act was to have less people uninsured, has it worked? Or, has it simply changed the faces of those who are without insurance? Robbing Peter to pay Paul.
And what about the Care aspect of Affordable Care? Has Care become more Affordable, or have we become so mired in the insurance aspect of the Act that the intention of making care more affordable has been lost?
If we evaluate the Act honestly, it is not equipped to make care more affordable. The cost of care has not gone down, it will not stay the same, in fact, it will increase.
It is, and it was from the outset, about insurance. The Affordable Care Act-has not worked. The Affordable Insurance Act—has not worked. The Act was about giving more people access to health insurance. The mistake the Act’s authors made was assuming payers would be good corporate citizens, was believing payers would act with some degree of benevolence, was believing that payers could be controlled or reigned in.
Cui bono? Who Benefits? Three years from now what will we have? When the dust settles, some without insurance may have it, some with insurance will not have it. Care will cost more. Payers will have higher revenues and larger profits.
And what about patients. Where does this all shake out when it comes to improving their experience? People who cannot afford healthcare, who cannot afford insurance, will not have an experience that can be measured by HCAHPs or anything else.
Pale Rhino Consulting 
Pingback: Customer Experience | TCELab Blog
Oh Paul, you give government far too much credit here. It was all about getting the uninsured into the marketplace and the affordability subsidies was to be offset by the reduction in costs to the hospitals and government when those folks show up in ERs for exacerbated ailments that should have been taken care of by GPs.
The ACA has been moderately successful in getting uninsured poor people onto state medicaid programs. But affordability is really a result of getting costs down and insurers don’t control that. They can negotiate on behalf on an insured population and employers but they can’t question costs. (Just talk with some insurers about the negotiations with Partners in Boston. They are almost a monopoly!)
Government doesn’t control much cost either. Under Medicare, it does set rates for providers but not for the really expensive things like drugs, diagnostics and medical devices, etc. It could but then that sounds too much like the National health care systems of Canada and the UK which benefit from the US population subsidizing the cost that makes those drugs and devices cheaper for those countries.
Healthcare costs are on the rise because, every facility and really good doctors want the best of everything, there is no real cost accounting; which is why you see the Medicare and insurance groups push to bundled payments, there is no competitive pressure because when someone is sick, they just want to get taken care of and they can’t afford the time to shop around, there is no consumer watchdog to assure that prices are reasonable and competitive and the vast majority of provider groups and hospitals are not for profit which culturally does not worry about cost.
So who wins? Not the patient, not the insurers, not the average doctor who just sold the practice to the large health conglomerate, not the taxpayers… hmmm who does that leave?
LikeLike