If Health Care Were Run Like Retail... We'd All Be in Big Trouble

Businessweek recently ran an article discussing Harvard Business School professor Regina E. Herzlinger who believes that health care should be run like retail. Dr. Herzlinger is a strong proponent of consumer driven health care.

"People can choose from 240 models and makes of cars pretty intelligently," she says. "Why do we assume they can't do the same when it comes to their health?"

Huh, here is why.

There are some markets where the consumer isn't necessarily the best at making informed and intelligent decisions. One is in healthcare. There other is in financial services. As employers stepped away from pension plans and workers were given defined contribution plans- 401(k)s, workers ended up working longer and had less savings set aside for retirement, even though planning for their future was in their best interest and despite an entirely new industry - mutual fund companies and financial advisors.

Unlike retiring, one can't choose or delay when to have a serious medical problem. How do consumers know what is good in healthcare when they can't figure out something as simple as saving money?

The other is consistently survey after survey consumers routinely indicate that they don't want the responsibility.

I certainly hope her perspective is not the dominant plan that the new Obama administration hopes to use to fix the healthcare system. Seriously.

Healthcare as the Answer to the Financial Crisis

NPR has Princeton professor of economics and public affairs Uwe Reinhardt speak about his view that health care stimulus would actually HELP the economic crisis.

Fascinating. An admitted "rebel", his perspective that healthcare is a major contributor to the gross domestic product and that expansion is a good thing is not commonly accepted.

At yet, he might be right.

He's not the only one. A recent piece in Businessweek called "Want Real Stimulus? Try Universal Healthcare" has the same perspective.

Medical Students Beware - Jobs Might Be Outsourced

The current generation of newly minted doctors are choosing lifestyle over career. Indeed the top students are choosing radiology, ophthalmology, anesthesiology, and dermatology. This is the trend of generation X and Y, who value time.

But will it continue? Healthcare is extremely expensive and each of these specialties not only pay top dollar, but also have great hours. Each of these specialties can be outsourced which is a concept foreign to medicine, but not to other industries.

Already some insurers are sending patients overseas for elective cases like heart surgery and joint replacements in well-run high quality hospitals for one-sixth the cost. Many of the doctors are US-trained. This trend can only continue as many of the insurers are giving patients a strong financial incentive, i.e. cash, to go overseas.

What does this mean? Already many radiological practices outsource their overnight call to other doctors to read at a fraction of the cost to have someone cover nights. Many Americans are having plastic surgery in South Africa, where not only do they recover at a five star resort, but also participate in a safari before they go home, which is still cheaper than staying in the States. With elective procedures in eyes and skin potentially going overseas, why wouldn't a smart consumer decide to get it done? In San Francisco, one company offers just that.

What does this mean for future doctors. Don't think your future will be so easy. It is very likely it will be much harder as much of the lucrative and easier procedures move overseas and the more complex cases can't be done because of medical complications barring travel. Medicine and healthcare may be the last industry to discover the devasting power of outsourcing businesses. Will patients opt for it? They have a very strong financial reason to do so and will.