The holidays are right around the corner. It's no wonder I've got shopping on the mind. And as with the contagion of Christmas music in a mall, I can't help but join the carol of intrigue surrounding the new health care marketplace.
The health insurance exchanges are open. Unfortunately, we can't really shop there. No, I'm not jumping on the bandwagon and killing the government for 'technical glitches.' The exchanges' fits and starts may very well impact which party takes seats in the legislature and wins out in the court of public opinion, but will not likely be the undoing of the exchanges or their promise. However major, the kinks will be worked through and when thought about in the context of what has been spent to date in comparison to the size of the health care market itself, the dollars against the rework are pedestrian. The real reason we can't shop on the exchanges is because they are not true marketplaces with choice. In our normal everyday shopping experiences, American consumers are accustomed to choice. We can splurge for the deluxe version, or go for the budget option. We can buy from the local guy, or from our favorite national chain. With shopping, we can always go elsewhere, or if we're not satisfied with the options, we can give up on the shopping adventure entirely. These are the fundamental principles of shopping, and Americans have mastered them. So how can we have designed a national storefront for health care that offers no real choice or the freedom to navigate within a truly open market?
On the plus side, with the insurance exchanges the government has dipped the health care industry's toe into shopping. Despite an inability for most to get from look-see to sign-up, HealthCare.gov has seen more looks than the most popular kitten video on YouTube. Any new online retailer would be thrilled to attract that traffic. Of course, having shoppers turn up en masse is certainly easier to achieve when the alternative is a federal fine. Regardless, the entire country is talking about HealthCare.gov (we are engaged), and the needle has been moved in the right direction in terms of focusing the American people on health care plans, policies, and enrollment. That's good news. However, the popularly-held belief that the "glitches" are the hurdle the exchanges need to overcome to truly be impactful is shortsighted. Sure, the glitches have prevented the all-important front-door from opening for too many, and there are back-end issues that need resolve; still, I can't help but focus on how we missed the mark on introducing the fundamentals of shopping. It's an opportunity wasted in the exchange setting, and as an example to be set for the broader health care marketplace. It is this - the lack of true shopping - that may prove the undoing of the exchanges, or in the very least will severely diminish their impact on reshaping health care.
The limited choices offered within the exchanges remind me of Wendy's 1987 "Russian Fashion Show" commercial. Remember it? "Daywear!" "Eveningwear!" "Swimwear!" And they were all the same despite some cheesy accessory. The current reality of the insurance exchanges is a less humorous illustration of how illusory "choice" can be in an unimaginative and over-regulated environment. Government tells sellers what they can offer and what they can charge, and buyers what they are allowed to buy.
To get shopping to work in health care, we need to create real market dynamics, with many sellers constantly bumping up against one another to compete for the customer. Right now, all four medal plans (bronze, silver, gold, platinum) that the government allows on the shelves are wearing the same gray uniform - all required to offer the same roster of "Essential Benefits." Everything looks the same because the scope of benefits is the same.
In the rest of our dynamic economy, disruptive innovations frequently change the game, making incumbent players compete harder to sustain brand leadership and customer share. Until the exchanges can move beyond the government's oversight of who can sell what, to whom, and how, we'll never see truly disruptive health plan offerings that are necessary to stoke competition and change the landscape of shopping today. The role of government is to protect power from concentrating in market, not to define the boundaries and players of a market.
For the exchanges to become 'true' marketplaces a few things need to happen. Neither of which expressly focus on getting the technology right. We will assume that happens on whatever timetable a mulligan of this magnitude takes, December 1 or thereafter.
First, insurers must be allowed and incented to compete on policy design and on price. For that to happen, more variation in plans must be allowed. We need more players and products, which requires a reimagined definition of what an insurer is and can be. I am but one example, but I'd love the plan that doesn't cover in vitro fertilization (I have five kids), leaves me high-and-dry if I get stage four cancer (because I'd want to die at home), doesn't support primary care (because I'm willing to manage this on my own), but covers me from sunrise to sunset on pharmaceutical alternatives and natural remedies. I can't buy this today.
Second, we need to get a handle on the subsidies. Right now the very subsidies that allow the masses to get insurance also obscure the total cost from too many consumers. As a result, "shoppers" on the exchanges behave much like "shoppers" before the exchanges, making decisions primarily on convenience rather than the ordinary metrics of shopping: price and quality. We need to arm patients (shoppers) with real data so they can direct where they go for care - where they send their health care dollars.
Nobody who exists in our current economy today would argue with the proposition that technology can be a powerful enabler of shopping. And I'm willing to bet the majority of the millions of people who have tried to enroll or window shop in the insurance exchanges these last two months would agree that the intent of the exchanges is good, but the service delivery and product design is bad. I deeply admire the well-meaning social good and zealous intent of the exchanges, but if the exchanges are to survive and truly make a difference not only must the storefront improve (and it will), but as important, the merchandise must become distinguishable, the seller bench must grow, and buyers need a clear window into price and quality. By bringing these elements that revolve around creativity, personalization and 'informed' choice to the fore, we can make shopping for health insurance as American as shopping for cars, jeans or a new tablet computer. With any luck, by the time the holidays roll around next year, it will be easy for a loved one to give a custom gift of health insurance.
Jonathan Bush is CEO and president of athenahealth, a provider of cloud-based services for electronic health records, practice management, and care coordination.