What if you found out that your company is spending over twice as much as your competitors on a key element of your business, but the excess spending provides no differentiation, market-share gains or price premiums for your company? You’d likely appoint a team to unearth root causes of this wasteful spending. Welcome to the US Health Care system. We spend 16% of our Gross Domestic Product (GDP) on healthcare – seven percentage points of our GDP more than the average of all OECD nations and 5 percentage points more than the second highest spender in the OECD, France. (The 34 member countries in the OECD span the globe and include many of the world’s most advanced countries.) Yet we have nothing to show for our excess spending in terms of population health, as cited in Forbes. Today’s situation will only worsen absent…
Disrupt the US health insurance business model
Let Washington fight a tug-of-war over how much or how little of the recently passed federal health care legislation gets enacted. I’d like to step away from the politics and talk about the business model for the health insurance industry, why it needs disrupted and how to accomplish just that. With US health care costs far exceeding that of the rest of the world and health status outcomes mediocre at best, our health care system is ripe for disruption. The insurance industry business model is one lever for accomplishing this. I’m sharing my thoughts here hoping to get your feedback on what’s right and wrong with my thinking. (Note: I am a political independent, seeking pragmatic solutions, whichever political party provides them.) Health insurer profitability is driven by a number of factors: Accurately assessing and pricing risks of insuring a pool of people…