Galen Institute Introduces Consumer Choice Matters

This week I want to introduce you to a new weekly publication of the Galen Institute called Consumer Choice Matters. It will be issued every Tuesday. This will be the flagship publication of Galen’s new Center for Consumer Driven Health Care and dedicated to new developments around the country in the movement for increased consumerism in health care.


There is so much going on in this area that writing it up in a linear fashion is almost impossible. It?s like trying to describe a river. Do you start with the rapids, the eddies, the banks, or the islands? What is most important ? how long, how wide, or how deep it is? The muddy water that has just passed by, or the fresh water yet to come?


The movement towards consumer driven health care is every bit as complex and fast moving as a river. My colleague Joe Moser and I are trying to develop a list of the companies involved in this movement, but how should we classify them? There are patient education programs, insurance products, third party administrators, software companies, debit card companies, banks and mutual funds, physician networks, quality assessment efforts, e-management firms, brokers, advisors, consultants, and venture capital companies. Some firms have already come and gone, others are just starting up, and others have completely revamped their original concept.


Of course there are other important players, too ? employers, regulators, legislators, physicians, hospitals, nurses, economists, and most important of all, individual consumers of health care services.


The river of consumer driven health care is sweeping up all of these players. After fifty years of ever-greater reliance on third parties to make decisions for individual consumers, the tide has changed. Virtually no one thinks the United States, or any other developed country, can continue to treat individuals as passive recipients of services granted by paternalistic bureaucracies.


The American people are increasingly well-educated and self-confident in making their own decisions about what is best for their families. Company health plans will soon become as anachronistic as company cars, company housing, or company towns. We no longer look to our employers to provide us with a home or a car. We expect to be paid good wages for good work, and we will decide how best to spend our own hard-earned money.


Recently many of us have discovered that we can?t always trust our employers for guidance on how to invest our 401(k) funds. What is best for management isn?t always best for the rest of us.


The same is true for health care. The industrial age is behind us. There is no guaranteed employment. We change jobs every few years. In the information age we need to make our own health care decisions. We need to control our own health care resources. We need to own our own insurance policies.


It isn?t that employers have done a poor job. They didn?t ask for the responsibility of running a health plan. It was thrust on them the same way it was thrust on us. They?ve done the best job they could for a very long time.


But imagine if you were told that from now on you would have to manage your neighbor?s health care. You would have to make all his decisions. You would have to decide how much money to spend on him. You would decide what doctor he could see. How would he feel about you? How would you feel about him?


It would be an impossible situation ? one that would create tension and hostility where there shouldn?t be any. And the situation would be no better if the responsibility were given to a government employee instead.


But moving a $1.3 trillion industry from reliance on third-party paternalism to consumer empowerment is no easy job. It will take many years to get there.


We have already taken the first few steps with the enactment of medical savings accounts, the establishment of health reimbursement arrangements, the creation of Internet enrollment and patient education, and the beginnings of defined contribution approaches to health plan purchasing.


Not everything we try will work. There will be errors and missteps, corrections and revisions. There will also be hopeful signs and success stories.


Galen?s Center for Consumer Driven Health Care will monitor all of this, and report on it every week in this Memo. We will try to provide an honest evaluation of the good and the bad, not just be cheerleaders for every screwball idea that comes along. We will review news reports, research papers, press releases and testimony and provide you with source material, including hard links whenever possible.


The Center will also work on educating decision-makers ? employers, politicians, physicians, insurers and consumers ? on what works and what doesn?t. We expect to be giving speeches and appearing in the media all over the country, publishing research reports, testimony, and op-eds.


We don?t have a monopoly on good ideas, and we hope you will become an active participant in the process. We hope to make our work as interactive as possible, so we can all learn from each other as we go along.


Rafting down a river isn?t for the timid. There are rocks and shallows and rapids around the bends. But we are glad to have you on board.


Greg Scandlen

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About the author

This week I want to introduce you to a new weekly publication of the Galen Institute called Consumer Choice Matters. It will be issued every Tuesday. This will be the flagship publication of Galen’s new Center for Consumer Driven Health Care and dedicated to new developments around the country in the movement for increased consumerism in health care.


There is so much going on in this area that writing it up in a linear fashion is almost impossible. It?s like trying to describe a river. Do you start with the rapids, the eddies, the banks, or the islands? What is most important ? how long, how wide, or how deep it is? The muddy water that has just passed by, or the fresh water yet to come?


The movement towards consumer driven health care is every bit as complex and fast moving as a river. My colleague Joe Moser and I are trying to develop a list of the companies involved in this movement, but how should we classify them? There are patient education programs, insurance products, third party administrators, software companies, debit card companies, banks and mutual funds, physician networks, quality assessment efforts, e-management firms, brokers, advisors, consultants, and venture capital companies. Some firms have already come and gone, others are just starting up, and others have completely revamped their original concept.


Of course there are other important players, too ? employers, regulators, legislators, physicians, hospitals, nurses, economists, and most important of all, individual consumers of health care services.


The river of consumer driven health care is sweeping up all of these players. After fifty years of ever-greater reliance on third parties to make decisions for individual consumers, the tide has changed. Virtually no one thinks the United States, or any other developed country, can continue to treat individuals as passive recipients of services granted by paternalistic bureaucracies.


The American people are increasingly well-educated and self-confident in making their own decisions about what is best for their families. Company health plans will soon become as anachronistic as company cars, company housing, or company towns. We no longer look to our employers to provide us with a home or a car. We expect to be paid good wages for good work, and we will decide how best to spend our own hard-earned money.


Recently many of us have discovered that we can?t always trust our employers for guidance on how to invest our 401(k) funds. What is best for management isn?t always best for the rest of us.


The same is true for health care. The industrial age is behind us. There is no guaranteed employment. We change jobs every few years. In the information age we need to make our own health care decisions. We need to control our own health care resources. We need to own our own insurance policies.


It isn?t that employers have done a poor job. They didn?t ask for the responsibility of running a health plan. It was thrust on them the same way it was thrust on us. They?ve done the best job they could for a very long time.


But imagine if you were told that from now on you would have to manage your neighbor?s health care. You would have to make all his decisions. You would have to decide how much money to spend on him. You would decide what doctor he could see. How would he feel about you? How would you feel about him?


It would be an impossible situation ? one that would create tension and hostility where there shouldn?t be any. And the situation would be no better if the responsibility were given to a government employee instead.


But moving a $1.3 trillion industry from reliance on third-party paternalism to consumer empowerment is no easy job. It will take many years to get there.


We have already taken the first few steps with the enactment of medical savings accounts, the establishment of health reimbursement arrangements, the creation of Internet enrollment and patient education, and the beginnings of defined contribution approaches to health plan purchasing.


Not everything we try will work. There will be errors and missteps, corrections and revisions. There will also be hopeful signs and success stories.


Galen?s Center for Consumer Driven Health Care will monitor all of this, and report on it every week in this Memo. We will try to provide an honest evaluation of the good and the bad, not just be cheerleaders for every screwball idea that comes along. We will review news reports, research papers, press releases and testimony and provide you with source material, including hard links whenever possible.


The Center will also work on educating decision-makers ? employers, politicians, physicians, insurers and consumers ? on what works and what doesn?t. We expect to be giving speeches and appearing in the media all over the country, publishing research reports, testimony, and op-eds.


We don?t have a monopoly on good ideas, and we hope you will become an active participant in the process. We hope to make our work as interactive as possible, so we can all learn from each other as we go along.


Rafting down a river isn?t for the timid. There are rocks and shallows and rapids around the bends. But we are glad to have you on board.


Greg Scandlen

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About the author