Institute for Health Care Marketing

Opinions

Professor Betsy Gelb and Partha Krishnamurthy, Director of the Institute, recently co-authored an opinion piece in the Houston Chronicle on the ongoing health care debate.

They made the following points in the editorial.

 

  • Business decisions today are international; firms will move their operations to cut costs, and have clearly done so in decimating the manufacturing base in the U. S. Midwest. At a focus group of Houston benefits managers, one participant burst into tears, having been told by her firm’s CEO that unless she brought down the company’s health care costs “you’ll be responsible for our moving overseas and destroying 1400 jobs here, including yours.”  Our conclusion:  the U.S. doesn’t have the luxury of maintaining the buying and selling of healthcare at current cost levels.   
  • However, international thinking has an upside.  Through a variety of mechanisms, University-based medical centers typically receive higher payments than other hospitals, helping them to pursue vital research and disseminate knowledge to medical residents. The reputation they earn with those activities attracts top-dollar-paying international patients to many U.S. institutions.  Our conclusion:  reducing payments to academic medical centers will not only harm them, but adversely affect the flow of self-paying international patients to all American hospitals.  Adequate payments from Medicare and other government programs are not simply costs, therefore; they are actually investments.
  • Many expenditures by consumers and also by businesses involve purchasing what are called “unsought goods.”  If a building floods, you pay to clean the carpets; if your car skids off into a ditch, you pay to have it towed out.  But these are not expenditures you make voluntarily, willingly, or enthusiastically even if you can well afford them.  Health insurance is an “unsought good” for many – viewed as not needed because the average person thinks that he/she is luckier than the average, based on what researchers call the “self-positivity-bias.” Our conclusion: if policy-makers want insurers to cover all who may need healthcare, the requirement of insurance purchase by all, with subsidies as necessary, must be legislated.  Our current system of employer-provided health insurance masks the fact that many if not most individuals would wait until an illness or injury strikes to buy insurance if coverage at that point were guaranteed.

We offer these few examples to make the point that thinking like a marketer can be useful in the current policy-forming process.  After all, the primary issues concern not healthcare itself, but the system through which it is purchased:  the domain of marketing.  Assumptions about what companies or individuals will do if a policy is framed in a particular way can be crucial.  We sincerely believe that consideration of research in the field of marketing can help.