Newspaper article St Louis Post-Dispatch (MO)

Driving Free-Market Consumerism in the Medical Marketplace

Newspaper article St Louis Post-Dispatch (MO)

Driving Free-Market Consumerism in the Medical Marketplace

Article excerpt

Not long ago, luxury buying experiences involved dressing up and going into a high-end shop to consult with a salesperson on what to buy. Perhaps you'd enjoy a glass of champagne while your purchase was being carefully wrapped up. You'd feel proud to exit the shop with your branded shopping bags; there's just something about spending a lot of money on yourself or a loved one that feels good as though you were entitled and the splurge was deserved.

But now, luxury brands attempt to replicate this process with lower quality goods in "outlet" stores, and later still the internet has allowed for easy shopping at home. No dressing up is required.

Looking at this phenomenon from an economic point of view, we see the high-end experience made it possible to price products in the store high. Brands knew consumers entering such retail establishments were ready to open their wallets. The buying experience was often more important than the product itself or the brand's name. However, most of that has changed now as consumers focus more on the value of products and services at the expense of the historic luxury buying experience.

Can the same be true of health care? In comparison with the luxury buying experience, the health care buying experience has similarities. Whether it be the need for a hospitalization or purchase of an insurance policy or the search for the physician, health care consumers have also been impressed by the high-end shop, the exceptional patient experience, and consulting with a physician to ensure that they were getting the best care their insurance could buy.

But also like the retail industry, the health care industry is undergoing metamorphosis. Patients now seek value of services more so than volume of services, which creates a new marketing dynamic. Harvard University professor Michael Porter, over the past decade, has advanced the concept of value-based health care as the answer to the problems of our broken health care system. He opines that value in the health care industry is the same as in any other, including the retail industry. Simply stated, health care value is a unit of measure that meets a set of patient needs and expectations. …

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