[Vision2020] More Proof Preventative Health Care Saves

[Jay Borden]

My heart goes out to the folks behind the examples you cite during your (hopefully brief) stay in the ICU… but they have nothing to do with human nature and prevention.    Your examples strike towards insurance and coverage… not preventative medicine.

 

The most recent personal example I have doesn’t deal with health care, so I’m sure it will be attacked as irrelevant… but it certainly strikes at human behavior.   (If you consider it too irrelevant, then chalk it up to ‘personal analogy’).

 

My second company (a widget producer) is the result of my taking over a bankrupt enterprise nearly two years ago.  The previous owner was severally in debt, was in the process of declaring personal bankruptcy, and was in the process of just walking away from the entire business.

 

Without diving too far into detail about the business, I found that the company was in financial ruin because of the sheer number of returns of widget sub-components.  An excel spreadsheet told me that there was over a 200% return rate for the widgets… (for every widget sold, a customer (on average) would return it for an exchange/replacement at least twice).  

 

As the number of exchanges grew, the previous owner (fearing customer backlash at product quality) would increase the length of the warranty, and try to off-set the replacement cost by raising the price of the widget.

 

Lengthening the warranty period only made the problem worse… customers had a larger window to return the widgets for replacement.

 

Turns out the problem had nothing to do with design… it was customers not bothering to read or learn anything about proper use of the widgets, or trying to use the widgets for a completely different purpose altogether.  

 

Tack on a free replacement guarantee, and customers didn’t bother to self-educate… they just let the company “fix the problem” with the warranty.

 

The first thing I did was change the warranty policy… and I shortened to a VERY SHORT length of time (to allow for ‘out of the box’ failures).  I followed this up with a dramatic reduction in price, making “true” failures after a length of time affordable to replace. 

 

The problem went away overnight.  Immediately customers started calling/emailing…  wanting to know more about proper installation procedures, proper use of their product, and “whether it would work in misc. environment X”.

 

As soon as it became the customer’s responsibility to take care of the widget, it suddenly had increased value to them, and they were more careful with it and made sure they used the widget properly.

 

The difference between the has been one of business SUCCESS vs. business FAILURE.

 

The (new) company has survived… customers have a parts solution… and life has continued.

 

Yes, I realize that many of you will probably dismiss this as irrelevant, since it doesn’t contain “health care”… but it’s human nature.  People tend not to care about something when someone else foots the bill.  

 

Whether you’re talking about widgets or high-blood pressure… if someone else is footing the bill and responsibility, people will generally tend to not think about the consequences or the price tag, and just go with whatever is easy.

 

 

Jay

 

 

 

 

From: Tom Hansen [mailto:thansen at moscow.com] 
Sent: Wednesday, January 18, 2012 11:56 AM
To: Jay Borden
Cc: Donovan Arnold; <vision2020 at moscow.com>
Subject: Re: [Vision2020] More Proof Preventative Health Care Saves

 

Jay Borden stated:

 

"I can tell you first-hand my experiences on how human behavior changes as soon as fiscal responsibility to pay is shifted to the individual as opposed to a faceless 3rd party."





Care to share some of your "first-hand experiences", Mr. Borden?





Or perhaps I should share some of mine . . . after spending 30+ days in the waiting room of Sacred Heart Medical Center's ICU (12/15/2011 - 1/17/2012), like . . .





. . . the one I mentioned earlier concerning the patient, whose activity on the left side of his brain was ever so slowly recovering, and his mother who was extremely concerned about how her son's medical care was going to be financed . . . two months after he was laid off, and





. . . the family who, while their father lay terminally ill not fifty feet down the ICU hallway, were openly discussing who was going to contribute how much to pay their father's medical bills, after having already cashed in his life insurance, and . . .





. . . remember that fatal accident that happened about two miles outside of Reardan, Washington (reported in the Spokesman-Review) on New Year's Eve.  The critically injured were transported to SHMC ER and in to ICU.  Talk about a reality wake-up call . . .





Care to share yours with us, Mr. Borden?





Seeya later, Moscow.

 

Tom Hansen

Post Falls, Idaho

 

"If not us, who?

If not now, when?"

 

- Unknown


On Jan 18, 2012, at 11:35 AM, "Jay Borden" <jborden at datawedge.com> wrote:

	I can tell you first-hand my experiences on how human behavior changes as soon as fiscal responsibility to pay is shifted to the individual as opposed to a faceless 3rd party.

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