Dr. Jon Cohen on Consumerism in Health Care

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We’re going into the vaults this week to bring back a TEDMED Video from 2012, where Dr. Jon Cohen, the CMO of Quest Diagnostics, discusses the nature of consumerism in health care. He makes a great analogy comparing the way Americans shop for their televisions to the way we “shop” for our doctors. He jokes about his friend shopping for a new HD-TV, reading online forums and review sites, learning about pixel sizes and external ports, asking him, “When did you get your Ph.D. in TV’s?” He goes on to explain that once his friend finally selected the model he wanted to purchase, that he couldn’t simply buy the TV and move on. No, his friend needed to go to a few more stores to ensure that he got the best price on that TV.

Now, the average 50” HD TV is going to cost somewhere between $500 and $1,000, which is comparable to the cost of an MRI in Tampa, Florida, depending on where you would go for the procedure. So why wouldn’t you shop around for the MRI the same way you’d shop for your next TV?

“Did you know that the average American spends twice as much time researching what TV to buy than deciding which physician to choose?”

Cohen points out that shopping for a television is the ultimate consumer experience because it relies on three important components; the price of the product or service, its level of quality and the consumer’s desire for the product or service. Consumer-driven health care, on the other hand, is not so simple. The idea that consumerism in healthcare would lower costs was reliant on patients spending wisely, but it isn’t working out that way for a number of reasons.

First of all, it’s normally assumed that price is a reflection of value, however, the concept of value in health care is not easily recognized. Cohen says for instance that you should be able to discern the difference in value between a $20,000 car versus an $80,000 car. When it comes to diagnosing and treating patients, however, two physicians could be paid the same amount, while one could have given the appropriate prescription and the other could have misdiagnosed the same patient.

The next issue is that the quality of a physician is very subjective, making it hard to tell the difference between Dr. A and Dr. B. Some patients judge a physician based on topical things like convenient parking, comfortable waiting rooms or even having snacks available. Cohen points out that these things are really more of a judgment of the practice’s level of service, rather than quality. He says that quality in medicine is truly an indication of experience and good judgment; unfortunately, there are no consumer reports for patients to look up those metrics.

Lastly and probably most importantly, consumerism requires a certain level of consumer desire. Patients simply don’t want to have to spend their hard earned dollars on health care. Cohen said that out of a group of physicians surveyed, less than 50% had gotten their colonoscopy screenings, even after their organizations tried incentivizing them with $5,000 bonuses if they went in for their stress test, colonoscopy and annual physical.
He says that really, the only case where patients actively shop around for affordable medical procedures is when they are getting cosmetic surgery because it’s something they truly want and can see the quality of the results. Intense desire trumps all barriers, showing that if someone wants something badly enough, they are willing to go out of their way to find a deal.

You can watch the full video of Dr. Cohen’s speech here: Dr. Cohen Speech

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