Health care challenges for leaders

• Published in: Leader to leader 2008, Vol.2008 (47), p.39-45
• Main Author: Herzlinger, Regina E.
• Format: Article
• Language: English
• Subjects: Business government relations; Consumer-driven health plans; Employee benefits; Health insurance; Insurance industry; Leadership
• ISSN: 1087-8149; 1531-5355
• DOI: 10.1002/ltl.267

The corporate leaders whose companies pay for health insurance are in a lose-lose situation: while health insurance costs grew at five times overall inflation, employees ranked health insurance as the country's worst service industry and fretted about quality of care and sufficient insurance for serious illnesses. Corporate leaders have been in this lose-lose situation before. What really worries them now is that their prior solution flopped. Most of the new managed care organizations controlled costs by just saying no to providers' prices and enrollee requests, through a network of independent providers who reluctantly accepted lower payments and gatekeeper oversight. A new solution lies in consumer-driven health care, which responds to consumers' choice with highly differentiated health plans, control of expenditures, and helpful information. Consumer-driven health care needs leaders: employers to fuel it, insurers and providers to create it, and governments to oversee it. 1. Employer leaders must empower employees with control, choice, and information. 2. Insurance leaders must create genuinely differentiated product offerings and provider leaders must re-create the process of delivering care. 3. Government leaders must enable transparency and regulation of insurers and providers to ferret out unscrupulous participants.