Cross Selling at the Doctor’s Office Part II: Expanding the stakeholders

In my first entry, I pointed out the cross-selling setup within the health care industry, one that is acknowledged by pharma companies, sales reps (see the bulletin boards on CafePharma), and even the medical community (see this article : warning email submission required). I also promised that in Part II, I would suggest an alternate system.

So to deliver on my promise, I give you: the consumer-centric cross-sell system.

One quick note, before we dive into how it would work: We are eventually moving in this direction. If the government won’t take a lead on it, the private sector and technology, in particular, will.

So, how would a consumer-centric system work? A critic might think that I am referring to the often-proposed plan of giving the consumer more choices.

In a way, the system I propose would encompass that. But it would go on to include something even more radical, institutionalized referrals by different stakeholders. To summarize and recap parts of the Part I discussion:

• The cross-sells are controlled by Medicare, HMO, PPO, and other Managed Care organizations (private-sector or government)
• Doctors, specialists, clinics, labs, etc. are within networks, and referrals are usually made in-network. Doctors therefore determine which specialist you should visit (by the virtue of recommendation or sometimes formal referral to a specialist)
• There are significant cost penalties for going outside of the network, even though better services may not be in the network.

Now, there are resources outside of the network that could help a patient in making a better decision. Take, for example:

• Informative (sometimes for profit) sites such as WebMD and Wikipedia
• Patient support groups (see Yahoo groups for examples)
• Eventually, we may have patient communities given the trend in social networking that we are seeing
• Person-to-person referrals (say, an email from Aunt May or a call from Mom and Dad)
• Corporate or relationship referrals (say the husband of a colleague who is a doctor or a friend who is a surgeon)

Now, imagine if patients made decisions based upon the resources they knew (they were “sold” by people already in their personal or professional networks rather than the CIGNA 800-number…):

• There would be better care (the cream of the medical community would be referred more)
• Doctors would be held liable (preserving reputation among the public is at least as effective a mechanism as being afraid of malpractice lawsuits)
• Costs would go down (less malpractice suits if people chose and trusted their doctors, and with doctors being more accountable)
• Development of an eventual market system, in which members of the medical community would be evaluated similar to those in other professions.
• • Mutual fund managers have ratings
  • Engineers and independent contractors have ratings
  • Businesses have ratings
  • Other organizations and professionals (CEOs, firemen, attorneys, etc.) have professional reputations
  • Why can’t doctors and hospitals (along with clinics, specialists, surgeons, RNs, PAs, etc.)?
•  And along with better care and lower costs, there would be trust again in the patient-doctor relationship

After all, when your house is damaged, you pick a contractor, and the homeowner’s insurance policy (if it’s good) reimburses you regardless of who you picked (as long as they are licenses, bonded, insured, etc…). It doesn’t matter if it’s your cousin Jim or someone you picked out of the Yellow Pages. Why can’t we ask that from our medical system?

Cross Selling at the Doctor’s Office Part I

It’s a political year – an election year to be precise. The candidates in both the Democratic and Republican primaries have had many ideas, platforms, and strategies about how to fix healthcare. Yet, when you really think about it, the current healthcare system, even though it is perceived as broken, is really just a giant system of cross-sells.

Most people aren’t trained to look for this, and you might actually be surprised that I am describing the healthcare “experience” like that. But think about it:

(Cross-sells are highlighted in bold)

- The moment you go into a doctor’s office, you present an insurance card. In all probability, the insurance referred you to the doctor, or the doctor was within the insurance network (i.e. HMO, PPO, other three letter acronyms…)

- If the doctor (often referred to in the profession as a “primary care physician”) can’t solve your problem, he may refer you to a specialist. The specialist may be within the insurance network, or it may simply be someone he knows well.

- Regardless of whether the PCP or the specialist (SPEC) fixes your problem, most likely they fix it by giving you a prescription, and in doing so recommending a drug or drugs (if you are lucky, you get several options), or alternate treatment avenues.

- Furthermore, if neither the PCP or the SPEC can figure out your problem, they may (here is that word again) refer you to a testing facility, X-Ray clinic, MRI center, laboratory, morgue, etc.. (the last one was a joke)

 - And on and on.

Many companies, such as pharma companies, actually deploy reps to try to influence the doctor’s recommendation of which drug to prescribe. Other companies, such as those pesky insurance companies, often hire people like us to “optimize their network in order to maximize the number of in-network referrals.”

All of which leads to an interesting proposal: Isn’t there a better way of cross-selling services and products? One that ensures quality, customer satisfaction, efficacy (i.e. whether it works in getting you better), and customer service rather than focusing solely on costs, revenues, and ultimately, profits?

What about a cross-selling scheme that is accountable to several stakeholders (including the patients, their employers, doctors, and society/government) and not just the insurance firms?

And more important given that we are in an election year, how do the candidates proposals reflect on this system of cross-sells? Will they make it worse by adding seats at the table but not really changing it? Or are they in effect promising wholesale changes?

Stay tuned for my next blog entry (Part II), in which I describe how an ideal physician-level cross-selling system would work, one that would entail a high overhead cost in terms of setup and administration, but along the way would actually deliver lower costs and increased benefits to all the stakeholders involved. And in Part III, I will be taking a look at whether any of the candidates’ platforms will ever come close to emulating that model.