US Healthcare

On June 18th, President Obama said that he is calling for a comprehensive overhaul of the U.S. healthcare system. He warned that soaring medical costs are a great threat not just to the well-being of our families but to the very foundation of the US economy.

I believe that President Obama is really saying that a market value breakthrough is possible in the healthcare market. To achieve a market value breakthrough, the Obama administration must prove that a specific breakthrough healthcare program has a market value advantage of 14 or more points. Not only hasn’t the Obama administration presented proof that a single payer system has a 14 point market value advantage but also, the only guidance that has been given is to create a program that appears to mimic the socialized medicine of Canada and Great Britain, which are known to have a market value disadvantage.

The MV Equation links three (3) multi-factorial components together to calculate a market value metric that correlates with market share and profitability. MV Metric = TechnoMarket (TMP) Value + Economic Value + Marketing Influence.

TMP Value is a scale that links all of a product’s or service’s properties together and correlates them with functional value during the product’s or service’s use for the entire life of the product or service. The TMP Value of healthcare products and services should be studied independently of Economic Value to determine the optimum TMP Value that people want throughout their lives. Services, such as preventative care and diagnostic care are known to require improvement. This doesn’t mean that something is wrong, it just means that one or more properties haven’t been optimized.

Economic Value is determined by an end-product/service to customer goal ratio. The numerator concerns the annual cost of healthcare. The denominator concerns customer goals. For example, the goals to have better service (Increased TMP Value), doctors of your choice, national and international access, etc. are in the denominator. Economic Value can be improved by either cost reduction or goal attainment. Optimum Economic Value is usually best achieved by a slightly higher cost with much better goal attainment. America’s Health Care is the World’s TMP Value leader. I believe that America’s Health Care is also the World’s Economic Value leader. Remember that the lowest cost usually doesn’t produce the best Economic Value.

Marketing Influence concerns all other factors, which are important from consumers’ perspectives. For example, risk/reward issues concerning change throughout a market value chain are an Influence factor, as is the complexity of change. Switching to socialized medicine will reduce the marketing influence of healthcare and hence reduce market value. Tort reform that reduces and stabilizes the cost of liability insurance for healthcare professionals will not only increase Economic Value but will also increase Influence. Federal legislation that creates unfunded mandates is both an Influence as well as an Economic Value factor. Unfunded mandates reduce both Influence and Economic Value.

Healthcare is a market rather than a basic right. In a free, market driven economy, achieving optimum market value should be the goal. Providing healthcare to everyone, whether or not they can afford and/or want it is a different issue. Social programs of this type are independent and should be developed and funded separately.

I have read all 1,017 pages of “America’s Affordable Health Choices Act of 2009” and prepared the notes to help me understand what this bill will do to America’s Health Care Market. I hope that others will find my notes useful.

After reading this bill and trying to understand it, I believe that the bill is an incomplete rough draft that is difficult to understand and clearly should not be voted on in its present condition. America has the best health care in the world. America’s Health Care Systems are not broken and creating a new Government Agency with the charter to change everything is not justified by this bill.