Opposite of Obamacare – Part 4/4 – The X-Prize Strategy
This is the last of a four part series on the solution to replacing Obamacare. Remember the free enterprise works when the consumer makes a buying decision based on price and quality. Unfortunately Obamacare has taken the opposite approach. The result has been a disaster with rising prices and falling quality.
While the strategies outlined in the previous parts will begin to push pricing down, this last strategy will help change the entire mindset of the industry and reduce prices down (while improving care) even faster.
First, an authoritative body, either the government or an industry non-profit, develops a “work breakdown structure” describing medical processes in full detail. This is a massive amount of information but perhaps not quite as difficult as it seems. Insurance companies have already compiled “practice guides” which outline how to treat any kind of disease or condition.
But let’s go a little further and describe any activity that has to be paid for, from the time the patient enters the doctor’s office to the time they leave. We document it, we explain it, we estimate the costs for each part of the interaction.
The next step is to estimated the total cost of each part of each interaction, industry wide. For example, the cost to register and store a blood pressure reading may cost $13 million if you add the instances together nationwide for a year. The process of getting a patient into a hospital gown, might be 300,000 instances totaling $18 million nationwide.
Now offer X prizes on any of the component of medical practice. If an entrepreneur can describe a process that will save more than 20% off of the price of a particular component, then they have earned an X prize from one of the many sources, who may have an interest in driving costs down.
X Prizes have been know to leverage their monetary value by an order of magnitude or more. The original X prize to build a re-usable craft to put human beings in orbit was a mere $20 million. The competitors spent hundreds of millions building their entries and several viable vehicles were built.
Entreprenuers, research corporations, and Universities now have a clear shot to invent new technologies and processes to reduce health care costs, with the incentive of an X prize and a brand new community of competitors.
But the most important contribution will be from the hundreds of thousands of doctors who live and breath their medical practice. Not only will they be eligible to receive an X-prize, they will strive to achieve efficiencies in their practice that will lower costs and increase their patient base.
The goal is to re-frame health care from a stolid, expensive and often church-like experience, to an ever improving and competitive business where patients can shop based on price and quality. X-prizes are the ultimate in encouraging creativity and inventiveness in free enterprise.
If you add the solutions in this four part series with some common sense measures (like being able to buy across state lines). If you would like to get the whole story with full details, click on the link above and get a copy of the book “The Opposite of Obamacare.” Then send it to Ryan and McConnell.