Random Thoughts from a Restless Mind

Dr. Darrell White's Personal Blog

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Posts Tagged ‘cost’

Cost + Quality + Convenience = Value

My wife Beth and I had a rather spirited discussion about how we in the U.S. might be able to pay for the healthcare of our citizens. Being ever practical, and also owning the job of writing the checks that pay for the “health insurance” our company offers its associates (including us), Beth in effect is arguing for a national consensus on something we might describe as a baseline ‘value’ for healthcare. Others would label her concept a ‘floor’, but you get the idea.

What Beth intuitively understands is the tension between cost, quality, and convenience. You pick a baseline or a floor level of value and offer that to everyone. With training as a nurse and 15 years in healthcare administration, her idea of what constitutes the sum of cost, quality, and convenience naturally overweights the integers for cost and quality: outcomes should be essentially equal across the board at the baseline or floor level, and the costs of achieving that should be in some way equitably shouldered by something we could describe as “society”. Very practical. A strategy that lends itself to being observable and measurable.

What’s the rub? Well, only two of the three elements that make up value are covered. To obtain an agreed upon level of medical outcomes (mortality, morbidity, longevity, etc.) the cost is covered. Ah, but HOW you obtain those outcomes is still a variable. It is the FLOOR of value that is guaranteed. Our family is experienced a bit of this recently with Beth’s Mom. After a hospitalization she was living in a setting that ws providing excellent care at a reasonable cost, but it was a setting that did not provide any extras; it was old, not very pretty, and she could  have had a roommate. Her (and her daughters’) experience, what we might call “convenience” or  in our formula, was found to be lacking. The girls opted to move her to a nicer setting, one that will eventually involve a higher cost because of the enhancements to the experience, with no change in the already best possible outcome, or quality.

Therein lies the problem with any discussion about literally anything that we might discuss as a “right”. Is everyone entitled to anything other than the minimal amount of convenience/experience necessary to obtain the best outcome at an affordable cost?

If we examine food, we find something quite similar. No one among us would say that X Million people should go without food. Indeed, we don’t even really talk about true hunger in the U.S. anymore, we talk about “food insecurity”, the concern that we may become hungry. By the same token, though, no one asserts that everyone is entitled to the same quality of food. Not even a little bit. No, quite the contrary, all that is discussed is cost and convenience (access).

Now, of course, we in the CrossFit world (and to a degree in the medical world) argue that quality is an ineluctable part of nutrition, that one must extend the equation outside of food alone so that an explicit choice is made that prioritizes quality calories over other purchases (cell phone, cable, fancy car, etc.). While this is accurate and proper I believe that we can reasonably quarantine nutrition and keep it separate from other needs, at least for the purpose of our discussion. The universal concept of the interplay between cost, quality, and convenience holds true in nutrition/food on a global, grand policy making level:

You can pick any two, but only two, when you are declaring what is the minimally acceptable level.

My formulaic approach to the coverage of needs has a little wrinkle that should be mentioned: quality cannot be increased ad infinitum. In all examples we might evaluate there is a practical limit to the ability to improve quality or outcomes. The law of diminishing returns arrives in the form of the asymptote as quality rises. On the other hand, cost and convenience are unbound and can rise almost infinitely. It is the alcohol in a drink that confers the health benefit; the same outcome occurs no matter what you drink. One person’s jug wine from Costco is another person’s Chateau Lafite served in the Gulfstream V. You get the picture.

What will become of our conversations about issues such as healthcare? Will we arrive at a similar juncture to the one we have now in food, clothing, and shelter? Where quality (outcomes) and cost issues are addressed and everyone is left to make their own call on convenience/experience? Beth can’t see how it can be any other way. Me? I’m much less optimistic. That old “want vs. need” thing just keeps popping up. Confusion arises when a truly generous people confuse what people want with what they need. Need is measurable and therefore finite, whereas want is neither. We can, and should, all work to pick up the check for the needs of each. “Want”, on the other hand, is the proverbial “free lunch”, and we as a society will need to agree on that before we can even begin to discuss begin to talk about the mechanics of paying the bill.

TANSTAAFL. Heinlein was right.