What ‘The Price is Right’ can teach us about healthcare
I watched a lot of The Price is Right growing up. I think I might have known the price of a pack of diapers almost before I was out of them myself!
I didn’t just learn the costs of common household items and compact cars from the popular show. I learned about incentives and how we react to them, too.
The one iron-clad rule of the game? The winner is the contestant closest to the actual price–let’s say this in unison–without going over! If you’re just $1 over the actual price, you’ve lost.
This rule led to, on its surface, a peculiar strategy. If a person thought every other contestant had overbid, no matter what he or she thought the price of the item actually was, the best bid was $1. After all, why risk overbidding?
The game incentivized underbidding and that’s what contestants routinely did. Decisions about the rules of engagement have consequences. The incentives they create represent perhaps the most important consequences of all.
Which brings me to a reasonable question we hear often at Goldfinch Health. In one form or another, it goes something like this:
“If Enhanced Recovery is as great as it seems, why isn’t everyone already doing it?”
The answer, of course, is incentives. Or, more specifically, the lack of aligned incentives.
Here is just a brief list of where misalignment may be holding back innovation:
- Hospitals/providers face intense pressure to manage and reduce readmissions within 30 days of hospital discharges, and for good reason. When viewed in isolation, however, readmission prevention can lead to overly-conservative medical approaches which cost patients (and their employers). If a patient could go back to work in three weeks—in fact, wants to back in three weeks—why keep them out for six weeks? Because of an arbitrary and conservative “standard?” Because of an exceedingly remote risk of readmission? How do we balance the potential cost of a readmission with the real cost of an individual unnecessarily held out of their everyday life, including work? To date, this imbalance has remained unaddressed.
- Federal reimbursement policy incentivizes hospitals to drive toward higher patient satisfaction. Telling a patient the hospital has a program to minimize opioid pain medications—in the face of a patient asking for opioid pain medications—may not serve the purpose of achieving higher satisfaction scores.
- No billing codes yet exist widely for reimbursement of Enhanced Recovery-based care. So, while hospitals ultimately save money when delivering on this approach, they do not earn more revenue per case.
Incentives drive behavior. They do so daily on the stage at The Price is Right. And they do so daily in our country’s surgical suites as well.
The first step is understanding the incentives in play. The second step is doing something about it. Our mission at Goldfinch Health is to connect these disparate dots in healthcare and bring Enhanced Recovery up to the standard of care. Will you join us on this journey?