Bigfoot and the case for high-deductible health plans

HDHPs are designed for a mythical being

There’s an assumption at the basis of the political push for high-deductible health plans (HDHPs). In short, these plans were going to revolutionize healthcare by requiring the patient to shoulder more of the burden of the cost. The thinking goes that if people have more ‘skin in the game,’ they will buy care more wisely.

But that’s not what’s happening. And part of the reason is because politicians seem to be writing their rules not for humans, but for a creature that, like bigfoot, has not been proven to exist. Who is this extraordinary creature?

Meet Homo Economicus 

This creature that policy makers often use as a stand-in for humans is called Homo Economicus. invented by economist to model responses to theoretical financial models. He’s a lot like you or I, except for one key trait: Homo Economicus is a purely rational being. That means he makes decisions without the influence of all that messy emotional stuff that drives most humans decisions.

No, Homo Economicus’ approach is cleaner, simpler. When there’s a decision to be made, HE calculates how much satisfaction will be generated by each option. He’s like a computer; running different scenarios and coldly picking the one with the highest numerator.

It’s not hard to believe that this purely rational creature wouldn’t be bothered by rising healthcare costs. He or she likely runs calculations on all kinds of healthy behaviors, and thereby, already eats a perfect diet, gets the perfect amount of exercise and has found ways to keep weight, blood pressure and cholesterol at the ideal levels. When he does have a health concern, he’s able to figure out exactly where to go to get the most bang for his healthcare buck, and knows he got the best deal he could.

Marketers have never met HE

Marketers can spot the critical flaw in this thinking right away. We know that, unlike Homo Economicus,  humans simply don’t act this way. We’re not purely rational. In fact, when buying everything from sunglasses to surgeries, we’re rarely rational. If we were, TV ads would be long, dull and written like logical step-by-step arguments. Or maybe ads would disappear altogether. After all, organizations could rely on HE to calculate how much satisfaction per dollar their products generate. We wouldn’t need ads to persuade rational humans to buy – our calculations would do the work.

But this is pure science fiction. In the real world, people buy emotionally. How else do we explain phenomena like handbags that sell for $60,000. They hold just as much stuff as a $50 bag, but people pay 1,200 times the price, as if they’ll get 1,200 times the satisfaction.

People buy healthcare emotionally, too. They’re not influenced by purely rational analyses of their care options. How else do we explain customers who seek treatment at hospitals with subpar clinical reputations? How else do we explain why hospital ads that tout awards don’t generate great results? How else do we explain why that expensive billboard featuring our highly-qualified doctors didn’t generate any phone calls?

Clinical excellence, awards, experience, all those rationally desirable characteristics, don’t sway the emotional human healthcare consumer. And when cost is a contributing factor in the care decision (especially high-deductible plans), humans tend to cut back on ALL care, even preventive services.

Marketers, the cost of care is now your problem.

And this brings us to an unfortunate realization. That is, until humans start behaving like the mythical, purely rational Homo Economicus, the cost of healthcare is a marketing problem.

And it doesn’t look like healthcare costs are going to decline in the near future. In fact, despite a lot of efforts by hospitals and other providers to control costs, the cost to patients is expected to go up. That means it’s up to marketers to do what they’ve done for decades in other industries: price their services strategically, make it easier for patients to pay, and make customers and prospects feel better about shelling out hard earned cash for care. Other industries have done it for products that are as expensive if not more than healthcare, and there are lots of inspiring lessons to be learned.

If you’re ready to bring some fresh thinking to the problem, read our ebook, Mindset Reset: How the cost of healthcare is your biggest brand opportunity. It puts forth three mind shifts that healthcare marketers must make to survive in the new world of healthcare consumerism.

If you’re looking for more personalized help, you might want to schedule some time to chat with some of our experts. You can book an appointment right on our strategy director’s calendar here, or give us a call at 518.272.2800.