Thursday, February 26, 2009

Early Death Means Health Care Savings

While there is much agreement about the need for health care savings we also need to agree on how we define good health services and outcomes.  CBO Director Elmendorf’s comment below needs our careful consideration:
"Even if successful, measures to reduce smoking and obesity—two factors linked to the development of chronic and acute health problems—might not have a substantial impact on health care spending for some time.  In the long term, spending on diseases caused by poor health habits could decline substantially, but the impact on federal costs would also have to account for people living longer and receiving more in Medicare benefits (for the treatment of other diseases and age-related ailments) as well as other government benefits that are not directly related to health care (including Social Security benefits)."
--Douglas W. Elmendorf; Director, Congressional Budget Office 
   Testimony before the Senate Finance Committee
   February 25, 2009

Wednesday, February 18, 2009

Prevention Is Not About Saving Money; It’s About Saving Lives

There are so many discussions going on about health that it is hard to keep track of which policy would make the most impact. Too often it is a case of holding on to the old models that defined the business of health care. Just as business has learned that fundamental aspects of their models were flawed the best health policies change some of the fundamentals of the current health debate. A good place to start is to rethink the purpose of prevention.

Prevention may save money and it may not. Last month Health Affairs reported that “... hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them.” As The Washington Post pointed out, when prevention works it extends life and there are the costs of using health care over those additional years of life. Also prevention requires reaching large population groups and that requires resources.

The additional costs of prevention is a matter of what we value. The benefits of breathing with ease from not smoking, not dying young from cancer through early detection, or not having a heart attack from starting to exercise are well worth the costs.

The cost savings through prevention is not what should make it worth doing but rather how it contributes to the vibrancy and productivity of our society. Prevention is important simply because it is the right thing to do.

Thursday, February 12, 2009

How Business Misses the Boat and the Consumer

St. John Knits represents what many executive women wear. I have shuddered at the prices but enjoy the basics and the decades of wear classic pieces provide. I also admit that I never paid full price. Many of my purchases were at last call sales and outlets. Nevertheless, these were investment pieces for many women.

So I wondered what George Sharp, Executive Vice President of Design for St. John Knits was thinking when he had Marie Gray (the founder of St. John) send a letter to her customers saying that the basic color black was being replaced by a new shade of black that would be their new standard. The new environmentally friendly collection would be called Caviar.

During these times does anyone think that women want to purchase new basics? Caviar is not black. And basics are basics. This is another example of how business thinking and strategic planning can lead people down a path that is no longer valid.

As for me this means that St. John is no longer the good investment. St. John is showing as much volatility as the market. One of my colleagues who usually paid full price will not buy the new and refers to her old classics as “Period St. John.” The lesson for business is obvious. It seems consumers adapt; and, we are not adapting by just buying more.

Tuesday, February 10, 2009

Charity Navigator - Why Many Good Organizations Are Not Listed

Charity Navigator only covers 5,300 organizations and while that may sound like a lot it is only a fraction of the not-for-profits in the U.S.

Did you ever wonder why that is the case?

At the National Alliance for Hispanic Health we are of course proud of our exceptional work in terms of health but we also consider ourselves to be a role model for our stewardship of our finances. We were concerned that somehow we had missed being listed by Charity Navigator. So we went through the process of submitting all the information that they required.

We waited and waited and received no response. Our most recent communication from them provided insight into their process.
“Thank you for contacting Charity Navigator. Due to the volume received, we are unable to give status reports regarding charities suggested for evaluation. Please know we have in excess of 1,800 eligible charities awaiting review. Given our limited resources, we dedicate most of our efforts to updating the financial information of those charities already in our database. We add new charity evaluations, but not as frequently as we have in the past. We will contact an organization prior to publication of a rating.”

It seems that that being listed in Charity Navigator is not as informative as some think. Better to do your own due diligence when you want to make a donation.

Meanwhile, we are still hoping that our $100 million donation will come with the next visitor we receive.