Editor's Corner: Healthcare remains far from its Henry Ford moment

Editor's corner
A doctor and patient.

Despite holding problematic beliefs, Henry Ford's penchant for innovative thinking would likely be useful if applied toward healthcare delivery.

 

Ford had two revolutionary accomplishments:

  • He refined the assembly line as we know it, using interchangeable parts to transform automobile manufacturing from the realm of an artisan shopkeeper to a truly big business.
  • He also used the efficiencies created by this technological advance to vastly reduce the price of automobiles. The iconic Ford Model T dropped from $950 in 1910 to $290 in 1925. Adjusted for inflation, that is the equivalent of a drop from about $23,300 down to around $4,000.

Such price drops don't occur in healthcare delivery. Need your appendix removed? Despite the fact the non-laparoscopic version of the procedure hasn't changed in more than a century, expect it to cost well into the five figures.

Of course, healthcare and automobile manufacturing are like comparing apples and oranges. Lives are not at risk when an automobile is being put together. And cars also aren't at risk of contracting infections.

However, there are still significant similarities between the delivery of services in both businesses. The anatomies of cars and human beings follow a generally standard protocol, with a significant number of varieties. It requires teamwork to assemble an automobile or provide healthcare. And, when the inherent flaws of the American assembly line process became glaringly apparent in slipshod build quality, Japanese and European automakers refined the process enough to vastly improve the end product. This happened in healthcare as well; watch an episode or two of the Cinemax series “The Knick” and you can find out how easy it was for someone to die back in the day from a hernia procedure or wound cauterization.

And while automobile prices have certainly risen in the days since the last production Model T was sold nearly 90 years ago, the car I can buy for $25,000 today has significantly more tech and features for what $25,000 bought a decade ago. Again, that truism doesn't apply in healthcare.

What's missing in healthcare? It's the persistent disconnect between what consumers are willing to pay and what they're being charged. Cars were initially luxury gadgets for the rich. Ford and the executives at his company knew the long-term key to success was lowering the price of the products so more Americans could afford them.

If there are some great efficiencies being delivered in healthcare that could drive down the cost, few consumers have seen them. Again, one business is manufacturing, the other is a service industry. But fast food is a service industry as well. And I can pretty much buy a fast food meal for the same amount of money I spent when I ate them for dinner during my first newspaper job more than 25 years ago as I wrote up articles about nighttime board of education meetings.

We are still vastly far from reaching that moment where price flattening and expansion of value in healthcare occurs. One of the hallmarks of both automobiles and fast food is price competition. Look at car ads from a century ago, and pricing is upfront. The same with many fast food ads.

Healthcare providers have been spending more and more money in recent years to advertise. You can't open up a magazine or newspaper or visit a website without seeing a hospital or specialty physician practice hawking its services. But pricing? Outside of shady plastic surgeons, I've never once seen cost mentioned anywhere.

The Henry Ford-like revolution in healthcare begins when I see ad copy that proclaims “bariatric surgeries from $9,995.” That's the day every provider begins competing on price. Whether I'll see it in my lifetime remains to be seen. – Ron (@FierceHealth)

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