Not long ago, I did a Public Radio commentary that predicted a new era of pricing transparency. The thought is that when we buy, say, a Nike sweatshirt, the price tag will tell us how much Nike pays its workers in Malaysia who produced it. (Think of it as a next-generation ingredient label.)
Behind this concept is the reality that consumers not only want, but are demanding: the whole "product biography" and judging companies by their corporate behavior, domestically and globally. This is driven by new levels of skepticism and distrust, by the transparency we are used to getting from the Internet, and from the psychographics of both baby boomer and Gen X consumers.
One area that could particularly benefit from this approach is the health insurance industry. Health care will no doubt be an election issue this fall, once again, and when that happens the industry gets vilified. The reason we have millions of uninsured, the rhetoric goes, is because health insurance companies charge exorbitant premiums that keep poor families out.
The industry could address this by employing this very notion of pricing transparency. How much of its premium income gets passed through to its members and their doctors and hospitals, versus how much is overhead and profit? Imagine how much better consumers would feel if they understood that HMOs exist to collect premiums from everyone in order to redistribute the money to those who need it. Essentially, it's a major re-education campaign.
This is a model that the non-profit world has adopted, as scandals such as the United Way mess focused attention on what percent of a contribution finds its way to those who need it. Indeed, these metrics have become part of their messaging strategy.
As an example, on their very own website United Way writes "A vast network of volunteers and the simplicity of corporate payroll deduction keep administrative expenses low - averaging 13 percent of all funds raised at the largest United Ways. This figure compares favorably with the suggested Better Business Bureau guidelines of up to 35 percent."
In many ways, consumers view health insurance companies as having non-profit attributes and qualities, since their mission is so critical to public health. As a result, they place high demands on these companies. Which means that adopting the approach which non-profits have taken would go a long way towards shifting public opinion in a more positive direction, and offsetting the horror stories of stingy providers more interested in hoarding money than paying claims.
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