Monday, November 4, 2013

Symptoms Versus Causes

Recently it's been reported that small business health insurance premiums are increasing substantially. Unfortunately, reporters and many of the subject matter experts are horrible quality engineers. One of the easiest tools to use to get down to root causes is "5 Why's"--ask 'why' five times and you're bound to get to a good answer with a good solution. In this case, it doesn't even seem the article got past asking one 'why'.

One simple example of asking 5 why's was related to a problem at the Jefferson Memorial.

Expenses are going up. Why? The article seems to imply it's because the Affordable Care Act requires it go up. However, insurance companies only raise premiums increase when provider reimbursements are going to increase.

Insurance companies expect expenses per policy to increase. Why?  Because more things are covered? If so, why? Because previous policies didn't have as much coverage? Or deductibles are decreasing (unlikely given the trend towards higher deductible policies)?

Because medical costs per procedure (i.e. providers are charging more) are increasing? Why? Are medical device and medical service taxes increasing to the extent that it's going to add 30-40% more to overall expenses (as the article implies premiums are increasing)?

Before we confuse symptoms with causes, let's ask some more questions. Try the '5 Why' technique with any issue in your company.

Don't let your spouse use it on you next time you're late getting home. "Why are you late, dear?" "Why did you get out of the office late?" "Why did you start a conversation with your boss at five minutes to quitting time?" "Why couldn't you have postponed the conversation till tomorrow?" "Why can't you stand up for what's important to you?"....and so on.

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