Government services as products: innovation and adoption

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As reported in this NPR story, Connecticut is one state that is succeeding with operating a healthcare exchange to implement the Affordable Care Act. Their website is working smoothly, and they have exceeded their first-year registration goals months ahead of schedule.

Other states haven’t done as well. According to Kevin Counihan, the CEO of Access Health CT, some of those states have connected Connecticut, looking for help.

“We were approached by several states who called us and said, ‘Would you have any interest in franchising your exchange to us as a state?’ And so, as we thought about that, we began coming up with this concept of an ‘exchange in a box,’ ” says Counihan.

When I heard this quote in the radio version of this story, I thought, “Yes! That’s how it should work.”

Proponents of states’ rights and state-based services argue that the 50 states can serve as laboratories of innovation. I like that idea. But, we lack a mechanism for evaluating those innovations, scaling the most effective ones, and making them best practices. What’s the point of competition if you’re not going to declare a winner?

To be sure, there’s some ego involved as well. As someone who’s lived in several states but now resides in California, I’ve seen both sides of what I call the “Made in California” phenomena.

For instance, as I’ve written in other posts, for nearly 40 years California has had some of the most effective energy efficiency regulations in the nation. The state’s per-capita energy use is half of the national average. With all our national contentions over carbon pollution, foreign oil, fracking, pipelines, tanker crashes, deep-water platform explosions, and other issues surrounding energy production, why haven’t other states adopted proven ways to reduce energy consumption?

I think it’s in part simply because those energy efficiency codes come from California, and California is too big or too liberal or too green or too something for other states. It’s pride, and it’s stupid.

States vary in their populations, needs, and regulations, so innovations can’t just be cut and paste into a new state. Connecticut’s approach to health insurance probably can’t be moved unaltered to other states. Still, their tools, processes, and experience from running a successful exchange could be very useful to other states, and also provide a source of revenue for Connecticut.

In marketing, some times you have to admit when a new innovation has become the industry standard. There’s a reason we’re all using slim, flat-panel computer monitors instead of the bulky cathode ray tube models. We need that same mechanism as we innovate public services.

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