- Steven Corn
Walmart Decides to Increase Their Pricing and Reduce Their Sales Force
Would Walmart actually thrive if they made their customers pay more and made it less convenient to do so? Certainly not! Walmart's success (as do most retailers and businesses) derives from keeping their customers happy. Walmart does this by offering a wide variety of products at the lowest prices possible and making it easy for customers to buy them. Their stock price rises and falls based on per customer loyalty and satisfaction which ultimately drive all other financial factors. Walmart wouldn't survive if they made the radical changes suggested by this headline.
Health insurance companies are perhaps the only industry where consumer satisfaction is not the driving force for success. Not surprising, the American Consumer Satisfaction Index published a study last year (ACSI Study 2015) showing that consumer satisfaction for health insurance companies is at a 10-year low.
It is no mystery why this is so. Pretty much everyone is facing higher insurance costs next year with lower benefits. Deductibles continue to rise, co-pay's increase (my ER copay went from $100 to $250), annual out of pocket maximums are getting higher...all the while, premiums just keep getting more expensive regardless of any rebates that ACA may offer.
Pay more...get less. That's usually a formula for failure in the business world. Not so with health insurance. In fact that is pretty much their modus operandi. This is why their CEO's are being rewarded with incredibly lucrative compensation packages and why insurer's profits continue to rise.
The main flaw in this equation is that we, as the insured, naively assume that our satisfaction is important to health insurance companies. It is not. CEO's are not striving to create happier consumers. They are not beholden to the people paying the premiums. Their main concern is to keep the shareholder's happy.
And apparently, they are doing quite a good job at that. Unfortunately, it's at our expense.