How not to price a product

Our partners group held its annual retreat last week. One of the topics we discussed was health care costs. A little background first: each year Zingerman's benefits committee solicits bids from insurance companies and creates a proposal document to help us understand the menu of costs and changes. It's not typical for us to talk about the proposal at the retreat but this year we had a few more changes than usual.

It took an hour. To say that people were mildly baffled is an understatement. It was a clusterfuck. It's not that things cost different amounts—that part makes sense. It's that each insurance company offers so many different options that cover so many different contingencies you need a degree in Kafka to understand how to read the bid. Explaining it is an exercise in invented language; the health care industry has so much jargon you need a glossary to understand what they're saying.

Yet a one hour meeting explaining a financial bid to seventeen experienced partners is nothing like what happens when we have to share the costs to our crew. That meeting takes two hours—per employee. We have dozens of those meetings during the enrollment period, which for some reason that's never been explained reasonably to me, only happens once a year. (That's right folks. You have the privelege of buying health insurance at most American businesses just once a year.)

Imagine if we had to sell sandwiches this way. Imagine we had to have meetings with our customers that took an hour to explain how to buy a sandwich. Imagine we had two dozen different pricing schemes per sandwich. Imagine we only let customers get in on the sandwich buying action once per year. Imagine any other industry where service remotely this bad is inflicted upon its customers.

The Worst Run Industry In America is my look at the American health care industry, its service, prices and promises, from my view as a merchant