Unhealthy levels of detail


Have you ever gotten one of those statements from your health insurance company that tries to show you a breakdown of your recent claims? This type of document is one of the most convoluted things around. For any given visit to the doctor, they might show you the retail price of the visit, the discount they received off retail, the amount they paid, the amount you paid as a copay, and more. It’s way more detail than anyone needs.

There are really only two pieces of data that belong on this type of document. First, the amount that the customer is responsible for, which is typically the copay you already paid. Second, the total amount of money that you saved compared to going to the doctor without any insurance. After all, who cares whether the savings came from what the insurance company paid, versus their preferred rates with the doctor. Either way, the money saved is a benefit to you as the customer.

Insurance companies love their bureaucracy, and confusing forms and statements seem to be a part of that package. If they just provided a simplified statement like the one I’ve described, it would probably reduce the number of questions and complaints they get from confused customers. But the people designing these documents probably have no incentive to reduce costs and maximize profits. That’s a whole different department, I’m sure.

In any event, those of us who actually care about things like costs and profits should take this lesson to heart. By identifying the places where we confuse our customers with excess detail and reducing them to the bare essentials, we can simplify things for customers while reducing our own support costs.