By KIM BELLARD

The most interesting story I read in the past week doesn’t come from the more usual worlds of health and/or technology, but from sports. It’s not even really news, since it was announced last fall; it’s just that it wasn’t until last week that a U.S. publication (The New York Times) reported on it. In a nutshell, a Paris football (a.k.a. soccer) club is not charging its fans admission during the current season.

Since last week I wrote about medical debt in the U.S. healthcare system, you might guess where this is going. The club is Paris FC. Last November it announced:

For the first time in history, Paris FC is offering free tickets for all home matches at the Stade Charléty, starting from the 11 November until the end of the 2023-2024 season from its Bastia reception, in a bid to offer a new and innovative vision of football by welcoming as many people as possible.

The policy includes the men’s second division team and the woman’s first division team. The NYT article clarifies that fans supporting the visiting team might be charged a “nominal” fee, and that hospitality suites still pay market rates.

Pierre Ferracci, Chairman of Paris FC, said: “We are proud to support this ambitious and pioneering project, which goes beyond the simple framework of sport in terms of the values it conveys. We want to bring people together around our club and our teams, while committing ourselves with strength and conviction. In a context of difficult purchasing power, we are confident that a club can be an ideal tool for bringing together people of goodwill and engage with societal issues.”

Fabrice Herrault, Paris FC’s general manager told NYT: “It was a kind of marketing strategy. We have to be different to stand out in Greater Paris. It was a good opportunity to talk about Paris F.C.” The club estimates it might cost them $1 million.

It seems to be working. The NYT reports:

Months later, most metrics suggest the gambit has worked. Crowds are up by more than a third. Games held at times appealing for school-age children have been the best attended, indicating that the club is succeeding in attracting a younger demographic.

The idea is not entirely de novo; last spring Fortuna Düsseldorf, a German second division football club, announced it would offer free admission for at least three matches this season, with the intent that eventually all home matches. “We open up football for all. We will have free entry for league games in this stadium,” Alexander Jobst, the club’s chief executive, said at the time. “We call it ‘Fortuna for all’ which can and will lead us to a successful future.”

In a NYT interview last spring, Mr. Jobst added: “We think it is completely new. We were trying to think about how we could do the soccer business completely different from before.”

I’m always a sucker for efforts to think about a business completely different than before.

Fortuna has now had two of its three free matches, and Mr. Jobst told NYT last week: “Our average attendance has gone from 27,000 to 33,000. Our merchandise sales are up by 50 percent. Our sponsorship revenue is up 50 percent. We have reached a record number of club members.”

Sure sounds like a success.

Keep in mind that for most professional sports, ticket and concession revenues are gravy; the real money is from TV deals, as well as sponsorships. The NFL, for example, only gets 17% of its revenue from fans, the NBA 26%, and MLB 31%, while MLS and NHL need over 40% (not such good TV deals!). Fortuna, in case you’re interested, only gets 20% of its revenue from tickets, even though it is only in the second division.

Meanwhile, Paris FC only gets 4% of its budget from ticket sales. “We’re not taking a big risk, and we won’t lose out,” Mr. Feracci told Le Monde. “The balance will be positive, thanks to new sponsorship income and the arrival of new shareholders who have shown themselves to be keen on our vision.

Spectators matter, not just as a revenue source. We all remember American professional sports during the early days of the pandemic. The NBA finished its 2019-2020 season in a bubble, with players, staff, and media quarantined, playing in empty arenas. Most of the NFL and MLB games that year were also without fans. Players and television viewers hated the experience; it just didn’t seem real without actual fans in attendance.

“Since the pandemic, there has been a growing awareness of the role of spectators in the ‘production’ of sporting events,” Luc Arrondel, a professor at the Paris School of Economics, told NYT. “The presence of supporters in the stadium increases the desirability of the television product, and therefore, possibly, the value of television rights,” 

Professor Arrondel has even made the case in a paper (“Faut-il payer les supporters?”) that it might actually make sense for professional teams to pay the most ardent fans to attend in-person.

Yes, all that is thinking about the business completely differently.

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Meanwhile, there’s the U.S. healthcare system, which treats its “fans” – i.e., patients – as revenue from whom every dollar should be squeezed. E.g., ever pay a facility fee for a doctor’s visit, or pay the inflated U.S. prices for prescription drugs? It’s not surprising that we end up with all that medical debt. As I wrote last week: “why are so many charges so high, why aren’t people better protected against them, and why don’t more Americans have enough resources to pay their bills, especially unpredictable ones like from health care services?”

So here’s a thought” out-of-pocket spending is “only” 11% of national health expenditures. What if we just abolished it? Healthcare’s version of not making fans pay to attend football matches.

Now you might say – that’s crazy, how would the health care system make up that 10%? I’d say two things: first, we all know that there’s 10% of savings to be had in our bloated system; what better to use them for than this?  Second, and more importantly, we need to admit that the current business model in the U.S. healthcare system does not work.

It’s time to think of ways to do the business of healthcare “completely different than before.”

Not making patients pay out-of-pocket might not be the “right” way to do that, although we could do worse, but, in any event, we better think of something completely different before the system crashes.

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor

Someone once showed me an analysis that demonstrated that the sum of workers’ salaries and benefits has stayed remarkably constant in real terms over the last two decades.  This means that companies have compensated for the increasing cost of health insurance over time by holding back on wage increases.

You can understand this.  After all, if companies are not able to increase the price of goods and services they sell to the public, they need to hold factor costs relatively constant.  So if it was costing them more and more to provide health insurance to their workers, an offsetting amount would have to be removed from possible wage increases.

This dynamic is still in place, but it is showing up in a different way, by shifting costs to workers in the form of higher deductible health insurance policies.  Deductibles are different from co-pays, where you plunk down $15 or $20 for each appointment or prescription.  With deductibles, you pay the first costs incurred as you and your family make use of the health care system, the entire cost of the office visit or of the prescription, until a preset amount is reached.  After that level is reached, you still pay the co-pays.  A recent story in the Washington Post documented this trend.

Currently, this kind of high-deductible policy is often combined with health saving accounts that are funded by the employer.  These accounts let patients buy medical services and drugs with pretax dollars.   So, although your insurance plan might require you to pay more of a deductible out of your own money, you could still use the HSA to cover those out-of-pocket expenses.

But the article suggested that this remaining employer contribution, the HSA, is likely to evaporate over the coming years.  “Half of all workers at employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade, according to a new paper from Rand Corp.”

Is this good or bad?  Supporters of high deductible plans say that the only way to make sure consumers have some “skin in the game” when it comes to society’s rising health care costs is to assign some of those costs to the consumers.  If you know, for example, that you will pay for the first $1000 of your annual health care costs, perhaps you will shop around when you need that MRI.  Instead of going to the local hospital, you will go to a specialized imaging center.  Perhaps, too, you will be less likely to go the emergency room for something that could wait a day or two.

On the other hand, opponents say that this kind of approach is unfair to people with chronic diseases like arthritis or diabetes.  They argue that these people make fewer discretionary choices when it comes to treatment.

Some people suggest that companies are “word-smithing” the trend to make it sound like it is in the public interest, even though it is really driven by corporate finances.   The article quotes Jonathan Oberlander, a health policy professor at the University of North Carolina. “Employers like it because they’re providing less coverage. If they can relabel it as consumer-driven then it even sounds good.”

One variant on high deductible plans is to allow consumers a lower deductible if they get their medical care at a “limited network.”  This would be a group of doctors and hospitals that agree to charge the insurance company less than a group of higher paid doctors and hospitals in the community.  You, as consumer, would choose.  If you really wanted to go to Dr. Really Famous at the local academic medical center, you would be responsible for the much of the cost, but if you went instead to Dr. Relatively Unknown at a community hospital, you would only be responsible for a small co-pay.

Perhaps, too, your deductible would be waived if you agreed to participate in an annual health care assessment.  The Post article told of one such plan:  “Chrysler introduced a preferred-provider plan with family deductibles as high as $3,400 for salaried workers…. The deductible falls to $1,000 for in-network care if employees receive a physical and take other steps such as completing an online health assessment.”

Of course, none of this works at all if the rates and charges assessed by doctors and hospitals are not transparent to the public . . . and if we have no quality indicators that tell us what we are getting for our money when we choose between Dr. Famous and Dr. Unknown.  Thus far, where such information is available, it is woefully out of date, often two or three years old.  If high deductible plans are coming our way, we should be demanding of our state government that both real-time price and quality data be available for all to see.

Paul Levy is the former President and CEO of Beth Israel Deaconess Medical Center in Boston. For the past five years he blogged about his experiences in an online journal, Running a Hospital. He now writes as an advocate for patient-centered care, eliminating preventable harm, transparency of clinical outcomes, and front-line driven process improvement at Not Running a Hospital.