Leap of faith assumptions needs to be identified and tested early on so that the company can make better decisions instead of incurring significant expenses by going down the wrong path. Unfortunately, our government does not subscribe to testing assumptions before spending billions of dollars of taxpayer money.
For example, take the main assumption that was made by the proponents of the affordable care act (ACA), a.k.a. Obamacare. They made the leap of faith assumption that by providing more low-income people with affordable and subsidized health insurance, the overall cost of health insurance would be reduced since there would be less high-cost emergency room visits made by people with no insurance.The assumption was that with medical insurance, the newly covered person would see a physician during office hours for non-emergency and primary care treatable illness rather than visit the much more costly emergency room.
However, a report from a randomized control study conducted by the state of Oregon, published before the ACA began full-scale implementation, provided the data necessary to prove this assumption false. The report showed that rather than achieving the desired results of less costly emergency room treatments for minor ailments like the common cold, flu, or a virus, it actually increased emergency room visits by this cohort by a whopping 40%. Moreover, with high deductible plans, many were still not able to pay their ER bills.
A well run for-profit business would have used the data to reevaluate their plan and simply abandon it or pivot before investing in a doomed solution.Testing assumptions before expanding your business’s vital resources can save you from betting the farm on poorly conceived projects.
Do you test your leap of faith assumptions before you make costly investments in your business?
IF YOU LIKE OUR CONTENT PLEASE SUBSCRIBE AND SHARE IT ON YOUR SOCIAL MEDIA CHANNELS. THANK YOU!