Consuming Healthcare

by Jim Clay

According to the 2004 Kaiser Family Foundation’s Employer Health Benefits survey, the average annual cost per employee for health insurance was $3,804 and $10,212 per family. Imagine for a minute what you could do with the extra money if you could put just a fourth of it into savings every year?

The goal of consumer-driven healthcare (the new buzzword in health insurance) is to do just that: trade benefits for cash savings. The only problem is that you probably will give the money back next year, or the year after that, unless you stay healthy.

That’s the catch, and it’s worth paying attention—not for the money, but for your life. Actuaries at the office of CMS (Medicare) estimate that every year our average life expectancy gains an additional three months. It is a fact; we are living longer. The question for most of us is not whether we will out-live our parents. The real question is whether we will be out on the golf course, living life and having fun, or be stuck with ill health as an economic slave to the healthcare industry?

Healthcare consumerism is not a new concept. The drug industry, for example, spends close to $2 billion dollars a year in direct consumer marketing. They don’t spend that money as charitable contri-butions. They spend it because advertising works, selling us the newest medicines to treat our maladies. We all want the latest and greatest, as long as we personally don’t have to pay for it.

Unfortunately, we are all paying the cost in some form, and the price tag is growing at an alarming rate. That’s why the Federal government is pushing individual consumers back into the fray with new Health Savings Accounts (HSAs), new rollover provisions on Health Reimbursement Accounts (HRAs), as well as legislation currently in the Senate to remove the “use it or lose it” rules and allow rollovers in Section 125 un-reimbursed medical accounts, also known as medical flex spending accounts (FSAs).

The underlying assumption is that we are not paying attention to our own health and that by putting some cash on the table we will change that current behavior. Specifically, if the money is in our hands, we will start acting as consumers when we are buying health services. More importantly, we will start proactively working on our own health so we keep more of the cash we get.

The statistics behind this second issue are stunning. Wellness experts claim that 90 percent of all illnesses are preventable. The Center for Disease Control estimates that 50 percent of all health issues are directly tied to lifestyle and behavior, including smoking, drinking and bad dietary habits leading to diabetes and obesity, among other risks. Basically, we don’t want to change our bad habits. We just want someone to repair the damage those bad habits cause.

In the 1980’s, the health insurance industry stepped into the fight with the thought that they could fix it through managed care programs that are part-nerships between them and the medical profession. Ironically, as the percentage of what individuals paid
fell with office visit co-pays and 100 percent HMOs, so did the relative health of our population.

Ominously, as technology and new medical services filled in the gap, the myth grew that the medical profession could fix anything. If they don’t fix us or the insurance company won’t pay for it, we will just sue them. Like children with an unlimited supply of candy and no consequences for eating it, we continue to demand more and more with no thought of eating our vegetables instead.

The counter offensive with consumer-driven healthcare is on. The discipline is the money in your pocket and the challenge is education with personal responsibility for our own health. I got my first assignment last week. I found out I have high blood pressure because the Government standard was lowered.

Tai Chi anyone?

 

Jim Clay is a Principal with The Resource Group. He can be reached at (913) 339-0800 or via e-mail at JamesClay@trglc.com.