Health Care Costs Destroying America

I was reading an article in Business Week and I got very excited about the future of medicine in the United States. I am a proponent of universal health care and the article gave me hope that our country is heading in that direction.

Medical Cost

The health care problem in America is worsening. A large percentage of our country’s GDP is spent on health care and this percentage is increasing annually.

These rising medical costs represent the worsening health of our country. Our poor health is weakening America physically as well as economically.

Health care costs are eroding the profit margins of all American companies. These eroding profit margins are making it difficult for American companies to compete in a global market place.

Fixing The Problem

We can decrease the costs in this country by:

* Encouraging disease prevention and screening

* Encouraging weight loss in the two-thirds of Americans who are overweight

* Eliminating the inefficiencies in hospital care and health information technology

* Providing a universal plan to all Americans funded by tax payer

Universal Health Care

A universal plan would eliminate the problem of the uninsured. There are 43 million Americans without health insurance.

Their lack of health insurance increases the costs for all Americans. The uninsured are less likely to get the prevention education and disease screening they need. This leads to chronic diseases, emergency room visits, and decreased productivity.

A universal plan with wellness incentive programs would spread the costs burden to all Americans and encourage healthier lifestyles.

Source: Dunham, Richard S. “One CEO’s Health-Care Crusade” Business Week. 3 July 2007

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Who is Responsible For Unsustainable Health Care Costs – Part I

Who is really responsible for the health care costs in this country? We have been conditioned to point the finger at Government, Private Insurance Carriers, or Medical Providers. We have heard the endless barrage of blame, the assault of accusation, and the fury of fault-finding between these parties for many months now. Each would have us believe that the others are solely responsible for the problems in our health care system. Without question, however, there is shared blame and joint accountability. In addition to the government, the large insurance carriers, and medical providers I would suggest three additional parties with culpability:

1) health insurance brokers
2) employers and
3) you and I individually.

There has been and will be plenty more said of the role that the first three parties have had in creating the current situation. My intent in this 3-part series is to expose the role of the latter three groups and suggest how these groups can actually become part of the solution.

Health Insurance Brokers

To include brokers in this discussion may seem self-incriminating since that is my profession. However, I do so with a clear conscience because of the approach that my company takes when representing our clients. Just last week I was discussing trends of High Deductible Health Plans with one of our local insurance carrier reps. She told me that she had recently heard a broker tell her, “I will not sell that product to one of my clients.” The broker who made this comment was referring to a High Deductible Health Plan paired with an HSA and the comment was made in context of his commission. The carrier rep. was astounded that the broker would confess to not showing a certain plan to his clients because of the impact it would have on his commission.

Utilization of a High Deductible Health Plan (HDHP) strategy will generate a substantial and immediate reduction in premiums – typically between 30 and 50%. You guessed it. The reduction in premiums means a corresponding reduction in commission for the broker. How many brokers are honest and ethical enough to suggest a strategy to their client that will result in a sizable pay cut for them? Unfortunately, that is the way the system is designed and it creates an inherent conflict of interest unless the brokerage firm is built on another model. A model that measures success based on savings achieved for their clients. Under this model, the broker will always look first to take advantage of the savings created by High Deductible Health plans when building a proposal rather than looking at them as a last resort or only if the client asks about these plans.

The government has actually provided some very good options for employer-sponsored health care plans. Flexible Spending Accounts (FSA’s), Health Savings Accounts (HSA’s) and Health Reimbursement Arrangements (HRA’s) offer different ways to achieve premium savings and tax savings. If properly designed, these tax-favored plans can result in equal or better coverage for the employees at a lower cost to the employer. A properly designed plan that accomplishes these win/win outcomes must be done by a broker that specializes in the design and administration of these plans, not a broker that merely suggests them as an afterthought or upon request by the client.

From the 2009 Kaiser/HRET Survey of Employer -Sponsored Health Benefits report, we gain insight into why employers have adopted HDHP’s and what the outcomes have been:

  • 72% of firms offering a HDHP said the primary reason they began offering this option was to save on health care costs
  • 49% of firms offering a HDHP reported that the most successful outcome has been the control of health care costs
  • An additional 27% reported that the most successful outcome has been the encouragement to employees to be better health care consumers (which, by the way, ultimately leads to lower health care costs)
  • 82% of the employees enrolled in a HDHP reported being either very satisfied or somewhat satisfied with the plan while only 3% reported being very dissatisfied

Here are the surprising statistics:

  • Only 5% of the firms not currently offering a HDHP reported that they are “very likely” to offer a HDHP with an HRA in the next year
  • Only 6% of the firms not currently offering a HDHP reported that they are “very likely” to offer a HDHP with an HSA in the next year

(The Kaiser Family Foundation and HRET, 2009, p. 166-167)

Why are so few companies planning to start offering HDHP’s when the results have been so favorable for both employers and employees? Brokers have not done a good enough job of promoting these types of plans and educating their clients on the financial benefits of utilizing a HDHP. Whether due to lack of product knowledge or a desire to preserve their commission, there is fault with the brokerage industry for not being more aggressive with the positive health care reform that the government has already enacted. Brokers must be knowledgeable enough and ethical enough to recommend, design and implement these plans to benefit their clients. Employers need to find a broker who is knowledgeable and ethical enough to recommend, design and implement these plans for their company.

Reference

The Kaiser Family Foundation and Health Research & Educational Trust (2009). Employer Health Benefits 2009 Annual Survey (Electronic Version). 166-167.

Workout Programs Help Manage Health Care Costs? YES!

I get a lot of questions from people asking me why someone would want to participate in a conditioning program of any kind. I often ask these individuals to take a step back and try to look at the bigger picture. Once you do that you can see how participating in a workout program can benefit so much more than just your body. It will also benefit your wallet.

My hope is that this article will show you how the benefits of a golf performance enhancement program can extend far beyond the golf course.

Money Is A Terrific Motivator

Money is a very strong motivator for most people. As such, I tend to use a financial perspective to motivate people. It is a perspective everyone understands and it works so well. I’ll use that same perspective here.

The health care industry in America continues to be a constant source of concern for the 50+ population. With advances in modern science, individuals are now living longer than any other time in history. While this can be seen as a positive, many individuals are worried about outliving their retirement funds (a very legitimate concern), having their standard of living being reduced due to lack of financial support and losing their personal mobility due to age.

One of the major issues that this country (USA) has on its hands is how we are going to care for the Baby Boomer population once they begin to get older. The overall financial strain it will put on our national health care and financial systems is projected to be very significant.

Strain On The Health Care System

There is already a terrible overall strain on the medical system we have. Many of today’s nurses are nearing retirement age. There is a recognized medical staffing crisis on the horizon as a result of this mass retirement.

Tomorrow’s health experts are not getting the clinical experience they need during school due to the incredible demand for new nurses, so much of the training is happening on the job. In short, they are not really ready for the hospital floor (this is a general, high level statement).

While this is not necessarily bad, it is a nightmare for hospitals, since there seems to be a significant drop in overall productivity and profitability from a veteran nurse to a new, “untrained” nurse. This is not good for their bottom lines.

Don’t forget that hospitals, insurance and pharmaceutical companies are for-profit organizations. As such, they are going to do everything in their power to make sure that they make money, and lots of it.

Health Care Costs Continue To Increase

All of these factors (insurance, hospitals, medical treatments, drugs, etc) continue to increase exponentially in cost due to increased usage and demand for their services. Health care costs are expected to grow because scientists are continually discovering medicines to treat diseases of aging and people are living longer. The elderly population, now 36 million, is expected to reach 70 million by 2030.

The positive part of all this is that individuals are beginning to realize that they can control, to some extent, the chance that they will need significant health care in the future. Taking care of yourself now can “save” you millions of dollars in health care costs not today, not tomorrow but many years down the road. Conditions that affect us while we continue to live (diabetes as an example) can be especially expensive, as you can live for decades with diabetes.

There are a number of other issues that will affect the future cost of health care. The point is, health care costs are not going to be getting any cheaper. You are by no means guaranteed to avoid all health problems by taking care of yourself, but you will stack the deck in your favor, and minimize your chance of realizing significant health care bills, by being proactive in the maintenance of your health.

Conditioning Benefits Will Transcend Improved Physical Health

The whole idea is to develop a better overall you. The core goal of a conditioning program should be about so much more than just fitness and conditioning. It should be about healthcare cost avoidance, quality of life, reduced pain, treating root causes of pain, etc.

I can think of only three investments that have very minimal, if any, risks but can yield huge returns: Education, health and family/personal relationships.

Think of taking care of yourself as a long term cost management strategy for your life. You can also look at it as a no-risk investment in yourself that will pay dividends far above and beyond any other investment you can make while also improving your body and energy levels. That is an investment I like to think most people would be willing to make.

Still Enjoy The Things You Love

Don’t forget that you can take care of yourself and still eat the foods and do the things you like in life. I workout a lot, but I also drink beer, love hamburgers and steak, eat McDonalds (occasionally) and enjoy Mtn Dew. I just don’t make them a staple of my diet.

Hopefully this article has shown you that once you take a step back and look at the bigger, long term picture that you can develop a much more compelling argument for general wellness, which is a natural byproduct of a properly designed fitness program.