Healthcare

Any scheme we contrive will not make health care “affordable.”

I began managing health benefits in 1961. I have done everything from process claims, design and communicate health benefits, negotiate insurance and TPA contracts to serving on boards of directors of health plans and negotiating physician contracts.

I am convinced of one thing with absolute certainty.

From the perspective of virtually all Americans health care will never be affordable! That is simply because the expense of health care is not in the hierarchy of household spending. Our spending priorities and sense of responsibility goes something like this. 

Food

Housing

Clothing

Everything else

Health care

What does that mean? Well, it means we are going to end up with a health care system that makes it appear health care is affordable, if not free.  Do I need to be more specific?

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3 replies »

  1. Agree with camcoogan.

    Until provision for out of pocket health care expense is part of our household budgeting process (I favor Health Savings Accounts), there will continue to be demand for someone else to pay, to lift and shoulder the burden.

    I still think the best option is in two parts:
    Create access to Health Savings Accounts for all workers, with a default to participation annually, where the individual can prospectively change their mind to opt out or opt in, or increase or reduce contributions at any time.
    Create access to a Health Savings Account for Medicare beneficiaries that is not voluntary, but is used to create a mandatory Medicare side-car for individuals to accumulate monies for out of pocket medical expenses in retirement.

    Can’t be done unless it is made explicit that the individual will be called upon to shoulder this burden. Once that is clear, acceptance of the funding option of Health Savings Accounts will be more readily achieved.

    I agree that it is much more likely that “we are going to end up with a health care system that makes it appear health care is affordable, if not free.” Joe will pay for your coverage. Tom will pay your out of pocket expenses. France will support US taxpayers (a la Mexico will pay for the wall, etc.)

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  2. An excellent and valid point. In the past, one could budget for the insurance premiums because out-of-pocket costs were nil. With managed care and more of the cost share on the consumer, we need to realize that health care expenses are a growing part of our monthly budget.

    Like

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