I recently looked at a Kaiser Family Foundation Public Opinion Survey that asked a random sample of people with employer insurance a number of questions about cost. The survey shows how far we have to go to come to grips with out-of-control health care costs.
The good news is that half have a reasonably accurate idea of the total cost of their health insurance. Their estimates were somewhat low, but in the ball park of reality.
The bad news is that the other half had no idea about a cost that was constraining their wages and cramping the employer they work for.
What dismayed me most were the responses to a list of possible changes to current insurance that would lower the cost of coverage. The only suggestion that received majority support (68%) was to "participate in a wellness program that promotes healthy behaviors such as losing weight or controlling your blood pressure or cholesterol." Only 30% were willing to accept paying more for brand name drugs, paying a higher deductible before the insurance kicks in, or accepting a more restricted list of participating doctors and hospitals.
So how are we going to keep health care costs from undermining public health more than is already happening?
Public education is important, but it won't do the heavy lifting. Despite lots of educational effort, something as obvious as constraining access to brand name drugs when alternatives are available still only gets 30% support.
Learning through experience is likelier to move our outlook. In the world of employer based insurance, employers and insurers should design multi-year approaches to helping us learn. We're starting to see employers offer "value-based" networks that emphasize primary care and community hospitals, with tertiary hospital care covered for services that aren't otherwise available. And as I've written about in previous posts, employers are putting more pressure on us to manage our health better (see here, here, and here).
In the current U.S. system, the majority of non-elderly with insurance get their health insurance through their employer. Employers and insurers should collaborate to make health insurance a "learning opportunity," not just a "fringe benefit." It takes us time to learn about financial responsibility in our growing up. It's going to take time and a similar concerted effort for us to learn health responsibility as adults!
Showing posts with label employer insurance ethics. Show all posts
Showing posts with label employer insurance ethics. Show all posts
Monday, October 31, 2011
Sunday, October 23, 2011
Should Wal-Mart Make Smokers Pay More for Health Insurance?
A recent article about changes Wal-Mart is making in its health insurance program reports that smokers will be required to pay an extra $10 to $90 each pay period — $260 to $2,340 a year.
Is that fair?
Greg Rossiter, speaking for Wal-Mart, defends the policy on the basis of cost - “Tobacco users generally consume about 25 percent more health care services than nontobacco users.” But patients with cancer also "consume" more health care services. I doubt that Wal-Mart intends to raise their premiums.
Wal-Mart doesn't justify the tobacco penalty by cost alone, but rather by cost combined with the conviction that smoking represents a choice.
Smoking is obviously harmful, and smoking cessation will be good for the individuals who stop, the cost of the corporate health program, and the impact of secondary smoke on others. But Wal-Mart's program is wrong.
Nicotine is addictive. Addictions don't stop on a dime. Here's what I would have recommended to Wal-Mart:
Is that fair?
Greg Rossiter, speaking for Wal-Mart, defends the policy on the basis of cost - “Tobacco users generally consume about 25 percent more health care services than nontobacco users.” But patients with cancer also "consume" more health care services. I doubt that Wal-Mart intends to raise their premiums.
Wal-Mart doesn't justify the tobacco penalty by cost alone, but rather by cost combined with the conviction that smoking represents a choice.
Smoking is obviously harmful, and smoking cessation will be good for the individuals who stop, the cost of the corporate health program, and the impact of secondary smoke on others. But Wal-Mart's program is wrong.
Nicotine is addictive. Addictions don't stop on a dime. Here's what I would have recommended to Wal-Mart:
- "If you haven't done it already, involve a council of "associates" (the Wal-Mart term for employees) in developing the policy re smoking."
- "Give associates advance notice of the financial penalties - no less than a year, perhaps two."
- "Offer strong support for smoking cessation."
- "Make sure the financial penalties aren't 'too large.' The aim of the penalty should be to focus attention on tobacco use and send an educational message, not to cover the incremental cost of health care. $2,390 is way too much for anyone but a senior executive."
I'm entitled to smoke if I wish, but I'm not entitled to make you pay for the future costs my smoking entails.
Given our reliance on employer-based health insurance for 60% of the population, it's ideal for employers to take a public health orientation towards employees. I think Wal-Mart is right to take on smoking as a public health issue for its employees, but clinical and ethical considerations require it to modify the way it's approaching the issue.
The Good Samaritan didn't ask the wounded traveller if he'd brought on his condition by faulty choices!
Wednesday, November 3, 2010
Nanny Employer or Public Health Leader?
The Massachusetts Hospital Association announced yesterday that as of January 1, tobacco users will not be eligible for employment. The blogosphere responded quickly. "Big Brother," "totalitarianism," and "fascism" were among the terms applied to the MHA policy.
Apart from fiery rhetoric, the most persuasive critique of what the MHA is doing is the "slippery slope" argument. Even those who favor high tobacco taxes and other preventive messages worry about the potential for employers to develop hiring policies that reflect prejudice, not public health. (In the 1980s, Electronic Data Systems banned facial hair and fired an employee who claimed that he wore a beard for religious reasons!)
In my view, it is entirely justifiable for a health organization to do what the MHA is doing. I formed this opinion as a fourth year medicine student on a medicine rotation at the Boston City Hospital. A man in his 50s died of lung cancer. I joined the resident in meeting with the family. As would be unthinkable now but was not so shocking in the 1960s, the resident was holding a cigarette. The widow was outraged - "How can you talk to me about my husband's death and smoke cigarettes yourself?" Of course she was right. It would be hypocritical at best for the MHA to preach public health without taking a strong stand against tobacco use.
But what about organizations not in the health sector? Banning smoking on the premises is justified by the risks second hand smoke poses to fellow employees. But not hiring smokers is problematic. The policy would contribute to anti-tobacco pressure, but it would have greater impact on low income workers, since tobacco use is more prevalent in low income groups. And it would fly in the face of the strong value Americans place on individual liberty.
In principle, further increases in tobacco taxes would be a preferable approach. Price increases lead established smokers to cessation efforts, reduce the rate of smoking, and discourage adolescents from initiating tobacco use. Critics, including tobacco company lobbyists, are correct in arguing that "sin taxes" are regressive - the poor pay proportionally more than the wealthy. But since there are more low income smokers, the relatively larger number who quit will, over time, make the tax less regressive. And, as a practical matter, determined low income smokers generally have access to lower cost black market products.
But we are likely to see non-health organizations following organizations like the MHA (or the Cleveland Clinic, which instituted a non-hiring policy in 2007), driven by concern about health care costs. Employers will justify the policy by (1) public health values but also (2) the potential that reducing (and ultimately eliminating) smoking among employees has to lower insurance costs for the company. Insofar as health care costs come out of wages, my liberty to smoke comes out of my fellow employee's paycheck. As I argued in a previous post, my liberty right to smoke if it's legal doesn't give me the right to lower your pay.
Apart from fiery rhetoric, the most persuasive critique of what the MHA is doing is the "slippery slope" argument. Even those who favor high tobacco taxes and other preventive messages worry about the potential for employers to develop hiring policies that reflect prejudice, not public health. (In the 1980s, Electronic Data Systems banned facial hair and fired an employee who claimed that he wore a beard for religious reasons!)
In my view, it is entirely justifiable for a health organization to do what the MHA is doing. I formed this opinion as a fourth year medicine student on a medicine rotation at the Boston City Hospital. A man in his 50s died of lung cancer. I joined the resident in meeting with the family. As would be unthinkable now but was not so shocking in the 1960s, the resident was holding a cigarette. The widow was outraged - "How can you talk to me about my husband's death and smoke cigarettes yourself?" Of course she was right. It would be hypocritical at best for the MHA to preach public health without taking a strong stand against tobacco use.
But what about organizations not in the health sector? Banning smoking on the premises is justified by the risks second hand smoke poses to fellow employees. But not hiring smokers is problematic. The policy would contribute to anti-tobacco pressure, but it would have greater impact on low income workers, since tobacco use is more prevalent in low income groups. And it would fly in the face of the strong value Americans place on individual liberty.
In principle, further increases in tobacco taxes would be a preferable approach. Price increases lead established smokers to cessation efforts, reduce the rate of smoking, and discourage adolescents from initiating tobacco use. Critics, including tobacco company lobbyists, are correct in arguing that "sin taxes" are regressive - the poor pay proportionally more than the wealthy. But since there are more low income smokers, the relatively larger number who quit will, over time, make the tax less regressive. And, as a practical matter, determined low income smokers generally have access to lower cost black market products.
But we are likely to see non-health organizations following organizations like the MHA (or the Cleveland Clinic, which instituted a non-hiring policy in 2007), driven by concern about health care costs. Employers will justify the policy by (1) public health values but also (2) the potential that reducing (and ultimately eliminating) smoking among employees has to lower insurance costs for the company. Insofar as health care costs come out of wages, my liberty to smoke comes out of my fellow employee's paycheck. As I argued in a previous post, my liberty right to smoke if it's legal doesn't give me the right to lower your pay.
Saturday, October 30, 2010
Nanny State and Nanny Employer
This election season has been saturated with backlash against "government takeover" of health care. Critique of the Patient Protection and Affordable Care Act ranges from thoughtful, fact-based responses to know-nothing paranoia.
The law is imperfect, but it's the best our body politic was capable of in 2010. It represents a substantial step forward. But it has touched a very raw nerve in our political psyche - the depth of our reluctance to acknowledge that health isn't just a matter of individual rights - our community has responsibilities to us as individuals, and we as individuals have responsibilities to our community.
The "Government, keep off my back!" issue is being fought out in federal court over the awkward, but necessary, legal, and ethically entirely justifiable individual mandate (see here, here, and here, for previous posts on the mandate). But the same dynamic is starting to emerge towards the growing tendency for employer-based insurance to include wellness incentives, as set forth especially clearly in this recent letter in the New York Times:
The employer takes money the company earns and puts it towards health insurance, money that otherwise could go into wages or improving the company's competitive position. If I'm hit by a car, my fellow employees and employer are, in effect, subsidizing my care. If that happens, I hope I'll be appropriately grateful. But my fellow employees and employer are entitled to expect me to approach my own health in a responsible manner, because (a) they care about me and (b) they will be paying for the health care I need.
I have a right to smoke, become a couch potato, and toss my medications into the toilet. But I don't have a right to tell my fellow employees and employer - "I have no responsibility for the consequences - it's your role to pay for me...and don't you dare ask any questions or ask me to take any responsibility!"
Incentives (carrots and sticks) can be done well or poorly, fairly or unfairly. Behavioral economics research on how incentives work and ethical reflection on what kinds of incentives are justifiable, is well underway. As an example, here's the mission of the Center for Health Incentives at the University of Pennsylvania, a leading site for behavioral economics research:
The law is imperfect, but it's the best our body politic was capable of in 2010. It represents a substantial step forward. But it has touched a very raw nerve in our political psyche - the depth of our reluctance to acknowledge that health isn't just a matter of individual rights - our community has responsibilities to us as individuals, and we as individuals have responsibilities to our community.
The "Government, keep off my back!" issue is being fought out in federal court over the awkward, but necessary, legal, and ethically entirely justifiable individual mandate (see here, here, and here, for previous posts on the mandate). But the same dynamic is starting to emerge towards the growing tendency for employer-based insurance to include wellness incentives, as set forth especially clearly in this recent letter in the New York Times:
“It’s About Time to Check the Fine Print on Your Health Plan” (Patient Money, Oct. 16) says that “your company may be offering cash rewards ... if you complete a health risk assessment or get screened for blood sugar, high cholesterol or high blood pressure,” as if this were an unproblematic perk. But it undermines your privacy when your employer monitors your health and offers incentives for good behavior.Some workers hate their employers with the same passion the Tea Party expresses towards the government. But even for them, it's potentially easier to understand the social compact that underlies employer-based health insurance than in our highly fragmented national system.
We are familiar with criticism of the nanny state, but isn’t it about time to extend such criticism to the nanny employer, whose power over employees threatens their freedom to make their own health choices about their own lives?
The employer takes money the company earns and puts it towards health insurance, money that otherwise could go into wages or improving the company's competitive position. If I'm hit by a car, my fellow employees and employer are, in effect, subsidizing my care. If that happens, I hope I'll be appropriately grateful. But my fellow employees and employer are entitled to expect me to approach my own health in a responsible manner, because (a) they care about me and (b) they will be paying for the health care I need.
I have a right to smoke, become a couch potato, and toss my medications into the toilet. But I don't have a right to tell my fellow employees and employer - "I have no responsibility for the consequences - it's your role to pay for me...and don't you dare ask any questions or ask me to take any responsibility!"
Incentives (carrots and sticks) can be done well or poorly, fairly or unfairly. Behavioral economics research on how incentives work and ethical reflection on what kinds of incentives are justifiable, is well underway. As an example, here's the mission of the Center for Health Incentives at the University of Pennsylvania, a leading site for behavioral economics research:
I hope we see lots of debate about "Nanny Employers" in the months ahead. It will be hard for us to take glib libertarian positions when those who will be affected by our actions are our comrades at work. It's easy to rail against "government takeover," "socialism" and "Obamacare." It's harder to look into the eyes of our fellow workers and spout the same nonsense!Our mission is to facilitate research that makes significant contributions to reducing the disease burden from major public health problems such as tobacco use, obesity, and medication non-adherence for cardiovascular and other diseases through better understanding of how to design and apply incentives and other behavioral economic approaches to improving health. The center has 3 primary missions:
- To advance knowledge about incentive design
- To develop and test scalable and cost-effective applications
- To work with private and public sector entities such as large employers, insurers and health systems to improve health care delivery and the health of the population
Wednesday, January 13, 2010
Michael Porter on the Employer Role in Health Care Reform
Here's what Michael Porter, the Harvard Business School strategy guru, said about employers in a New England Journal of Medicine article last summer:
We must keep employers in the insurance system. Employers have a vested interest in their employees' health. Daily interactions with their workforce enable employers to create value by developing a culture of wellness, enabling effective prevention and screening, and directing employees to high-value providers. Employers can also foster competition and drive broader system improvement in ways that are difficult for government entities to replicate. To motivate employers to stay in the system, we must reduce the extra amount they now pay through higher insurance costs to cover the uninsured and subsidize government programs. We must also create a level playing field for employers that offer coverage by penalizing employers that are free riders.Employers didn't envision just how complex their role would become when they began to offer health insurance as a benefit during World War II. Wartime wage controls prevented them from using higher pay to recruit and retain desirable employees. Health insurance (and other benefits) allowed them to compete for the employees they wanted.
If we were designing a health system from scratch we wouldn't make employers so central for making it work. Health and health care isn't the business they're in. But that's the system we have, and we have to play with the cards that we've been dealt!
Employers are well positioned to change the system in positive ways.
- Getting smarter about costs. Public discussion of health care costs last year was pathetic. If we listen to Democrats we believe "greedy insurance companies" are the villains. If we listen to Republicans we believe that "greedy malpractice lawyers" are the evil-doers. Neither party helped us understand the real drivers of the cost explosion: (1) our belief that more care = better care, (2) the corporatization of medicine, (3) fee-for-service payment, and (4) our national allergy to acknowledging the need for limits.
Employers can educate the 160 million Americans who get health insurance through their work about health costs better than politicians can. How much is the total health bill for the company? What percentage is from insurance costs, and how much comes from the impact of "life style choices" on health and productivity? Are the practice patterns in the community efficient and effective, or is insurance money being wasted? Are individual employees (and their families) doing what they can to promote their own well-being?
All but the smallest businesses are large enough to allow meaningful cost patterns to be understandable. And all but the largest multinationals are small enough for employees to feel allied to the employee population they share health costs with. - Influencing care delivery. Physicians, hospitals, and other providers are difficult for politicians to tangle with. We like and trust our providers more than we like and trust our politicians. But businesses are accustomed to looking at value for money in a matter-of-fact way. They can ask tough questions about whether the health services they purchase are producing good outcomes in an efficient manner or if the system that serves them is fragmented and riddled with waste - which, alas, it is!
Quality circles, Lean, and other employee-centered approaches to process improvement have led to substantial gains in value in manufacturing and other industries. Wherever possible, employees should be enlisted in similar activities with regard to the health care they receive. Efficiency shouldn't be the exclusive province of PhD and MD experts. I appreciated the suggestions I received from my own patients about how I delivered care. Employees could contribute useful front line observations about how care can be delivered in a more integrated and efficient manner. - Improving health. Virtually every area of health has peer-led health improvement activities. AA and NA help with substance problems. Cancer support groups have often been shown to contribute to better outcomes. Peers can help each other stick to healthier diets and get more exercise. Over the years it was more and more common for me to encourage patients to go to the web to see what kinds of help they could get from others who have experienced similar conditions.
When employers identify the areas of health that are most problematic for its workplace community it can encourage and support positive actions by individuals, ranging from weight loss and exercise to diabetes management.
(For additional advice from Michael Porter, see his article "What Should Employers Do About Health Care?"
Monday, January 4, 2010
A Remarkable Health Initiative at the University of New Hampshire
Watching the federal health reform process has strengthened my conviction that the changes our health system needs will have to come from the bottom up, not the top down, and that employers play a key role.
Here's how I put this idea a month ago in a post about employer incentives:
I recently came upon the website for Healthy UNH, a remarkable program launched this fall at the University of New Hampshire. The scope of the program is breathtaking, as evidenced by this statement of vision and goals:
Vision: UNH will be the healthiest campus community in the country by 2020.
Values:
1. Transforming health care delivery
2. Creating value for the money we invest in medical care
3. Ensuring that the care we purchase is the right care at the right time
4. Following medical care practices that are evidence-based
5. Improving the health of our entire community, spanning multiple locations and audiences
6. Sustaining health and health care
7. Collaborating across our community
8. Engaging and educating our community
9. Advancing mental and physical well-being
10. Promoting work/life balance
The website includes action plans for changing the way care is delivered to the UNH community, educating the community about what's driving the cost trend, encouraging the use of evidence-based cost effective care, and increasing wellness-promoting behaviors. It's a comprehensive program about enhancing the bang for the bucks the University invests in health insurance (for approximately 2,800 faculty and staff) and improving the health of the entire community, which includes 15,000 students.
It's too early to know what the Healthy UNH program will accomplish. But the way the program is conceptualized can show other employers how worksites can become a force for health literacy, promotion of wellness, and delivery system change.
Over time, as more employers take a holistic approach to promoting health, reforming health care delivery, and getting a grip on runaway costs, state and federal legislators will get the message. Our leaders will lead us better when the front lines show them what needs to be done and how to do it!
(Additional posts about worksite initiatives are available via the "Employer Insurance Ethics" tab. See also a New England Journal of Medicine article - "The Employer as Health Coach.")
Here's how I put this idea a month ago in a post about employer incentives:
Federal health reform is the front page news, but states and businesses are the laboratories for change. Next to Governors, who have to deal with hideous budget problems driven by declining revenues and escalating Medicaid costs, employers who offer health insurance to their employees are most directly concerned about health care costs.Employer insurance covers approximately 160 million of the non-elderly U.S. population. Because the business world is way ahead of health care in its zeal for (a) casing the environment for good ideas ("benchmarking") and (b) adopting those that work well elsewhere, (c) promising innovations have the potential for rapid diffusion.
Health reform requires three ingredients: (1) facing facts, (2) thinking strategically and (3) embracing individual and population concerns. Given the virulent divisiveness of current U.S. politics, employers who offer health insurance are the most promising venue for applying this triad in a "businesslike" manner!
I recently came upon the website for Healthy UNH, a remarkable program launched this fall at the University of New Hampshire. The scope of the program is breathtaking, as evidenced by this statement of vision and goals:
Vision: UNH will be the healthiest campus community in the country by 2020.
Values:
1. Transforming health care delivery
2. Creating value for the money we invest in medical care
3. Ensuring that the care we purchase is the right care at the right time
4. Following medical care practices that are evidence-based
5. Improving the health of our entire community, spanning multiple locations and audiences
6. Sustaining health and health care
7. Collaborating across our community
8. Engaging and educating our community
9. Advancing mental and physical well-being
10. Promoting work/life balance
The website includes action plans for changing the way care is delivered to the UNH community, educating the community about what's driving the cost trend, encouraging the use of evidence-based cost effective care, and increasing wellness-promoting behaviors. It's a comprehensive program about enhancing the bang for the bucks the University invests in health insurance (for approximately 2,800 faculty and staff) and improving the health of the entire community, which includes 15,000 students.
It's too early to know what the Healthy UNH program will accomplish. But the way the program is conceptualized can show other employers how worksites can become a force for health literacy, promotion of wellness, and delivery system change.
Over time, as more employers take a holistic approach to promoting health, reforming health care delivery, and getting a grip on runaway costs, state and federal legislators will get the message. Our leaders will lead us better when the front lines show them what needs to be done and how to do it!
(Additional posts about worksite initiatives are available via the "Employer Insurance Ethics" tab. See also a New England Journal of Medicine article - "The Employer as Health Coach.")
Monday, November 30, 2009
Obesity, Health Insurance, and Employer Incentives
Federal health reform is the front page news, but states and businesses are the laboratories for change. Next to Governors, who have to deal with hideous budget problems driven by declining revenues and escalating Medicaid costs, employers who offer health insurance to their employees are most directly concerned about health care costs.
Health reform requires three ingredients: (1) facing facts, (2) thinking strategically and (3) embracing individual and population concerns. Given the virulent divisiveness of current U.S. politics, employers who offer health insurance are the most promising venue for applying this triad in a "businesslike" manner!
In previous posts I've written about how IBM promotes primary care and encourages employees to find a medical home (here), how Foundation Coal and Peabody Energy understand and act in accord with comparative effectiveness concepts (here), and how the Hannaford supermarket chain rewards employees who have surgical procedures like joint replacement in Singapore, where high quality services are available at lower cost (here). An article in yesterday's New York Times - "Health Care Savings Could Start in the Cafeteria" - describes a pilot collaboration between employers, a health plan, and The Full Yield, a start up health improvement company.
Starting in January, employees at John Hancock and the City of Boston will be able to enroll in a year-long Full Yield program that will provide access to healthful prepared meals, nutrition coaching, and other self-management tools. At John Hancock participants will get $100 worth of coupons that can be used at the office cafeteria and at local supermarkets that carry the Full Yield products. At the City of Boston, participants will have a series of biometric measurements taken at least three times during the year. The Full Yield is partnering with Harvard Pilgrim Health Care, the not for profit insurance company for which I run the ethics program, to administer and evaluate the program.
The Safeway company has apparently achieved the near-miracle of keeping its employee health insurance costs level since 2005. Steven Burd, the CEO, attributes its success to "creating a culture of health," part of which involves incentives for managing tobacco use, healthy weight, blood pressure and cholesterol levels. For achieving targets in those four areas, employees can reduce their contribution to health insurance premium, by up to $780 per year for individuals and $1,560 per year for families. (see here)
Incentives - especially if they're guided by insights from behavioral economics - work. (See, for example, this article in JAMA by Kevin Volpp and colleagues.) And, since obesity is a highly stigmatized condition that tracks closely with socioeconomic status, the wrong kinds of incentives could reinforce prejudice and discriminate unjustly. But those risks are reasons to use incentives carefully and monitor for negative impacts as well as success - just as good clinicians do for the treatments they administer - not reasons to avoid incentives altogether.
I continue to believe that employer/employee collaboration on behalf of promoting health and constraining health care costs within the workplace "family" is an extremely promising approach to transforming our national health non-system!
Health reform requires three ingredients: (1) facing facts, (2) thinking strategically and (3) embracing individual and population concerns. Given the virulent divisiveness of current U.S. politics, employers who offer health insurance are the most promising venue for applying this triad in a "businesslike" manner!
In previous posts I've written about how IBM promotes primary care and encourages employees to find a medical home (here), how Foundation Coal and Peabody Energy understand and act in accord with comparative effectiveness concepts (here), and how the Hannaford supermarket chain rewards employees who have surgical procedures like joint replacement in Singapore, where high quality services are available at lower cost (here). An article in yesterday's New York Times - "Health Care Savings Could Start in the Cafeteria" - describes a pilot collaboration between employers, a health plan, and The Full Yield, a start up health improvement company.
Starting in January, employees at John Hancock and the City of Boston will be able to enroll in a year-long Full Yield program that will provide access to healthful prepared meals, nutrition coaching, and other self-management tools. At John Hancock participants will get $100 worth of coupons that can be used at the office cafeteria and at local supermarkets that carry the Full Yield products. At the City of Boston, participants will have a series of biometric measurements taken at least three times during the year. The Full Yield is partnering with Harvard Pilgrim Health Care, the not for profit insurance company for which I run the ethics program, to administer and evaluate the program.
The Safeway company has apparently achieved the near-miracle of keeping its employee health insurance costs level since 2005. Steven Burd, the CEO, attributes its success to "creating a culture of health," part of which involves incentives for managing tobacco use, healthy weight, blood pressure and cholesterol levels. For achieving targets in those four areas, employees can reduce their contribution to health insurance premium, by up to $780 per year for individuals and $1,560 per year for families. (see here)
Incentives - especially if they're guided by insights from behavioral economics - work. (See, for example, this article in JAMA by Kevin Volpp and colleagues.) And, since obesity is a highly stigmatized condition that tracks closely with socioeconomic status, the wrong kinds of incentives could reinforce prejudice and discriminate unjustly. But those risks are reasons to use incentives carefully and monitor for negative impacts as well as success - just as good clinicians do for the treatments they administer - not reasons to avoid incentives altogether.
I continue to believe that employer/employee collaboration on behalf of promoting health and constraining health care costs within the workplace "family" is an extremely promising approach to transforming our national health non-system!
Tuesday, March 31, 2009
Walmart, Caterpillar and Medical Ethics
When I think about patient-centered collaboration in medicine I picture teams of physicians, nurses and social workers or primary care physicians working with specialists.
Now I'm thinking about Walmart and Caterpillar.
While Washington girds itself for a mega-debate about health care reform, companies that provide insurance for their employees are trying all sorts of innovations to make health care more affordable. This is what managed care programs did in the 1990s, but providers and patients turned against them for "intruding on the doctor-patient relationship" and challenging "physician autonomy." Insurers backed off. Costs skyrocketed.
An article in the Chicago Tribune describes how Caterpillar got fed up with its ever-rising health care costs. It decided that its pharmacy arrangements were "not adding value, but just higher prices." That led to a contract with Walmart to offer generic drugs to Caterpillar employees for free if obtained at Walmart or Sam's Club!
This is a straightforward business deal. Caterpillar, which is self-insured, lowers its drug costs. Walmart gets additional customers coming into its stores.
From the perspective of health system ethics the important thing here is that Caterpillar employees have an opportunity to understand health care in a more business-like manner. It's a system that can be influenced if we get tough with it. Maybe they will ask - "if my employer can get free generics for us by using its purchasing power why don't we do the same thing with the Medicare drug program, instead of forbidding Medicare from bargaining with drug companies? Look how much I'm saving as an employee? Why not do the same for us as taxpayers?"
We've allowed our health system to fragment the population into so many insurance pools that except in organizations like Kaiser Permanente it's next to impossible to think about the dynamics of cost for a population. Self insured businesses represent "populations" of people with something important in common - they work for the same company. If health care costs get out of hand the company can go down the tubes, as may happen in the auto industry. Thinking about value for money in health care becomes very personal.
In previous posts I've written about cost-containing innovations at Hannaford supermarkets, Foundation Coal and Peabody Energy, and Serigraph/Wellpoint. I hope we're seeing the start of a ground-up movement to treat containing health care costs as a moral and economic imperative.
If the business community gets business-like about the money it lays out for health care, maybe we'll make some progress with this issue nationally!
Now I'm thinking about Walmart and Caterpillar.
While Washington girds itself for a mega-debate about health care reform, companies that provide insurance for their employees are trying all sorts of innovations to make health care more affordable. This is what managed care programs did in the 1990s, but providers and patients turned against them for "intruding on the doctor-patient relationship" and challenging "physician autonomy." Insurers backed off. Costs skyrocketed.
An article in the Chicago Tribune describes how Caterpillar got fed up with its ever-rising health care costs. It decided that its pharmacy arrangements were "not adding value, but just higher prices." That led to a contract with Walmart to offer generic drugs to Caterpillar employees for free if obtained at Walmart or Sam's Club!
This is a straightforward business deal. Caterpillar, which is self-insured, lowers its drug costs. Walmart gets additional customers coming into its stores.
From the perspective of health system ethics the important thing here is that Caterpillar employees have an opportunity to understand health care in a more business-like manner. It's a system that can be influenced if we get tough with it. Maybe they will ask - "if my employer can get free generics for us by using its purchasing power why don't we do the same thing with the Medicare drug program, instead of forbidding Medicare from bargaining with drug companies? Look how much I'm saving as an employee? Why not do the same for us as taxpayers?"
We've allowed our health system to fragment the population into so many insurance pools that except in organizations like Kaiser Permanente it's next to impossible to think about the dynamics of cost for a population. Self insured businesses represent "populations" of people with something important in common - they work for the same company. If health care costs get out of hand the company can go down the tubes, as may happen in the auto industry. Thinking about value for money in health care becomes very personal.
In previous posts I've written about cost-containing innovations at Hannaford supermarkets, Foundation Coal and Peabody Energy, and Serigraph/Wellpoint. I hope we're seeing the start of a ground-up movement to treat containing health care costs as a moral and economic imperative.
If the business community gets business-like about the money it lays out for health care, maybe we'll make some progress with this issue nationally!
Saturday, February 7, 2009
IBM and UnitedHealth Experiment with Medical Homes
Lately I've been dabbling in realism in this blog. Basing our health insurance system on employers is a cockeyed idea that emerged during the World War II wage freeze. But it's the system we have. Happily, employers are getting mad about how much insuring their employees costs and how mediocre the high priced care is, and they're taking some promising steps.
An article in this morning's New York Times reports on a medical home program in Arizona between IBM, which has 11,000 employees there, and UnitedHealth, its insurer. What's important is not the idea, which is mainstream common sense, but the fact that two huge corporations are running with it.
"What we buy is garbage." That's how Dr. Paul Grundy, IBM's director of health care transformation, describes the care health insurance typically provides. IBM catalyzed formation of the Patient Centered Primary Care Collaborative, for which Grundy is chair. The organization advocates for a coordinated, primary care-centered health system based on these sensible principles:
The medical home concept isn't new. The American Academy of Pediatrics introduced it in 1967. What's new is the degree to which businesses are endorsing it. Having a good idea is a starting point. But when IBM talks, people listen!
[For previous postings on how employers can contribute to a more rational and ethical health care system, see here, here and here.]
An article in this morning's New York Times reports on a medical home program in Arizona between IBM, which has 11,000 employees there, and UnitedHealth, its insurer. What's important is not the idea, which is mainstream common sense, but the fact that two huge corporations are running with it.
"What we buy is garbage." That's how Dr. Paul Grundy, IBM's director of health care transformation, describes the care health insurance typically provides. IBM catalyzed formation of the Patient Centered Primary Care Collaborative, for which Grundy is chair. The organization advocates for a coordinated, primary care-centered health system based on these sensible principles:
Personal physician - each patient has an ongoing relationship with a personal physician trained to provide first contact, continuous and comprehensive care.Of the Arizona program Grundy says “We’re not doing this because we expect to see huge savings. The medical home is more about whether patients have access to care at the right time and whether that care is appropriate. I think it’s the right thing to do.”
Physician directed medical practice – the personal physician leads a team of individuals at the practice level who collectively take responsibility for the ongoing care of patients.
Whole person orientation – the personal physician is responsible for providing for all the patient’s health care needs or taking responsibility for appropriately arranging care with other qualified professionals. This includes care for all stages of life; acute care; chronic care; preventive services; and end of life care.
Care is coordinated and/or integrated across all elements of the complex health care system (e.g., subspecialty care, hospitals, home health agencies, nursing homes) and the patient’s community (e.g., family, public and private community-based services). Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.
Quality and safety are hallmarks of the medical home:
* Practices advocate for their patients to support the attainment of optimal, patient-centered outcomes that are defined by a care planning process driven by a compassionate, robust partnership between physicians, patients, and the patient’s family.
* Evidence-based medicine and clinical decision-support tools guide decision making
* Physicians in the practice accept accountability for continuous quality improvement through voluntary engagement in performance measurement and improvement.
* Patients actively participate in decision-making and feedback is sought to ensure patients’ expectations are being met
* Information technology is utilized appropriately to support optimal patient care, performance measurement, patient education, and enhanced communication
* Practices go through a voluntary recognition process by an appropriate non-governmental entity to demonstrate that they have the capabilities to provide patient centered services consistent with the medical home model.
* Patients and families participate in quality improvement activities at the practice level.
Enhanced access to care is available through systems such as open scheduling, expanded hours and new options for communication between patients, their personal physician, and practice staff.
The medical home concept isn't new. The American Academy of Pediatrics introduced it in 1967. What's new is the degree to which businesses are endorsing it. Having a good idea is a starting point. But when IBM talks, people listen!
[For previous postings on how employers can contribute to a more rational and ethical health care system, see here, here and here.]
Wednesday, November 12, 2008
Medical Tourism, Self-Insured Employers, and Medical Ethics
Wellpoint, which provides health insurance to 35 million, is starting to pilot medical tourism. The initial numbers are small - Serigraph, a self-insured printing company in Wisconsin, with 700 employees.
But when an elephant puts a toe in the water it's big news! (Elephants actually have toes, but they're inside their feet.)
The pilot allows patients to go to hospitals in Bangalore or Delhi for joint replacement and spinal fusion. Patients who go to India would have no out-of-pocket expenses or deductibles. Their travel, and travel for a companion, would be covered. I couldn't find out how much patients would save by going to India, but the self-insured employer would save between $30,000 - $50,000.
So why am I writing about this in a blog about ethics?
Here's why. Better governance of the U.S. health "system" requires better public understanding of the dynamics of the industry. Currently, public understanding is pitiably low. Employees tend to believe that their employers pay for health insurance, and don't understand that they're the ones who pay (through forgone compensation). Patients tend to believe that more care is always better care, and that what the physician recommends is ipso facto "medically necessary." Physicians tend to believe that Americans are incapable of accepting limits, and that they must therefore recommend any intervention with the slightest chance of providing benefit without considering costs. And woe unto anyone who doesn't automatically agree that "health is priceless."
Companies like Serigraph are - potentially - small communities. Workers know each other, and when labor-management relationships are good, there is opportunity for open deliberation about health care choices. Self-insured businesses can - potentially - take a truly business-like approach to health care, as by asking "what do we get for our money?" and "how do we get the biggest bang for the bucks we spend?" And large self-insured companies, even if widely dispersed geographically, can orchestrate electronic town meetings on important topics.
I can't think of any health policy mavens who recommend basing health insurance on employment status. But that's the system we have for the foreseeable future. Once five or ten self-insured employers demonstrate the potential for thoughtful deliberation about health care and can show bottom line impacts, like the Serigraph-Wellpoint medical tourism benefit, we'll see others emulating the practice. That process will contribute, at least a bit, to improved health policy literacy in the United States.
But when an elephant puts a toe in the water it's big news! (Elephants actually have toes, but they're inside their feet.)
The pilot allows patients to go to hospitals in Bangalore or Delhi for joint replacement and spinal fusion. Patients who go to India would have no out-of-pocket expenses or deductibles. Their travel, and travel for a companion, would be covered. I couldn't find out how much patients would save by going to India, but the self-insured employer would save between $30,000 - $50,000.
So why am I writing about this in a blog about ethics?
Here's why. Better governance of the U.S. health "system" requires better public understanding of the dynamics of the industry. Currently, public understanding is pitiably low. Employees tend to believe that their employers pay for health insurance, and don't understand that they're the ones who pay (through forgone compensation). Patients tend to believe that more care is always better care, and that what the physician recommends is ipso facto "medically necessary." Physicians tend to believe that Americans are incapable of accepting limits, and that they must therefore recommend any intervention with the slightest chance of providing benefit without considering costs. And woe unto anyone who doesn't automatically agree that "health is priceless."
Companies like Serigraph are - potentially - small communities. Workers know each other, and when labor-management relationships are good, there is opportunity for open deliberation about health care choices. Self-insured businesses can - potentially - take a truly business-like approach to health care, as by asking "what do we get for our money?" and "how do we get the biggest bang for the bucks we spend?" And large self-insured companies, even if widely dispersed geographically, can orchestrate electronic town meetings on important topics.
I can't think of any health policy mavens who recommend basing health insurance on employment status. But that's the system we have for the foreseeable future. Once five or ten self-insured employers demonstrate the potential for thoughtful deliberation about health care and can show bottom line impacts, like the Serigraph-Wellpoint medical tourism benefit, we'll see others emulating the practice. That process will contribute, at least a bit, to improved health policy literacy in the United States.
Friday, September 12, 2008
Medical Tourism and Medical Ethics - At Home and Abroad
I'm a clinician and an academic. For insights into medical ethics, health policy and the health system, I typically turn to case reports and research studies, not to the source of this posting - supermarkets!
Hannaford is a 125 year old supermarket chain, with 27,000 employees ("associates") and 164 stores in the northeast. Since 2000 Hannaford has been part of the Dehaize Group, a 141 year old Brussels-based food retailing company with 2,700 stores in 7 countries (Belgium, Germany, Greece, Indonesia, Luxembourg, Romania, and the United States).
Like many large companies in the U.S., Hannaford is self-insured for its health insurance. (For non-U.S. readers - "self-insured" companies pay for the health care costs of their insured employees themselves, and hire insurance companies to handle typical insurance functions like paying claims. It is usually cheaper for the company to provide health insurance this way.)
Hannaford made the news in January by offering incentives to its employees to have procedures like hip and knee replacement done in Singapore, which delivers comparable quality at a significantly lower cost. Peter Hayes, director of health benefits at Hannaford, reported that "after the announcement, I got calls from several U.S. hospitals offering to match Singapore on pricing." Now Hannaford offers the same incentives to employees who travel to U.S. hospitals that meet quality standards at a price that is competitive with Singapore.
Anyone at all knowledgeable about health policy knows that the U.S. incurs sky-high costs but provides mediocre quality. Until self-insured companies began to act on this information by encouraging employees to seek care abroad, the national reaction has been nil. Self-insured companies like Hannaford are familiar with outsourcing business functions that can be done more cheaply elsewhere, so outsourcing medical care wasn't a far out idea for them. Now hospitals around the U.S. are noticing the loss of business and are taking price competition seriously.
One reason the U.S. health system is in such a mess is fragmentation. The population is divided into hundreds of thousands of employer groups, unions, etc., the cost of whose care is covered by thousands of different insurers. We think more and more in individual terms. The way the system is organized makes it hard to get the big picture. Unlike virtually every other developed country, no one takes overall responsibility for population health.
This is what makes Hannaford so interesting. The parent company is based in Belgium. According to Hayes:
I don't think anyone designing a health system from scratch would create the hodge podge of employer-based insurance and thousands of insurance companies we have in the U.S. But as of 2008 that's what we've got. If we wait for reform to come from the top down we may still be waiting when Godot finally arrives. But as more self-insured companies enagage seriously with health system dynamics, we may see important learning emerging from the ground up.
Hannaford is a 125 year old supermarket chain, with 27,000 employees ("associates") and 164 stores in the northeast. Since 2000 Hannaford has been part of the Dehaize Group, a 141 year old Brussels-based food retailing company with 2,700 stores in 7 countries (Belgium, Germany, Greece, Indonesia, Luxembourg, Romania, and the United States).
Like many large companies in the U.S., Hannaford is self-insured for its health insurance. (For non-U.S. readers - "self-insured" companies pay for the health care costs of their insured employees themselves, and hire insurance companies to handle typical insurance functions like paying claims. It is usually cheaper for the company to provide health insurance this way.)
Hannaford made the news in January by offering incentives to its employees to have procedures like hip and knee replacement done in Singapore, which delivers comparable quality at a significantly lower cost. Peter Hayes, director of health benefits at Hannaford, reported that "after the announcement, I got calls from several U.S. hospitals offering to match Singapore on pricing." Now Hannaford offers the same incentives to employees who travel to U.S. hospitals that meet quality standards at a price that is competitive with Singapore.
Anyone at all knowledgeable about health policy knows that the U.S. incurs sky-high costs but provides mediocre quality. Until self-insured companies began to act on this information by encouraging employees to seek care abroad, the national reaction has been nil. Self-insured companies like Hannaford are familiar with outsourcing business functions that can be done more cheaply elsewhere, so outsourcing medical care wasn't a far out idea for them. Now hospitals around the U.S. are noticing the loss of business and are taking price competition seriously.
One reason the U.S. health system is in such a mess is fragmentation. The population is divided into hundreds of thousands of employer groups, unions, etc., the cost of whose care is covered by thousands of different insurers. We think more and more in individual terms. The way the system is organized makes it hard to get the big picture. Unlike virtually every other developed country, no one takes overall responsibility for population health.
This is what makes Hannaford so interesting. The parent company is based in Belgium. According to Hayes:
"Hannaford's new coverage policy was prompted by stinging criticism from its European owners. For them, medical costs and outcomes in the United States just don't add up. [They said] look at what they're spending in the United States. It's two or three times what they're spending in any other industrialized country. But if you look at quality, [the U.S.] is ranked dead last. So the Europeans said, 'why is health care going up at this extraordinary rate in the United States?'"I've come around to the view that our employer-based health system, which is so dysfunctional in so many ways, may be the most promising source of learning and reform. Employees are part of a community - the company they work for - and are in a better position to understand the cost and quality of their health care and the impact of cost on wages and corporate success. We in the U.S. have fought tooth and nail against facing the need to make trade offs in health care. But employees can understand that higher costs trade off against lower wages and possibly even loss of a job. And they can see the implications of having joint replacements at their local tertiary hospital or, assuming comparable quality, at lower cost in Singapore.
I don't think anyone designing a health system from scratch would create the hodge podge of employer-based insurance and thousands of insurance companies we have in the U.S. But as of 2008 that's what we've got. If we wait for reform to come from the top down we may still be waiting when Godot finally arrives. But as more self-insured companies enagage seriously with health system dynamics, we may see important learning emerging from the ground up.
Monday, June 23, 2008
Self-Insured Employers and Health System Reform
We Americans cherish the right to carry guns. But what about the right to carry a paunch?
“Waistlines Expand into a Workplace Issue” in yesterday’s New York Times describes early efforts by a small number of U.S. employers to take a public health approach to their employees’ weight status. When PSEG, a New Jersey utility company, recognized that overweight employees were likelier to experience musculoskeletal injuries, it began to offer weight control and nutrition programs, and provided a small financial incentive for employees to fill out a personal health assessment.
Compared to Japan, the PSEG program is public health lite. Japan recently passed a law requiring companies and local governments to measure the waistlines of all people between 40 – 74, to identify those whose girth exceeds the governmental target of 33.5 inches for men and 35.4 inches for women. If those who exceed the limit have not lost weight in three months they will be given diet education, with reevaluation after six more months.
More and more employers are turning to self insurance. This creates the potential for more employee engagement with the issue of health care costs. Better self-management of wellness, health, and medical utilization, are crucial requirements for success in improving quality and cost.
In recent years we have seen significant improvement in the degree to which patients and physicians collaborate in planning care. But the U.S. has had little success in engaging citizens in co-managing the health system itself. U.S. political culture is not going to allow employers to measure our waist size anytime soon. But there is significant potential for steps forward in rational governance of the health system via self insured employers.
The U.S. has moved steadily away from seeing health and health care as community responsibilities. Insurance has gone from being community rated (the same cost for all enterprises) to being experience rated (if my employees cost less, I pay less). Now we are trying to shift financial risk to individuals themselves.
Self-insured employers (the employer takes the financial risk for utilization, with third party administrators handling claims and other backroom insurance functions) are small communities. Whether the employee group is local, as in a utility company, or multinational, employees have a shared interest in the success of the organization. Employees are well-positioned to understand that health costs involve trade offs against other items of importance, such as compensation, benefits, and success of the business itself.
With skillful leadership, self-insured companies could engage employees in co-managing the company's health plan. This is a more promising approach than the individually-focused, "skin-in-the-game" use of deductibles that is currently fashionable. If I have a heart attack, the deductible will not prod me to shop for cost-effective care. But if my employer engages me in considering the cost of insuring me and my fellow employees, and I see that lower cost providers may provide high quality care, I will have a "duh" experience. Why should we - my fellow employees and I - pay more than is required to be well cared for?
If the U.S. was designing a health system from scratch, we would not ask employers to be insurers as well. But that's the way it is. If self insured employers and employees work together to manage the employer's health plan, we can make some local progress in making our cockeyed health system function better.
“Waistlines Expand into a Workplace Issue” in yesterday’s New York Times describes early efforts by a small number of U.S. employers to take a public health approach to their employees’ weight status. When PSEG, a New Jersey utility company, recognized that overweight employees were likelier to experience musculoskeletal injuries, it began to offer weight control and nutrition programs, and provided a small financial incentive for employees to fill out a personal health assessment.
Compared to Japan, the PSEG program is public health lite. Japan recently passed a law requiring companies and local governments to measure the waistlines of all people between 40 – 74, to identify those whose girth exceeds the governmental target of 33.5 inches for men and 35.4 inches for women. If those who exceed the limit have not lost weight in three months they will be given diet education, with reevaluation after six more months.
More and more employers are turning to self insurance. This creates the potential for more employee engagement with the issue of health care costs. Better self-management of wellness, health, and medical utilization, are crucial requirements for success in improving quality and cost.
In recent years we have seen significant improvement in the degree to which patients and physicians collaborate in planning care. But the U.S. has had little success in engaging citizens in co-managing the health system itself. U.S. political culture is not going to allow employers to measure our waist size anytime soon. But there is significant potential for steps forward in rational governance of the health system via self insured employers.
The U.S. has moved steadily away from seeing health and health care as community responsibilities. Insurance has gone from being community rated (the same cost for all enterprises) to being experience rated (if my employees cost less, I pay less). Now we are trying to shift financial risk to individuals themselves.
Self-insured employers (the employer takes the financial risk for utilization, with third party administrators handling claims and other backroom insurance functions) are small communities. Whether the employee group is local, as in a utility company, or multinational, employees have a shared interest in the success of the organization. Employees are well-positioned to understand that health costs involve trade offs against other items of importance, such as compensation, benefits, and success of the business itself.
With skillful leadership, self-insured companies could engage employees in co-managing the company's health plan. This is a more promising approach than the individually-focused, "skin-in-the-game" use of deductibles that is currently fashionable. If I have a heart attack, the deductible will not prod me to shop for cost-effective care. But if my employer engages me in considering the cost of insuring me and my fellow employees, and I see that lower cost providers may provide high quality care, I will have a "duh" experience. Why should we - my fellow employees and I - pay more than is required to be well cared for?
If the U.S. was designing a health system from scratch, we would not ask employers to be insurers as well. But that's the way it is. If self insured employers and employees work together to manage the employer's health plan, we can make some local progress in making our cockeyed health system function better.
Friday, February 15, 2008
Collaborating to Control Health Care Costs
In the losing battle to contain health care cost increases, employers and insurers are getting some black eyes.
In previous posts I discussed (a) employer experiments with penalties for poor employee health habits and (b) Blue Cross of California's stab at enlisting physicians in detecting enrollee fraud. Both efforts are in retreat.
Blue Cross had asked physicians to review the accuracy of insurance applications from their patients. This practice is allowed by California law. But physicians were outraged at being asked to "rat" on their patients. Blue Cross backed down, and acknowledged that it "was creating a misimpression and causing some members and providers undue concern."
With regard to employer incentives, Clarian Health Partners, an Indiana hospital system with 13,000 employees, had set standards for tobacco use, weight, blood pressure, blood glucose, and cholesterol. They proposed that employees who did not meet the targets and were not working toward them would pay $5 per risk toward their health insurance premium per pay period. Employees revolted. Like Blue Cross, Clarian backed down.
I don't agree with the California Medical Association in faulting Blue Cross or with the Clarian employees in faulting Clarian. Blue Cross and Clarian are trying to make cost-containing moves in a profoundly broken system. As a result, like drowning swimmers they thrash about and raise havoc with those they interact with.
Until a clone of former Oregon Governon John Kitzhaber appears on the national political scene, we can't expect the kind of educative leadership our body politic needs. (See the speech I proposed ten years ago for the Vermont Governor.) In the absence of top down leadership, we have to rely on bottom-up collaboration. Blue Cross should sit down with the California Medical Association and say - "OK guys - we really messed up. Let's learn from our mistakes and work together to get a better grip on costs..." Clarian should do the same with its employees.
Liberal outrage against "unethical insurers and employers" and conservative outrage against "entitled, cost-unconscious employees" make for lively journalism and elevated pulse. But the psychiatrist in me sees these unproductive battles as efforts to avoid acknowledging a painful fact - we need to set limits in health care. Family therapists know that family fights don't end until the family acknowledges the real source of pain. When that happens, families can get down to work on making things better.
We need to learn to use the "family arguments" between insurers and physicians and between employers and employees as pathways towards ground-level collaboration. In families, when parents crump out - the way our political leaders have been doing for years - the kids have to do the work!
In previous posts I discussed (a) employer experiments with penalties for poor employee health habits and (b) Blue Cross of California's stab at enlisting physicians in detecting enrollee fraud. Both efforts are in retreat.
Blue Cross had asked physicians to review the accuracy of insurance applications from their patients. This practice is allowed by California law. But physicians were outraged at being asked to "rat" on their patients. Blue Cross backed down, and acknowledged that it "was creating a misimpression and causing some members and providers undue concern."
With regard to employer incentives, Clarian Health Partners, an Indiana hospital system with 13,000 employees, had set standards for tobacco use, weight, blood pressure, blood glucose, and cholesterol. They proposed that employees who did not meet the targets and were not working toward them would pay $5 per risk toward their health insurance premium per pay period. Employees revolted. Like Blue Cross, Clarian backed down.
I don't agree with the California Medical Association in faulting Blue Cross or with the Clarian employees in faulting Clarian. Blue Cross and Clarian are trying to make cost-containing moves in a profoundly broken system. As a result, like drowning swimmers they thrash about and raise havoc with those they interact with.
Until a clone of former Oregon Governon John Kitzhaber appears on the national political scene, we can't expect the kind of educative leadership our body politic needs. (See the speech I proposed ten years ago for the Vermont Governor.) In the absence of top down leadership, we have to rely on bottom-up collaboration. Blue Cross should sit down with the California Medical Association and say - "OK guys - we really messed up. Let's learn from our mistakes and work together to get a better grip on costs..." Clarian should do the same with its employees.
Liberal outrage against "unethical insurers and employers" and conservative outrage against "entitled, cost-unconscious employees" make for lively journalism and elevated pulse. But the psychiatrist in me sees these unproductive battles as efforts to avoid acknowledging a painful fact - we need to set limits in health care. Family therapists know that family fights don't end until the family acknowledges the real source of pain. When that happens, families can get down to work on making things better.
We need to learn to use the "family arguments" between insurers and physicians and between employers and employees as pathways towards ground-level collaboration. In families, when parents crump out - the way our political leaders have been doing for years - the kids have to do the work!
Thursday, December 6, 2007
Is Making Employees Pay for Bad Health Habits Ethical?
Employers are desperate about health care costs. Some are dropping health insurance altogether. Some are making employees put more “skin in the game” with increased deductibles. And some are starting to make employees pay for bad health habits.
A Harris poll reported in the Wall Street Journal in October showed that a majority believe that employers should not make employees who smoke, are seriously overweight, or do not exercise, pay more for their health insurance,
But starting next month, the Tribune Company in Chicago will charge employees who smoke $100/month. And the Kellogg Company is raising the premium for non union employees $360 for those who decline to take a health risk assessment. Other companies will follow their lead.
How ethical are programs like these?
I believe for a behavior like smoking that, while addictive, is potentially controllable, charging a small fee is ethically justifiable. The fee should be modest at the start. The aim is to attract attention and make the point that smoking doesn’t just harm ourselves – it taxes others by the health costs we generate. For that reason, the fee should be used to offset overall insurance costs. The $100/month the Tribune Company plans to charge would be punitive for most employees and seems too high. But the Tribune has addressed this by waiving the fee for employees who complete a smoking cessation course.
A teamster official who works for the Chicago Tribune asked “What are you going to do next? Say a guy who has history of heart disease has to pay more? Where’s it going to stop?” This is the right question. Charging more for people who are sick is not justifiable. But charging for a modifiable habit that contributes to higher costs for the whole group is.
We Americans worship financial fixes. What the Tribune and Kellogg are doing is justifiable if thought of as part of a broad attempt to help us recognize that we will only tame runaway health costs if we pull together as a population and self-prescribe some painful medications. A carefully planned charge for bad health habits can play a small part in the large educative process we need to carry out.
A Harris poll reported in the Wall Street Journal in October showed that a majority believe that employers should not make employees who smoke, are seriously overweight, or do not exercise, pay more for their health insurance,
But starting next month, the Tribune Company in Chicago will charge employees who smoke $100/month. And the Kellogg Company is raising the premium for non union employees $360 for those who decline to take a health risk assessment. Other companies will follow their lead.
How ethical are programs like these?
I believe for a behavior like smoking that, while addictive, is potentially controllable, charging a small fee is ethically justifiable. The fee should be modest at the start. The aim is to attract attention and make the point that smoking doesn’t just harm ourselves – it taxes others by the health costs we generate. For that reason, the fee should be used to offset overall insurance costs. The $100/month the Tribune Company plans to charge would be punitive for most employees and seems too high. But the Tribune has addressed this by waiving the fee for employees who complete a smoking cessation course.
A teamster official who works for the Chicago Tribune asked “What are you going to do next? Say a guy who has history of heart disease has to pay more? Where’s it going to stop?” This is the right question. Charging more for people who are sick is not justifiable. But charging for a modifiable habit that contributes to higher costs for the whole group is.
We Americans worship financial fixes. What the Tribune and Kellogg are doing is justifiable if thought of as part of a broad attempt to help us recognize that we will only tame runaway health costs if we pull together as a population and self-prescribe some painful medications. A carefully planned charge for bad health habits can play a small part in the large educative process we need to carry out.
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