As we approach Thursday’s bipartisan health summit, no one has yet successfully challenged the comprehensive health reform proposal I describe in my book, speeches, media interviews, and this blog. It has withstood all technical, actuarial, financial, behavioral, and economic challenges to date. This would be gratifying if it weren’t for one annoying loose end—the political issue.
Almost everybody tells me that my approach’s lack of sound-bite simplicity renders it DOA as a workable legislative agenda. They have a point. As bad as our health care system is, it’s not yet bad enough to engender the kind of political will necessary to put American consumers fully in charge of buying their own health insurance and medical care. Until we get there, let me offer a simpler, interim proposal that will immediately offer relief from out-of-control medical costs: we should make everyone financially responsible for his own preventable illnesses.
According to the U.S. Centers for Disease Control and Prevention (CDC), 75% of all our medical expenditures are for treating chronic diseases. CDC has stated that “chronic diseases—such as cardiovascular disease (primarily heart disease and stroke), cancer, and diabetes—are among the most prevalent, costly, and preventable of all health problems.”
Both Democrats and Republicans seem to agree that, to achieve prevention savings, insurers must improve prevention coverage so that more people will seek early screenings and treatments from their doctors. Unfortunately, they’re wrong. The only thing more expensive than treating preventable chronic diseases is preventing them—at least at the medical level. It surprises most people to learn that a 2008 New England Journal of Medicine article revealed that, “although some preventive measures do save money, the vast majority reviewed in the health economics literature do not.” Similarly, Health Affairs concluded in 2009 that “Over the four decades since cost-effectiveness analysis was first applied to health and medicine, hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them. Medications for hypertension and elevated cholesterol, diet and exercise to prevent diabetes, and screening and early treatment for cancer all add more to medical costs than they save.” In other words, forcing insurers to cover this stuff drives premiums up, not down.
The problem boils down to this. Although treating chronic illnesses may be a medical issue, preventing them is not. It’s a personal behavior issue. A doctor may tell an obese patient that she won’t live a long, healthy life unless she loses weight, but unless the patient actually engages in new, permanent, 24/7 habits that include exercise and calorie reduction, virtually nothing the doctor can say or do will prevent her diabetes, cardiovascular disease, or cancer. The primary caregiver for prevention is the individual, not a doctor who may see her a grand total of maybe two hours a year.
To get effective prevention—and lower medical costs—we must permit insurers to implement new, long-term, more effective incentives for people to stop smoking, drinking, eating, and couch-potatoing themselves to death. The most straightforward and effective way to do that is to allow—even encourage—insurers, employers, Medicare, and Medicaid to charge lower premiums (or to pay rebates) to people who demonstrate control of their risks of smoking, obesity, hypertension, cholesterol, blood sugar, and alcohol. All are objectively measurable and all are subject to reasonable individual control by almost everyone. Properly applied, such incentives could lower health costs and insurance premiums by more than half for anyone and everyone willing to measure and control these risks. Many will respond to such incentives and stop smoking, lose weight, avoid excessive alcohol, and get their blood pressure, sugar, and lipids under control. Others will undoubtedly continue to exercise their god-given right to let their risks continue unmanaged. It’s just that, now, that right will be accompanied by a countervailing responsibility to bear the financial burdens that result. They’ll have to pay higher premiums. But the option will always be open for them to change their behavior and pay lower premiums—not to mention to live longer, healthier, more productive lives.
Premium incentives would be calculated by each insurer’s actuaries to be equivalent to the average expected annual costs of treating the preventable diseases associated with the various risks. Thus, a smoker would pay the added statistically expected medical costs of his behavior over his (abbreviated) lifetime. It is critical that incentives offer ongoing rewards for ongoing results, not efforts. Just joining a gym or participating in smoking-cessation programs won’t do it. Maintaining healthy weight and refraining from smoking will.
Critics will argue that such incentives are unfair to those who, despite their best efforts, aren’t able to earn the rewards under medically appropriate conditions. But we can easily apply exceptions for such people based on individual circumstances and sound medical and behavioral evidence. The key point is that, for the vast majority of Americans, such health-risk goals are individually attainable and, once attained, yield massive annual medical cost savings without putting further burdens on insurers to cover things that only add to premiums.
A really powerful benefit of this proposal is that it gives everyone the immediate opportunity to pay lower health insurance premiums. And if enough at-risk people respond by eliminating the risks leading to preventable chronic diseases, our national health care bill could drop by half or more.
But somebody has to tell President Obama and the Democrats and the Republicans. That would be you, dear citizen.