The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.
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“The only way to keep your health is to eat what you don’t want, drink what you don’t like and do what you’d rather not.” - Mark Twain
Health care reform has become a cause célèbre with potential costs that will threaten many small businesses. That’s one of the reasons I’m attracted to the growing use of “consumer-directed” plans that require each of us to take a more active role in managing the financial side of our own health care.
The New York Times looks at some of these alternatives in “Making Sense of High Deductible Plans“. You should also consider the comments by John Mackey, president of Whole Foods, in his controversial op-ed piece explaining Whole Foods’ approach to health care coverage, a piece that caught the attention of the Obama administration.
Over the years, I’ve repeated ad nauseam my belief that the principal flaw in the health care industry is our lack of individual financial accountability. If you think about it, there is virtually no other form of insurance that covers nearly all of our routine, out-of-pocket expenses. We decide whether to get an oil change for our car, rotate the tires or get scratches and dents fixed … because we pay for it. We consider the costs, the trade-offs and our personal objectives and make the decisions. Insurance is there to protect us, and others, against significant loss that is less frequent but more costly.
Likewise, we decide whether to fix or replace the windows in our house, repair the roof, clean the gutters, mow the lawn, fix the furnace – the list goes on. These are considered normal and routine maintenance expenses that are the homeowner’s responsibility. Property insurance is available to cover larger costs resulting from storms, power outages, even earthquakes.
Not so in the health care world. With the exception of generally small co-pays and modest deductibles, most insured individuals and families have no responsibility for, or knowledge about, any of the so-called “normal and routine maintenance” costs of taking care of our basic health needs.
At least so far, we don’t expect our insurance company to provide Band-Aids or over-the-counter medications that we buy for headaches, colds or other maladies. Yet the moment we step into the doctor’s office, we expect someone else to pay for it regardless of why we’re there.
There are two irascible demons at work here. The primary demon is “What do I know about it?” I don’t have any medical knowledge so I need to trust my doctor and do what he says, don’t I? The other rascal is “What if I’m experiencing a minor symptom of a major disease?” Is that little flutter in my chest the beginning of a heart attack? Is that pain in my leg the result of my track workout yesterday or is it the beginning of a circulatory disorder? Do I have a stomach-ache or do I need an appendectomy?
Our ignorance about the costs of basic health care, and our devil-may-care attitude, is one reason another federal bailout is appealing to many. While there are important issues that must be fixed, for my money they can be addressed separately without massive overhaul, tort reform, electronic record keeping, safety nets for the uninsured, etc. Another coin toss to the feds isn’t the solution.
Watch the “60 Minutes” piece from Oct. 25 which exposes the estimated $60 billion waste-fraud-abuse scandal in Medicare and Medicaid if you think another federal program is the answer. It’s truly nauseating to witness the shamefully lax enforcement process and how easy it is to set up sham companies – storefront addresses, no employees, no equipment – and still make millions. The FBI task force in this Florida story reported that Medicare fraud far exceeds the cost of the drug business that infamously plagues South Florida.
It’s time for middle market businesses to square up to these issues and seriously consider consumer-directed plans to right this ship before it capsizes. Whole Foods is a one example to consider. Either we begin to enter into the decision-making process or someone will do it for us.
Me? I’d rather take an active personal role than to let some impersonal bureaucracy decide what’s in my best interest. There’s no silver bullet that will make these growing costs go away, but personal responsibility trumps an inept government bureaucracy any day.