Health care in today's World
Now I tend to not blog about topics like politics or health care unless I'm moved to speak out. Today is one of those days. Have you ever heard of Consumer Driven Health Care? Well I once worked at one of the companies that championed that concept. Instead of providing an 80/20 PPO plan they came up with the idea of health savings accounts (HSA) and health reimbursement accounts (HRA).
The goal of this company was to provide a workable solution for lowering health care costs across the board. To do this they came up with the idea that the patient has the option to find out how much a procedure costs and decide where they want that procedure performed. You are given X number of dollars into your account and all medical expenses will come out of that account till it's exhausted. Then you'll move to a traditional 80/20 plan until you hit your annual maximum. On most plans the original HRA/HSA amount spent goes towards the annual maximum.
Where the HRA plans tend to fail is for older employees that have chronic health issues. Often the older plans are better for them because they end up getting a more balanced payment. Often these people are better suited for an HSA plan. The HSA plan is kind of liek a 401k for health care expenses. You put money into an interest baring account tax free up to $3000 for an individual and $6000 for a family. Some plans allow you to have an HRA and an HSA plan so you can double up.
I think these consumer plans are the first step to the true health care reform. The next step has to be removing health care as a work benefit. Right now I pay $250 a month for my HRA plan from work and the company puts $2000 in my account each year. I have no idea what the company pays for this plan. What I propose is shopping for health insurance just like you would for car insurance. This insurance would strictly be for major medical issues and then you could choose to have a HRA or HSA account to help pay for the small incidentals or regular checkups.
If companies dropped health care as a benefit would they pass that savings on to their employees though higher pay? Maybe or maybe not. Still if I could save $3000 a year and put that towards private health insurance it would be me picking the best plan for my family. I think this plan will cause office visit rates to drop and it might even mean better customer service like on time appointments. What the health care industry needs is old fashioned capitalism, let the free market decide the cost of medical services. Unfortunately a more socialist big government plan is where health care reform seems to be where our country is heading.
The goal of this company was to provide a workable solution for lowering health care costs across the board. To do this they came up with the idea that the patient has the option to find out how much a procedure costs and decide where they want that procedure performed. You are given X number of dollars into your account and all medical expenses will come out of that account till it's exhausted. Then you'll move to a traditional 80/20 plan until you hit your annual maximum. On most plans the original HRA/HSA amount spent goes towards the annual maximum.
Where the HRA plans tend to fail is for older employees that have chronic health issues. Often the older plans are better for them because they end up getting a more balanced payment. Often these people are better suited for an HSA plan. The HSA plan is kind of liek a 401k for health care expenses. You put money into an interest baring account tax free up to $3000 for an individual and $6000 for a family. Some plans allow you to have an HRA and an HSA plan so you can double up.
I think these consumer plans are the first step to the true health care reform. The next step has to be removing health care as a work benefit. Right now I pay $250 a month for my HRA plan from work and the company puts $2000 in my account each year. I have no idea what the company pays for this plan. What I propose is shopping for health insurance just like you would for car insurance. This insurance would strictly be for major medical issues and then you could choose to have a HRA or HSA account to help pay for the small incidentals or regular checkups.
If companies dropped health care as a benefit would they pass that savings on to their employees though higher pay? Maybe or maybe not. Still if I could save $3000 a year and put that towards private health insurance it would be me picking the best plan for my family. I think this plan will cause office visit rates to drop and it might even mean better customer service like on time appointments. What the health care industry needs is old fashioned capitalism, let the free market decide the cost of medical services. Unfortunately a more socialist big government plan is where health care reform seems to be where our country is heading.
What are your family expenses for medical care for the year? Are you getting regular check ups? or your wife? the kids? Is you dental covered? What kind of coverage would you have if you or one of family members had to go to the hospital, surgery? What would your coverage cover? In one hospital in Milwaukee,just staying ove rnight for observation plus a couple of tests costs over $9, 000. How do you regulate such costs?
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Charging $9000 a night is outrageous. If people knew the cost they would never go to that hospital. Most people see the doctor maybe 2 times a year tops. Under my current HRA plan I don't pay a single out of pocket cost this year. The kids doctor appoints are all covered under preventative care. The shots, which are crazy expensive, are covered by the money in my HRA account. One thing my prior company offered was a web site you could visit to help you see how much a procedure cost and compared the cost vs local hospitals. You could also compare drugs and find a cheaper alternative or the possibility of alternate size pills. It's crazy how the same drug may be increasingly cheaper at a smaller size. If prices were known upfront then people would be more proactive about reducing costs.
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I agree. I would like to know where my prescriptions would be cheaper. Hoever, it's hard to find a pharmacy other than Wallgreens. The hospital is St. Luke and people do go there because they have the best reputations and the state of the art medical procedures.
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I don't know who your insurance is through but they should have a website that may have drug alternatives. We can discuss this offline as well.
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HSA potentially is a good step in reducing costs but is unnecessarily complex and doesn't show the consumer much of any real cost. Insurance is still covering the majority of the costs. The real question is why are the Insurance companies not negotiating costs down with the Medical/Drug providers? Being non-profit, selling to employers rather than consumers directly and regulations impeding competition between insurance companies are all to blame. There are possibly more reasons - I don't completely understand all the forces involved. Having a free-market for Insurance companies, Federally underwritten insurance (in case Insurance companies fail), proper consumer protection laws (e.g. cannot exclude consumers for so-and-so reasons) and direct to consumer insurance should all help.
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