Ken’s Take: The Safeway healthcare program – loaded with insurance discounts for people who don’t smoke, watch their weight and cholesterol, and generally live healthier – has gotten mucho press coverage – since it works !
Nonetheless, proposed healthcare reform packages are either silent on healthy lifestyle incentives or explicitly deter them. I guess the logic is that they would discriminate against people who smoke, eat too much, and refuse to walk around the block. My view: those are choices and behaviors, not genetics. Go ahead and do them, but don’t expect me to subsidize them.
On a related topic: all the proposed healthcare reforms include – explicitly or implicitly – a rationing of healthcare in an person’s final years. First, how can regulators know when the game clock is about to expire? Second, shouldn’t Sen. Kennedy – who, incidentally, is old, fat, and a notorious alcohol abuser – walk the talk and start refusing medical treatments ?
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WSJ, “Reform Needs Healthy Life Incentives”, Garrington, June 29, 2009
Sen. Kennedy doesn’t want insurers to reward good behavior.
The House Democrat and Kennedy-Dodd proposals do all they can to prevent health-insurance premium rates and coverage terms from reflecting the health status — and thus health-related behavior — of any insured person. Health status would not be permitted to affect coverage decisions, terms or pricing.
Benefit design and marketing of coverage would be regulated in an attempt to keep insurers from rewarding healthier people. Retrospective “risk adjustment” would be employed to reallocate funds from insurers that experience lower medical costs to those with higher costs. If an insurer were to attract relatively more healthy people — or keep more people healthy — it would run the risk of paying some or all of the gains to competitors.
The proposals’ strong aversion to having insurance rates or coverage terms related to health status reflects the view that either the need for health care is immune from individual control, or that a person should not be financially responsible for behavior that contributes to poor health, or both. These views are difficult to reconcile with the consensus that unhealthy behavior contributes significantly to obesity, diabetes, heart disease and cancer, and thus accounts for a substantial proportion of health-care costs.
Regulation that seeks to divorce insurance rates and coverage terms from health status would deter potential innovation that might provide meaningful financial incentives for healthy behavior and lower costs.
Incentives for healthy behavior have traditionally been weak under employer-sponsored health insurance, in part due to federal and state regulation that constrains the ability to reward healthy behavior. Turnover among employees and policy holders also reduces incentives to make long-term investments to promote healthy behavior.
Health-care reform should seek to encourage rather than discourage private innovation to provide incentives for healthy behavior. Safeway’s program offering employee premium discounts related to tobacco use, weight control, blood pressure and cholesterol levels is a good example.
Financial incentives for healthy behavior have the potential to significantly reduce costs without reducing quality.
An aversion to having health-insurance rates and coverage linked to individual behavior may be on the verge of becoming national policy. If that happens, the unintended consequences could be very costly.
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Mr. Harrington is professor of health-care management and insurance and risk management at the Wharton School of the University of Pennsylvania
Full article:
http://online.wsj.com/article/SB124623169143066199.html
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