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Keep Workers Healthy and Reduce Health Care Cost: Eliminate Co-Pays

Large corporate employers are starting to figure out that charging their employees higher co-pays for medical care is not saving them any money. In fact, it’s costing them more.

What a surprise.

For years now we have been browbeaten about how employees are driving up the cost of health care by using too many services. If only people would be more responsible in their use of health care, we have been told, we would be able to control the cost of health care.

According to this kind of thinking, the solution has been to raise the cost of services to employees by charging them higher co-pays and deductibles. If people are spending their own money, the argument goes, they won’t spend as much.

Well it turns out that the last part of the argument is true. They won’t spend as much on health care, primarily because they won’t be able to afford it. They start opting out of treatments and trying to stretch their prescriptions by taking their pills less frequently.

A recent article in the Wall Street Journal Online (May 15) documents the trend among a few large employers to begin reducing co-pays on certain services in order to reduce health care costs. As it turns out, these employers have found that as costs have risen, employees have responded by cutting back on treatments they really should have had. And the results over the long run have been greater costs to employers, not lower costs.

What a surprise.

It has been common knowledge in the insurance world for just about ever that the vast majority of health care costs can be attributed to care provided in the last two years of life and care provided to people with chronic conditions. And yet employers and the insurance industry have persisted in the free market fantasy that health ­ and the cost of health care – is somehow subject to market forces. Just raise the price of health care, and demand will adjust accordingly. That is to say, demand will fall. In this imaginary world, it was the employees who were unnecessarily running up the cost of care because care had been under priced, misguidedly subsidized by employers.

I suppose those devoted to the blame-the-individual-not-the-system school of hard knocks will say that these malingerers really can afford to pay more for their meds, but they choose to spend their available funds on cable TV and the National Enquirer instead. These are the same people who will tell you that young people having trouble re-paying student loans are just irresponsible. They don’t want to talk about the outrageous rates of interest and other predatory practices that have surreptitiously come to dominate the student loan industry. And the credit card industry, etc. For these people, social inequity, injustice, poor health, and poverty can never to attributed to the systems in place in this land of the free. Whatever befalls someone is always the fault of the individual.

But as much as employers might want to believe this canard, facts are forcing them to reconsider. As it turns out, if you make quality care readily available to people, they use it responsibly and they lead healthier lives, costing less money in the first place. Marriott, Procter and Gamble and Pitney Bowes, to name a few, are reducing or eliminating co-pays for treatments for targeted conditions like heart disease and diabetes, osteoporosis and asthma, even pregnancy. And wonder of wonders, they are finding that the overall treatment of these conditions costs less. (That’s not even counting the benefits of increased employee productivity.)

Let’s work through this carefully. Give people good care at a reasonable price and they get healthier and spend less money on health care. Make care expensive and difficult to obtain and people are less healthy and end up spending a lot more money in the long run. Duh!

Sorry but this is not a revelation. This has always been the case and it’s always been obvious. The trend to raise the price of health care as a cure for high costs has always been based on misconceptions, at best. More to the point, the trend has simply been the application in the field of health of the every-person-for-themselves, winner-take-all mania that has been tightening its grip on this country since the days of Ronald Reagan.

When we finally get serious about tackling the issue of rising health care costs, we’ll look first at the systems of health care delivery. We’ll start with the 20 to 30 percent administration costs run up by the insurance industry and the mega-salaries for health care CEO’s. We’ll look at the blood-money profits of the pharmaceutical conglomerates and we’ll reconsider the notion that if we don’t promise billion dollar profits as the reward for discovering new cures for our illnesses, all research and discovery will somehow grind to a halt. And if we’re really serious about our health, we’ll start teaching kids about health in the schools, we’ll redesign our food production and distribution system, we’ll renew our efforts to protect and restore a clean environment, we’ll make quality food and education more available in low income areas, and well .. you get the idea.

And while we’re at it, maybe we’ll even revisit the popular idea that we can’t afford to spend so much of our gross national product on health care. For years corporate America has been up in arms about the fact that we spend something like 14 percent of GNP on health care while every other industrialized nation spends less. The corporations don’t seem to care so much that we also have the worst overall health outcomes among industrialized nations.

When we’re really serious about our health in this country, we’ll spend whatever it takes to create a health system that works for everyone, and in the long run we’ll be healthier, happier, and it will cost us less than it does now.

Don’t worry. We can afford it. We’ll take it from the bloated, sickening military budget, which any good economist can tell you is the worst investment possible. Health care dollars will turn over more times in the economy, create more wealth, and our economy will be healthier along with each and every one of us. It’s an investment in ourselves, and we are our greatest asset.

You’d have to be sick not to want to do this.

JEFF SHER lives in the Bay Area. He can be reached at: jeffsher@sbcglobal.net

 

 

 

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Jeff Sher is a journalist specializing in the health care industry. He lives in San Francisco.

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