Friday, July 10, 2009

Health Care Inflation

The opacity of the current Health Care reform debate is painful. Probably more painful than reading this post (I hope). I do not have any illusions that I can understand the nuances associated with rising costs of health care. But there are loads of interesting questions that can be asked about the policy options.

The rate of health care cost is expected to be significantly higher than both the general inflation rate and the projected rate of economic growth over the next decade on an annual basis. The debate is as focused on the slowing the rising cost as it is on providing some health care coverage for the millions of uninsured people. It is is apparent that the removal of the tax exemption for employer health coverage can not even be discussed lest the health care political gods strike down the blasphemer. The discussions of the other possible incentive options that could secure the cost reductions is interesting as an academic exercise.

Employer based incentives seem great. There are many examples of employers and insurers that incentivize healthy choices. The state of Ohio created "Take Charge! Live Well!". "Take Charge! Live Well!" analyzes where the health costs are for the state and provides monetary incentives to employees for participation in health programs and results. Safeway's "Healthy Measures" program screens employees for health risk factors and rewards employees with lower premiums based on improvement in risk factors. Also many employers provide discounted gym memberships and other incentives. My previous health insurance company even paid part of a gym membership, provided a minimum of attendance was demonstrated. For more details click here: Addressing Health Care Costs From All Angles

Here is an interesting piece by the CEO of Safeway Inc.

If we can't talk about ending the health insurance tax exemption perhaps we can end run the issue by imposing a "sales tax" on the health service provided. A visit to the doctor would end with you paying a percentage the cost of the visit to a health care fund. Patients with health care provided by their employers would be absorbing a monetary cost of visiting the doctor. I have not found any research into this area.

Would that encourage people to be healthier or to not visit the doctor? Would this idea generate enough revenue to insure the uninsured people?

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LP said...

What about people on fixed incomes--would they have to pay the sales tax? What happens to medicare/medicaid patients?

The Observer said...

This obviously is not a detailed policy proposal. But I think you missed the part that says:

"Patients with health care provided by their employers would be absorbing a monetary cost of visiting the doctor."

Thanks for reading.

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