I have over eighteen years of experience in the employee benefits industry as a sales rep for various insurance and HMO companies. I hold a Certified Employee Benefits Specialist professional designation from the Wharton School of Business Now; I am an insurance broker & consultant. As an employee benefits consultant, it is my responsibility to help my clients manage their growing employee benefits budget, provide strategic input, financial and benefit analysis which includes progressive solutions to help control costs.



I want to discuss three topics related to healthcare costs that are a result of a survey conducted by the Institute of Management and administration, Inc. IOMA to over 300 benefit managers and HR executives.

1. The Root physical causes of health care increases

2. Our Attitudes impact on healthcare cost

3.A possible solution: Consumer driven health care (CDHC) plans.

Root Causes of health care increases

While many factors drive the increases in health care cost, there are specific demand factors that increase healthcare costs, such as the high demand for prescription drugs, the rise of excessive overweight and its related conditions of diabetes and heart disease, and the increase reliance upon specialist are the most influential causes.

Overweight has been in various forms of the media the past few months.

What is overweight?

Overweight results from the excessive accumulation of fat that exceeds the body's skeletal and physical standards. According to the National Institutes of Health (NIH), an increase in 20 percent or more above your ideal body weight is the point at which excess weight becomes a health risk. Today 97 million Americans, more than one-third of the adult population, are overweight or obese. An estimated 5 to 10 million of those are considered morbidly obese. (Does not include kids)

Morbid obesity? Morbid obesity is typically defined as being 100 lbs. or more over ideal body weight or having a Body Mass Index of 40 or higher. According to the National Institutes of Health Consensus Report, morbid obesity is a serious disease and must be treated as such.

It is easy to blame insurers, doctors, hospitals, drug companies, lawyers and the government. Their role in the increase of healthcare is real, however, it is not nearly as great as the one played by consumers. Over 70% of the nations health care costs are attributable to lifestyle choices, behaviors, and attitudes.

The harsh and politically unpopular reality is that far too many of us do not take care of ourselves and yet we expect the best medical care in the world that other people’s money can buy.

This has been a pervasive mindset for a long time. Currently, many employers believe it is not their responsibility to educate their employees about lifestyle, behaviors, and attitudes. On the other hand, as long as employers continue to finance the health care system, the employer’s stance may begin to change. Attitudes do have an impact on health care costs.

Attitudes

There are PROFOUND barriers in communicating and educating employees on health care cost: For example, The Survey revealed that attitudes such as health care as an entitlement is considered greater obstacles than employees’ abilities to grasp the complexities of health care costs and choices.

The survey results also discovered employees with less formal education are not always associated with greater barriers instead it was the workforces with more formal education that indicated entitlement attitudes. Moreover, the highly educated had more difficulty in grasping the complexities of health care costs and choices.

How can we control healthcare costs?

The introduction of Consumer driven health plans is a possible vehicle to help control costs ---late 1999 early 2000.

Consumer Driven Health Care

Currently the consumer has been insulated from the “true" cost of health care. For example, it does not cost $20 to go to a doctor; it is more like $80-$150 and even more if it is specialist. Some maintenance drugs cost over $500.00 for a 90-day supply not $40.00.

The concept of the Consumer Driven High deductible ($2500) plan is to bring the consumer into the Health purchasing process as in any other consumer transaction we do in this country. Patient consumers need to ask, “How much does it costs?"

I believe Americans are the smartest consumers in the world. We have the greatest economy in the World. Yet we have been insulated from the true cost of healthcare far too long. I say. Involve the consumer in the true costs of healthcare and health care costs will be arrested in its seemly endless climb. I believe the costs will even start a decline. Here is why:

Results of Survey of CDHP vs. Traditional Plans, by Destiny Health

9/15/04

98% of Consumer Driven Participants understand that a person’s lifestyle has a direct impact on healthcare cost vs. 29% in traditional plan participants

85% of Consumer Driven Participants report starting an exercise program in the last 12 months vs. 24% in the traditional plan participants

60% of Consumer Driven Participants have reduced the amount the are paying for health care be switching to doctors who charge less and switching to generic drugs when available vs. 15% traditional plan participants

In Summary, our lifestyles, behaviors, and attitudes do have an impact on health care costs. As unpopular it may be, we have to assume responsibility for our own health and become healthcare consumers.