For years I have wondered why health insurance hasn’t been treated like other insurance, like car insurance. With car insurance, the riskier your profile, the more expensive the insurance. You get caught driving drunk, you have accidents, you drive a sports car, those all make you higher risk to an insurer, so your rates reflect it.
Not so with health insurance. There aren’t really checks in place to know if you smoke, or if you have a horrible diet and become obese.
But when I bring it up people would say “oh, that’s too personal, that will never happen” – talking about giving people incentives to be more fit and eat/drink smarter, and stop smoking. But every time I hear that, I can’t help but think it’s just bad business and that usually drives corporate behavior. That said, as long as the insurance companies are making enough money and the companies that pay for our health care (when we have jobs) can afford it, a system like this can be sustained, as business-bizarro as it is. And yes I realize that some people have medical conditions (like thyroids) that make weight control hard, but I also know that there are often tests like things like that so people wouldn’t be punished for things that aren’t their fault – Type 1 diabetes is a good example of that.
But in recent years, we have seen that these costs skyrocket to a point that’s no longer sustainable for a lot of companies, like Safeway and drastic measures are needed to curb these crazy insurance costs.
So I wasn’t at all surprised to see this article by Ron Lieber the other day talking about new programs that incentivize healthier living. With cash. And I totally agree with his point about the boss handing out $100 bills at the end of the year in front of everyone. That would have a very big impact.
Anyone who has ever managed a team, but especially a sales team, knows that the way people are measured and rewarded causes them to behave in very measurement-aligned ways, so of course people are going to put down the Big Mac when there is a stack of $100 bills waiting for them.
And of course people will keep eating the Big Macs (and Whoppers, and Wendy’s this, and KFC’s that, and whatever Jack-in-the-box is pushing this week) if there is no reward (or punishment) for the behavioral change.
I honestly don’t understand why this took so long, especially after we have all been conditioned to expect this sort of thing from car insurance (see above), homeowner insurance (don’t buy a house on flood plain), life insurance (if you have ulcers, life insurance costs a lot more), etc. But I am really glad it’s finally here.
This is the sort change that could really have a transformational effect on the cost of health care that companies are paying, but more importantly, it can cause people to make smarter choices about their lives and their lifestyles. A major seismic event in the world of health care. An earthquake. Excellent.
Speaking of earthquakes. . . you might check out my new book which is called Surviving a Business Earthquake that has just come out exclusively as an eBook through the Apple iBook store. It’s only about four dollars – I hope you like it.
-Ric
I totally agree that incentives will make the changes in people´s “way of living”, and consequently in their health.
But I think there is also an important aspect to be considered: the “social aspect”.
Young people, with strong arms, can pay more than older people, usually with a more fragile health and, sometimes, with much less money. Furthermore others, that become incapable, should be remembered.
So, a factor of “loss of health” along the years, and another of “sudden loss of working capability” should be considered, not ignoring the practices of giving incentives for people with “good practices” in terms of heath.
It would be unfair charge much more for health insurance for a person with an income much lower, and less healthier.
These two factors should also have some weight in this calculations.
And since some, with less work capacity, should pay less, in a natural order, other should pay more (as as financial reserve for themselves and for others) when they are more capable to work.