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Our ‘Health Care River’

'Our Health Care River'

‘Our Health Care River’

I am both intrigued and baffled by the ongoing public dialogue that occurs about rising health insurance premiums. The recent Wellmark rate request for individual policyholders is a case in point. Last November, Wellmark requested a 12.2 percent rate increase for three blocks of their individual health insurance business, in addition to the Wellmark Farm Bureau block of business.

No one wants to see health insurance premium increases of any amount, let alone annual increases that are a multiple of the general inflation rate. However, insurance companies should not be the general villain – but they are. Why?  They represent a very easy target for many – they are large, appear to be very profitable, have nice buildings, provide generous pay to key executives, and so forth. With the naked eye, public umbrage may be understandable.

The mainstream mentality is to reform the big and bad insurance companies.  By doing so, we will have more reasonable health insurance premiums in the future…or so we think.

Now it’s time to add a good dose of reality into this discussion.

Health insurance premiums are nothing more than a derivative of health care costs. If health costs move up, so will your premiums that you pay to insurance companies. If medical costs consistently go down or become more stable, your premiums will also be favorably impacted. The true cost drivers of “Our Health Care River” fall into two general buckets:

  1. Fragmented Delivery System
  2. Unhealthy Lifestyles

Our fragmented delivery system is really not a “system,” but rather a concoction of multiple temporary or expedient remedies that attempt to solve our problems as we confront our health care needs. No one is at fault, yet we ALL are.

For decades, we have allowed our legislators (both federal and state) to cobble together laws and regulations to combat the immediate issues of the day without really understanding the repercussions of how these actions will ultimately impact long-term societal goals. We are always developing short-term solutions to long-term problems, and, by doing so, creating a fragmented delivery system that resembles more of a ‘Frankenstein’ health care system.

Unintended consequences are typically an unwanted by-product of both good and bad legislation. The consequences we have in our fragmented delivery “system” include:

  • Misalignment of payment incentives to health care providers
  • Recommended care is only delivered about 55 percent of the time
  • Little transparency in cost and medical outcomes
  • Poor coordination of care
  • Deficiencies in clinical information systems
  • Lack of accountability in care delivery
  • Medical mistakes harm about 25 percent of all patients – costly both in dollars and in lives
  • About 30 percent of all funds expended for health care are wasted

Much like chemicals in a farm field, the unintended consequences of our fragmented delivery “system” runs off into the “health care river,” causing further problems downstream. This ultimately results in higher insurance premiums, medical mistakes and, unfortunately, premature mortality.

On the other side of the ‘health care river,’ we have unhealthy lifestyles – which has been well documented. Unhealthy lifestyles include:

  • Lack of physical activity
  • Poor dietary habits
  • Smoking & alcohol consumption
  • Aging population (just a fact of life!)
  • Emotional & spiritual needs are unmet
  • Overweight and obesity issues
  • About 70 percentof the factors influencing our health are lifestyle issues

As both cost drivers flow into our health care river, the consequences become unsustainable. Trying to fix health insurance premiums downstream will first require innovative activities and solutions UPSTREAM. We all have a part to play in this new ‘system,’ a very meaningful part. This is the type of public dialogue we need to have as we continue to confront future health premium increases.

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Healthy Habits

Did you make a resolution for 2013? If so, are you sticking with it?

According to one, about 36% of resolutions made for the new year are discontinued during the first 30 days. By the end of six months, only 54% of resolutions remain. Only 8% of people successfully achieve their resolutions in a given year. So what does this tell us? We need to find successful approaches to break old habits and replace them with desired habits. It’s that simple.

But how?

According to a recently published book, ‘The Power of Habit’, written by Charles Duhigg, an investigative New York Times reporter, developing newly desired (and healthy) habits are quite possible – we just need to understand a few things about our existing habit(s) and then do some tinkering.

Duhigg describes how habits become permanent, but we are able to replace them at a later time. A ‘habit loop’ will develop when three things occur:

  1. CUE – This is “a trigger that tells your brain to go into automatic mode and which habit to use.”
  2. ROUTINE – Can be physical, mental or emotional.
  3. REWARD – Helps the brain figure out if this particular loop is worth remembering for the future.

As this loop is repeated, it becomes more automatic – much like a cruise control in an automobile. As Duhigg writes, “the cue and reward become intertwined until a powerful sense of anticipation and craving emerges.” From this, a new habit has been developed.

According to a Duke University study, habits (not decisions) make up about 40% of our daily routine. The good news is that we have the “freedom and responsibility” to remake our habits.

The science discussed in this book uses various stories and examples to help us understand which habit loop we need to modify in order to make the desired changes to transform our businesses, our communities, and of course, our personal lives.

I don’t usually promote books in my blog, but this one is worth the read, especially for those who wish to make meaningful changes in 2013 and beyond.

What habit(s) would you like to change?

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Industry Reports Now Available!

David-P-Lind-Benchmark-2012New and exciting additions to our website continue. With the Lindex scores now published, we also have five new industry reports available for purchase and download!

The 14th annual Iowa Employer Benefits Study© allowed us to generate five industry reports from the following sectors:

  1. Manufacturing
  2. Retail
  3. Finance, Insurance, and Real Estate
  4. Healthcare and Social Services
  5. Government and Education

As you might imagine, each industry sector offers benefits that will differ from one another. For example, 70 percent of Retail employers reported offering health insurance, while a larger percentage of the other four industry sectors offer health coverage: Finance/Insurance – 84 percent; Government /Education – 97 percent; Healthcare/Social Services – 80 percent; and Manufacturing – 80 percent.

So what was the average increase in health insurance premiums reported by each sector? The overall average in Iowa (regardless of employer size and industry) was seven percent. Again, this number varies with each sector:

  • Manufacturing – Up 7.0 percent
  • Retail – Up 8.9 percent
  • Finance, Insurance, and Real Estate – Up 7.9 percent
  • Healthcare and Social Services – Up 7.6 percent
  • Government and Education – Up 5.4 percent

The 2012 Study is the very first time that we’ve developed separate industry reports. With 1,206 survey respondents in 2012, we are able to establish enough data from each sector to provide a good statistical report on the benefits offered within these key Iowa sectors.

The benefits offered by employers will vary due to a number of reasons:

  • Size – Larger employers offer more comprehensive benefits than their smaller counterparts.
  • Location – Rural employers tend to offer fewer benefits than Urban/Metro-based employers.
  • Industry – There are factors inherent in each industry that will affect the type and likelihood of certain benefits being offered to employees. One example: Bargained benefits. Public organizations typically have organized labor who will bargain for specific benefits. To a lesser extent, Manufacturing will also have bargained benefits.
  • Culture – This is the ‘wildcard.’ As you know, each organization is unique due to the culture that has evolved over time. This culture is most often reflected in the benefits offered to employees.

It is for these reasons that each organization must determine how competitive they wish their benefit offerings to be.

We are always happy to assist you with any questions that you may have!

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