Earning points for good health habits
Today's Wall Street Journal has an article about a South African health insurer that gives "frequent good behavior" points to individuals in the plan who engage in healthy habits. You can cash in the points for desirable stuff, like deep discounts on hotel rooms or resort stays. The plan has a high deductible. So alot of day to day health care is paid out of your own pocket.
The insurer, Discovery Health, claims that people in their 50s who were actively going after these wellness points were able to lower their health care costs (they have yet to publish any of this data in peer-reviewed medical journals). The article also provides anecdotes from participants who say the program encourages them to do the right things for themselves more often. Sounds good, huh?
I am the type of person who would go out of my way just to rack up those frequent flyer miles. I have even taken less convenient flights to get those United Miles. My desk drawer is full of coupons and cards from a million local and regional stores that promise me some kind of ditzel once I buy from them 10, or 20 times more. If I belonged to Discovery Health, I would hit elite status in no time.
But, is this the right model for health care? I am going to work out and try to eat healthy foods regardless of whether I earn wellness points. I value a healthy lifestyle. It is its own reward. But if I have the choice, I would sign up for a plan that offered me the points. Why not?
Some critics of this approach say that it is only a gimmick to attract healthy and/or motivated people into your health plan. In health policy circles, we call it "cherry picking." If I already have a chronic illness, or if I am constantly battling inherited tendencies to drink too much or eat too much or do other things too much, I am most likely not going to earn any points. I am also an expensive health plan member and, under the high deductible scheme, I would have high, possibly unaffordable out-of-pocket costs. I suspect Discovery Health would be just as happy if I signed up with a competitor.
From a public policy point of view, there are some big risks to widespread use of high deductible plans even when they are combined with medical savings accounts--remember, this is what President Bush is advocating right now. The risks are that all of the healthy, motivated people migrate into plans with high deductibles and all of the sick or less motivated people stay in fully insured plans (plans with low or modest deductibles and co-pays). When that happens, the fully insured plans end up with a high concentration of expensive people. They then must raise premium to cover those costs or else they risk going out of business. As the rates go up, people, even sick people who really need the coverage, find they can't afford to pay the premium. So they join the ranks of the uninsured. The plan's revenue declines and they have to raise rates again. So on and so on...we call that a "death spiral" in the insurance world.
So what's the right answer. Some really smart people have spent alot of time trying to figure that out. There are a few things that are clear. We need some sort of universal coverage so that we bring folks back into the insurance pool again so that it can become more affordable for more people. We also need invest in real public health...like what Governor Mike Huckabee is trying to do in Arkansas.
Do we need healthy behavior incentives? I don't know. The jury is still out. BTW, who is the jury? It is the health services researchers who design studies to look at the results in a systematic unbiased way and then subject their studies to the scrutiny of informed readers.
There you go, my 2 cents...I wonder how many points it is worth.