âHealthy Incentivesâ is the name of King Countyâs latest initiative to rein in runaway spending on employee health care. In order to encourage employees to take more responsibility for their own health, those who voluntarily fill out a questionnaire attesting to healthy lifestyle habits will enjoy lower deductibles. The program contains a kernel of sense in recognizing that the key to controlling costs is for employees to take more responsibility for their own health spending. Unfortunately, this programâs implementation combines the intrusive nanny-state with ineffectual government where nobody is accountable for results. Donât expect the countyâs ballooning healthcare bill to deflate any time soon.
The program isnât slated for launch until 2006 and the details are still being developed. The questionnaire hasnât even been written yet, so itâs too soon to say how intrusive and/or effective the questions might be. But King County spokeswoman Elaine Kraft gave me an overview of âHealthy Incentives,â and what I did learn wasnât encouraging. First, the questionnaire is a self-assessment on the honor system. As Ron Sims was quoted saying in the Seattle Times last week, âThe county will reward effort, not results.â Expect optimism to prevail over reality. Questions like âDo you smoke?â will be answered âNoâ by those who have vowed to kick the habit, no matter how much they still smoke. The most fundamental flaw, however, is that the plan was perversely designed to avoid shifting the burden of financial responsibility onto the employee. I wasnât surprised that Kraft couldnât cite any examples of similar programs that have successfully lowered health costs for other employers.
King County (and its unions) have chosen to avoid the very burden that is key to reining in skyrocketing health-care costsâmotivating individual consumers to demand lower prices.
A couple of years ago when my wife took time off from work, we lost her diamond-studded employer health insurance and were left to buy our own coverage. We opted for a tax-deductible medical savings account tied to high-deductible catastrophic insurance.
Fortunately, everybody in my family is healthy. But the bills for even minor injuries and ailments can add up. Since we were now paying for almost everything out of pocket, we had an incentive to ask the question that fully insured patients never have any reason to ask: âCan you suggest anything cheaper?â In every case that mattered, from prescription drugs to diagnostic tests, equally effective but cheaper solutions were available. We managed to save hundreds, even a few thousand dollars in a short period of time, just by demanding less expensive ways to accomplish the same results. If other consumers had the same motivation to demand lower costs for health care, overall spending would remain in check just as in every market where individuals, not bureaucracies, make the final purchase decisions.
âHealthy Incentivesâ does seem to offer county employees some good educational materials with tips for staying healthy. But it wonât make much of a dent in the countyâs health-care budget until it offers some real incentives for the employees to control their spending.
