Internet to the rescue
Health care costs are still rising (see “Health care soon unaffordable”
2/18/02) and they will continue to
do so for several reasons because
- The increasing effectiveness of treatment and the public
awareness of that.
- The rapid changes in biomedical technology.
- The increasing access to real information
- The change in age composition — older employees cost more. .
While employees incur these increasing health costs they are
often not aware of their magnitude. All they see is the insurance paperwork; they do not have to lay out cash except for minor
part of their health costs.
Employers have only so much money with which they can
compensate employees and mandatory
health plans have become a major
cost. As employer-paid health costs increase, it tends to reduce the pay and other
benefits that employees currently receive. Most employees do not realize that
were health insurance not so high they could have more
take home pay.
Most employees are also not aware that:
indirectly subsidize other high-risk plan users (obese, smokers, high-risk
sports) who raise plan costs.
- They subsidize
emergency room care for the
indigent since no one goes without health care these days, insured or not. Nationally, this has resulted in health
plans costing ten percent more
than they would otherwise.
pay for the extensive paper work needed by insurance companies, beyond what
is medically necessary, which is very costly, and raises health plan costs.
into health plan costs is the high price of litigation both in court
awards and the practice of "defensive medicine," which adds
unnecessary and costly procedures to avoid lawsuits.[i]
It is well that we in Hawaii
look at some of the trends in medical cost reduction on the Mainland to get a
little perspective on what could be done here.
Health Savings Accounts (HSAs)[ii]
are a major trend right now. Here’s
how they work: You get a high-deductible
policy from, say, Blue Cross for $86
monthly for a 40-year old
non-smoking male opting for a $3,500
You then open a Health Savings Account at, say, Wells Fargo,
into which you may deposit up to $225 a month tax deductible. You pay by check for any medical expenses (except health plan
premiums) during the year out of your HSA up to the amount of the deductible
After that, your Blue Cross plan takes over. Any amounts you
do not spend stay in the HSA and, for
tax purposes, you treat just like an IRA.
Another new trend is the ability to shop for all different kinds of plans online. If you are
for example, you can shop
extensively for medical plans with
different costs and benefits and deductibles at ehealthinsurance.com
Once you have such a
high deductible, it means your first $3,500 is cash out of pocket and suddenly
you have an attitude change and find yourself shopping for
Here are some new options:
On-line doctors such as Teladoc.com
and Doctokr.com are springing up. Rather
than charging the flat fee per visit for
which the insurance companies traditionally reimburse them, they charge $15 cash
for each five-minute block when
on-line, and 50 percent more for an office visit. Patients apparently are far more focused on their specific illnesses during such
visits and far less prone to time-wasting chitchat. For
those occasions when you know the drug or
physical therapy you need, the quick on-line email is very cost-effective.
Also available on
the mainland are COD’s — cash only doctors[iv]
— operating as many dentists do in Hawaii.
Doctors pass along the considerable
savings, from not having to prepare insurance paperwork
and collect payments, to the patient. It also gives doctors
more time to practice medicine.
Many doctors forming
this new, but growing, trend are organized
under the SimpleCare.com banner. Membership has grown to 22,000 patient
members and 1,500 doctors. Some doctors reject all insurance and take only cash, while
others continue to accept insurance while offering discounts of 15 percent to
50 percent for cash-paying patients.
Another trend is
that of in-store nurse practitioners
working, in Target stores and large pharmacies, for
groups like minuteclinic.com. They say, “Our
Certified Family Nurse Practitioners evaluate, diagnose and recommend
treatments, including appropriate prescriptions for
common family illnesses and are covered by most insurance plans.” And are
open for extended hours and weekends
The world of
medicine has been changing and it will continue. After all, we no longer expect
doctors to make house calls, when
not so many years ago that was the norm.
But few, or any, the
foregoing choices are available to Hawaii residents because
our legislators know better than we
do what is good for us. Right.
Cliff Slater is a
regular columnist whose footnoted columns are at www.cliffslater.com