Tuesday, July 19, 2011

Self Sufficient Healthcare

This post may be boring to some, if not, most people.  Stop reading now because I couldn't care less about appealing to you as a reader.  For those still reading, there is an interesting trend going on in our country that is unrecognized by many.  I will use a series of statistical graphs (click on any to enlarge) to illustrate this trend and my points.  So get your analytical thinking helmet on and come for a ride.

What the above graph shows us is that people are spending much less of their own money on healthcare than they did 50 years ago.  In 2006, 64% of Americans ages 18-64 were insured by their employer.  

The above graph illustrates that despite out of pocket expenditures going way down, the overall national spend on healthcare has gone way up.  The average employer-paid family health insurance premium is $13,871 per year in our country.  That could really add up to a non trivial amount of money for any employer.  No wonder salary increases are stagnant and unemployment rates continue to be high.  This is a tremendous burden on business.  If they are spending all that money, we should be REALLY healthy right?  

So lets analyze the return on investment (click on graph to enlarge).  The above graph shows that the USA (all by itself way on the right) spends nearly twice as much on healthcare per person/per year than any other single country charted on the graph.  Yet, we are not living longer lives than people in many other countries.  Any investment advisor would tell you this is a terrible return on dollars invested. 

People have unknowingly offloaded the responsibility of their own health to their employer or the government.  It is no wonder the health of our country has deteriorated so much.  People don't care because their employer paid health insurance or Medicare/Medicaid has always been there to bail them out.  

Something has to give right?  Well it is and I've seen it at my company and companies elsewhere.  Employers are or will be shifting the burden of paying for healthcare back to the employee.  The graph above shows a projection of increased healthcare spending by families moving forward.  Part of this increase is the shift of responsibility to the employee.  Here are some intersting quotes from a 2010 Washington Post article:
"Most big employers plan to shift a larger share of health-care costs to their workers next year, according to a survey released Thursday.

Many say they may charge more to cover spouses, tighten eligibility standards for their health plans and dispense financial rewards or penalties based on the results of certain lab tests.  At some companies, overweight employees could be excluded from the most desirable plans.
Meanwhile, employees at many companies can expect significantly higher premiums, deductibles and co-payments...."
It's happening at big businesses and small businesses alike.  Companies refuse to continue to be financially responsible for the poor habits and unhealthy lifestyles of their employees.  The trend I am trying to reveal is the shift back to individuals being more financially responsible for their own healthcare.  Things start to get real for people when it hits them in the pocketbook.  So what is a person or family to do to prepare for this? 

The above graph shows that the US is spending much less of their income on food.  Food is an afterthought to most people and most families.  The philosophy of many is to fill their bellies in the cheapest way possible.  This in itself can cause a myriad of expensive health problems.  Quality food is the path to maintaining personal health.  I feel if we were to take our food a bit more seriously and spend a bit more money on it now, it will save us a lot of money in the future.  



MAS said...

Excellent post. I think another clue is to look at the percentage of home cooked meals today versus 50 years ago.

Today I Am Dirty, I Want To Be Pretty (I used to name my posts after song lyrics)

Be said...

When we aren't paying out of our own pockets it also leads to excessive visits to the Doctor or the ER. The last time I was at the ER I couldn't believe the lame reasons people where there for - like having a cold.

This also explains how non paying consumers are contributing to the over testing and unnecessary procedures.

Maybe I am just lucky but I have NEVER been to the hospital (for me) and the only time I've seen a Doctor in 5 years is to get physicals - that seem a bit unnecessary at that (of course had they found anything I might not say that).

We have to shift these costs back to the consumer. Good post!

Chuck said...

people do reconsider constant healthcare visits when they have to pay for it. i believe they will also reconsider the consequences of what they put in their mouth if it can reduce healthcare costs.
this is what it will take because getting cancer, diabetes, or heart disease is not scary enough anymore to change the way people eat. i have seen people with these and other chronic diseases not make any real dietary changes. they just keep on shoveling crap in their pie hole.