Making Cents of Your Health Insurance Dollar

As President Obama continues to lobby the American people and Congress on Healthcare Reform, talk of change and what it means to average Americans travels from the board rooms of global corporations to the kitchen tables of homes across the country.

In quite a number of discussions, this quote sums up the feelings of many people I have talked to.  “Spare me the details – I just want to know what Healthcare Reform will mean to me.”  If this is how you feel, than this short video from CNN Money might help answer the question.  CNN Money video

One of the major components of the President’s plan is to require almost everyone to have some form of health insurance – tackling the current social and economic  burden of a population of approximately 47 million Americans who are uninsured.  This will add approximately 47 million Americans into the existing insurance pools of either government provided insurance, employer provided insurance or private insurance.  You can find the current breakdown by coverage class in my related post earlier this week.

That being they case, I thought it might be helpful to look at where our insurance dollars go.  To do  that, I referenced the bi- annual report on that information from the same industry report that was referenced by the Senate.  In January of 2008, Price Waterhouse Coopers published research on health insurance costs as commissioned by America’s Health Insurance Plans.  This link takes you to the full report. The Factors Fueling Rising Healthcare Costs 2008

The graphic above shows the break out of the pool of dollars that make up the  employer and private health insurance spend. Looking at the graphic, 13cents of each dollar goes to corporate profits, administration and sales and marketing support.  The other 87 cents goes towards the basics of helping us stay healthy, diagnosing illness or other medical conditions, and treatment.

So if we are going to lower healthcare cost, realistically, the focus will fall predominately in the area shaded in aqua – that 87%.  It is in these areas where we have the greatest opportunity to use American innovation to improve the healthcare process.  Information technology enhancements in the area of medical records management can help us reduce duplicate tests and better manage patient care.  New biotech diagnostics currently in development will allow us to detect and diagnose diseases earlier – thus greatly reducing the total cost of treatment by addressing small problems before they become big ones.   But technology and process improvement alone will never be the answer. 

We, the people, will also need to make some changes in our behaviors if we are ever to really get things under control.  Here are a few things each of us can do to put the health back into healthcare:

  1. Get a check up.  85% of Americans, who have health insurance, do not get an annual check up.  Yet studies by Medicare and Medicaid have shown that if we detect and diagnose chronic disease early we can avoid as much as 90% of the costs of treatment. And, chronic disease represents almost 70 percent of the medical services spend. 
  2. Take a walk.  It is estimated that approximately 31% of Americans are either clinically overweight or obese.  This condition has been directly correlated to a wide range of chronic conditions including Diabetes, Heart Disease, Stroke, Hypertension, some types of Cancer, Sleep Apnea, Osteoarthritis, and Gallbladder Disease.
  3. Ask questions and talk to your doctor.  Whether in your annual exam or during treatment, take an active part in the healthcare discussion.  Ask your doctor what you can do to be proactive about managing your health and your healthcare spend.  Very often a few extra minutes can leave you with good information, ideas, and in the case of treatment sometimes more cost effective alternatives.
  4. Understand what your healthcare plan has to offer.  If you have a bad health habit you want to break, many plans offer free services to help you.  Pull out that booklet they send you once a year and look.  You might be surprised at the resources you are paying for that you have never used.

President Obama may or may not get everything he wants out of Congress this year in the way of health care reform.  And even if he does, the some of the changes will take years.  But we can each start our own healthcare recovery plan today – if we choose to.

Thanks for stopping by. Stay Tuned…

Joan Koerber-Walker

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