Came across an article I wrote for InterBusiness Issues a couple years ago. Still applicable and has even larger implications now...
Your health plan should be an investment, not a gamble.
The one thing all investors have in common—whether business owner or individual, risk-averse or aggressive—is the shared goal of yielding a profit or some sort of material result. Strategy and degree of risk-taking aside, the desired result is a gain of some sort. Otherwise, why bother?
The role of investing would likely change in today’s economy if it became mandatory on any level. In that scenario, the goal would invariably shift from following various paths to pursue a profit toward a newer model of fulfilling the fictional investment mandate with the least possible expense.
The strategic planning, diligence, expectation and engagement of the investor in the process would be reduced to meeting the mandate with the least possible expenditure of time, money and effort. What happens when we apply this philosophy to healthcare?
Deck Chairs on the Titanic Fortunately, or unfortunately, the Affordable Care Act introduced this scenario into reality. Politics and the potential pros and cons of the ACA aside, it brought with it a crisis to many employers and individuals. With constantly increasing premiums, brokers, advisors and employers are left with few options to continue to provide healthcare. Some liken this to rearranging deck chairs on the Titanic: you can rearrange all you want, but the ship is still going down, and you are going with it.
These “deck chairs” can look like the reduction of benefits, shifting of costs, or sometimes reduced coverage for spouses—and are often the only methods that exist to make coverage even remotely affordable to the employer and ultimately, their employees. In many cases, no one is left happy.
Per the U.S. Department of Health and Human Services, about 82 percent of business owners in the United States are unhappy with this solution. Finding that the lowest-rate strategy is simply not working, they seek out various self-funding options for their group health plans.
Investing, Not Gambling But brokers, consultants and advisors across the country are realizing this does not have to be the only approach. Rather than health insurance being a line item on company budgets—and simply a forced expense—there is another financial strategy with which to deal with healthcare. Self-funding is a long-term strategy of engaging a health plan solution that is more of an investment, or even a promise.
By re-evaluating a health plan through an investment lens, one cannot help but address some basic elements of investing. To understand investing as it relates to healthcare, it is helpful to define what investing is not. One thing investing is not is gambling. Whereas gambling puts money at risk by taking a chance on an uncertain outcome—with little more than hope that luck is on your side—investing requires action, such as research and analysis, followed by a commitment of capital… but only when there is a reasonable expectation of a profit or material result.
While there is risk in both, and occasionally even loss in both, there are opportunities for wielding a level of control within the investment arena that does not occur in gambling (short of counting cards, but that is another issue altogether). That same level of control can be present in a group health plan, if only it is viewed as an investment.
Putting the Health Back In Health Plans A group’s health plan can neither be handled like gambling, nor reduced to a mandated expense, to reach its fullest potential for the employers sponsoring the policy, the members using the policy, or the improved quality of life for the company and surrounding community. After all, that is the truest intent of healthcare: to utilize services to promote the highest form of health. The World Health Organization defines health as the “state of complete physical, mental and social well-being, and not merely the absence of disease or infirmity."
Unfortunately, healthcare has become reduced to—and all too often aligned with and controlled by—health insurance. The notions are contradictory at best, as insurance is utilized to hedge against the risk of loss. If healthcare becomes a peripheral offering, controlled and dictated by health insurance (merely protecting against the risk of loss), the state of well-being is triaged as a priority only after the goals of insurers are met.
If the philosophy is inverted and the state of well-being is the primary healthcare goal for all involved, it logically follows that the health plan be seen as an investment. This investment translates to the investor waiting with bated breath for the desired profit or material result, only after a calculated expenditure of time, energy, analysis and planning.
Engagement with the investment, including research and self-education, can only improve its performance. In the case of healthcare, the investment is not restricted to the employer-sponsored healthcare strategy.
Expect a Return There is also limitless potential for consumers to re-evaluate their engagement with their own health as an investment all in its own. This engagement looks like communication with providers, research and awareness of one’s family history, and a desire to become an educated consumer. The shift in philosophy does not merely yield financial profit, but the improved health of employees, increased productivity and reduced collateral costs, such as those stemming from absenteeism and worker’s compensation claims.
It also puts the health back into healthcare—pulling it away from the restrictions and dismal realities of health insurance, manifesting a visible investment and promise to employees and peripheral benefits for the company, the families and the impacted community. Continuing in the spirit of optimism and hope in the potential of this view of health plans, it is worth noting the often-appalling lack of regulation in the healthcare industry. Perhaps, in light of all this, that is a good thing: as now, direct interaction with your primary care provider cannot be cited as insider trading.
*As published in April 2017 issue of iBi.