Tom Emerick is absolutely right. The slowdown in health care spending is almost COMPLETELY driven by changes in the macro economy, specifically, the recession. When (if) the economy ever normalizes, medical care inflation will return to pre-recession levels. Most importantly, it will continue doing what it has always done to confound business leaders…it will significantly exceed the inflation rate in the broader economy (a truly scary prospect, if you grasp monetary policy). This is because medical care utilization is driven predominantly by demographics: growing population; older population; expanding chronic disease burden that provokes demand for new (read: more expensive) medical care technologies; these same technologies are almost always cost-additive, not cost-substitutive; and, finally, we want everything and we want it now and for free.
There is not a wellness or disease management program that I know of that is driven by a grasp of the underlying demographics of an employee group. HRAs and biometrics are not tools for demographic analysis; they are tools for driving people into the medical care system for what is often highly dubious care. Indeed, wellness is predominantly just managed care warmed over, albeit one of the more insipid and lackluster forms of it. Consider that one large wellness vendor (which has major health systems as clients…shows how much they know) actually promotes doubling payments to primary care physicians on the premise that encouraging people to see their physician more and giving physicians more money is the mechanism for holding down the long-term growth of medical care spending and promoting health in a population. This same vendor’s leaders also want employees to set aside ever-more funds into tax advantaged savings accounts, on the preposterous premise that if employees don’t use the money on medical care (as they are being strongly encouraged to do), they will then have saved additional funds for their future (leave aside that the real rate of return in these accounts is now negative). This is like saying that I should take my car to my mechanic more frequently, and pay him more (even when there is nothing wrong with it), so that at the end of the vehicle’s useful life I will be able to show that the cost of ownership was lower than someone who did not follow this pattern (the control in this example would be a car owner who simply exercised common sense and followed the manufacturer’s recommendations for maintenance). And, in addition, I should set aside more of my earned income each month to support car repairs. This entire construct is ludicrous.
Because the wellness industry is unburdened by intellectual heft, one almost never sees programming (or even provocative, literate, conceptual debate) that is based upon any analytic framework other than convention. HRAs, biometrics, incentives, games, challenges and lotteries. Repeat. Ad infinitum, with nary a shred of data to show for all these falsely positive machinations. Wellness, as practiced by the masses of vendors out there, is, indeed, an unbearable lightness of being.
Cracking Health Costs » Low Growth in Health Spending? Who Gets the Credit?.
Appreciate the perspective. Some solutions? Lots of assertions about the typical impacts on health care costs and the problems with the wellness industry. I’d like to seem some “light” on top of the potentially valid criticisms. What are the winning approaches to facilitate the challenging and difficult issue of health/wellness/corporate health/employee health? Love the tweaks, just want ideas too.