Sunday, October 30, 2005

Show Me the Money

Something that has been bugging me for a while turned up on 60 Minutes tonight. They ran a story about people who were fired from their job because they wouldn't quit smoking. Not because they were smoking at their desks, or because a co-worker or a customer had complained, not even because they were smoking at work. Just because they wouldn't quit, period.

It turns out to have nothing to do with job performance and everything to do with the bottom line. Companies that provide health insurance for their employees pay a higher premium if they have employees who smoke.

The story went on to show several other companies that had put in place "wellness programs" designed to modify the behavior of employees toward the end of reducing health care costs. These programs were not just about smoking, but also about diet, exercise, and sexual behavior. The programs require participants to fill out a lifestyle questionnaire and then have follow up drug tests, polygraph tests, and even a "lifestyle nagger" who calls people up to ask them what they've been eating and whatnot.

The way things are going, it would seem inevitable that nearly every employer with a substantive number of employees will put such a program in place. My employer this year radically restructured our benefits. I wonder how long it will be until someone calls me to ask me when the last time I went to McDonald's was, or how long I am sleeping.

Never mind that my lifestyle is 90% a manifestation of my job and job stress. Perhaps they ought to ask that in their questionnaire.

One employer on the show was lamenting how much it sucks that he can't extend a mandatory smoking ban to spouses of people that work for him.

Here's the problem for me. I think these employers are within their purview to enforce such plans. Medical costs for employees are a business expense for them, and just like they would try to save money anyplace else, why should the benefits program be off limits if there are savings to be made.

Curiously, they are able to make a societal change here that doctors, schools, insurers, or government can't. They are able to say "you must change." All the other mentioned bodies can't drop someone for poor behavior in any kind of a final way. Public institutions can't do that. Private ones can.

Naturally, the terminations have been litigated. It turns out that in most states it is completely legal behavior to fire someone over completely legal behavior. So not only is it good business sense, but it is also within the law. For the moment.

Because of course now that politicians have seen the problem, and since this is a great case for the little guy, there is talk about trying to make this kind of practice illegal. I have a better idea.

Let's divorce health insurance from work.

Why it seemed like a good idea to have health benefits at your job is beyond me. It leads to all kinds of privacy breaches. It makes people hate their employers when they otherwise love their jobs. It makes people that hate their jobs stay with their employers long after the thrill is gone. It places an undo stress on small businesses to provide an insurance plan - even when the owner of the business feels like the plan is trash - just to say they have a plan.

I recently heard a statistic that said that basically GM loses money on each vehicle it sells because of the amount of money they spend in employee health benefits.

Why are our employers involved in this at all?

Supposedly there is an advantage to creating large networks of patients to spread the costs and minimize the risks. But all things being equal, most companies are really joining federations of federations. Why not just let individual people join groups on their own. You know, like for homeowner's insurance, auto insurance, renter's insurance... Why is health insurance so different that we approach it in a totally different way?

For that matter, why is you employer the only entity that can aggregate stakeholders? I play frisbee, and belong to the Ultimate Players Association. Why can't they run a health plan? I am a professional theatre artisan and belong to the United States Institute of Theatre Technology. Why not have a plan there? We associate in many many ways that we could utilize for averaging health care costs (some might even say we could aggregate as a nation - perish the thought). Why are we passing this on to employers as a business expense?

Maybe it would make sense if the employer owned a hospital. When I worked at Yale, I was a member of the Yale Health Plan, and I went to a Yale Doctor at a Yale facility. Maybe that makes sense. But really, in situations where the employer is not in the doctor business, why do I want to count on them to make reasonable health decisions for me - especially within the context of their making reasonable business decisions for them (and by transference to me, because on at least some level what's good for the business ought to be good for the employees).

And really, what possible interest should my employer have in mucking around in my off the clock behavior? Do we want employers telling people they can skydive or scuba? How about getting fired for getting a speeding ticket?

This doesn't even begin to touch the idea that employers should do pre-hiring health screenings. Want to lose a chance at a job because your grandparents both had cancer?

This really is a better idea. Lets let employers take that individual premium and turn it into salary, and lets let people work on their own to shop for the best insurance. Let's moot this problem rather than regulating it.

4 comments:

Anonymous said...

I absolutely agree. I've always been at a loss as to why people expect the person they work for to subsidize their health care. Why should the fact that I pay you to stock the shelves in my store or type up my legal briefs or run the sound board in my theater obligate me to pay for your wife's pre-natal care? I'm not obligated to provide a car insurance plan for you, or a home insurance plan. Why health insurance?

Your idea to raise salaries by the cost of the premiums and let people shop around for their own insurance is a good one.

On a somewhat related topic, I also have had a problem with a lot of those "nanny-state" laws in the public sector that regulate my behavior "for my own good". Laws that force me to wear a seatbelt, for example. I always wear a seatbelt because I think it's a good idea but I don't think it's the government's place to protect me from myself. If I want to do something reckless, like ride a motorcycle without a helmet, that's my choice. When I vote for my representatives, I'm not voting for a governmental mother and I don't want them passing laws whose only purpose is to protect me from myself. I'ma grown adult and I'll make these decisions for myself, thank you very much.

The typical response is that the laws protect society because people who don't wear seatbelts burden everyone by burdening the health care system.

Well, where does this "invasion of personal autonomy for the good of society" method of regulation stop? Heart disease kills more people every year than car accidents by an order of magnitude. Should be outlaw fast food? Should the government be able to mandate an exercise program for every citizen backed up by fines and imprisonment for anyone who refuses to participate? Should the government be able to prescribe your diet through force of law for the good of society?

Most people who have no problem with seatbelt laws would say absolutely not when it comes to diet yet I haven't met one yet who can tell me what the conceptual difference is.

Anonymous said...

I agree as well, but on the down side of that, HOLY CRAP health insurance is REALLY REALLY EXPENSIVE!!!! i mean, before we do away with company plans, we should at least make it affordable. for example, in NY, it is illeagal to deny insurance due to anyone based on health or pre-existing conditions. ergo, its really costly. luckily, i guess, last year i was so poor, i got the insurance subsidized for poor people. this year, i've freelanced enough weeks (12) in a row that i qualify for freelance union i nsurance, but what if i worked at a small company and had to buy it myself? i checked, and with drugs, aetna (cheapest) was about 650 a month. thats more than my rent.... is that really right?? to pay more every month because i might get sick than my rent?

David said...

Sure, you're paying it now. You just don't see it because your employer does some of it gratis and some of it as a deduction.

What I am saying is that they should just give that money to you rather than invest it for you. They have absolutely no stake in the outcome and every reason to try to reduce costs. If they just paid it to you you could make those decisions as someone that actually cares about the care.

It would of course mean a ratching up of salaries, and I bet some of that money would be lost. And some of this is currently pretax, so the increase would have to be deductible. But those aren't epic challenges.

But the bottom line is, if insurance is more than rent, then thats what it costs. Why should we pretend otherwise by obfuscating the accounting?

Anonymous said...

Great blog I hope we can work to build a better health care system. Health insurance is a major aspect to many.