"Please, sir, may I have some more?"
When Oliver Twist pleaded this, he presaged a deafening chorus of echoes that would resound across the Atlantic 185 years later. The modern-day Twist, however, is that Americans are not asking for more food, but for more medical care.

It has always been logical to realize that health insurance is expensive because health care is expensive. Health insurance gets even more expensive when we want it to cover an expanded list of medical treatments, or even cosmetic treatments. It gets ruinously expensive when we continue to increase how often we get medical treatments. Compound this across our 330-million-strong population, all of whom are getting older (and not necessarily living longer, anymore), and "we ain't seen nuthin yet!"

Key trends driving cost increases

• The aging population. The fastest growing age group (in percentage terms) is 85+; the second fastest is 65+. As we get older we typically consume more medical care - often lots more. The average annual cost incurred by Medicare for a typical 85-year-old can be triple that of a 65-year-old.

• Cost shifting. With the typical low birth rate of developed countries, America's working population will shrink relative to Medicare-eligibles. With Medicare's famously low reimbursement rates, medical practitioners and facilities will continue to seek recoupment of Medicare operating losses from insured/working patients, which will continue to hit company-sponsored health plans increasingly hard.

• Price + utilization = cost. The ongoing three-card monte game of billed vs. allowable charges will continue to confound everyone's ability to understand what should be one of the simplest components of health care costs: price.

The emphasis of the BUCAs and others on the percentage "discounts" they negotiate with providers are - in our opinion - nigh-on meaningless - X% off WHAT? The billable charge is a complete fiction. Nonetheless, the other component of cost - and one that we all have been roundly "sub-successful" at addressing - is utilization. People are as "sick" as they are - the more treatment people need, the higher the costs to employers.

This is compounded by the ongoing failure of virtually every type of cost mitigation program (wellness, disease management, point solutions, cost & quality transparency, etc.) to engage a sufficient number of employees and dependents to impact avoidable utilization enough actually to achieve the aspirational goal of all such programs - reduced costs.

• Technology and pharma - new machines and new drugs cost a lot, and the demand for the "latest and greatest" continues unabated. I won't even delve into my deep offense at the outrageous cost impact of DTC advertising by pharmaceutical companies.

Suffice it to say, when that prohibition got lifted in the late 90s, Rx costs began their intrepid upward spiral - which remains effectively unmitigated to this day! The U.S. and New Zealand are the only 2 countries in the world that allow this.

Tech proponents, conversely, point out that the newest means often reduce the higher costs associated with older modalities. While this tends to be true - over time - it's usually preceded by higher costs to offset the development costs of the new modalities.

• Stress and obesity - many would infer a correlation between these two, as overeating is often a narcoticized response to mental and emotional stress, and Americans are definitely stressed. Obesity is now recognized for tax purposes as a medical condition; how long before Stress is accorded that status?

Demand is the primary modifiable trend factor
The insurance industry - just like the general populace - can do nothing about our aging demographic. We can (effectively) do nothing about Medicare reimbursement rates. We can do very little about technology companies developing new machines, and pharmaceutical companies developing new drugs.

So, how then do we address demand? "Consumer-Driven" plans attempt to do so from the financial flank, wellness seeks to address the lifestyle flank, and disease management and point solutions target the clinical flank. All 3 approaches will continue to increase their market presence, howsoever incrementally that market positioning may occur. Still, after 15+ years of concerted efforts in these directions, confirmative evidence for their success remains sparse. Yet, we clearly cannot afford to give up on the pursuit of Well-Being, Self-Care and Personal Responsibility.

More treatment ≠ more health
“More” health is a good thing, but we’ve established an American culture – from which business culture naturally ensues – that seems to believe that more health comes from more medical & pharmaceutical treatment. It doesn't take a genius to look at the general state of Americans' health and conclude, "it simply ain't so."

Almost 30 years ago, the late journalist Lynn Payer wrote a book titled Disease-Mongers, in which she described the confluence of interests of doctors, drug companies and media in exaggerating the severity of illness and the ability of drugs to “cure” them. “Since disease is such a fluid and political concept, the providers can essentially create their own demand by broadening the definition of diseases in such a way as to include the greatest number of people, and by spinning out new diseases,” she wrote.

The last word
"The Demand For More" must be tempered. Companies have much to gain, and little to lose, by engaging their workforces in making better choices that require less not more medical treatment. It’s not an overnight change, but reversing a trend requires first that we stop going in the wrong direction.

~ Mark Head
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Aspirations
"As long as you keep a person down, some part of you has to be down there to hold them down, so it means you cannot soar as you otherwise might."

~ Marian Anderson

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