On Friday there was an opinion piece in the Wall Street Journal by Steven Burd, the CEO of Safeway. In it he declares:
While comprehensive health-care reform needs to address a number of other key issues, we believe that personal responsibility and financial incentives are the path to a healthier America.
It is not only refreshing to see that some business leaders think outside the box on health-care issues but it is especially refreshing to see that Mr. Burd’s thinking outside the box involved a free-market approach to finding answers. In a free market you can’t remain static for very long or your likely to lose money and Burd suggested:
As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year.
I have pondered something like this for a while and I am sure I am not the only citizen of the United States to do so. The comparison to, even the modeling after, the automobile insurance industry is also something that I discussed with my dentist father-in-law a few years ago. What would it take to insure people in a manner that encouraged personal responsibility via healthy habits and rewarded that behavior accordingly?
Without having researched the obstacles to such reform, it seems to me that there is one big (generic) problem to implementing a health care reform like this plan (that has kept Safeway’s health insurance costs from rising over the last four years while the rest of the country has had an average of a 38% increase in costs): Government.
Government “meddling” in the health-care world via Medicare and Medicaid has distorted the ability of real reform-minded individuals and companies from making any inroads to meaningful changes. When you insure a large group of the population free of charge (to the insured, at least) via Medicare and you artificially set reimbursement rates to providers that are below market value then you have a system that cannot sustain itself (where are my “sustainable lifestyle” peeps now?). As more people join the rolls of the “no-cost-to-the-individual” insurance of Medicare, the health-care providers are either forced to accept those patients at lower reimbursement rates or dump them all because there is no financial incentive to provide care for them.
It has been my experience that government regulation, and not the “evil” insurance companies, are to blame for most of the problems and waste found in the health-care industry. Insurance companies have a host of factors to look at when they insure an individual and his family, but it appears to this average consumer that it is the factor of government regulation that causes the most problems for the company. Of course, the insurance company is left holding the ball when all is said and done so it usually appears to the insured that their insurance company is the one that raked them over the coals.
I may not have all the answers to a workable health-care solution, but I can at least identify the problem. End government interference in health-care and let the power of the individuals operating in a free market begin to find a genuine solution.