The Good News for Today; What We Work for: To Pay Our Health Insurance Premiums

The cost of health insurance in the United States climbed nearly twice as fast as wages in the first half of 2007, with family coverage costing employers around 1,000 dollars (714 euros) a month, a poll showed Wednesday.

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Actually, here is more:

There was a great line at this morning's Business and Health Care forum, attributed to Newt Gingrich, which went something like, "one man's $200 billion in waste is another man's $200 billion profit stream." That's about the most essential fact in health care politics there is.

Some other thought-provoking comments:

• "In this country, our biggest source of health costs are preventable, chronic diseases. 25 years ago, they were acute conditions." In other words, the bulk of our spending isn't in cardiac arrest, but in managing cardiac disease. That suggests a prevention and wellness directed approach to cost control, not to mention significantly more research into how to cost effectively manage chronic conditions.

• "We need plan designs that incentivize the right patient behaviors and disincentivize wrong behaviors. At Pitney-Bowes, we eliminated the costs of 'tier one' drugs for chronic conditions. The result was reductions in the rate of cost increase for diabetes, cardiovascular health, etc -- all because we made those drugs free!" This goes to my progressive cost-sharing argument, but there are quite a few treatments we know to be effective and cheap if followed. If we made it effective and cheap to follow them, it would lower costs and improve health.

• "Commodities that are very bad for you are heavily subsidized. Poor people thinking very rationally about how to maximize their food purchasing are purchasing foods that contribute to chronic conditions." Our subsidies go into corn, not organic fruit. So those most likely to take advantage of subsidized foods load up on corn. And then they get sick. And then we pay. On the bright side, this is very good for a very small number of very politically powerful corn farmers.

• "In the past, folks have asked if we really should have wellness plans, because well be spending money on employees who leave for other companies. The hope, now, is that enough other companies will do this that we'll benefit from their programs and they'll benefit from ours." This is what you'd call a collective action problem: If every company will invest in wellness, they'll all save money. But on your own, it doesn't make sense to pump money ensuring a healthy middle age for young workers who will leave your firm.