Pay Me to Stay Healthy

An interesting story showed up recently on the web page of an Omaha TV news station, KETV. The story noted that there is a bill, now in the Ways and Means Committee, that would allow people to set aside money in their health savings accounts (HSAs) or flexible savings accounts (FSAs) to use toward fitness programs and fitness equipment.

While the piece did not mention the bill by name or number, I suspect that they were referring to the Personal Health Investment Today (PHIT) Bill (H.R. 245) which was introduced in January by Gerald (Jerry) Weller, (R, IL) and would amend the Internal Revenue Code of 1986 to treat certain amounts paid for exercise equipment and physical fitness programs as amounts paid for medical care.

In other words we could use our HSA’s and FSAs as mechanisms to pay for health clubs and fitness equipment with pre-tax dollars just like we can use these funds to pay for IRS-approved medical expenses today.

It really is a novel idea that we would pay to help people stay healthy rather than to just spend money once they get sick.

It is no surprise that the International Health, Racquet & Sports club Association (IHRSA) a non-profit trade association representing health and fitness facilities, gyms, spas, sports clubs, and suppliers worldwide has come out in support of the proposal. In an news release published in April of this year, the IHRSA said that H.R. 245 “takes a giant step toward a healthier America.”

The group went on to note that by allowing for exercise and physical fitness programs and certain exercise equipment to be paid for out of pre-tax dollars, PHIT will help provide the level of support many Americans need to be able to adopt healthier lifestyles and become more physically active.

The IHRSA press release cites the Centers for Disease Control and Prevention, saying that people who participate in moderate-intensity or vigorous-intensity physical activity
on a regular basis lower their risk of coronary heart disease, stroke, non-insulin- dependent (type 2) diabetes mellitus, high blood pressure, and colon cancer. Yet, more than 50 percent of American adults don’t get enough physical activity to provide health benefits. And a startling 30 percent — more than 60 million people 20 years and older — are obese.

Its is certainly worth giving this idea a shot. Unfortunately, the bill has not gotten much traction in Congress (currently eight co-sponsors), nor has it received much publicity. No doubt it will die in the House Ways and Means Committee as did its 2006 predecessor H. R. 5479. What a shame.

Humana Website is a Wiki for Healthcare Reform

It was just in my last post that I mentioned Humana for their innovative cell phone technology designed to help people lose weight, but again this week Humana has hit the innovation radar with an announcement about the launch of a new website designed to get people communicating about ways to improve the quality and efficiency of the health care system and decrease the cost.

It really is a neat Web 2.0 (or is that Health 2.0) kind of idea. Create an online forum where all the stakeholders: individuals, employers, providers, and health plans can post ideas for improving the health care system. (Note that the site has not assigned the government a role in helping to solve this problem.) The website is called ChangeNow4Health and describes itself as being “a broad, grassroots coalition committed to improving the nation’s health care system through immediate action.” This “web-based coalition” is built on the social networking idea of communities of members who will address specific areas of improvement though blogs and online posts.

Acting as a sort of wiki for health care reform, ChangeNow4Health is intended to create the work space for interested parties to join and help create the solutions and the ultimate direction of the campaign. The concept is that site members will join “communities” where they can learn from each other and be part of coming up with what the site calls “realistic solutions” to the nation’s health care crisis.

Initially, the communities will focus on three areas of interest:

  1. Helping Consumers Make Smarter Health Care Decisions – Ensuring that consumers have the tools, the information, and the desire to take responsibility for their own health and to use health care resources wisely.
  2. Simplifying the Business of Health Care – Streamlining health care’s administrative and financial functions so that the system works more cost-effectively.
  3. Preventing Sickness and Maintaining Health – Changing individual behavior and clinical practice so that the system more effectively prevents disease from ruining health and prosperity.

Each of these three communities offers registered members the chance to post ideas and to comment on blogs posted for group. There is also a chance from everyone to participate in the writing of a book entitled “50 Ideas for Changing Health Today,” by posting ideas.

In addition to the user-generated site content, ChangeNow4Health has news feeds and articles describing some of the issues facing the health care system as well as examples of success stories.

I have participated in past efforts to bring together the stakeholders to solve the health care crisis. Most of these well-intentioned efforts have failed because they just required too much time and effort on the part of the participants who had to give up their day-to-day business to attend meetings. Maybe a web-based forum will have the ability to overcome some of these barriers and produce some real solutions. At any rate, give Mike McCallister and his team at Humana credit for trying something new.

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Call Me When It’s Time to Eat

I wrote last week in this blog about the somewhat curious health plan innovation offered up by the Pittsburgh-based health plan Highmark. You may remember that Highmark announced that it was using pre-paid card technology to sell health care gift cards to be used for everything from Lasik surgery to making co-pays.

This week Humana announced an innovation that struck me as a little off the wall even though I had been aware of this venture for a couple of years now. Sensei Inc., a joint venture between Humana Inc. and Card Guard AG, introduced a new health and weight management program that uses cell phones as personal coaches. The program, called “Sensei for Weight Loss,” currently is available to Sprint and AT&T customers.

According to a story in the Louisville Business Journal, users go online to enter personal information such as desired weight, food preferences, meal times and exercise routines, and the program generates a customized nutrition and fitness plan. Throughout the day, the program delivers messages to the user’s cell phone, such as weekly shopping lists, meal recommendations and motivational tips. The program also records the user’s eating choices and fitness activities and tracks progress toward goals.

I personally am not sure that I want that close of a relationship with my cell phone, but for people who need and want this type of monitoring, Sensei for Weight Loss could have an impact on health care costs.

Consider that a Congressional Budget Office (CBO) report outlining projections for long-term health care spending and reviewing the factors that contribute to growth in spending was also released last week. The report projects that, in the absence of changes in federal law, total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.

The report discussed two potential approaches to reducing health care spending: (1) generating more information about the relative effectiveness of medical treatments; and (2) changing the incentives for providers and consumers in the supply and demand of health care. CBO noted that some analysts have advocated significant expansions of disease management and care coordination as mechanisms for reducing costs.

With those sobering facts in mind, maybe a cell phone that monitors and promotes healthy behaviors is not so far fetched. In deed, it might be exactly what the doctor ordered.

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HSA Welcome Kit is “Best in Class”

Health care innovation can take many forms. Sometimes it is a new health plan design, other times it is a way to create more transparency in pricing, but occasionally it comes in the form of repackaging something as mundane as the Welcome Kit.

That is exactly what First Horizon Msaver, the Health Savings Account administrator, did when it sought to improve on the pile of paper that most companies send out to new customers. In fact, The Consumer Driven Market Report (CDMR) has recently named First Horizon Msaver as this year’s best in class for the Best HSA Welcome Kit.

The publication noted that much of the information currently provided to new Health Savings Account (HSA) users is “confusing and unnecessarily complex,” but cited the First Horizon solution, an attractive CD, as being the best in class example of what a Welcome Kit should be.

According to the CDMR, “The cover of the CD contains reassuring, basic useful HSA information, while the CD itself gives all the details.”

E. Craig Keohan, president of First Horizon Msaver said that the CD Welcome Kit was developed over a year ago as a means to provide essential information in an interactive, easy to understand and convenient format. “Since we began providing new HSA account holders the choice between the CD Welcome Kit and a paper version, our customers have overwhelmingly opted for the interactive CD,” Keohan said.

If it saves paper and makes understanding who to use HSAs easier for new account holders, it qualifies as a Health Plan Innovation.

Highmark Issues Health Care Gift Card

I can’t let the week go by without commenting on the story that appeared Monday in The Wall Street Journal about the Pittsburgh-based health plan, Highmark, announcing that it is selling a Healthcare Visa Gift Card. That’s right, a gift card like the ones you buy at the appliance giant Best Buy or at your favorite book store, only this one is to pay for health care. Very interesting.

According to the article, the card will be restricted to certain merchant codes so that they can only be used at medical providers or merchants that Visa categorizes as health related, including physician’s offices, pharmacies and health clubs. At least for now the cards aren’t available at grocery or retail stores — they can only be purchased online or by calling a toll-free number.

Who will buy these cards loaded with $25 to $5,000? Highmark believes that the card will fill the needs of many people who want to help others — from college students to baby boomers — with various expensive health-related needs. They expect to sell “several hundred thousand” gift cards, mostly between $75 and $100 over the next year.

Having spent two days last week at the Visa Prepaid Card Forum in San Francisco, I am a big fan of using the latest prepaid and debit card technology to make paying for healthcare easier. Over the next few years, millions of these cards will be issued to make using Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Health Spending Accounts (HSAs) more convenient for consumers.

New IRS regulations requiring retailers who want to participate in this huge market to maintain a special inventory system to flag eligible expenses will take the guesswork out of using account based plans. It will also reduce the need for consumers to file claims or send receipts to their plan administrator to prove the card was used appropriately.

But, a healthcare gift card? I am not sure. It strikes me that Highmark is doing this because they can, not because there is a pressing consumer need for such a stored value card. However, it is innovation and worthy of taking note.

Health Savings Account Basics

Open enrollment time is upon us and many employers this year are offering health plans that include the option of opening a Health Savings Account (HSA). Find out how an HSA can benefit you.

Yes, we are expensive, but we do poor work.

A news story carried by Reuters on Thursday led with a summary of findings from a new report stating that Americans spend double what people in other industrialized countries do on health care, but they have more trouble seeing doctors, are the victims of more errors and go without treatment more often.

This appears to be another twist on the expression, “Yes, we are expensive, but we do poor work.” In any other context we would have a little laugh at that idea, but would never acknowledge that we were so careless with our own money that we would actually hire anyone who subscribed to such a motto – at least not for long.

What if your plumber, auto mechanic, or dry cleaner posted a sign that read:

Yes, we are expensive, but we do poor work.”

How long would it take you to find a new one? Not very long, I trust, as we are all careful with our hard-earned money. We would not long tolerate a mechanic with whom it was difficult to get an appointment and who made frequent errors. But now we find out that we Americans each spent $6,697 on healthcare in 2005 — a whopping 16 percent of gross domestic product — at a merchant that had that sign posted in the back room if not in the front window. What were we thinking?

Let me point out right now, that I am not blaming health care providers. Health care is the United States is the most responsive and dynamic in the world. Higher prices enable the system to cater to patient desires for convenience and innovation and as a result our system excels in treatment of some specific diseases, such as breast and prostrate cancer.

I am not blaming insurance carriers either. They have been struggling for decades to come up with plans that employers can afford and that employees will find acceptable. Meaning that they feature low out-of-pocket costs and a fair amount to freedom to seek care when and how we choose.

I am sticking the blame on the government. Yes, the government that started this crazy system that grew out of World War II wage freezes.  Crazy is a system where we have to depend on our employers to provide us with medical coverage. Of course at first, we patients were part of the process. We were sensitive to the overall cost of health care and found the insurance to be a financial lifesaver when something unpredictable and serious happened to us or a family member.

By the late seventies it was necessary for employers to make the first real push to control what was becoming out of control spending. The answer was managed care. The promise was lower costs for employers and convenient co-pays for the employee instead of a percentage of the total bill. The tradeoff was that we had to go though a primary care physician who “managed” our care including our visits to specialists and stays in the hospital. We hated it.

So what happened? The employers and insurance carriers said, “Ok, you can go see anyone you want, any time you want and still pay a co-pay as long you stay in the network.” Fine, we can do that. But the costs started mounting again. Why? Because we all now believe that doctor visits cost $20 and all prescription drugs are $10, Of course the real cost is much more, but how would we know? We as consumers have been insulated from the real cost of health care because the insurers and the providers have negotiated the prices and let us in on the true cost only after the fact. This should be enough to prove that negotiations at a corporate or government level can not solve the problem.

It takes the everyday negotiations of the marketplace to really have an impact. Mechanics and dry cleaners who are expensive and do poor work are soon adjusting their business models, or they are closing their doors. It is time we apply the same logic to our health care system.