4 ways to cut the rising healthcare cost

by Jothi Nedungadi

It is an almost inevitable discussion point these days after perhaps, politics and the Iraq war. We are, in one way or another affected by healthcare and the rising cost of healthcare. According to recent statistics, it is rising faster than the rate of inflation. Where once, not too long ago, having a job was a guarantee that you would have good or reasonable medical coverage, now employers are re-evaluating this very basic benefit (that we are accustomed to) and reviewing ways to cut costs while placing the onus on employees to become better consumers. Where is all of this leading us?

There are many of us who have asked these questions: “Why can’t I be offered insurance at a reduced rate?”, “How difficult would it be for the government to step in and offer universal health insurance/socialized medicine”? “What would it take for the insurance providers to offer a better deal?” But looking at the current state of our healthcare system, you will quickly realize what the consequences of implementing these often asked questions would be. It is a M-O-N-U-M-E-N-T-A-L task! But nonetheless, it needs to be undertaken and, effective solutions sought.

Just for an instance let’s consider universal health insurance. What would that entail and how would it affect us? In my opinion, we would, essentially be paying for others who may be less conscientious about their healthcare and since insurance is all about risk pooling, we would have to pay into a pool along with others that do not have much regard for their healthcare! Now, that does not seem like a good alternative for being a good consumer and being more conscientious about our respective healthcare if others did not put in their fair share and took on their responsibilities seriously as well, would it?

To put things in perspective, it is important to note that healthcare, as an employee benefit was instituted after WWII as a result of a cap on wages! (yes, for those of you who were not aware, healthcare as a benefit to employees was offered to compensate for the loss in wages after WWII). It was a definite perk to entice employees to potential jobs. There is no cap on wages now, but the benefit has outlasted its purpose and employers are at a cross-roads on how to maintain that benefit without placing the burden on their employees.

We, as a society have accepted paying for home insurance, auto insurance and life insurance without much reluctance or hesitation, so why not health insurance?

We are accountable for our lives, our health, our families and anything else that we value. It doesn’t look like the health insurance issue is going to be resolved overnight. So, we as consumers have to make better choices? There are 4 key areas where we can make a difference with our choices.

• Lifestyle change

A healthy lifestyle is one of the best ways to begin while you are evaluating your other options. It may seem simplistic at the outset but it is the least intrusive option. Increasing awareness of the foods you consume, your general health and exercising regularly helps with leading a healthy lifestyle. It can be time consuming initially, but it has a long term payoff. Companies and individuals who have taken this path to healthful realization have come away with positive results and a better attitude towards their health. They have taken the initial step to self awareness and personal health accountability.

• An Accomodating Health Plan

As suggested earlier, a recent study indicated that healthcare costs are rising at a higher rate than inflation. That is an alarming statistic. Premiums are rising and the coverage benefits are decreasing. A lower premium for a higher deductible plan may be just what some consumers need in order to feel like the money that they/their employers are contributing towards their health benefit is not going down the drain. This option can be valuable if consumers fully understand the implications of setting up a High Deductible Health Plan (HDHP)/Health Savings Account (HSA) and how to utilize it effectively. It also can be a savings vehicle for the consumer that can manage their healthcare and is in relatively good health. The contributions can be used for any qualified medical expensewhile being held in a tax-sheltered, HSA account. The money in the account can be rolled from year to year and invested, without any tax implications. The funds can be made available to the account holder, tax-free after age 65. And with each passing year since the inception of the HSA, the maximum that can be contributed to the account, for a familyor an individualhas been increasing. This account does require a consumer to manage the funds and be accountable for how the money is spent for medical purposes.

• Outsourcing Medical Procedures

While this may not be an option for everyone, it is still an option worth considering for those who have done some basic research on the charges that they would incur if they were to handle a procedure in certain healthcare systems. With the rising costs associated with any medical procedure in the US, consumers are looking at less expensive options outside the borders (medical travel/medical tourism). There are several successful overseas institutions (in India, Malaysia, Singapore, Thailand, Philippines, Brazil just to name a few) that are providing high quality services at a third or fourth of the cost along with a substantially longer respite and recovery, post surgery. There are risks associated with handling the procedure in another country but it is no different from the ones that we face here in the US. Being well-informed and planful can eliminate some of the anxiety, stress and problems associated with such services. It may also be advisable to consult with your current medical insurance provider to see if any of the charges would apply to your out-of-network coverage. A few insurance companies have also taken the additional step of providing their services in those countries. Therefore, it would be in the consumer’s best interest to conduct their due diligence prior to arranging for any medical procedure regardless of location.

• Online pharmacies

For those who are riddled with on-going expenses for medications. There are online options available to purchase medications. In late 1999, the National Association of Boards of Pharmacy(NABP) unveiled its Verified Internet Pharmacy Practice Sites(VIPPS) program, which provides consumers valuable information about the credentials of online pharmacies. There are pharmaceutical companies that also offer assistance/subsidies to consumers based on circumstances. It requires a little time and effort to research this information and make an informed decision.

From all accounts, it does seem like we can ease the healthcare cost burden and these are just a few options to consider while the discussions regarding our healthcare continues at many levels. It is important to note that we are ultimately responsible for all of the choices that we make. In that respect, healthcare is no different. The bottomline is that, we have to be better consumers and be well-informed of the choices that are available to us in order to make the right decisions.

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