It seems like every day I get some new offers to help contain medical utilization and provide some new and previously unknown answer to dealing with healthcare costs. And after 50 years of working in employee benefits, I have seen a lot of these promises and “magic thinking”. But, over the 50 years, medical plan premiums have still gone from $30 to over $600 per person per month.
Let me start with what I call an economic truth. Money coming into any economic system must always be greater than money going out of the system. Simply said, medical insurance premiums must exceed claims.
And then there is the reality that medical claims come from people who get sick or injured. Injury is not typically the issue, but lifestyle illness is fixable and avoidable and until you can fix that, medical claims will continue to increase in severity and expense.
So, if your fancy new system cannot actually improve people’s health and deal with inherent human behavior, you cannot solve the problem with “Cost Containment!”