by Martin Harris
Some years back I designed a bumper sticker with a picture of the AFLAC anas platyryncvhos white-feathered mascot and a text “The Second Amendment-It’s Not Just about Duck Hunting”. The NRA wasn’t interested, apparently unwilling to be associated with any Thomas Jefferson “tree of liberty” concepts. But the phrase structure has some transfer value: consider, for example, the current malaise (excuse the semi-pun noun choice) about government health care plans and the unpublicized (and quite unique) program of one of the nation’s larger supermarket chains to provide health insurance for its employees. It’s called The Safeway Plan, and it’s partially based on the politically-incorrect notion of individuals being held at least somewhat fiscally responsible for the personal-health consequences of the behavioral choices they embrace. Because the conventional wisdom is biased in a far more collectivist direction -the “community rating” system, whereby everyone pays the same health insurance costs, irrespective of how prudently (or not) he/she/? conducts his/her/?’s own affairs (pun intended) Safeway is far better recognized for its niche at the retail end of the farm-to-consumer food chain than for its remarkable foray into rewarding personal responsibility in a time when political correctness calls for just the opposite. Reminder: Safeway isn’t just about groceries.
Historically, the supposedly unique Safeway Plan -insurance premiums vary according to risk assessment-is actually more the norm than “community rating”. From the venerable Lloyds of London, insuring merchant ships in accordance with their owners’ choice of cargo value and trade routes, to domestic fire insurance, higher where street hydrants and building sprinklers are absent, lower where owners have chosen site location and building design to include them, to auto insurance, where drivers who rack up their cars and claims are charged more than those who don’t, statistically-based risk assessment has always been the usual practice, and “community rating” a newer, Left-leaning anti-individualism ideologically driven, concept. Contrast that to the Safeway statistically-driven principle.
It’s based on two “insights”, said CEO Steven Burd for attribution in a 2009 Wall Street Journal interview. “The first is that 70% of all health care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardio-vascular disease, cancer, diabetes, and obesity). Furthermore, 80% of cardio-vascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable”. He goes on to explain that “…Safeway has done nothing more than to borrow from the well-tested automobile insurance model”. I might add that the automobile insurance model doesn’t countenance delaying insurance purchase until after a pre-existing condition has been created, and then demanding free or low-cost coverage on compassionate grounds.
I don’t have the column-inches here to review the multiple problems in all the state or federal programs in place (or proposed) to service everyone by insuring everyone – an excellent summary requiring nearly a half-page of print is in the 31 March Wall Street Journal– but its header includes two words that say it all: “…Containing Costs…” Not re-allocating costs to different sets of taxpayers who can’t refuse but can politically object, or to different sets of providers who can (and do) refuse to service some sets of customers, or to quit entirely, or to set up fictitious budgets and try to hide the ensuing deficits. I can note that TennCare tried (and pretty much failed) to contain costs, and ShumlinCare seems to avoid the subject, although it offers one Medical Care Organization (TennCare has a dozen) with some sort of gate-keeping function. Neither comes close to touching the political third-rail of the Safeway Plan, even though it’s the only one that offers the only route to real cost-containment. It isn’t the SP formula which enrages the Politically-Correct; who could object to incentives for healthier behaviors? And it isn’t the above-average-health-wise constituency which the SP plan services; because they’re all SP employees, they’re all in the work force, holding down jobs, contributing to national productivity, raising families and paying taxes, statistically a far healthier group and one less expensive to service than those who aren’t. The statistical exemplar for the unavoidable correlation among and between such indicators comes from the data of the Bureau of Indian Affairs, which reports that its client population has the highest unemployment rate in the nation and the shortest life-span. And there’s the political third-rail: the unpleasant but unavoidable statistics showing that lower-income identity groups always have higher health-care costs, and that they also display higher frequencies of health-negative behaviors, from obesity to substance-abuse, than the higher-income identity groups. Not to mention that in most cases (you, reader, can identify the major obvious exception) the lower-income identity groups are also of demographic minority status.
Consider, for example, the stats underlying TennCare’s problems in TN and ShumlinCare’s problems in VT. The latter is 96% white, has a Median Household Income of $52,000, and a poverty rate of 10%. The former is 80% white, has a MHI of $44,000, and a poverty rate of 16%. It’s interesting that the percent-in-welfare state rankings aren’t all that different -VT #5 and TN #4 in the nation, both at a fraction over 2%, for reasons subject to the usual speculations— but the obesity rates tell the tale : VT at 23%, T at 32%. Most obese State is MS, least is CO. And the diabetes stats report the expected: VT, under 7%, TN over 11%. Out of cowardice I won’t correlate with minority percentages here. As the Safeway Plan recognizes, and both TennCare and ShumlinCare don’t, rewarding your customer base to go non-obese can save a lot of money. Even so, the above stats suggest that VT should be spending less, per capita, on health care than TN It isn’t. More next week.