Invest in Your Health

In 1962, economist Selma Mushkin discussed the additions to our economy by investments in health.  She discussed the effect of a reduction in the death rate on the rate of economic growth from advances in healthcare.  Fast forward to today.  The United States spends more than any other developed country on healthcare, however life expectancy at birth is 2 to 3 years lower.  Any other investments that we make, we look at the dividend paid or the final yield and wonder are we better off than where we began. Why don’t we look at our investments in healthcare?

Healthcare further complicates itself as a business. There is a third party in most of the transactions and contracts.  The third party in this transaction is your health insurance.  They negotiate rates with the employer, or more often tell the employer what they’ll pay.  Then the insurance company will negotiate rates with the health care organization that has the supply. 

Being able to change insurance companies every year, means that insurance companies see no high value investments in your health.  In their eyes, they may see an investment they make in your long term health could mean that their competitor will receive the dividend.  As patients regularly change payers, any individual third party payer has less incentive to commit to any expensive, high value treatment, as the result may mean their competition will reap the reward.  I don’t blame them for this. Often Medicaid programs and sometimes small insurers will say that short term budget constraints keep them from paying for high value therapies.  

Hospital costs are up, healthcare administration costs are up, diagnostic costs are up, pharmaceutical costs are up, and insurance companies have less incentive to control long term costs and make you healthy.  Some people have even said this was a large driver of the opioid crisis.  For example, third party payers would pay for an opioid prescription in lieu of physical therapy for an injured patient, because the negotiated rate on the 30 day supply of an opioid was much cheaper than 6 weeks of physical therapy, though PT may have been the answer.  We’ve seen multiple pieces of legislation across the country addressing this very issue.

So, the question I get asked the most about is “Is single payer the right strategy for our country?”.  People have very strong views about healthcare.  I recall working in the Governor’s office when the Affordable Care Act was passed.  We had people calling in droves to the switch board telling us to keep our government hands out of their Medicare.  They didn’t understand that Medicare is government healthcare and the Governor had little control over it.  The bottom line is, no matter what the democrats tend to trot out, I see neither an economic model, nor a political environment where that will work.  Further, we have gone down this road for so long, I can’t imagine the federal government destroying entire companies to replace them with a federalized healthcare system similar to European models.  

The next step in healthcare reforms will be focusing on value based healthcare and perhaps eventually capitation in health plans. Third party payers are going to do everything possible to limit their share of the risk involved in healthcare. The best advice anyone can get from this is to take care of his or her own health. Its the only way you can guarantee some modicum of lower healthcare costs in the near future.

Published by Danny Scalise

Danny Franklin Scalise, II is the Executive Director and Chief Lobbyist of the West Virginia State Medical Association and its subsidiary organizations as well as a professor of Health Policy at the West Virginia University School of Public Health. He is considered one of the leading health policy experts in West Virginia and is a passionate advocate for public health. Scalise has been a public policy adviser to two Governors. He is well known across West Virginia as a problem solver and a great student of West Virginia politics & the legislative process. As part of the Manchin administration, Danny was the Recovery Czar in West Virginia managing $1.8 billion in grants and entitlement funds from the American Recovery and Reinvestment Act of 2009.
 Danny earned his Bachelor of Science degree in Business Management from West Virginia University Institute of Technology in 2002, his Master of Business Administration from West Virginia University in 2005, and his Master of Public Health degree in Health Policy in 2018. In 2016 he became Certified in Public Health by the National Board of Public Health Examiners. He has been published on and regularly speaks on issues of public health, health policy, and local health department governance & organizational structure. Danny sits on the Board of Directors for the Thomas Health System in South Charleston, WV and in 2019 Mayor Amy Shuler Goodwin appointed him to serve on the Kanawha-Charleston Board of Health which governs the largest and first PHAB Accredited Health Department in West Virginia. 
 
 Danny has been recognized by Opportunity Nation in 2013 as part of their national Opportunity Leaders & Scholars program and was awarded the “Health Administration Rising Star” by the American Public Health Association in 2016. He is a 2012 Leadership West Virginia graduate, was on the State Journal’s 2016 Generation Next: 40 under 40 list, was named a 2019 Young Gun by West Virginia Executive Magazine, and was given the 2019 Advocacy Award by the West Virginia Immunization Network for his work to protect West Virginia’s childhood immunization laws. Since joining in 2007, Danny has been an active participant in Mensa.
 
 


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