Harvard faculty miss the point of health care reform

On Jan. 5, The New York Times ran an article about the anguished outcry of Harvard University’s faculty over the imposition of copays and deductibles for their health care coverage. Even with these changes, coverage for Harvard’s employees remains significantly richer than that typically in the marketplace.
Leave aside pure self-interest (no one really wants to pay more out of pocket), the Harvard faculty is just plain wrong, failing to see the bigger picture. This illustrates how, when faced with obligations to take personal responsibility for making good health care choices, most people react emotionally and thoughtlessly.
How will we be incented to do better here if there is no financial consequence?
The faculty’s response demonstrates a head-in-the-sand approach to one of the most important issues in health care – our personal responsibilities to access health care responsibly and to take appropriate care of ourselves.
Historically, before high deductibles and copays became the norm, many consumed health care indiscriminately with little regard for cost. It simply didn’t matter to them, especially under plans such as Harvard’s which, once employees paid upfront shares annually, there was little disincentive to spending irresponsibly.
Under the old model, the sky was the limit. It was equivalent to paying an admission fee, and then having the run of a high-end clothing store to take whatever one needed or wanted, without charge. Who wouldn’t select the most expensive options, and lots of them?
Evidence shows that’s exactly what happened, and it played a direct role in today’s out-of-control health care costs. This explains why Harvard’s own professor David M. Cutler (correctly) suggested to the Obama campaign in 2008 that having some financial skin in the game could encourage employees and their families to become more discerning health care shoppers.
Yet, despite a recent slowing of the yearly increase of our national health care expenditures, we’re still spending multiples of what we should in exchange for relatively poor quality care and outcomes.
Moreover, according to Don Berwick, former head of the Centers for Medicare and Medicaid Services, waste (i.e., unnecessary, erroneous, duplicative and lost services) accounts for upwards of 25 percent of our total health care spend.
Another MRI? Sure. Can’t find the test results? Do another. No cost to the patient.
This is about wasted money that could be better spent. Every million dollars Harvard saves under the new program can mitigate the need for other cost increases, such as tuition, which like health insurance premiums, have skyrocketed and become relatively unaffordable over the past three decades.
To call this “taxing the sick” (which was a quote from a faculty member) cartoonizes the matter. Of course we aren’t talking about healthy people who rarely access/purchase health care, but the 5 percent of the population that accounts for 55 percent of our national health care spend. And because only those in need use health care, the idea is to incent those users (who may well be sick) to shop for and consume health care more discriminately.
Rather than taxing the sick, this amounts to incenting (and one would hope, giving the tools to) those in need to access the system more responsibly. Because Harvard caps annual out-of-pocket expenses and also has a program “to provide protection against high out-of-pocket costs for employees earning $95,000 a year or less,” there’s less chance that families of limited means will be devastated or scrimp on needed health care.
One might ask why employees who responsibly access health care should be charged these copays and deductibles? Because it’s not about individuals here – this is a mechanism to incent everyone – applied equally.
And for those who prudently access health care and take good care of themselves, there can and should be corresponding wellness program rewards paid by the employer. Incentives may be positive as well as negative.
To mitigate unsustainable health care cost increases, we must be disruptive. Half measures and nibbling around the fringes will not do. It’s time for everyone, including Harvard faculty, to accept programs designed to change everyone’s behavior despite some short-term discomfort. •


Jim Purcell served as chief operating officer and CEO of Blue Cross & Blue Shield of Rhode Island for 11 years.

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