Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Here’s the Proven Model That Could Save Health Care and the US Economy

Politics / Healthcare Sector Nov 04, 2016 - 07:03 PM GMT

By: John_Mauldin

Politics

Millions of Americans are learning just how much their Obamacare premiums will be next year. But even if you have health coverage through your employer—or you’re 65+ and on Medicare, like me—you’re going to see severe inflation in the healthcare part of your budget.

But there’s a possible solution to the healthcare problem. The Cleveland Clinic has achieved remarkable results with its 100,000+ employees and dependents. They are making people healthier and reducing medical costs. And it’s a model that I think could work on a much broader scale.


The success of the Cleveland Clinic model

Cleveland Clinic CEO Toby Cosgrove turned his own workforce into a test case back in 2010. He wanted to help people avoid the six key conditions (high blood pressure, high cholesterol, excess weight, diabetes, asthma, and tobacco use) that cause most of our health issues. His idea was to provide workers an incentive to get healthier: lower insurance rates.

Cleveland Clinic workers who opt to take part in the Healthy Choice program see a practitioner who monitors weight, cholesterol, etc. and offers help to improve health. Those who meet their goals or make progress toward them can save 28% or more on their health insurance premiums.

Since 2010, almost two-thirds of those with one or more of the six key conditions managed to get them under control. And the vast majority have kept it that way. The incentive system and aggressive monitoring have succeeded in changing people’s behavior patterns.

The Cleveland Clinic’s CFO was skeptical at first—as it cost hard dollars—but he’s now a believer. After the Clinic slowed the rise in its healthcare costs, actual healthcare outlays flatlined for a few years. Last year, they fell 2%.

The Cleveland Clinic is now helping other companies develop similar programs, like cement company LafargeHolcim. Since implementing their wellness program, they’ve literally cut almost 50% of their projected cost increase for 2015. That’s real money saved.

Here are two large organizations in completely different industries, both cutting their healthcare cost growth in half or more. Better yet, the employees are healthier (and presumably happier, since they share in the cost savings). And numerous other companies are seeing the same type of results with similar wellness programs.

Implementing this model on a national scale

Would a similar program work on a national scale? If so, it would remove one of the main impediments to economic growth.

One aspect of the healthcare challenge you don’t often hear about is its drag on everyone’s time. Trying to find a provider who can treat your condition and who accepts your insurance… filling a prescription… these things take too much time. The burden multiplies if you have children or elderly parents under your care.

All that time adds up across the economy. It takes us away from our work, causes us mental stress, and eats up our leisure time. It may well explain some of the puzzling worker productivity declines in recent years. Healthcare is both a direct cost and a kind of invisible tax that sucks away time and money we could all use in better ways.

Before we get too excited, I can think of some reasons the Clinic’s model might not work everywhere.

Still, it would be fascinating to see one or more states apply something like this program to their low-income Medicaid populations.

Would people stop smoking, eat healthier, exercise a little, take their meds to bring down their cholesterol, and work towards weight loss and other health markers if you gave them a $2,000 cash reward every year?

I suspect many would—and the rewards would be less expensive for taxpayers than treating the behavior-driven illnesses that plague our society.

The broader finding is key: Give people financial incentives to adjust their lifestyle toward better health, and they will respond. I suspect the same will be true just about everywhere, though the specific incentives will vary.

Just about the only thing economists agree on is that incentives matter. With the proper incentives, people will change their lifestyle.

FREE Report: How the High Priests of Economics Are Leading Us to Monetary Hell

Contrary to common belief, it’s not greedy Wall Street brokers that are wrecking the US economy—but academic policymakers like the ones employed by the Federal Reserve. And they all have the best intentions… Read financial-bestseller author John Mauldin’s riveting special report, How the High Priests of Economics Are Leading Us to Monetary Hell. Click here to get your free copy now.
John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in